Category Archives: Stats & Numbers

San Francisco’s Top 10 Overbids

From $1,400,000 to $14,000,000 on 25th Ave?! Are you kidding me!? Yes, that’s a typo for sure. Agent error. Fat fingers. Something. It’s not right. But the rest – wow!

Address BR/BA/Units DOM List Price Sold Price Overbid
2910 24th Ave 4/2.00/N/A 10 $1,400,000 $14,000,000 900.00%
140 Jerrold Ave 3/1.50/ 7 $215,000 $413,000 92.09%
1725 Kearny St 5 2/2.00/5 14 $1,450,000 $2,450,000 68.97%
2186 14th Ave 2/1.00/N/A 1 $949,000 $1,500,000 58.06%
1574 Innes Ave 2/1.00/N/A 14 $599,000 $915,749 52.88%
2546 McAllister St 2548 2-4 Units 60 $995,000 $1,510,000 51.76%
228 3rd Ave 3/1.00/N/A 12 $995,000 $1,475,000 48.24%
2475 15th Ave 4/2.00/N/A 20 $1,195,000 $1,695,000 41.84%
141 Beaver St 2/2.00/N/A 18 $1,798,000 $2,507,000 39.43%
270 Valencia St 2/1.00/206 13 $648,000 $900,000 38.89%

Have a great weekend.

Don’t forget, we have the full Top 20 on The Goods, and Top 20 Underbids too.

-The Goods, Because your clients deserve better.

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Case-Shiller: New Jump In Bay Area Home Prices

The new S&P Case-Shiller Home Price Index for April 2014 came out today and it showed another bump in home prices for the 5-county San Francisco Metro Statistical Area. For homes in the upper tier of home values – as most of San Francisco’s are – prices are up approximately 17% in the past 12 months and up 41% since the recovery began in early 2012.

Based upon what we are seeing on the ground in the market, we expect another bump in the May Index, which will come out at the end of July.

image001 image002 image004Be sure to check back on theFrontSteps for future reports as well as all the good stuff you’ve come to love from us – including the top 10 Overbids of the Week, which will come out tomorrow.

USA is through to the next round!!  (Sorry if you had it recorded and I just spoiled.)

Case-Shiller_Simpl-Percentages

Recessions, Recoveries & Bubbles

My company just put out some heavy duty data crunching that can shed some light on this recent housing boom. I have put the entire report below. Enjoy and share.

 30 Years of Housing Market Cycles in San Francisco

Updated Report

Below is a look at the past 30 years of San Francisco Bay Area real estate boom and bust cycles. Financial-market cycles have been around for hundreds of years, all the way back to the Dutch tulip mania of the 1600’s. While future cycles will vary in their details, the causes, effects and trend lines are often quite similar. Looking at cycles gives us more context to how the market works over time and where it may be going — much more than dwelling in the immediacy of the present with excitable pronouncements of “The market’s crashing and won’t recover in our lifetimes!” or “The market’s crazy hot and the only place it can go is up!”

Market Cycles: Simplified Overviews 

Up, Down, Flat, Up, Down, Flat…(Repeat)

Case-Shiller_Simplified_from-1984

Case-Shiller_Simpl-Percentages

Smoothing out the bumps delivers these simplified overviews for the past 30 years. Whatever the phase of the cycle, up or down, while it’s going on people think it will last forever: Every time the market crashes, the consensus becomes that real estate won’t recover for decades. But the economy mends, the population grows, people start families, inflation builds up over the years, and repressed demand of those who want to own their own homes builds up. In the early eighties, mid-nineties and in 2012, after about 4 years of a recessionary housing market, this repressed demand jumps back in (or “explodes” might be a good description) and prices start to rise again. It’s not unusual for a big surge in values to occur in the first couple of years after a recovery begins.

