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Stock market woes: how will this affect the Bay Area real estate market?

The stock market’s turmoil has been unsettling for most of the country over the last 48 hours. Reports are rolling in that close to 2.1 trillion dollars have been lost to the “indigestion” that the market is suffering from. The Dow, S&P 500 and Nasdaq have all tumbled into correction territory, their first such 10% decline from a recent high since 2011. Market dips raise red flags for homeowners, who are concerned about how these international turns will affect their home’s value. Patrick Carlisle, Chief Market Analyst at Paragon Real Estate Group offers his insight to how despite the doom and gloom headlines, and it is not time to hit the panic button yet. Carlisle weighs in below on what is happening in the market and makes a few predictions of where things are headed.

This series of helpful charts help illustrate the finer points of market trends discussed by Patrick Carlisle Chief Market Analyst for Paragon Real Estate Group.

This series of helpful charts help illustrate the finer points of market trends discussed by Patrick Carlisle Chief Market Analyst for Paragon Real Estate Group.

Paragon Real Estate Group

Worried about opening bell?

Photo Courtesy of Pixabay.com

“First of all, with all the current drama in world stock markets, it’s not unreasonable that a person will want to step back and see what happens – and trying to convince someone otherwise is a losing proposition. “- Patrick Carlisle

What We Know

Housing prices, under normal conditions, do not react at all to short-term ups and downs in the stock market, though depending on how dramatic they are, they can temporarily slow activity as buyers wait to see if something really serious, with long-term ramifications, is developing. It is generally the more affluent who step back and wait, since one they have much more wealth in financial investments (stocks), and two they are much more in tune with financial market movements. Housing prices are not a liquid bid-ask market – our area has small numbers of relatively unique homes in San Francisco, not millions of uniform shares of stock – and sellers always react more slowly to economic downturns since they don’t want to reduce prices if they don’t have to, and no one can make them sell. There is a built-in delay in sales between offer negotiations and closed transactions, so it takes a while for price movements to clarify.

Besides U.S. economic conditions, there are the existing boom economic conditions in the Bay Area, which means our housing market may react differently. The S&P 500 to begin to compare the stock market to the various Case-Shiller Index Bay Area home price tiers. Different price tiers had bubbles and crashes of different magnitude due to the subprime financing (and refinancing) fiasco. Finally, make sure to note that while the latest stock market decline is indicated, other short-term fluctuations will not show up in year to year figures.

The Big Picture

Generally, all market segments react to big, sustained, macroeconomic events as can be seen in the 3 S&P Case-Shiller charts below for the low, mid and high-priced tiers of the Bay Area home markets. However, it is interesting that when the dotcom bubble burst, only the mid and high price tiers’ home prices were affected (and then, briefly), and the high-priced tier was impacted more than the mid-tier. The buyers in the high tier were much more affected in their wealth by the crash in the Nasdaq, especially in the Bay Area, and the most affluent buyers drew back the most as they waited to assess the shake out.In the last cycle, the more expensive SF neighborhoods were the last to peak in value in early 2008, and the first to recover in late 2011- early 2012. San Francisco was generally much less impacted by the bubble’s crash than the rest of the Bay Area, state and the country though some neighborhoods were more affected than others.

“Generally speaking, San Francisco’s housing market has since appreciated well beyond its previous peak values”. – Patrick Carlisle

In the last bubble and recession, lower priced homes surged much higher and crashed much more dramatically than higher priced ones, but that was not because of the stock market, but because of the subprime loan situation which led to massive foreclosures in the lower end (with buyers who couldn’t afford the home they were buying in the first place). Subprime lending played a very small part in higher priced home purchases (which dominate in San Francisco), whose buyers also tended to be more financially savvy (and weren’t targeted by predatory loan brokers and generally didn’t buy homes they couldn’t afford).

“It’s interesting to note that all 3 Bay Area housing price tiers, according to Case-Shiller, are now showing a uniform 117% appreciation rate since the year 2000.” – P. Carlisle

It is important to keep in mind that as markets cycle up and down, that reviewing data regularly with seasoned professionals will help consumers weather most storms. Based on current economic activity and conditions in the U.S. – there is very little chance of a U.S. stock market crash occurring in the near future (though the scale of an “adjustment”, if such happens, is unknown) and it’s quite possible the current dramatic volatility may soon become a distant and irrelevant memory, as other short-term economic events often have.

“I don’t profess to be a Nobel Laureate in Economics, so take my analysis for what it’s worth – one point of view based on one assessment of the data. So let’s see how things shake out.” –

Patrick Carlisle Chief Market Analyst for Paragon Realty Group

And now for the fine print. . .

