The View from Space — Part 2

More pearls from Ken Rosen and the other big brains who addressed UC Berkeley’s  Annual Real Estate and Economics Symposium on Monday:

•    What to Invest In Now: Rosen and several other commentators say that REITS (publicly traded companies that invest in investment-grade real estate) are cheap relative to their underlying assets.  Some are trading at around 50% of the replacement value of the assets they hold and are paying a dividend of around 10%.  The best sector of the real estate market right now is the apartment rental market.  (Makes sense, since a lot less people can afford to buy homes.) So look for REITS that own big apartment complexes in decent market areas (see below).   Do your homework:  be sure that they have good management teams and don’t have too much short-term debt because refinancing anything is going to be tough for a while. Hedge your bets.  (Easier said than done for us mortals down here on planet earth.)  Rosen has parked his cash in short term Treasuries.  Obviously he’s worried.  We should probably be too. ...  Additional Details

The view from space — Part 1

Ken Rosen is a smart guy.  He’s the co-chair of the Fisher Center of Real Estate and Urban Economics at the Haas School of Business at UC Berkeley and the investment advisor of choice to some of the biggest players in real estate, from banks to insurance companies to REITS.

Once or twice a year I spend the day in a windowless hotel conference room listening to Ken and some of the biggest heads in the real estate biz  expounding on the state of real estate. These guys (and they are mostly guys) look at real estate through the lens of global macro-economics and international finance.  Want to know where interest rates are going?  They study yield curves on T-Bills and monetary policy in the capitals of Europe.  This is “the view from space.” ...  Additional Details

Dataquick vs MLS: why the discrepancies?

In my October 27 blog discussing the Case-Shiller Index, I referred to Bay Area County stats from Dataquick that showed San Francisco’s median prices to be down 12.7% from a year previous (YOY) vs.  the 11.36% that I’d quoted in my October 23 blog.

The reason for the discrepancy?  Dataquick compiles its figures from the San Francisco County Recorder’s Office; my numbers come from the MLS.  Transactions like foreclosures or transfers between family members or between legal entities generally don’t involve agents or brokers so they don’t show up in the MLS.  They also tend to be at lower values because they are often at below market rates, so Dataquick’s numbers will always be somewhat lower than the numbers pulled from the MLS.  Thanks to Rick Campbell at the REReport for his quick response. ...  Additional Details

Update to Halloween Horror: Did it just get scarier….??

The day after I posted my take on the Case-Shiller Index, they came out with July’s report (they’re always trailing three month averages) showing a continuing decline in the San Francisco MSA.  Wait for it:  down 27.3% from July 2007.  Are we worried?  Not that much.  Why not?  Read my October 27 blog:  “San Francisco” means most of the Bay Area when it comes to the Case-Shiller Index.

You want scary?  Median prices are down 45% year over year in Contra Costa County. ...  Additional Details

Horror Headline (just in time for Halloween): SF home prices down 24.8%!!!

Yup, that’s right folks.  According to the well-known and well-respected Case-Shiller Index published by Standard and Poor’s, San Francisco home prices in July 2008 were down a whopping 24.8% from a year previous.  How can this be, when you read right here that median prices were down YOY (year over year) a “mere”  11.3% in September  (see Oct 23 blog below) and just 5.5% YOY for July 2008 — see my market trends archive.)  More realtor fluffery, you huff, designed to make the credulous public believe that things are not so bad. ...  Additional Details

Cool new blog with an analytical approach

I came across a great post analyzing condo prices in Pacific Heights at TheFrontSteps.com.  Source of the article is a new blog Inside SF Real Estate, very much of the same philosophy as I believe in:  independent analysis, hard fact, no bs.  I’m adding them to my blogroll today.

They also have a great chart and article focusing on Noe Valley condo and home prices (wish I’d done it first 🙁 ).  Go take a look.  And good luck Arrian!

Just How Bad Is It? (Answer: depends)

I’ve been digging a bit deeper into the raw data that’s used to generate the beautiful graphs you can find here and which I used to generate the MLS District graphs in my blog of a few days ago.

So I thought I’d check how September 08’s median home prices (condos will come later) compared to their all-time highs and to the median prices of a year ago, both by MLS District and for all of San Francisco.  I didn’t include District 8 (North-east) because it doesn’t have enough data to be useful, and I also didn’t include the southern-most districts of SF (3 and 10) because to be honest I don’t follow them closely. Here’s the result: ...  Additional Details