Stats & Numbers: 2-4 Units 09/07 versus 09/08
October 29, 2008 – 9:30 am | by thefrontsteps
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NUMBER OF UNITS is the equivalent of number of sales/transactions. For condominiums, each unit is treated as a sale. For 2- to 4-unit buildings, the “building” is treated as a sale.
NUMBER SOLD is the number of properties in the market segment that closed escrow during the month.
NUMBER FOR SALE is the number of active properties on the market for one day or more during the month.
MEDIAN PRICE (SOLD) reflects the “middle” price point of a group of properties that have successfully closed escrow on a monthly basis, i.e. half sold for more and half sold for less than the median price. Tracking the movement of median prices over time provides a good indicator of the direction market forces are moving.
If the percentage change is positive between the two periods then there is upward pressure on prices in that market segment. If the percentage change is negative between the two periods then there is downward pressure on prices in that market segment.
AVERAGE DAYS ON MARKET (DOM) reflects how long it has been taking (on average) to draw an offer on a reasonably priced property exposed to the market. The AVERAGE DAYS ON MARKET is defined as: The average number of days it took all of the properties that went under contract during the period to accept a first position offer.
MONTH’S SUPPLY OF INVENTORY (MSI) is a measure of how long it would take, in months, to sell the existing inventory at the current sales rate for the specific neighborhood and property type. The MONTH’S SUPPLY OF INVENTORY is defined as: The number of active properties on the market for one day or more during the month, less the number of properties that have been withdrawn or expired, divided by the number of properties that have gone under contract during the month.
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Data provided by Terradatum. For additional information about market statistics and/or additional information about Terradatum’s products and services, please call Terradatum at 1-888-212-4793 Ext. 2 or send e-mail to info@terradatum.com.
Tags: 2-4 Units, data, san francisco, San Francisco Real Estate, statistics
9 Responses to “Stats & Numbers: 2-4 Units 09/07 versus 09/08”
By anna on Oct 29, 2008 | Reply
What is your read on these data?
By thefrontsteps on Oct 30, 2008 | Reply
Anna,
Good question. What is says to me is that things in the multi-unit world aren’t that bad. While volume may be down slightly in some areas, it’s hard to make comparisons when less than 10 properties in any given district have changed hands this year vs last. The rental market is actually really good and many investors still looking for good buys. The important column for me is #units for sale, and although substantially more inventory is on the market at this time, it’s not as if we’ve jumped from 50 units/district to 150 units. Broken down as percentages it seems like a lot, but a change from 16 to 22 (D-8) isn’t something to lose sleep over. All in all, these numbers kind of make me feel better that the bottom really hasn’t fallen out.
By dothemath on Oct 30, 2008 | Reply
I guess the market for multi-units won’t be as affected as sfh’s/condos -as they are typically bought with more than say 20% financing, and so less likely to struggle to get loans for in the current market.
But this is only a guess – any other views?
By fluj on Oct 30, 2008 | Reply
Seemingly they are taking about twice as long to sell. I say that with the twin caveats that, yes they are still selling at about the same price, and yes the samplesets are small. But by taking this data for what it is we can guess that investors are by and large buoyed by rent projections. I think DOM is perhaps a little more telling for multi unit buildings than other properties. The marketing tends to be flatter, targeted toward investors.
By zanon on Oct 30, 2008 | Reply
dothemath:
I was interested to hear that you say the rental market is doing well. In my area, rents are still extremely below purchase prices, and any investor — even with 30% — is very cash flow negative on the property and must be hoping to make it up through appreciation.
Not to say that there aren’t people like that!
Is that what you’re seeing as well?
By fluj on Oct 30, 2008 | Reply
I know of several properties that would be cash flow positive with 30% or 40% down.
By paco on Oct 30, 2008 | Reply
still lots of competition for the multi-units i’ve looked at but the pace is quite abit slower.
it does not seem like an area that will have distressed selling.
By zanon on Oct 30, 2008 | Reply
fluj: and where would those be?
I’m talking about SFH on the Peninsula that sell for about $1.5M and rent for $2K/mo. That’s deep underwater, even with 450K down (30%). You need to cover interest on $1.05M, which even at 6% is 63K a year, never mind everything else. You’re only getting $24K in a year, so losing $40K/year.
By fluj on Oct 30, 2008 | Reply
Zanon,
I’m not going to give out that information over the internets to completely anonymous people. If you want to email me, then by all means do so. kohlmyer@garrisonrealty.net