All data from sources deemed reliable, but may contain errors and is subject to revision. Statistics are generalities and how they apply to any specific property is unknown without a tailored comparative market analysis. Outlier sales that would distort the statistics were deleted from the analysis when identified. All numbers should be considered approximate.

Sources:

Paragon Real Estate Group

CNN Money

Recessions, Recoveries & Bubbles: 30 Years of Housing Market Cycles in San Francisco & Marin

Below is a look at the past 30+ years of San Francisco Bay Area real estate boom and bust cycles. Financial-market cycles have been around for hundreds of years, all the way back to the Dutch tulip mania of the 1600’s. While future cycles will vary in their details, the causes, effects and trend lines are often quite similar. Looking at cycles gives us more context to how the market works over time and where it may be going — much more than dwelling in the immediacy of the present with excitable pronouncements of “The market’s crashing and won’t recover in our lifetimes!” or “The market’s crazy hot and the only place it can go is up!”

Note: Most of these charts generally apply to higher-priced Bay Area housing markets, such as those found in much of San Francisco, Marin and San Mateo Counties. (Different market price segments had bubbles, crashes and recoveries of differing magnitudes in the last cycle.)

Market Cycles: Simplified Overviews

Up, Down, Flat, Up, Down, Flat…(Repeat)

The first chart below charts changes in dollar values, according to the Case-Shiller Index method (January 2000 = a home value of 100). The second chart graphs ups and downs by percentage changes at each turning point.

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Smoothing out the bumps delivers the simplified overviews above for the past 30 years. Whatever the phase of the cycle, up or down, while it’s going on people think it will last forever: Every time the market crashes, the consensus becomes that real estate won’t recover for decades. But the economy mends, the population grows, people start families, inflation builds up over the years, and repressed demand of those who want to own their own homes builds up. In the early eighties, mid-nineties and in 2012, after about 4 years of a recessionary housing market, this repressed demand jumps back in (or “explodes” might be a good description) and prices start to rise again. It’s not unusual for a big surge in values to occur in the first couple of years after a recovery begins.

All bubbles are ultimately based on irrational and/or criminal behavior, whether exemplified by junk bonds, Savings & Loan frauds, dotcom stock hysteria, “Dow 30,000″ exuberance, “the end of the business cycle” nonsense, gorging on unsustainable debt, runaway greed (without any corresponding desire to produce anything of value) or dishonest financial engineering, but the most recent subprime-financing/ loan-fraud bubble was even more abnormal than usual, because it was fueled by large numbers of buyers purchasing homes that they clearly couldn’t afford (liar loans, deceptive teaser rates and the abysmal decline in underwriting standards) with no actual investment in the properties being bought (no down payment, 100%+ loans).

This Recovery vs. Previous Recoveries
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The light blue columns in the above chart graph the home-value appreciation that occurred in the first three years of each recovery – our latest rebound has been somewhat quicker than other recoveries, probably due to 1) the depth of the previous market decline, and 2) the huge, high-tech employment, population and wealth boom that has played out in San Francisco and nearby counties. (Not shown on chart: appreciation has continued in the first half of 2015, bringing total recovery appreciation since 2012 to approximately 57%.) The gray columns chart the appreciation of past recoveries from the beginning to peak value for each cycle, and the red bars delineate the percentage declines from those peaks, pursuant to the market adjustments that occurred. As always, note that market appreciation and depreciation rates can vary widely by county, community and neighborhood.

Surprisingly consistent: Over the past 30+ years, the period between a recovery beginning and a bubble popping has run 5 to 7 years. We are currently about 3.5 years into the current recovery, which started in early 2012. Periods of market recession/doldrums following the popping of a bubble have typically lasted about 4 years. (The 2001 dotcom bubble and 9-11 crisis drop being the exception.) Generally speaking, within about 2 years of a new recovery commencing, previous peak values (i.e. those at the height of the previous bubble) are re-attained — among other reasons, there is the recapture of inflation during the doldrums years. In this current recovery, those homes hit hardest by the subprime loan crisis — typically housing at the lowest end of the price scale in the less affluent neighborhoods, which experienced by far the biggest bubble and biggest crash — are taking longer to re-attain peak values. However, higher priced homes — which predominate in San Francisco, Marin and San Mateo Counties — have already surged past their previous peaks.

This does not mean that these recently recurring time periods necessarily reflect some natural law in housing market cycles, or that they can be relied upon to predict the future. Real estate markets can be affected by a bewildering number of economic, political and even natural-event factors that are exceedingly difficult to predict.

