Category: Newsletter

(Photo courtesy of Henri Borius @ IG_Henri_Borius_Photos)

Noe Valley, where I live, is supposed to be sunny.  But I can tell you that – until this July 4 week-end’s delightful respite  — I was getting tired of waking every morning to another milky white sky and a temperature reading that seemed stuck on 50º. It’s not just the weather that’s been gloomy. One article after another seems to take delight in enumerating San Francisco’s travails.  The Economist, among other magazines, opines that downtown San Francisco may risk falling into a “doom loop.”  The San Francisco Chronicle followed up with a list of major retail vacancies after Westfield gave up its flagship property on Market Street.  And the Financial Times, in an article titled “Defaults Raise Alarm Over Stability of San Francisco’s Commercial Property,” quoted the chief executive of the company that owned two major hotels given back to their lenders as saying “San Francisco’s path to recovery remains clouded and elongated by major challenges” including “concerns over street conditions”. ...  Additional Details

Happy New Year everyone!  It’s been nearly three years since the Covid pandemic hit the world. Back in March 2020, as San Francisco’s streets became eerily quiet, it might not have been wrong to predict an apocalyptic end to the modern world and city life in particular à la Station 11, ( I highly recommend the Amazon Prime series).  As people fled the city and its density, predictions for SF’s real estate collapse propagated faster than new Covid variants.

Fast forward to mid-2022: both house and condo prices hit records of $2 and $1.3 million respectively.  For the full year, the median house price ended down just 1% from the all-time high set in 2021; condos ended down just 2% from the previous year.  Covid, Schmovid, you might say. ...  Additional Details

A quick reminder that Property Taxes are technically deemed delinquent if received after 5 pm on December 10. Since that falls on a Saturday this year, you’re probably ok if they receive payment by Monday at 5 pm or your payment is postmarked before that time. At least that’s the case in Sonoma County and Santa Clara County. Of course, San Francisco’s website chose not to be that clear. You always have the option of paying online.

My apologies for having dropped the ball on my newsletter in the second half of this year, a combination of many factors mostly having to do with too little time. Here are a couple of charts that reflect the current state of the market. In a word, it is sloooowww. The second chart, which covers year over year 3 month moving averages for condos shows more clearly how the market has really decelerated in the second part of the year. (I don’t have a three month moving average for home sales). ...  Additional Details

If I simply posted our most recent charts on the San Francisco residential real estate market, you could be excused for shrugging and concluding “another crazy month in San Francisco.” The median price of a single-family home hit $2.050 million in April, just $10,000 down from its all-time high of the previous month.  The median price of a condominium in April was $1.365 million, an all-time high.  Single family homes were on the market for an average of 11 days; 15 for condos. Both were near record lows. To put things in perspective, take a look at the table below to see how things compared to April 2020, just after the pandemic hit, and last month. ...  Additional Details

A very happy New Year to my loyal readers and apologies for the long delay between my last newsletter and now.  Between a death in the family and a very busy end-of-year, my newsletter got put on the backburner, if not taken off the stove altogether.

But enough of that.  Let’s dig into the data! 

The Executive Summary

For those that want the big picture fast, the table below summarizes key metrics for the market as a whole.

While the price data may be interesting, what really strikes me is the absolute explosion in Dollar Sales Volume ($13.55 billion), which must have been driven by a combination of (a) a massive increase in condo sales (4590 units), (b) a very healthy increase in house sales (3075 units), and (c) huge increases in the number of properties that sold for $3 million or more (766 units at over $3 million; 203 at over $5 million). ...  Additional Details

Back in February 2021, the august NY Times veritably crowed “They Can’t Leave the Bay Area Fast Enough,”  citing nothing less than “the end of a tech era.”  I was skeptical.  The Bay Area’s demise as a tech and people magnet had been predicted many times before.  So I’ll confess to a certain amount of relish at being proven correct when, just a couple of weeks ago, the self-same paper announced that “tech workers who swore off the Bay Area are coming back.”  That would be obvious to anyone who has been driving Bay Area highways since mid-June. ...  Additional Details

I’m barely into the New Year, and The New York Times headline shrieks “They Can’t Leave the Bay Area Fast Enough !!!” [OK, the exclamation points are mine.] Not only that, but “a tech era,” no less, is drawing to an end. Can the extinction of the dinosaurs, not to mention the collapse of San Francisco real estate values, be far behind?

It’s true that San Francisco residential rents have fallen by 27%.  It’s true that many techies and non-techies have found the lure of a suburban back yard in the time of Covid isolation a compelling reason to move away from the City, especially when all the restaurants, bars, gyms, and other urban entertainment options are closed.  Indeed, according to the annual United Van Lines survey, more people moved out of California in 2020 than into it, and that goes for the Bay Area as well. ...  Additional Details

I was wrong – kind of. In my April newsletter I opined: “The longer the crisis continues, the more likely it is that it will do long-lasting damage to the economy and the real estate market itself.” But, looking at the numbers in the chart below, you’d never know that we are now eight months into a global pandemic.

Median house sales prices are well over where they were a year ago.  Condo prices are not down by much.  Days on market (DOM) for single family homes is a brisk 28 and they are still selling at a slight premium to asking price (102.5%).  The number of combined luxury houses and condos selling above $2.5 million is up substantially (177), as is the number of super luxury houses and condos (22). ...  Additional Details