Surprisingly consistent: Over the past 30+ years, the period between a recovery beginning and a bubble popping has run 5 to 7 years. We are currently about 2.5 years into the current recovery. Periods of market recession/doldrums following the popping of a bubble have typically lasted about 4 years. (The 2001 dotcom bubble and 9-11 crisis drop being the exception.) Generally speaking, within about 2 years of a new recovery commencing, previous peak values (i.e. those at the height of the previous bubble) are re-attained — among other reasons, there is the recapture of inflation during the doldrums years. In this current recovery, those homes hit hardest by the subprime loan crisis — typically housing at the lowest end of the price scale in the less affluent neighborhoods, which experienced by far the biggest bubble and biggest crash — may take significantly longer to re-attain peak values, but higher priced homes have already done so.

This does not mean that these recently recurring time periods necessarily reflect some natural law in housing market cycles, or that they can be relied upon to predict the future. Real estate markets can be affected by a bewildering number of economic, political and even natural-event factors that are exceedingly difficult to predict.

Mortgage Interest Rates since 1981

It’s much harder to decipher any cycles in 30-year mortgage rates over the same period. Despite the rate spike over the summer, rates remain very low by any historical measure, and this, of course, plays a huge role in the ongoing cost of homeownership.

Average_30-Year_Mortgage-Rates

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In the 2 charts below tracking the S&P Case-Shiller Home Price Index for the 5-County San Francisco Metro Area, the data points refer to home values as a percentage of those in January 2000. January 2000 equals 100 on the trend line: 66 means prices were 66% of those in January 2000; 175 signifies prices 75% higher.

1983 through 1995 

(After Recession) Boom, Decline, Doldrums

Case-Shiller_HT_1983-95

In the above chart, the country is just coming out of the late seventies, early eighties recession – huge inflation, stagnant economy (“stagflation”) and incredibly high interest rates (hitting 18%). As the economy recovered, the housing market started to appreciate and this surge in values began to accelerate deeper into the decade. Over 6 years, the market appreciated almost 100%. Finally, the eighties version of irrational exuberance — junk bonds, stock market swindles, the Savings & Loan implosion, as well as the late 1989 earthquake here in the Bay Area — ended the party.

Recession arrived, home prices sank, sales activity plunged and the market stayed basically flat for 4 to 5 years. Still, even after the decline, home values were 70% higher than when the boom began in 1984.

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1996 to Present 

(After Recession) Boom, Bubble, Crash, Doldrums, Recovery

Case-Shiller_HT_1996-2011This next cycle looks similar but elongated. In 1996, after years of recession, the market suddenly took off and became frenzied — actually quite similar to what we’re experiencing today. The dotcom bubble pop and September 2001 attacks created a market hiccup, but then the subprime and refinance insanity, degraded loan underwriting standards, mortgage securitization, and claims that real estate never declines, super-charged a housing bubble. Overall, from 1996 to 2006/2008, the market went through an astounding period of appreciation. (Different areas hit peak values at times from 2006 to early 2008.) The air started to go out of some markets in 2007, but in September 2008 came the market crash.Across the country, home values fell 15% to 60%, peak to bottom, depending on the area and how badly it was affected by foreclosures — most of San Francisco got off comparatively lightly with declines in the 15% to 25% range. The least affluent areas got hammered hardest by distressed sales and price declines; the most affluent were typically least affected. Then the market stayed flat for about 4 years, albeit with a few short-term fluctuations. Supply and demand dynamics began to change in mid-2011, leading to the market recovery of 2012.

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San Francisco from 2010 to 2014

A Strong Recovery


Median_SFD-Condo_by-Qtr_Short-term

Case-Shiller_High-Tier_2011

In 2011, San Francisco began to show signs of perking up. An improving economy, soaring rents, low interest rates and growing buyer demand coupled with a low inventory of listings began to put upward pressure on prices. In 2012, as in 1996, the market abruptly grew frenzied with competitive bidding. The city’s affluent neighborhoods led the recovery, and those considered particularly desirable by newly wealthy, high-tech workers showed the largest gains. However, virtually the entire city soon followed to experience similar rapid price appreciation.