In the 2 charts below tracking the S&P Case-Shiller Home Price Index for the 5-County San Francisco Metro Area, the data points refer to home values as a percentage of those in January 2000. January 2000 equals 100 on the trend line: 66 means prices were 66% of those in January 2000; 175 signifies prices 75% higher.

1983 through 1995

(After Recession) Boom, Decline, Doldrums

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In the above chart, the country is just coming out of the late seventies, early eighties recession – huge inflation, stagnant economy (“stagflation”) and incredibly high interest rates (hitting 18%). As the economy recovered, the housing market started to appreciate and this surge in values began to accelerate deeper into the decade. Over 6 years, the market appreciated about 100%. Finally, the eighties version of irrational exuberance — junk bonds, stock market swindles, the Savings & Loan implosion, as well as the late 1989 earthquake here in the Bay Area — ended the party.

Recession arrived, home prices sank, sales activity plunged and the market stayed basically flat for 4 to 5 years. Still, even after the decline, home values were 70% higher than when the boom began in 1984.

1996 to Present

(After Recession) Boom, Bubble, Crash, Doldrums, Recovery

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This next cycle looks similar but elongated. In 1996, after years of recession, the market suddenly took off and continued to accelerate til 2001. The dotcom bubble pop and September 2001 attacks created a market hiccup, but then the subprime and refinance insanity, degraded loan underwriting standards, mortgage securitization, and claims that real estate never declines, super-charged a housing bubble. Overall, from 1996 to 2006/2008, the market went through an astounding period of appreciation. (Different areas hit peak values at times from 2006 to early 2008.) The air started to go out of some markets in 2007, and in September 2008 came the financial market crash.

Across the country, home values fell 15% to 60%, peak to bottom, depending on the area and how badly it was affected by foreclosures — most of San Francisco got off comparatively lightly with declines in the 15% to 25% range. The least affluent areas got hammered hardest by distressed sales and price declines; the most affluent were typically least affected. Then the market stayed flat for about 4 years, albeit with a few short-term fluctuations. Supply and demand dynamics began to change in mid-2011, leading to the market recovery of 2012.

The Recovery since 2012 (Case-Shiller)

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This chart above looks specifically at home price appreciation since 2012 when the current market recovery began. Generally speaking, the spring selling seasons have seen the most dramatic surges in appreciation.

San Francisco Median Sales Price Appreciation

The charts below look at median sales price movements in San Francisco County itself over the shorter and longer terms. These do not correlate exactly with Case-Shiller – firstly because C-S tracks a “metro area” of 5 Bay Area counties, and secondly, because median sales prices are often affected by other factors besides changes in fair market value (such as significant changes in the distressed, luxury and new-construction market segments; in interest rates; seasonality; buyer profile; and so on).

The Current Recovery: 2012 – Present

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In 2011, San Francisco began to show signs of perking up. An improving economy, soaring rents, low interest rates and growing buyer demand coupled with a low inventory of listings began to put upward pressure on prices. In 2012, as in 1996, the market abruptly grew frenzied with competitive bidding. The city’s affluent neighborhoods led the recovery, and those considered particularly desirable by newly wealthy, high-tech workers showed the largest gains. However, virtually the entire city soon followed to experience similar rapid price appreciation.

San Francisco median home sales prices increased dramatically in 2012, 2013, 2014, and then again in the first half of 2015. In the second half of 2014, after the spring frenzy had cooled off, home prices flattened out. We will see if that happens in the second half of 2015 as well.

Longer-Term: 1993 – Present

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Comparing San Francisco, California & National Median Price Appreciation

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San Francisco has been dramatically out-performing the overall state and national markets.

Mortgage Interest Rates since 1981

It’s much harder to decipher any cycles in 30-year mortgage rates, but rates remain astonishingly low by any historical measure, and this, of course, plays a huge role in the ongoing cost of homeownership and the real estate market.

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Interest Rates: 1993 – 2015
This chart highlights the big changes in interest rates since 1993, right before market prices surged in the mid-nineties.

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More information regarding underlying demographic and economic conditions of the current real estate market can be found here: 10 Factors behind the SF Market

Housing Affordability Index (HAI) Cycles, 1991 – Present
It’s interesting to see the reverse correlation between the trend lines for housing affordability rates and those of real estate price cycles (above). HAI rates jump higher in market recessions, peaking at the bottom of the market, and then decline as the market recovers, bottoming out when peak prices are hit. The lowest Bay Area housing affordability housing index rates (probably in history) were hit in 2007 right before the 2008 market crash. The Bay Area is still above those lows in its current recovery. (My gratitude to J. Thomas Martin of the SF & East Bay Real Estate Networking Group for bringing his excellent analysis of affordability rates to my attention and allowing me to piggyback on it).

