July 2010 vs. July 2009

Single Family Homes
197 Sold/Median Price $775k vs. 249 Sold/$780k Median Price. Supply is +6% & Demand is -21%

Condos
165 Sold/$700k vs. 155/$650k. Supply is +11% & Demand is +6%

Lofts
14/$594k vs. 15/$580k. Supply is -21% & Demand is -7%

Looking forward into August – 128 SFH’s have sold compared to 152 last year with another 200 pending. For Condos 89 have sold compared to 107 last August with another 116 pending. And for Lofts 12 have sold vs. 7 last year with another 8 pending.

In the second quarter of this year we experienced the highest volume for Single Family Home & Condo sales in San Francisco since the second quarter of 2007.

KEEP THIS IN MIND

• Online home appraisal Web sites assign home values without knowing the features or upgrades of a home or the neighborhood in which it is located. Some Web sites offer a price range of $20,000 – $40,000 more or less than the actual value of the home.

• Since housing markets are local and not every home of a certain size is the same value, consumers can be misled into believing a home is worth more or less than the actual value. Working with a local REALTOR® can help minimize inaccuracies in home values. REALTORS® can provide local housing market data and show homeowners and buyers recent sales of comparable homes in the area, to help determine an accurate list or offer price.

• While some agents report that Web estimates can educate clients and provide a reasonable assessment of market conditions and the home-buying process, working with a local REALTOR® is the best option.

Source: California Association of Realtors

Yun urged caution on interpreting price data. “The median price is influenced by the mix of homes that were sold and do not reflect pure appreciation or depreciation,” he says. “The recorded home prices in many markets were significantly depressed last year because of a large percentage of distressed homes sold at discount. Now as more normal, non-distressed home sales are occurring, the median price in many areas is showing higher values.”

Total state existing-home sales, including single-family and condo, rose 9.1 percent to a seasonally adjusted annual rate of 5.61 million in the second quarter from 5.14 million in the first quarter, and were 17.3 percent above the 4.78 million-unit pace in the second quarter of 2009.

Source: NAR

Please click on each chart for a clearer view.

International home buyers are increasingly attracted to property in the U.S., according to the National Association of REALTORS®’ 2010 Profile of International Home Buying Activity. Several factors, including the strength of the dollar, the value and desirability of U.S. real estate, and the emerging economic recovery, continue to drive international interest in owning a home in this country.

“While all real estate in the U.S. is local, the same is not true for property owners,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox Real Estate in Tucson, Ariz. “The U.S. continues to be a top destination for international buyers from all over the world. Foreign buyers understand the value of owning a home in this country and can rely on REALTORS® to help guide them through the complex process of buying property in the U.S. With expertise, knowledge and experience, REALTORS® have a global perspective.”

The survey, released today, covers the period between April 1, 2009, and March 31, 2010. During that time foreign buyers, including those with residency outside the U.S. as well as recent immigrants and temporary visa holders, are estimated to have purchased $66 billion of U.S. residential property, or 7 percent of the residential market.

Slightly more than a quarter of REALTORS®, 28 percent, reported working with at least one international client in the past year. This is a significant increase from the 2009 report, when 23 percent of REALTORS® worked with foreign clients. Eighteen percent of all REALTORS® were estimated to have completed at least one sale, compared to 12 percent last year.

“Several factors have contributed to an increase in international buyer interest in the U.S.,” said Golder. “A large majority of REALTORS® report the changes in value to the U.S. dollar have had a strong impact on the international real estate business. In addition, perceptions abroad about trends in the U.S. real estate market have led many international clients to believe purchasing a home in the U.S. is more affordable than in their country and holds more value.”

International buyers came from 53 different countries around the world. The top four countries were Canada, Mexico, the U.K. and China/Hong Kong. With 23 percent of international buyers coming from Canada, the country has remained the largest buying group in the past three years. Foreign buyers from Mexico have been steadily increasing. In 2010 Mexico replaced the U.K. as the second largest buying group with 10 percent of buyers. Buyers from the U.K. buyers decreased from 10.5 percent in 2009 to nine percent in 2010. Eight percent of recent buyers came from China/Hong Kong.

Two factors important to international clients when purchasing property in the U.S. are proximity to their home country and the convenience of air transportation. Florida typically attracts European, Canadian and South American buyers while the East Coast draws Europeans. The West Coast brings Asian buyers and the Southwest attracts Mexicans.

International buyers were reported in 39 states in 2010, but a slight majority of the total buyers are concentrated in Florida, California, Arizona and Texas. These four states account for 53 percent of purchases and have remained the top destinations for the past three years, with Florida and California remaining the top two destinations.

The median price paid by international buyers for a home in the U.S. was $219,400, a decrease from 2009’s median price of $247,100. However, the median price paid by foreign buyers was significantly higher than the overall median market price, which was $172,500 in 2009. On average, foreign buyers tend to purchase closer to the upper end of the market; 16 percent of the total international purchases were for homes priced at more than $500,000. According to REALTORS®, this was because international buyers are typically looking for a second home.