San Francisco median home sales prices increased dramatically in 2012 and then accelerated further in the first half of 2013. San Francisco and the Bay Area are in the midst of a very dramatic recovery. Among other positive signs, new home construction is soaring once again, generally in the form of large new condo projects.

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Different Bay Area Market Segments:
Different Bubbles, Crashes & Recoveries

1990 to Present

Case-Shiller_3-Tiers_Trends

Again, all numbers in the Case-Shiller charts above relate to a January 2000 value of 100: A reading of 182 signifies a home value 82% above that of January 2000. These 3 charts illustrate how different market segments in the 5-county SF metro area had bubbles, crashes and now recoveries of enormously different magnitudes, mostly depending on the impact of subprime lending. The lower the price range, the bigger the bubble and crash. The upper third of sales by price range (far right chart) was affected least by the subprime fiasco and has now basically recovered peak values of 2006-2007. In the city itself, where many of our home sales would constitute an ultra-high price segment, if Case-Shiller broke it out, many of our neighborhoods have risen to new peak values. The lowest price segment (far left chart), more prevalent in other counties, may not recover peak values for years. If one disregarded the different bubbles and crashes, home price appreciation for all three segments since January 2000 is almost exactly the same, in the range of 75% to 82%.

All data from sources deemed reliable,
but may contain errors and is subject to revision.All numbers are approximate and percentage changes will vary
depending on the exact begin and end dates used.

SF_Zip-Income

San Francisco Demographics

A statistical breakdown by household income, education, homeownership, foreign-born population, household size, age and other criteria.

The below charts and table are based upon U.S. Census surveys from 2010 – 2013. Please note that zip codes often contain neighborhoods of widely different demographics. For example, 94115 includes Pacific Heights, one of the most affluent areas of the city, as well the Western Addition, which is much less affluent. A number of SF zip codes are like this and when mixing very different neighborhoods together, you often end up with statistics that don’t really apply to any of them. Zip codes are relatively blunt instruments for demographic investigation, but we still found the analysis to generate interesting, new insights into San Francisco, our ever-changing city.

Each chart illustrates the data for 10 to 12 SF zip codes. Below the charts is a complete table of all the data collected.

The neighborhoods associated with zip codes in the charts and table below are simply representative labels; other neighborhoods are contained within each zip code and many are divided between two or more zip codes.

Median Household Income 

Many factors impact this statistic: household size, level of education, percentages of homeowners vs. renters, whether the rental units are subject to rent control, median resident age, quality of housing, and cost-of-housing issues besides rent control. The South Beach-Yerba Buena zip code takes top place for median household income in San Francisco. Interestingly, it is at the bottom of the ranking for average household size. This zip code is dominated by newer condo projects, many of them at the top of the price scale and the rental units here, which make up over half the housing, are typically not under rent control. The second ranked zip code for income is quite different: the St. Francis Wood-Miraloma Park area has a completely different ambiance, very few condos or renters, older residents and bigger households. And number 3 is the Presidio Trust zip code with no homeowners, all renters but no rent control, and younger residents than either of the first two. All 3 of the top zip codes, however, have very high percentages of residents with bachelor’s, graduate and professional degrees.

SF_Zip-Income
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Case-Shiller_High-Tier_2011

New Case-Shiller Shows Another Jump In Bay Area Home Prices – Up 37.5% Since 2012

The new Case-Shiller Index report for the 5-county San Francisco metro area, for March, is showing the same acceleration in home prices that buyers and sellers are experiencing in the market. The 2.4% increase from February to March 2014 is the largest since spring 2013, and further significant increases are expected in the Index reports for April and May when they come out in the next two months. Nationally, home prices saw only a .17% increase month over month, and Case-Shiller’s 20-City Index showed a .87% increase, so San Francisco and the Bay Area is strongly outperforming the rest of the country in home price appreciation.

Since the market recovery began in earnest in early 2012, northern Bay Area home prices have appreciated approximately 37.5% through March, according to Case-Shiller.