Housing affordability percentages typically and unsurprisingly run lower in affluent counties than in less expensive counties. In San Francisco, HAI is also affected by the very high percentage of residents living in rent-controlled housing, which disconnects, to a large degree, resident household income with market rate housing costs. Another issue in SF is that much of the market is being driven by new jobs and new wealth, which also skews the dynamic between existing household income and home prices.

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Housing Affordability Rate Calculation Methodology

Inflation & Interested Rate-Adjusted Housing Cost (since 1993)

The Home Cost Trends chart below reflects a very approximate calculation of monthly home payment costs (principal, interest, property tax and insurance) adjusted for inflation – i.e. in 1993 dollars – using annual median house sales prices, average annual 30-year interest rates, and assuming a 20% downpayment. The average annual compounding CPI inflation rate fluctuated, but averaged approximately 2.4% over the period, and average annual mortgage rates fluctuated from 8.4% to 3.7% (see mortgage interest rate charts earlier in this report), which, as mentioned before, had a huge impact on financing costs.

Adjusting for inflation and interest rate changes means that though the median sales price is now far above that of 2007, the monthly housing cost is still a little bit below then. This isn’t a perfect apples-to-apples comparison because it doesn’t take into account that the amount of the 20% downpayment increased significantly over the time period. Still, since ongoing cost is typically an important factor for homebuyers (at least those getting financing), this affords another angle on our market.

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Different Bay Area Market Segments:
Different Bubbles, Crashes & Recoveries

2000 to 2014

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The comparison composite chart above has not been updated since mid-2014, but it dramatically illustrates the radically different market movements of different Bay Area housing price segments since 2000. Farther below are updated individual price charts for each price segment.

Again, all numbers in the Case-Shiller chart relate to a January 2000 value of 100: A reading of 182 signifies a home value 82% above that of January 2000. These 3 charts illustrate how different market segments in the 5-county SF metro area had bubbles, crashes and now recoveries of enormously different magnitudes, mostly depending on the impact of subprime lending. The lower the price range, the bigger the bubble and crash. The upper third of sales by price range (far right chart) was affected least by the subprime fiasco and has now basically recovered peak values of 2006-2007. In the city itself, where many of our home sales would constitute an ultra-high price segment, if Case-Shiller broke it out, many of our neighborhoods have risen to new peak values. The lowest price segment (far left chart), more prevalent in other counties, may not recover peak values for years. If one disregarded the different bubbles and crashes, home price appreciation for all three segments since January 2000 is now (as of autumn 2014) almost exactly the same, in the range of 96 to 97%.

Updated Case-Shiller Price-Tier Charts

Low-Price Tier Homes: Under $561,000 as of 5/15

Huge subprime bubble (170% appreciation, 2000 – 2006) & huge crash
(60% decline, 2008 – 2011). Strong recovery but well below 2006-07 peak values.

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Mid-Price Tier Homes: $561,000 to $925,000 as of 5/15

Smaller bubble (119% appreciation, 2000 – 2006) and crash (42% decline)
than low-price tier. Strong recovery has put it back very close to its 2006 peak.

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High-Price Tier Homes: Over $925,000 as of 5/15

84% appreciation, 2000 – 2007, and 25% decline, peak to bottom.
Now climbing well above previous 2007 peak values.

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These analyses were made in good faith with data from sources deemed reliable, but they may contain errors and are subject to revision. All numbers are approximate and percentage changes will vary slightly depending on the exact begin and end dates used for recoveries, peak prices and bottom-of-market values.

Copyright 2015 Paragon Real Estate Group.

Older Millennials and young Boomers are the generations to watch in real estate

The San Francisco housing market is in full recovery mode, but the formation of new households is changing in the area. New household formation slowed during the recession as “multigenerational” households became necessary for survival during hard economic times. Two factors that are affecting this market are the booming tech industry and the rising cost of rents in desirable neighborhoods.

The Terner Center for Housing Innovation at UC Berkely recently released a new study called “Who is Actually Forming New Households”. The study brings to light the changing definition of a household across the country. The study revealed that new households are not being formed by the traditional group of very young adults and explored which age groups are forming new households. The two key groups the study highlighted were older Millennials and young Baby Boomers. These two groups were the focus of small concentrated growth in new household formation.

The San Francisco Association of REALTORS® regularly provides the public demographics about the changing population. Occupational Employment in San Francisco is made of up 73. percent of White Collar employees. The median age for the area is 38.68 and 51.5 percent of residents are reporting that they have never married before. The average household has 2.2 people and the median household income is $77,734.00.

