We asked, and Misha delivered:
It is important to note, as Misha does:
This chart, while it does illustrate something meaningful about the overall SF market, doesn’t tell you anything about values in any particular neighborhood. It lumps together data from neighborhoods as diverse as Hunter’s Point and Visitacion Valley in District 10, which has been slammed for well over a year now, with neighborhoods like Noe Valley in District 5 and St. Francis Wood in District 4, both of which seem to be holding up pretty well.
Regardless, it is great data, and we know you love it, so have a look. Click the image to go to a larger version.
So, 03 prices already and falling like a stone. median looks about 30% off peak already?
wonder how long it is before the compasrison will need to go back to the 90s as well, poissibly by the end of the year?
Draw that conclusion if you like. This chart offers me very little, though. My reality is a buyer-client who wants something in a safe neighborhood near transit for under 600K. Charts like this one, and hey I find it intersting too, but charts like this one only reinforce the conventional wisdeom people have adopted. Unfortunately, you can’t buy a house with CW script. It actually takes money.
fluj, I think you underestimate the role CW plays in buyer psychology. I willing to buy up to $2M. Up to $1.3M I can close in 3 days, so I think I am the buyer many sellers are dreaming of in this market. However, unless I see a 2003/2004 price (or an amazing story associated with an amazing property about why it is worth more), there is no way I’ll buy right now. I’d rather take my chances in the Fall, when either buyers will be regretting opportunities lost or sellers will realize that the Spring bounce didn’t.
I’m sure I’m atypical, but there is too much data to suggest that prices will have to drop in all districts for me to ignore it.
steve – curious to know what you mean by “I’d rather take my chances in the Fall, when either buyers will be regretting opportunities lost… “
Been there — just I am expecting the market to move one way or the other by Fall. I’m betting the direction is down, but I could be wrong and prices might have recovered, hence, “buyers will be regretting opportunities lost.” Didn’t mean to be cryptic.
The market has already moved one way or the other, surely? and yes, the direction is down.
Underestimate? I’m not sure I underestimate it, Steve. I am butting my head up against it daily. It’s my reality and I do not underestimate its power.
If you don’t mind my asking, where are you looking? And for what, precisely? I feel as if there has to be some relative value in that range at this point. But then again, that price range is probably the least effected price range, ~2M. If you listen to the internet posters, they’d have you believe that peak market $2M houses can now be had for 1.5M. But you and I both know that is very much not the case. I point to that house at 1470 Noe street that Moises Alou previously owned. Three apples to apples sales in the past four years, and it’s off by maybe 5% at most. Don’t know what it’ll sell for, but it got into contract after a flat two weeks.
fluj, we see some of the same things, and I find your characterizations of the market to be helpful and accurate.
I look at what is happening to the economy in general, and tech specifically, and then I think about changes related to financing, and I wonder how could a $2M house from last summer not be $1.5M by Fall.
stiil, I agree that the chart does not reflect the reality in my price range, as you suggest. but, my point was that if enough buyers believe it does (or it will soon), it must become reality for someone needing to sell.
the great unknowns are: how much pent up demand is there (with the resources to act on it) and how many folks will have circumstance changes that require them to sell.
You’re dead on it, Steve. The thing that’s tripping us all up is that people really don’t need to sell. I think the reset tsunami thing has been met by government, so I personally rule that factor out. So now it’s jobs, almost purely. We’ve seen a few here and there that have needed to sell. But so far the commensurate demand has so far let them off the hook pretty easy.
And again, I look at my 600K or under marching orders from one client. At this moment in time one cannot get a single family home in a safe neighborhood near transit for 600K or under. It isn’t really all that close, either. A ten percent shift from right now still might not even do it.
Fluj: a propos of “people don’t really need to sell.” This is one of the takeaways in a generally depressing article in last Sat’s NY Times, which I quote on my own blog here: http://www.pegasusventures.net/wordpressblog/2009/03/09/more-grim-news-on-housing/
It describes urban markets like SF and NY, which heretofore have been holding up reasonably well, as “frozen.”
As for buyer reality, what happens in depressed markets like these is that the good properties continue to command high prices and the rest get knocked down or withdrawn. The values are in the “B” houses, not the A’s. But most clients still want the A’s even if they say they’ll settle for a B.
Analyze it all you want… SF prices are going to continue to slide – end of story. The city has been insulated from the decline in property values until now. I encourage everyone to just wait…. and wait and sooner or later they’re all going to have to give on the price…
these are wise words, Credit card lines are getting cut by the big banks. under new regulation the banks have to be able to collateralize their outstanding loans, so they are cutting their credit card lines. to most americans who delay payment of bills by credit card , this will be like a pay cut. SF is not immune to this process, i understand that there are good business’s in sf , like yahoo, who just cut revenue by 78% year on year, hmm a few less porsches running around i bet, GUYS SF is not London, not the same draw, see you down there