Danielle Lazier
Archive for the 'Economic News & Market Updates' Category
Have Single Family Homes in San Francisco Dropped in Value & By How Much?
Ripped from the coffee shop…or rather what I was asked today while getting an Americano.
The question is how much have single family homes in San Francisco gone down in value over the past 6 months? This is a great question! How has the stock market crash affected the housing market?
Of course, as you know, I hate looking at broad statistics. San Francisco is too big and variant to yield particularly helpful results if we look City-wide. Excelsior’s market has little to do with that of Pacific Heights, you know?
Yet, for a macro-perspective and for ***** & giggles, let us see.
This graph is for all single family homes in all of San Francisco. You can see that the median value fell 12.8% since June.
Although the median value is more helpful than the average, these statistics remain misleading. Our market has so many different types of homes. A super luxury sale can swing the numbers as can the fire-sales in the outer-lying neighborhoods.
Ask me about your particular neighborhood.
Check out a full version of the report HERE.
A home buyer on Trulia just asked about home values in Pacific Heights since June. Here you go!
Please note the number of homes sold. This is a VERY exclusive market so statistics here are based on so few homes…. Yet, it seems the value has not changed! View the entire report for Pacific Heights home values.
The Tale of 2 Not-so-Hot Octobers: San Francisco Home Prices Over the Years
Curious about the state of home values in San Francisco?
As I’ve written before, there is a tale of two cities here in San Francisco. I’d venture to say this is true for most metropolitan areas.
Please don’t put much stock in the San Francisco real estate statistics you see in the mass media. A lot of these indexes are actually Bay Area-wide and let me tell you, what happens in Hayward is not exactly what happens in the Castro! Or so they say… 
Here in the City, the outer-lying areas have suffered more than the central parts of San Francisco. I did some research on how the central parts of SF have weathered the storm since 2006. As you can see the median home price is just about the same as it was two years ago! That said, it is down from the highest point.
This following is a graph of all single family homes, condos, TICs, lofts, and coops in San Francisco, excluding MLS Districts 10 and 3. It shows median home price October 2006-October 2008.
For a larger, easier to read version of the report click here. Want to know how your neighborhood has fared? Ask us and we’ll post or email a comprehensive report of homes for sale and recently sold in your ‘hood. Email us.
Ok, we must be near the bottom now. Manhattan has joined the fun!
At the risk of sounding bitter and petty (not for the 1st time, I’m sure), I found just a wee bit of glee to read in the New York Times that even holier-than-thou Manhattan real estate is feeling the downturn.
Of course, be careful to understand the broader picture.
Some neighborhoods have seen median home prices go down while others have seen their real estate values go up.
Most notably, “the neighborhoods that fared the best through the third quarter included Fifth Avenue and Park Avenue from 59th to 96th Streets, where median prices went up 35 percent.” 35% folks! Wow. Looks like their are some Masters left…just not at Lehman Brothers.
Points of interest & commonality to our San Francisco real estate market:
1. Real estate is very local.
The outer lying, less expensive neighborhoods and the areas that we consider transitional like South of Market or the Dogpatch have been & will be hardest hit.
“As to whether the neighborhoods that have softened first will weaken more quickly, Mr. Miller said: “Emerging neighborhoods by definition are more volatile. They have more potential to decline when the market weakens, and conversely they have more potential upside when the market returns.”
Our San Francisco real estate market plays out the same way. You’ll see much deeper price declines in outerlying and/or transitional neighborhoods. Think the Excelsior, Soma & Central Waterfront lofts, the parts of Bernal Heights on top of the freeway, etc.
Check statistics carefully and don’t rely on city-wide, county-wide or heaven forbid Bay Area-wide analysis. Find out what is going on in your micro-market.
2. If you want to sell, price it right and by right, I mean lower than the competition.
Get buyers in the door. The more buyers at your showings, the higher the sales price. You gotta get the action at the open house and today that means aggressive pricing.
If a property is priced AND presented right, it will sell in today’s SF housing market. Compared to the rest of the country, San Francisco and Manhattan real estate is doing GREAT. If you’ve owned your home for a few years, you might consider taking advantage of the incredible move-up buying opportunity.