Case-Shiller_High-Tier_2011

Case-Shiller_from_1990

That’s amazing. Truly amazing.

Condo Trends

San Francisco Condominium Prices Increase 19% YOY

Below, and attached, you will find the recent condominium sales report from the Mark Company, one of the leaders in new development sales in San Francisco. They have a keen eye on all things new construction, high rise, and luxury that is popping up around town, and they are behind many of the sales offices you might be visiting. To say they know the high rise market in San Francisco would be an understatement. They are truly the front lines, so have a look.

APRIL 2014 SAN FRANCISCO CONDOMINIUM PRICES INCREASE 19 PERCENT OVER PREVIOUS YEAR
The Mark Company Trend Sheet Tracks New Construction and Resale Market Trends

San Francisco – May 19, 2014 – San Francisco condominium prices rose 19 percent in April 2014 over the previous year, according to the Condominium Pricing Index released today.

The Mark Company Condominium Pricing Index for April was $1,115 per square foot, which is up 8 percent from March. New construction inventory was 45 percent lower than a year ago, and down 1 percent from the previous month with only 136 units now available.

‘The Condominium Pricing Index underwent by far its largest single month gain this year, building on an already strong market in San Francisco caused by low inventory and extremely strong demand,’ notes Erin Kennelly, senior director of research, The Mark Company. ‘However, a surge of new condominium projects scheduled to come online this year may indicate an easing of the city’s inventory crunch.’

The Condominium Pricing Index, part of the firm’s monthly Trend Sheet, represents the price per square foot of a new 10th floor, 1,000-square-foot condominium. It is based on recent sales data, and uses a proprietary quantitative method to measure trends in market demand. It tracks the value of a new construction condominium without the volatility of inventory changes.

The Mark Company Penthouse Pricing Index, which applies the same methodology to a new 30th floor, 2,000-square-foot condominium, was $1,915 per square foot in April, up 19 percent year over year.

The condominium price per square foot was $927 for resales, up 7 percent from March 2014 and up 19 percent year over year, according to The Mark Company Trend Sheet for San Francisco. In addition, there were 307 condominium resales in San Francisco in April, 259 active condominium listings representing less than one month of inventory, and 155 pending condominium listings.”
markcotrendsheet

With what little inventory there is all across the city, versus what incredible demand remains, these numbers should come as no surprise.

As always, I’m here to help if you have any questions, or would like to buy or sell in any luxury high rise tower in San Francisco.

-The Mark Company Trend Sheet (pdf)

San Francisco New-Housing Construction Trends

San Francisco New-Housing Construction Trends

Within its 47 square mile envelope, San Francisco is already
the 2nd most densely populated city in the United States,
and it’s growing denser, more affluent and more expensive.

May 2014 report with 13 custom charts

The following charts are mostly based on the San Francisco Planning Department’s excellent Housing Inventory and Pipeline reports, which can be accessed using the links at the bottom of this article. Quotes below are excerpted from these reports.

Packed with information, the data in one report section will not always agree perfectly with that in another – due to the multiple sources of data used by the Planning Department – and this is reflected in our charts as well. In the complex, lengthy process of application and review, public hearings (and, lately, ballot proposals), revisions, entitlement, permitting, construction and completion, how and when a project is counted may vary. Housing units are being built and being removed, and there are so many types: rental or sale, market rate or affordable, social-project housing or luxury condominiums.

Last but not least, this landscape is in constant flux: new projects, plan changes, and shifts in economic and political realities. Everything below is simply a good faith estimate. The basic reality is that San Francisco, after its recent 2008-2012 new-construction slump, is now experiencing a building boom. So far, however, it has not been able to keep up with population growth and rising buyer/renter demand.

 

New construction authorized typically will not show up as housing units completed until later years. And, of course, a developer can decide not to build after authorization if market circumstances change. The post-2008 drop in authorizations is clearly illustrated here.