A majority of international buyers, 66 percent, purchased single-family detached homes. However, more international buyers purchased a condo than did their U.S. counterparts, at 23 percent and 7 percent, respectively. Only 44 percent of international buyers used a mortgage to pay for their home, compared to 92 percent of domestic buyers. Fifty-five percent of foreign buyers paid all cash. REALTORS® reported that a majority of international buyers use all cash because of the difficulty in establishing international credit in the U.S. Over one-third, 34 percent, of potential foreign buyers was unable to complete transactions because of financing problems in the U.S.

Source: NAR

Growing confidence in the San Francisco economy and its housing market has revived home sales activity in the City by the Bay. Home sales activity continues to accelerate, while inventory levels recede from recent highs, according to the latest Market Focus report issued jointly by the Rosen Consulting Group of Berkeley and the San Francisco Association of REALTORS®.

“As closed sales activity has rebounded, sellers have regained some leverage in negotiations,” says John Lee, president of the San Francisco Association of REALTORS®. “Prices at the low-end of the market are stable while pricing volatility in higher-priced segments remains,” according to Lee.

The Rosen Consulting Group believes that despite the pause in median price appreciation and anticipated slowdown during the summer months, the underlying housing market trend remains positive and will continue to improve through the remainder of the year.

Although recent stock market volatility driven by the European debt crisis continues to rattle investors and potential home buyers, the Market Focus report observes that the crisis effectively pushed mortgage rates back to historically-low levels.

In May 2010, the median single-family home price in San Francisco improved to $752,500, a slight increase from May 2009. But Rosen Consulting Group states, “While the rate of growth in the median sales price flattened, the market is still in much better shape than it was one year ago when home prices were in free fall. Rising housing affordability, driven by attractive pricing and low mortgage rates combined with a more optimistic view of the economy assisted by government incentives have brought buyers back to the market. Recognizing the shifting market conditions, sellers who have been waiting for more favorable market conditions to place their homes on the market should begin to do so in coming months.

Although the Rosen Consulting Group expects to see some effects of expiring tax credits on future home sales in San Francisco, Lee believes that the pent-up demand in the market matched with a rise in hiring activity into the second half of the year, should counterbalance the anticipated fallout from expiring government programs, sustaining the market’s recovery.

Condominiums for the same time period saw an overall 4% drop in the median price even with a huge 84% surge in demand when compared to last May, and inventory shrunk 2%. Days on market also decreased significantly by 40% from 75 to 45 days.

What does all of this mean to the average buyer or seller? Sellers seem to be on the mark with their asking prices – thus the increase in demand, and buyers may actually face a little competition when looking for their dream home. With interest rates at historic lows we hope to see a further stabilization of the market throughout the summer and fall.

Pre-listing inspections are not advisable, says June Fletcher, a housing columnist at The Wall Street Journal. She says that while the inspection gives sellers an idea of the home’s strengths and weaknesses, it also requires sellers to disclose those problems that they don’t intend to fix.

As Fletcher says, if the seller is “blissfully unaware,” the issue may not come up in the seller’s inspection. If it does, the buyer has already made a commitment and that puts the seller in a stronger negotiating position.

Fletcher says she knows this runs counter to the advice most practitioners would give, but practitioners might have some degree of self-interest in the decision “since if buyers discover a defect that wasn’t disclosed up front, they’ll be more inclined to blame (and sue) the inspector than the [practitioner,]” she says.

Source: The Wall Street Journal, June Fletcher (05/15/2010)

John Lee, president of the San Francisco Association of REALTORS®, notes that the scarcity of housing units for sale has driven up the median sale price of single-family homes. “In March,” he notes, “the median single-family home sale price increased by 19.4 percent, compared to a year ago, to $791,000.”

In a welcomed development for a city known for the high value of its real estate, the report indicates that the sale of luxury property has gained traction in recent months. The Rosen Consulting Group attributes this development to sentiment among high-end buyers becoming more positive.

The condominium market also gained ground during March with the median sales price rising to $670,000, a 4.9 percent increase from the March 2009. Stimulated by the availability of FHA financing, tax-credits, and attractive pricing/concessions in comparison to recent periods, completed condominium sales reached 206 units in March, a 76 percent increase from the previous year.

The report sounds an optimistic note about housing sales activity in the near-term future by noting that the market’s return to supply and demand fundamentals as a result of a decline in the number of foreclosures is likely to drive home price appreciation. California’s $200 million home buying tax credit program should continue to incentivize home buying, supplanting the expiring federal tax credit. While mortgage rates are expected to increase in coming months, with the end of the Federal mortgage-backed security purchase program, rising interest rates from private investments should help offset the rise in mortgage rates.

Source: San Francisco Association of Realtors, Rosen Consultant Group

Here’s the complete list of February’s sales with photos. The only water view unit that sold besides a BMR at the Met was #516 at 88 King for $925,000.

Michael Novia
Broker Associate
Sotheby’s International Realty

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