The “Older Millennials” 25-35

The Terner Center’s study revealed that older Millennials are looking to purchase a home independently before starting a family. Younger millennials still do not have the income to support becoming a head of household. They are staying with their parents longer or doubling up in tiny rentals. The study also noted that the link between employment and living with parents is not black and white. Employed 25-34-year-olds are less likely to live with their parents while the under or unemployed Millenials cannot afford independent housing.

Zillow.com recently released their updated data on first-time home buyers that agrees with what the Terner Center found.

“Millennials are delaying all kinds of major life decisions, like getting married and having kids, so it makes sense that they would also delay buying a home,” said Zillow Chief Economist Dr. Svenja Gudell.

According to Zillow, the average first-time homebuyer is about 33. Their median income is $54,340, which is about the same as what first-time homebuyers made in the 1970s, when adjusted for inflation. Zillow also found that more new homeowners are single. In the late 1980s, 52 percent of first-time homebuyers were married. Today, only 40 percent were married.

“Millennials are delaying all kinds of major life decisions, like getting married and having kids, so it makes sense that they would also delay buying a home,” said Zillow Chief Economist Dr. Svenja Gudell. “We know millennials value home-ownership and want to buy. The next challenge will be figuring out how they can save for a down payment and qualify for a mortgage, especially while the rental market is so unaffordable all over the country. The last hurdle will be finding a home they like amidst very tight inventory, especially among starter homes.”

The “Young Baby Boomers” 65-74

The first wave of aging Baby Boomers reached full retirement age in 2011. Over the next 20 years, 74 million Boomers will retire. The Terner study found that this population accounted for more than two-thirds of overall new household formation across the country. According to the SFAR, these boomers have a median income of $57,502.00. This median compared to young millennials under 25 who report a median income of $48,613.00 shows a significant difference in buying power.

As these new households come together, inventory drops and pricing rises. The study wrapped up by stating that millennials face housing challenges, and this is the new “normal”. This “normal” is the lingering effects of the recession. The study also hinted that if boomers keep pushing for new households, that construction may be more focused on urban options and less focused on single family needs.

Review the full UC Berkeley study and its findings in its entirety here, and visit the San Francisco Association of REALTORS® Housing Demographics page for more statistical information.

Sources:

Terner Center for Housing Innovation UC Berkeley

Demographics San Francisco Association of REALTORS®

Zillow “Today’s First-Time Homebuyers Older, More Often Single”

San Francisco Bay Area Housing Affordability

The California Association of Realtors just released its Housing Affordability Index (HAI) for the 2nd quarter of 2015. All Bay Area counties saw declines in their affordability index reading – which measures the percentage of households that can afford to buy the median priced single family dwelling (house) – and San Francisco is now only 2 percentage points above its all-time low of 8%, last reached in Q3 2007.

In this analysis, affordability is affected by 3 major factors: median house price, mortgage interest rates and household income. (Housing Affordability Index Methodology).

Affordability Percentage by Bay Area County, Q2 2015

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Minimum Qualifying Income to Buy Median Priced House

Assumes 20% downpayment and including principal, interest, property tax and insurance costs.

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Bay Area Median House Prices, Q2 2015

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Affordability Trends: San Francisco, San Mateo & Marin

These 3 counties illustrate the general ups and down in Bay Area housing affordability since 1991.

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San Francisco County: Median Price vs. Affordability

Illustrating the surge in SF home prices and decline in affordability since the current market recovery began in 2012.

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Important considerations:

  • By definition, half the homes sold in any given county were at prices below the median sales price, i.e. there were numerous homes that were more affordable than the median price, with lower associated housing costs and income requirements.
  • The CAR Housing Affordability Index uses median house prices for its calculations. In all Bay Area counties, median condoprices run below and often far below median house prices, which also adds to overall affordability. In San Francisco itself, more than half of all home sales are condos, stock co-op apartments and Tenancy-in-Common units (TICs), and if units of less than 2-bedrooms are included, they are significantly less expensive than houses. (SF condos of 2-bedrooms or more actually come within 4% to 5% of overall median house prices.)
  • Besides increases in employment and population, much of the demand for Bay Area housing is being driven by increases in household wealth, which is different from household income. Wealth includes gains from a surging stock market and such things as stock options and IPO proceeds at high-tech companies, which have generated huge amounts of new wealth over the past 3 years.
  • Pertaining to San Francisco: Most of its households are made up of renters, most of whom are under rent control. Furthermore, a very large percentage – 39% – of SF households is made up of single persons. Both these issues skew the household income equation: According to census figures, SF has a lower median household income than Santa Clara, Marin, San Mateo and Contra Costa (but higher home prices).