“She (Veronica Raehse ) and other brokers said that they had been advising sellers to price their apartments 10 to 15 percent below the latest comparable sales. “You have to use comps as a starting point and price down from there,” she said. “It’s the only way to get more activity, because if buyers don’t think a deal is being offered, they’re just not going to bother with it.”
Donald Kemper, a vice president of Prudential Douglas Elliman, agreed that the only way to be a successful seller in the current market is to set a competitive price. “You have to establish value right away,” he said. “Because nobody wants to buy now and find that they could get it for less next year.”
3. The Election eased tensions and provides some clarity.
Whether you are happy or not about the results, the Election’s conclusion brings a little bit of certainty to the table. There was (and still is) too much confusion and uncertainty. Uncertainty leads to fear. Fear to panic. Panic to paralyis. Folks just don’t seem to do much of anything when they are in fear. They don’t buy cars. They don’t buy stocks. And, the don’t buy real estate.
Confusion – Uncertainty – Fear – Panic – Paralysis
We are calling it “the Obama effect.” One of many, I imagine.
Already, I am getting more emails and calls from buyers who are now ready to buy. I guess these first time buyers are ready to change their own lives too! Seriously, though, buyers are getting a clue that this opportunity won’t last forever.
(Actually, one client of mine who found me on this Blog (yay!) wrote an offer on his dream home 2 days after the Election!)
I’m also hearing from home owners who want to “trade-up” from their starter home, condo or loft.
They want to take advantage of the chance to move-up to a bigger, nicer house in a different neighborhood. They want the bigger discount on the new house. In the long run, they know it will actually save them money to take the loss on their current, “starter home.”
For my own real estate business, I expect to work with more home buyers and sellers in the 4th quarter than I did in the 3rd!
What are your plans?
California Housing Prices Continue Down BUT Number of Home Sales Continue Up
According the 2009 California Housing Market Forecast from the California Association of Realtors, prices will continue to decline into early 2009 while the number of sales will continue to increase. Of course, we usually have a holiday/winter slowdown.
What does this mean?
On the one hand, prices continue to adjust downward. Most economists foresee the decline to level soon-ish. How’s that for vague?
On the other hand, more homes are selling than was projected.
This signals the beginnings of the turnaround. Buyers, in particular first time buyers, are getting back into the market. Many would-be home buyers are realizing that this is a rare opportunity for them and they don’t want to miss it. Rates are low and prices are down. No one knows how long it will last.
As housing inventory lessens due to increased buyer activity, the market will be able to rebound. It is all about supply and demand, right?
Keep in mind that the following is for all of California. As one of the world’s biggest economies (8th, right?), our real estate market is huge and varies greatly from place to place.
My advice to folks considering buying or selling San Francisco real estate in today’s market:
To the first time buyer: BUY (This is a “once in 10 to 15 years” kind of opportunity. TICs, Condos, Lofts and some single family homes are ON SALE. Rates are great and loan options abound for those with low or high down payment.) Read more here. FHA loan info here.
To the home owner of 1-3 years: HOLD (Stay put and enjoy your home. It will be a great investment in time. Don’t worry! You own your home in one of the World’s most coveted Cities! You are not a renter! You save money in taxes!)
To the homeowner of 3-5 years: HOLD or TRADE-UP (Ask us to help you determine what your current home is worth AND what your next dream home costs with today’s discounts. Depending on the answer, it might be more profitable to move-up. Plus you get the house of your dreams. Benefits of Trading Up in a Down Market HERE.)
To the homeowner of 5+years: TRADE-UP or DOWNSIZE (Long-term gains in San Francisco real estate remain substantial. Take advantage of the discount in the home your really want, whether it’s a easy-living South Beach condo or a trophy house on Liberty Hill.)
From CAR:
C.A.R. FORECAST CALLS FOR PRICES TO LEVEL OUT AND SALES TO RISE IN 2009
Home prices throughout most areas of California will post declines next year, while sales of existing homes will continue to rise in 2009, according to C.A.R.’s “2009 California Housing Market Forecast,” released today during CALIFORNIA REALTOR® EXPO 2008 (www.realtorexpo.org), running through Thursday, Oct. 16 at the Long Beach Convention Center in Long Beach.
“The current uncertainty about the financial system and economy is likely to persist over the next several weeks, and could extend into next year,” said C.A.R. President William E. Brown. “Our forecast assumes that the financial system will begin to show signs of stabilization late in 2008 and into early 2009.”
