Wednesday, February 3, 2016

Report Methodology

From time to time we get questions about the methodology behind the reports we publish.  Here's a little background:

Over the years as our clients became more tech-smart and sophisticated, our data collection has also evolved.  

Monthly Sales Reports

Today, we conduct a monthly survey of San Francisco and Marin counties residential real estate markets looking at sales and current listings.  In San Francisco our survey covers approximately 61% of all residential sales (single family homes, condos, co-ops and TICs plus 100% of 2-4 unit residential buildings).   In Marin we survey approximately 75% of all residential sales (single family homes and condos.

One of the features that sets our surveys apart from most published statistics is that we focus on the most common/popular configurations of homes (for example: 2 bedroom, 1 bath single family homes; 1 bedroom, 1 bath condos).  This gives a truer picture of changes in the market than averages that include all residential properties, especially since we have some very expensive homes in both counties that would otherwise skew results.  It’s especially helpful for buyers and sellers since it allows them to focus in just on the segment of the market their specific configuration represents.
In San Francisco we also break down sales by the ten real estate districts established by our local association of realtors and MLS. 
Sales by Price Range
Over the years we have added reports that include all residential sales in specific price ranges.  When we first started it was rather easy to develop the ranges since it was obvious that selling prices under $500k were quickly disappearing.  The next ranges, $500k-$799k and $800k-$999k, were chosen because many buyers were only able to qualify for mortgages in those ranges.   (For a while, $799k represented the upper limit for buyers who could only qualify for a “conforming” loan).  The final ranges were determined largely by what seem to be naturally occurring sales price clusters or groups.

New Listing Market Watch
All of the reports described above are done on a monthly or quarterly basis which means we’re looking back at purchase decisions that were made as much as 4-8 weeks prior to the date of the report.  We were missing a “predictive” component that would bring us closer to the current mindset of buyers and sellers.  We began to report on the “hot sheet” feature of our MLS.  This allows us to track the number of new listings in the previous two weeks as well as price reductions and the number of those new listings that go into contract within that same period.  This gives us an idea of the volatility of the market since competition is almost always a factor in the San Francisco real estate market.  Along with average asking prices for active listings which we track in our monthly sales reports and personal knowledge gleaned from open houses, brokers’ tours and other agents experiences, this information gets us as close to current as possible.

New Listing Watch - in Lockstep with Last Year

Our second look so far at the number of new residential listings in San Francisco for 2016 shows an almost lockstep similarity with the same period last year.


There were 84 new single family homes and 134 condos newly listed in the two week period ending 2/1/2016.  An almost identical number and ratio was listed in the same period last year:  18 single family homes and 130 condos.  The only meaningful difference this year is that only 6% of the single family homes went into contract during that same two week period vs. 21% last year.  Similarly with condos, 18 went into contract this year compared to 38 last year.


This could mean a slowing in demand (and competition).  The number of newly listed properties going into contract in the same two week period as they were listed has been less than the comparable period a year ago for the last 15 reporting periods except for 4 (3 for condos).

Tuesday, February 2, 2016

Recap of 2015 San Francisco Residential Real Estate

The 2015 San Francisco real estate market continued its steady march upward reaching new historic high selling prices almost every month.  In one sense San Francisco is the “perfect storm” of residential real estate.  Inventory remains low, demand continues to be very strong, and government regulation tends to limit the supply of new housing.

Below are some of the highlights we’ve found analyzing our statistics and reporting during 2015:

1.  Single family homes comprise about 44% of our residential market;  condominiums (including TICs and co-ops) are 56% of the total.

2.  For the second year in a row the total number of sales has decreased by about 7%.  From 2008 to 2012 the number of sales had increased between 3 and 16%.

3.  The percentage of single family homes and condos that sold below $1,000,000 has reached a new low of 38%.  62% sold for over $1,000,000.

4.  Only 110 homes sold below $500,000, less than 10 per month.  Most of these were either fixers or part of a “below market rate” program where selling and re-sale prices are mandated/regulated by legislation.

5.  2 bedroom/2 bath condominium units were the most sought after home in San Francisco followed by 1 bedroom/1 bath condo units, and then 2 bedroom/1 bath single family homes.

6.  Average selling prices for the year are summarized below:


Configuration
Average Selling Price
Single family homes
2 bd/1 ba
$970,000
3 bd/2 ba
$1,300,000
Condominiums
1 bd/1 ba
$794,000
2 bd/1 ba
$1,000,000
2 bd/2 ba
$1,300,000


1      7.  Total market share by selling price range shows:

Rank
Price Range
# of sales
% of total sales
Average days on market
1
$1m - $1.499m
1,635
32.2%
26
2
$800k - $999k
983
19.1%
30
3
$500k - $799k
877
17.1%
36
4
$1.5m - $1.999m
766
14.9%
23

8.  The most active real estate districts in San Francisco for single family home sales in 2015 were:
Real Estate District
Number of
Single Family Home Sales in 2015
Percentage of Total Sales 2015
1
249
27%
2
202
22%
4
123
14%
9
104
12%
5
78
9%
3
74
8%
1
51
6%
6
13
1%
7
6
.5%
8
4
.5%
 9.  The most active real estate districts in San Francisco for condominium sales in 2015 were:
Real Estate District
Number of
Condominium Sales in 2015
Percentage of Total Sales 2015
9
658
38%
8
292
17%
5
280
16%
6
161
9%
7
150
8%
1
82
5%
10
37
2%
4
33
2%
3
30
1%
2
25
1%


Monday, January 18, 2016

New Listing Watch -- Right on Schedule ...

...new listings bounced right up after the holidays and new year's holidays.  Of the 91 new single family home listings during the last two weeks, 11% (10) are already in contract.  The bounce was even more pronounced with condos where 138 new listings appeared during the last two weeks and almost 17% (23) of them are already in contract.




Assuming the usual pattern holds, inventory will continue to increase through the May-June period, drop off during the July-August period, reach another peak in September-October and then fall steadily through the end of the year.

Monday, January 4, 2016

New Listing Watch -- Lowest Levels Since This Time Last Year

As expected the number of new listings during the past two weeks is at its lowest level since this time last year.

We see this pattern year after year in whether it's a buyer's market or a seller's market.

For buyers, this can provide an opportunity since competition is also relaxes during this period.


Two weeks from now we expect to see a significant upturn in new listings.