Monthly Housing Costs: Purchase vs. Rental

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Two issues to keep in mind when comparing monthly ownership costs with monthly rental costs, both of which are very high in the Bay Area: Firstly, the average house is much larger than the average apartment, so this is not an apples to apples comparison. Secondly, the housing costs for ownership should ideally be adjusted for loan principal repayment, which builds equity, as well as for the tax deductibility of mortgage interest and property tax payments (depending on one’s specific financial circumstances). Those are two reasons why buying often makes financial sense when compared to renting. Long-term home-price appreciation may be another.

San Francisco: Trends in Prices and Rents

The same economic and demographic forces have been putting pressure on both home prices and apartment rents.

SF Median Home Prices since 2012, by Quarter

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SF Average Asking Rents since 1994, by Year

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Mortgage Interest Rates since 1981

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Interest rates play an enormous role in affordability, and it is certainly reasonable to be concerned that affordability percentages are now hitting such depths while interest rates are also close to historic lows. For example, in 2007, when affordability percentages hit previous low points, prevailing mortgage interest rates were approximately 50% higher than today’s. When interest rates start to rise – when and how much being the real questions – there will be potentially dramatic effects on affordability, which could presumably affect demand and prices.

Monthly Housing Cost Adjusted for Inflation and Interest Rates

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This chart illustrates a very approximate calculation of monthly housing cost (principal, interest, property tax and insurance)adjusted for inflation – i.e. in constant 1993 dollars – over the past 22 years, using annual median house sales prices, average annual 30-year interest rates, and assuming a 20% downpayment. The compounding CPI-Urban inflation rate fluctuated over the period, but averaged about 2.4% annually. Average annual 30-year mortgage rates fluctuated from 8.4% to 3.7%, hitting a historic short-term low of 3.4% in 2013; it is currently running around 4%.

Adjusting for inflation and interest rate changes means that though the median sales price is now far above that of 2007, the monthly housing cost is still a little bit below then – which generally correlates with the HAI percentages. This isn’t a perfect apples-to-apples comparison because it doesn’t take into account that the amount of the 20% downpayment increased significantly over the time period.

Other reports you might find interesting:

30+ Years of San Francisco Real Estate Cycles

San Francisco Market Overview Analytics

San Francisco Neighborhood Affordability

10 Factors behind the San Francisco Real Estate Market

Marin, Napa & Sonoma Real Estate Market Reports

This weekend: Bark and Meow around the Block

What are you doing this weekend? Are you interested in helping the Berkeley Humane Society promote an excellent cause? If so, don’t miss Bark and Meow around the Block, which takes place this Saturday, Aug. 15 from 10 a.m. to 4 p.m. at Ninth and Carleton Streets in West Berkeley.

On tap will be the shelter’s annual Adopt-A-Thon and street fair, featuring reduced adoption fees, tasty food and entertainment for the entire family. Admission is free! In excess of 100 dogs and cats will be available for adoption not only from Berkeley Humane, but more than 20 partner rescues – you’re bound to find your new best friend! In addition, you’ll enjoy great food, beer and wine from local restaurants, breweries and wineries as well as kids’ games and activities, live music and entertainment, a raffle and vendor with pet-related and other products.

“Our goal,” the Berkeley Humane site proclaims “is to find well-matched homes for as many animals as we can and clear our shelters.” The event is part of a greater effort to “clear the shelters” throughout the country, something achieved through heightened public relations efforts, events such as Bark and Meow and reduced adoption fees.

Attendees’ pets are also welcome at the event, so long as they’re “well-behaved dogs and fearless cats on leash”, according to the Humane Society. For more information, call (510) 845-7735 ext. 228 or email information@berkeleyhumane.org.

The Berkeley-East Bay Humane Society was first founded in 1927 by a trio of three concerned citizens. Originally known as Animal Rescue Haven, the organization has seen its priorities shift with the needs of the community’s animals over the years, eventually adding education programs, community pet support programs and a veterinary hospital. The latter was closed in 2009 in order to focus on providing medical care exclusively for shelter dogs and cats. In the 1970s, the group’s board of directors committed to a revolutionary adoption guarantee model that no healthy or treatable shelter animals in its care would be euthanized – setting the stage for a nationwide movement that continues to develop to this day.

Realtor.com ranked San Francisco as the #1 Hottest Housing Market in July

SFStock

The U.S. housing market may be finding more balance, according to a new report from realtor.com®. For the first three weeks in July, the median list price rose to $234,000 nationwide, up 7 percent year-over-year, while inventories of for-sale homes rose and the median days on the market increased to 69 days.

“This year we’re seeing inventory continue to grow in July, albeit at a slower pace than this spring,” says Jonathan Smoke, realtor.com®’s chief economist. “And while demand overall is strong, the trend in median days on market is suggesting that the market is finding more of a balance, which bodes well for more moderate price appreciation in the months ahead.”