The median home price in California will decline 6 percent to $358,000 in 2009 compared with a projected median of $381,000 this year, according to the forecast. Sales for 2009 are projected to increase 12.5 percent to 445,000 units, compared with 395,600 units (projected) in 2008.
“Sales in 2008 will be ahead of last year by 12 percent, with a further increase of 12.5 percent expected in 2009,” said C.A.R. Chief Economist Leslie Appleton-Young. “However, the next couple of quarters in late 2008 and early 2009 will be marked by seasonal decreases in activity, with a pickup expected by the second quarter of next year.”
Greenspan predicts market recovery to begin soon. Stay tuned.
Alan Greenspan recently commented that he expects the US housing market to begin its recovery in the first half of 2009.
From Yahoo News,
“Greenspan wrote that the recent slowing in the rate of decline in U.S. home prices is the first positive note in the year-long trauma and that eventually, frozen credit markets will thaw “as frightened investors take tentative steps toward reengagement with risk.”
“More conclusive signs of pending home price stability are likely to become visible in the first half of 2009,” he wrote.
Once the housing market finds it footing, markets will be able to tackle the core issues of the credit crisis.”
Glory, glory hallelujah. Yeah, yeah, I know other guys think we’re eternally doomed. I choose to believe in the power of positive thinking and the resiliency of the markets. Frankly, I think it would be Un-American not to. So there.
Think long-term and get over the drama. Again, I must ask do you think a home here in San Francisco will be worth more or less in the year 2014, which is just over 5 years from now?
Q: What can you do to save the economy? A: Buy a home!
Haha, so I know you are thinking that this is the most self-serving real estate blog post that could come from a San Francisco Realtor but c’mon….hear me out!
Rather, hear out my buddy (not that we’ve ever met) James B. Stewart, a columnist for SmartMoney Magazine and SmartMoney.com who wrote recently in the Wall St Journal about what we regular citizens…you know Joe and Jane Six-Pack or for us San Franciscans Joe and Jane Latte…can do to help the markets.
“As president Franklin Roosevelt confronted far more dire circumstances than anything we’ve experienced in my lifetime, let alone last week, and yet he never succumbed to panic, desperation, greed or, most famously, fear….
The proximate cause of last week’s crisis in the financial markets, which evidently brought us to the brink of economic catastrophe, was paralysis: the refusal of banks to lend virtually anything…As paralysis seemed to grip our major financial institutions, I felt some of this myself…”
Sound familiar to anyone reading this? No, not you Ms. Fence-Sitter and certainly not you, Mr. Time the Market Perfectly!
But I digress.
“In times of financial crisis, collective action can achieve what would be unacceptably hazardous for any one individual… Put that way, $700 billion strikes me as a not unreasonable price to pay for the stability of the financial system on which our entire economy and collective well-being rest…..
The administration’s proposal hasn’t been accompanied by much high-minded rhetoric aimed at the American people. That is unfortunate. The plan, no matter how expensive or sweeping, will fail if all of us continue to be gripped by fear and risk aversion.
It is time for all of us to summon the courage to invest calmly and rationally and in doing so demonstrate our confidence in the potential of the global economy and our fellow man.
What, in practice, does this mean?
It means continuing to accept and even embrace a prudent degree of risk.
It means to continue following a disciplined approach to asset allocation and investments…
It means to continue rebalancing your portfolio…
It means considering investment alternatives. I found myself looking at real estate listings…
Based on my perusal this weekend, in some parts of the country we have reached the kind of opportunity to buy real estate that only comes along once a decade, if then.”
Read the entire column HERE.
Mortgages in the News AGAIN…BUT actually with good news.
Taking me up on my offer to publish pertinent and helpful info of interest to my readers, i.e. San Francisco home buyers and sellers, Frank Sandoval, mortgage broker extraordinaire of Pacific Bay Financial has sent over his take on the mortgage news and how it affects us here in the City by the Bay.
Frank says,
“Mortgages are in the news again, but this time, the news is good! Especially for people looking to buy or refinance a home, as interest rates have dropped to the lowest levels seen since April.