“Some of the larger projects completed in 2013 include: 1190 Mission Street (355 market-rate units and 63 affordable units), Rincon Green (277 market rate units and 49 affordable units), Nema (279 market rate units and 38 affordable units).”

“Very large projects (200 units or more) filed in 2013 and are under Planning Department review include: Mission Rock (1,500 units); 150 Van Ness Avenue (429 units); 41 Tehama Street (398 units); 1066 Market (330 units); 950 Market Street (316 units); and 1301 16th Street (276 units).”

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A glance at the recent past, the present and the possible future of new housing construction in the city. New projects are continually entering and moving through the pipeline, and existing plans may be changed or even abandoned.

“There are currently 857 projects in the pipeline. Of these, 74 percent are exclusively residential and 17 percent are mixed-use projects with both residential and commercial components. Only 8 percent of projects are non-residential developments. A net total of 50,400 new housing units would be added to the city’s housing stock according to current data. Around 18 percent of all projects, representing 6,000 net added housing units and 2,750,000 sq. ft. of commercial space, are under construction. Around 20 percent of projects (with another 4,200 net units and 3.8 million sq. ft. of commercial space) have received building permit approvals. As of the time of writing, some may have moved to the construction phase.”
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Over/Under List Price — April Percentages For Your Appraisals

I wanted to share these stats for any and all of you buyers, mortgage brokers, or agents that run into appraisers who feel it is their duty to question the price a buyer is willing to pay for a property in this market. In my humble opinion, appraisers should not ever look at percentages above or below asking price. Actually, I think San Francisco doesn’t need appraisers in a transaction at all, ever. If a buyer is willing to pay $$ for a property and a seller is willing to sell it for that, that’s what the property is worth.

Anyhow, this chart shows the staggering number of overbids in San Francisco for April, and the lengths buyers are willing to go to win.

If you’d like to see Overbids, Underbids, Sales, Stalefish, and more, on a regular basis, sign up for my email delivery of exactly that at sfnewsletter.com.

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Prices Jumping – Yet Again – Across San Francisco

The San Francisco real estate market grew increasingly frenzied as the first quarter of 2014 progressed, leading to another surge in home prices in virtually every neighborhood in the city. The high-demand/ extremely-low-inventory/ competitive-bidding situation is similar to what occurred first in spring 2012 and then, to an even higher degree, in spring 2013. After the market seemed to stabilize in the second half of last year, we didn’t expect to see it turn this fierce in early 2014, but right now it appears to be every bit as ferocious as last spring’s.

Of major metro areas, the new Gallup-Healthways survey ranked SF-Oakland second in the nation (behind San Jose-Santa Clara) on their index for “well-being.” Though already the second most densely populated city in the country (after NYC), San Francisco simply has many more people wanting to live here than there are homes available to rent or buy.

Sales over Asking Price
The heated competition for new listings coming on market has resulted in an astounding percentage of sales occurring above, and often far above, list price.

This chart below breaks down, by neighborhood, the average sales price to list price percentage for the 90% of homes selling without price reductions. Of the areas assessed, Bernal Heights came out on top with sales prices averaging an incredible 21% over list prices over the past 2 months.



Median Sales Price Spikes
Typically, the first quarter of the year does not show a dramatic increase in median sales prices over the previous quarter – in fact, a decline is not unusual due to holiday market dynamics. But the first quarter of 2014 saw large spikes in median prices for both single family homes (houses) and, especially, condos in San Francisco.
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Current San Francisco Home Values by Neighborhood, Property Type & Bedroom Count

These tables report average and median sales prices and average dollar per square foot, along with average home size and units sold, by property type and bedroom count for a wide variety of San Francisco neighborhoods. The tables follow the map in the following order: houses by bedroom count, condos by bedroom count, 2-bedroom TICs, and finally a small table on 2-unit building sales.

The analysis is based upon sales reported to MLS between April 1, 2013, when the last big surge in home values began in San Francisco, and February 21, 2014. Value statistics are generalities that are affected by a number of market factors and all numbers should be considered approximate.

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