However, some housing markets continue to see rapid growth. Realtor.com® found that 20 markets receive 1.5 to three times the number of views per listing compared with the rest of the nation. Inventory in those markets is moving 24 to 41 days quicker than the national average.

“These hottest markets are the best in the country from both a supply and demand perspective,” Smoke says. “Sellers are seeing listings move much more quickly than the rest of the country and at an accelerating pace from just last month. Meanwhile, these markets are clearly attractive to buyers as the listings in these markets are viewed as much as three times more often than the national average.”

Here is realtor.com®’s list for hottest housing markets in July:

San Francisco, Calif.
Denver, Colo.
Dallas, Texas
Vallejo, Calif.
Santa Rosa, Calif.
San Jose, Calif.
Midland, Texas
San Diego, Calif.
Ann Arbor, Mich.
Santa Cruz, Calif.
Detroit, Mich.
Sacramento, Calif.
Stockton, Calif.
Yuba City, Calif.
Columbus, Ohio
Austin, Texas
Los Angeles, Calif.
Oxnard, Calif.
San Antonio, Texas
Fort Wayne, Ind.

Source: “The 20 Hottest Real Estate Markets in July 2015,” realtor.com® (Aug. 3, 2015)

San Francisco tops Realtor Magazine’s hot housing market list

Besting such urban hotbeds as Santa Rosa and Midland, Tex., our fair city by the bay is at the top of Realtor Magazine’s hottest housing markets for July. With the median list price across the country rising to $234,000, up 7 percent year over year, and inventories of for-sale homes rising as well, the magazine muses that the U.S. housing market may be finding more balance at the moment.

“This year we’re seeing inventory continue to grow in July, albeit at a slower pace than this spring,” Realtor.com chief economist Jonathan Smoke said in a statement. “And while demand overall is strong, the trend in median days on market is suggesting that the market is finding more of a balance, which bodes well for more moderate price appreciation in the months ahead.”

The country’s hottest markets, Smoke said, proved to be the best performers in terms of both supply and demand, with the top 20 seeing 1.5 to 3 times the number of views per listing as compared with the rest of the nation. Inventory in these markets is moving 24 to 41 days more quickly than the national average.

“Sellers are seeing listings move much more quickly than the rest of the country and at an accelerating pace from just last month,” Smoke said. “Meanwhile, these markets are clearly attractive to buyers as the listings in these markets are viewed as much as three times more often than the national average.”

A few of the other cities on the list include Denver (no. 2), San Diego (no. 8), Sacramento (no. 12), Yuba City (no. 14) and Columbus, Ohio (no. 15). Not specified, however, was the exact number of San Franciscans who appeared willing to trade in life by the Bay for any of these cities.

Where to Buy a Home in San Francisco for the Money You Want to Spend

The charts below are based upon 2015 YTD transactions reported to MLS by July 24, 2015 . We’ve generally broken out the neighborhoods with the most sales within given price points. To a large degree, if you’re buying a house in San Francisco, your price range effectively determines the possible neighborhoods to consider. That does not apply quite as much to condos and TICs: Generally speaking, in neighborhoods with high numbers of condo and TIC sales, there are buying options at a wide range of price points – though, unsurprisingly, the number of bedrooms increase as prices get higher.

Of course, era of construction, views, average size and many other features and amenities can vary widely between neighborhoods.

Where to Buy a HOUSE for under $1 million in San Francisco

The overall median HOUSE price in the city in the 2nd quarter of 2015 was about $1,350,000, so the under million-dollar house is becoming much less common. The vast majority of house sales under $1,000,000 now occur in a large swath of neighborhoods running across the southern border of San Francisco: from Ingleside and Oceanview through Crocker Amazon, Excelsior, Portola and Visitacion Valley to Bayview. These southern border neighborhoods are by far the most affordable house markets in the city. (They don’t contain many condos at this point, though some big developments are planned.) Neighborhoods that not so long ago had numerous sales in this price range – such as Sunset, Parkside, Outer Richmond, Bernal Heights and Miraloma Park – have now generally appreciated over the last 3 years to the point where such sales are increasingly rare.

The horizontal columns reflect the number of sales under $1 million in 2015 YTD for each area, while the median sales prices noted are for all house sales during the period. Median price is that price at which half the sales occurred for more and half for less.