You’ve probably heard that Fannie Mae and Freddie Mac were taken over or “bailed out” by the Federal Government over the weekend. The announcement came as the government felt that both of these institutions were potentially unable to meet their obligations.
These agencies must pay off maturing Bonds every month, and they do so by selling new Bonds. But during the last twelve months, investor appetite to purchase new mortgage-backed security Bonds has deteriorated.
As such, it has become more difficult for Fannie and Freddie to replenish capital to fund more loans. If both Fannie and Freddie became insolvent, the housing market as well as the mortgage market would come under further pressure.
With the Treasury stepping in to provide a “backstop” for the mortgage giants, investors now have confidence to purchase Mortgage Bonds. And the greater interest has helped lower interest rates today.”
Frank Sandoval is an excellent mortgage broker. My clients have happily worked with him many times over the years. For more info, visit his website.
More News on what the Freddie & Fannie Bailout means for San Francisco Home Buyers and Sellers
We’re all a twitter over here in the San Francisco real estate world due to the ongoing credit mess.
Last weekend, the government (finally?) stepped in and took over Fannie Mae and Freddie Mac. As there are hundreds of articles, blogs, and opinion columns on this and sure to be more, I want to share some information that I feel well-described what the bailout means to you, me and other folks interested in local SF real estate.
How does this affect you if you are a San Francisco first time buyer? What about if you are already a homeowner who is looking to refinance or move up to a bigger or nicer home?
Here’s what one of our local mortgage experts has to say about the situation and how it’ll affect us, at least in the short term. No one knows the long-term effects. Not yet.
Based on what’s happening, what would I recommend? If you’re on the fence about buying, stop worrying about timing the market and get yourself a good value on a home, loft, condo or TIC and take advantage of the interest rate drop!
If you’re a homeowner, call your lender to see if refinancing makes sense for you. Just make sure you call someone trust-worthy so you know the information and advice is accurate and in your best interest. It won’t make sense for all of you to refi…so be careful.
If you don’t have a lender, call C.J. or ask me for more referrals. As my livelihood depends on working with solid San Francisco mortgage brokers, I certainly can recommend some great ones.
Here’s what local mortgage broker, CJ Kerls of Guarantee Mortgage has to say on the PROS & CONS of the government bailout…*
“On Sunday morning the US government took over the ailing mortgage giants Fannie and Freddie. Below are what I believe to be the Pros and Cons to this historic event.
Pros:
- Interest rates immediately took a positive outlook to the news. The benefit to consumers is clear. Cheaper money makes homes more affordable and refinancing into a 30 year fixed a better option for those who qualify. Rates are down to 5.625% – 6.0% depending on points or no points for a 30 year fixed!
- The move will strengthen the US housing market.
- Line of Credit – the two firms will have an unspecified line of credit… essentially, they’ll be able to operate without the looming threat of running out of money and collapsing! In an effort to provide even more liquidly for the credit strained market, the fed will be purchasing mortgage-backed securities issued from the two firms later this month.
Cons:
- This won’t make it any easier for a borrower who can’t qualify for a loan now.
- We could see guidelines get a little tougher… especially regarding limited documentation and low down payment loans.
- If you owned common stock of either of the two firms… you just lost big.
- No silver bullet – the credit crisis isn’t over because of the move.
Sincerely, CJ Kerls: Managing Partner, Guarantee Mortgage Corporation, 415.586.6003, cj (at) kerls.com “
SIDE BAR PLEASE:
Who are these characters Freddie Mac and Fannie Mae? According to Wikipedia, that all-knowing source…
The Federal Home Loan Mortgage Corporation (FHLMC) (NYSE: FRE), commonly known as Freddie Mac, is a privately-owned and run government sponsored enterprise (GSE) of the United States federal government. It is a stockholder-owned corporation, authorized to make loans and loan guarantees.
The FHLMC was created in 1970 to expand the secondary market for mortgages in the US. Along with other GSEs, Freddie Mac buys mortgages on the secondary market, pools them, and sells them as mortgage-backed securities to investors on the open market. This secondary mortgage market increases the supply of money available for mortgages lending and increases the money available for new home purchases. The name “Freddie Mac” is a creative acronym of the company’s full name that has been adopted officially for ease of identification (see “GSEs” below for other examples). More HERE.
The Federal National Mortgage Association (FNMA) (NYSE: FNM), commonly known as Fannie Mae, is a publicly owned government sponsored enterprise (GSE) of the United States currently run by the Federal Housing Finance Agency (FHFA). It is a stockholder-owned corporation authorized to make loans and loan guarantees.
The name “Fannie Mae” is a creative pronunciation of the company’s acronym, FNMA, that has been adopted officially for ease of identification. It is more than an informal nickname; FNMA now refers to itself by this name. The acronym “Fannie Mae” is a borrowing from the well-known candy company, Fannie May Confections but with the spelling altered from “May” to “Mae,” so as not to confound the two, in writing. More HERE.
* Have more information you’d like to share on how the current economic news affects us here in the crazy world of San Francisco real estate? Let us know. We do not easily promote other businesses but if you have good ideas and a good track record, we want to share your insights with our readers. The idea is to educate, inform and help our clients and readers. So, with that in mind, send over whatcha got! 
What’s going on in the San Francisco Single Family Home Market? August ’08 v August ’07
How’s the San Francisco single family home market doing in this economy, you ask? Well, it’s a mixed bag. Overall, our market is holding up VERY well. Kiss your sidewalks, folks.
There is some price depreciation in areas but it’s minimal as compared to the greater Bay Area, California and certainly nationwide.
August 08 v August 07 shows an overall median single family home price decrease of 7.4%. Of course, 2007 was already past the peak so prices may be down more than that from the top of the market.
However, keep in mind that these numbers can be VERY skewed. Some districts have so little inventory that one big or small sale throws off the numbers completely.
For example, there was only 1 sale in all of District 8 in August of 2007 and only 3 in August of ’08!
If you want to know specific sales prices in your neighborhood, send me an email and I’ll get that info to you asap. No obligation, of course.
Click here for a larger version of the chart.
Why Freddie and Fannie Matter to You?
I am sure to blog more about this topic. First off, don’t panic.
The good news is that right now, interest rates are down! Other than that, we are just sorting out what this will mean long-term. I don’t know and frankly, neither do you!
There is a lot of gossip going around the water coolers right now. I urge you to make the best decisions for yourselves based on accurate data and information.
And by accurate, I do not mean what you hear mumbled over the cube.
In San Francisco, at least, many people are successfully buying and selling real estate.
Think about the long-term and put yourself where you want to be. Be careful. Be smart. Don’t max out. But think long-term. 5 years from now, where do you want to be? What do you think property in San Francisco will be worth in 5 years? 10 years? And so on.
And now, back by popular demand….drum roll, please. Another exciting video from the California Association of Realtors. Yes, folks, you ask and I deliver.
But seriously, it is interesting and informative. Turn off the pundits and hear what the experts in the trenches have to say.
Ask For Danielle!
415-695-8805×196
Team Video
Social Networking
Danielle’s Listings & Lifestyle
- 512 Oak Street
- 555 33rd Avenue @ Anza
- 184 Locksley Ave #2
- Yesterday, an Agent. Today, a Broker. Tomorrow?
- 419 14th Street
SF’s Top Agent Network
Zillow
HGTV
Search MLS
Luxury Real Estate Specialist
Free Home Values Report
Recent Posts
- $1,089,000 – 512 Oak Street @ Webster – Hayes Valley Triplex for Sale in San Francisco!
- $995,000 – 555 33rd Ave @ Anza – Outer Richmond Duplex for Sale in San Francisco!
- $469,000 – 184 Locksley Ave #2 @ Warren Dr – Bright & Open Remodeled TIC for Sale in San Francisco!
- Outdoor Space Has It Factor: Noe Valley Roof Decks, Patios & Gardens!
- Bernal Yoga is Moving to 908 Cortland Avenue
Search SFHotlist
Categories
- Uncategorized
- Short Sale & Foreclosure
- Useful Information and Resources
- New Construction
- Quarterly Newsletter
- Humor
- Commercial/Leasing
- Video
- Luxury Real Estate
- 7X7 Community/Events
- Economic News & Market Updates
- Featured Properties
- Home Buying
- Home Selling
- Real Estate Investing
- San Francisco Architecture & Interior Design
- San Francisco Neighborhoods
- San Francisco Real Estate
- Real Estate Financial Knowledge
Zillow
Trulia Voices Q & A
Archives