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Where to Buy a CONDO, CO-OP OR TIC for Under $1 million in San Francisco

The overall SF median condo price in the 2nd quarter of 2015 was about $1,125,000. Sales under $1m still occur in almost every area of the city that features these property types, but a studio unit in Russian Hill may cost the same as a 2 bedroom unit in Downtown. Some areas with large volumes of sales, such as South Beach/South of Market or the greater Noe Valley district, offer units for sale at virtually every price point. In such districts, what will vary will be the prestige and amenities of the building, the size and graciousness of the unit, the floor the unit is located on, whether parking is included, and the existence of views and deeded outside space (decks, patios, or, less often, yards).

In the general category of condo, co-op and TIC sales in San Francisco, condos make up about 90% of sales, stock co-op apartments 1 to 2%, with TICs making up the balance. TICs typically sell at a significant discount (10% – 20%) to similar condos, but there are a number of factors that affect the exact price differential.

The horizontal columns reflect the number of sales under $1m in 2015 YTD broken down by sales of 1-bedroom units and sales of 2+ bedrooms.

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Spending $1 Million to $1.5 Million

In this price point for houses, one starts moving into a different group of neighborhoods on the west side and in the central-south areas of the city. Within this collection of neighborhoods, one will typically get more house for one’s money in the Sunset, Parkside or Outer Richmond than in Miraloma Park, Bernal Heights or Potrero Hill. In the greater Noe, Eureka and Cole Valleys district, houses in this price range are now difficult to find.

In the charts below, the horizontal columns reflect the number of sales in each area, while the dollar amounts reflect average dollar per square foot values for the homes in this price range in the specified areas.

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Condo, co-op and TIC sales in this price range are mostly concentrated in those areas where newer (and expensive) condo developments have come on market – and continue to arrive in increasing numbers – over the last 10 years, as well as, of course, in high-end neighborhoods such as Pacific Heights & Russian Hill, and Noe, Cole & Eureka Valleys.

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Buying a HOUSE for $1.5 million to $2 million

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Buying a LUXURY HOME in San Francisco

For the sake of this report, houses selling for $2 million and above, and condos, co-ops and TICs selling for $1.5 million and above are designated (somewhat arbitrarily) as luxury home sales. What you get in different neighborhoods for $2 million or $3 million or $5 million can vary widely.

The charts below are broken out by increasingly higher price segments within the overall “luxury” price range.

Luxury CONDO, CO-OP & TIC Sales

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Luxury HOUSE Sales

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San Francisco Neighborhood Map

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For prevailing SF median house and condo prices, our interactive map of neighborhood values can be found here: SF Neighborhood Home-Price Map

SAN FRANCISCO REALTOR DISTRICTS

District 1 (Northwest): Sea Cliff, Lake Street, Richmond (Inner, Central, Outer), Jordan Park/Laurel Heights, Lone Mountain

District 2 (West): Sunset & Parkside (Inner, Central, Outer), Golden Gate Heights

District 3 (Southwest): Lake Shore, Lakeside, Merced Manor, Merced Heights, Ingleside, Ingleside Heights, Oceanview

District 4 (Central SW): St. Francis Wood, Forest Hill, West Portal, Forest Knolls, Diamond Heights, Midtown Terrace, Miraloma Park, Sunnyside, Balboa Terrace, Ingleside Terrace, Mt. Davidson Manor, Sherwood Forest, Monterey Heights, Westwood Highlands

District 5 (Central): Noe Valley, Eureka Valley/Dolores Heights (Castro, Liberty Hill), Cole Valley, Glen Park, Corona Heights, Clarendon Heights, Ashbury Heights, Buena Vista Park, Haight Ashbury, Duboce Triangle, Twin Peaks, Mission Dolores, Parnassus Heights

District 6 (Central North): Hayes Valley, North of Panhandle (NOPA), Alamo Square, Western Addition, Anza Vista, Lower Pacific Heights

District 7 (North): Pacific Heights, Presidio Heights, Cow Hollow, Marina

District 8 (Northeast): Russian Hill, Nob Hill, Telegraph Hill, North Beach, Financial District, North Waterfront, Downtown, Van Ness/ Civic Center, Tenderloin

District 9 (East): SoMa, South Beach, Mission Bay, Potrero Hill, Dogpatch (Central Waterfront), Bernal Heights, Inner Mission, Yerba Buena

District 10 (Southeast): Bayview, Bayview Heights, Excelsior, Portola, Visitacion Valley, Silver Terrace, Mission Terrace, Crocker Amazon, Outer Mission

Some Realtor districts contain neighborhoods that are relatively homogeneous in general home values, such as districts 5 and 7, and others contain neighborhoods of wildly different values, such as district 8 which, for example, includes both Russian Hill and the Tenderloin.

All data is from sources deemed reliable, but may contain errors and is subject to revision.

© 2015 Paragon Real Estate Group