patrick.net

Hey Patrick,

Can you do the same graph including data prior to the peak?

I think where part of the infighting comes from on this site, is people speak about house prices in general, when in fact, they are very much local phenomena. Actually, its land prices we are talking about, seeing as how the line on this graph fluctuates between 800k-1M. What the flying fuck kind of insanity is that.

Here in my local area, median house price is closer to 150k

I'm just glad we hard working folks here in flyover country are priviliged enough, to help fund that fucking madness. What kinda asshole would want to live in such insanity in the first place? San fransisco isn't that nice.

Is there a way to break this graph down by price bracket? (250k to 500k, 500k to 750k, 750k to 1 million, etc).

Goran_K says

Is there a way to break this graph down by price bracket? (250k to 500k, 500k to 750k, 750k to 1 million, etc).

Right, because median price doesn't really tell much. Houses in 250k-500k range could be moving up, yet no sales in high end markets would have the graph pointing downward, especially if there was more (bowel) movement in the higher end the previous month(s).

As a mortgagedebtor, I root for lower valuations so that the taxman doesn't come and kick me in the nuts. And as we all know, the one trick pony in this push/pull relationship is continually lower interest rates, and when they drop ill refi (again)

I knew it already, but reading over the paperwork and gfe on this refi I'm mulling over, my TI is over 1/3 of my monthly payment. The PI is quite affordable, and that will eventually go away, but that TI part is absolutely insane

CL says

Hey Patrick,

Can you do the same graph including data prior to the peak?

Goran_K says

Is there a way to break this graph down by price bracket? (250k to 500k, 500k to 750k, 750k to 1 million, etc).

Those things are time and work because they are not automated, but if either of you subscribe, I'll do them manually for you.

http://patrick.net/housing/subscribe.php

errc says

Right, because median price doesn't really tell much.

Well I think the median sold price does say something, but it's not perfect. The median inherently sorts out "noise", and dramatic outliers.

That being said, I have a feeling this market downturn is top heavy. I feel the lower-priced Bay Area properties are probably selling briskly, but I have a feeling properties over the conforming jumbo limit are experiencing long selling times, and numerous price reductions.

Those things are time and work because they are not automated, but if either of you subscribe, I'll do them manually for you.

No problem Patrick. I know you have a lot on your plate with the site.

I believe the data source is Craigslist. So the follow-up questions are:

How many homes for sale actually advertises on CL? 10% of total, 20%?

How many homes advertised for sale are duplicated in the same month. 4 or 5 or every seven days?

From that perspective, CL captures very little since most homes for sale don't advertise on CL and those that do are dulplicated muliple times. thus that graph is meaningless/junk.

Ask SFrenter if prices are falling?

I think any data that shows a price rise of ~40% from Sept '11 to Dec. '11 has to be taken with a large grain of salt.

Not that I consider Redfin a one-all source for housing information, but they are reporting their first month-over-month median drop for San Francisco since February of this year.

Take what you will from that.

errc says

I'm just glad we hard working folks here in flyover country are priviliged enough, to help fund that fucking madness.

Just curious how you guys help fund the SF madness? Besides buying sourdough bread.

I honenstly don't understand why rents and home prices are so high in S.F. Considering that if you really want the entertainment of S.F., you can always BART in in 1 hr tops and then go back to the suburb and not deal with all the noise, dirt, panhandlers, parking inconveniences and myriad of other issues. The rents in SOMA for instance are around 2600 a month for a horrendous small 1 bd apartment and then you have to pay for parking on top of that. Why would someone subject themselves to such nonesense - so that they can say that they "live in the city" and take a cab to a restaurant that's open to 1 a.m.? If I were to live in the city, the only way I would do it would be to get a rent controlled apartment in sunset district, that's about it.

evilmonkeyboy says

Just curious how you guys help fund the SF madness? Besides buying sourdough bread.

Actually, the people in flyover country do in fact fund the SF madness by being forced to guarantee much higher Fannie and FHA loans than they themselves can get.

Another way to say it: jumbo loan limits are much higher in SF due to the forced imposition of risk on people in flyover land. Conforming loan limits are unfairly different. SF buyers get lower interest rates on loans above $419K because the risk is pushed onto the flyover taxpayer.

So some farmer in Iowa has his tax money used to guarantee $729,000 loans in SF when the farmer himself is eligible for low rates only for $419,000 max loan.

Actually, the people in flyover country do in fact fund the SF madness by being forced to guarantee much higher Fannie and FHA loans than they themselves can get.

Makes sense.

dublin hillz says

I honenstly don't understand why rents and home prices are so high in S.F. Considering that if you really want the entertainment of S.F., you can always BART in in 1 hr tops and then go back to the suburb and not deal with all the noise, dirt, panhandlers, parking inconveniences and myriad of other issues. The rents in SOMA for instance are around 2600 a month for a horrendous small 1 bd apartment and then you have to pay for parking on top of that. Why would someone subject themselves to such nonesense - so that they can say that they "live in the city" and take a cab to a restaurant that's open to 1 a.m.? If I were to live in the city, the only way I would do it would be to get a rent controlled apartment in sunset district, that's about it.

It's a lifestyle decision that a lot of people are making. You may prefer to live in the suburbs and commute when necessary. Many many other people (especially the younger generation) would rather take a smaller, more expensive rathole and be in the "middle of it all" It's a trend that's occurring worldwide. If you're happier living the the suburbs then be thankful that the price of your suburban living costs is lower because of your contrarian view.

zesta says

Many many other people (especially the younger generation) would rather take a smaller, more expensive rathole and be in the "middle of it all"

Not me. I like having a working toilet.

Interesting! Tweeted!

And yet the number of Realtards on SFGate forums who claim SF Prices have not fallen remains high.

That rag is like an official orifice of the NAR, house for sale ads top front page, daily real estate "blog" topics.

Business section selectively picks stories for discussion that soft peddle bad economic news, Goebbels would be proud.

Heh. One important difference of note mite be that Patrick is not a bedfellow with any RE enterprise.

Don't really care if SF is more expensive. We already bought in the east bay so for starters I no longer care in general and secondly, if people want to pay more to live somewhere- let em'. Its their choice.

Well alls I know is all my houses are rented and I am looking to buy some more. I got a feeling mortgage rates is going down again before year end and we will see more buying frenzy, so I wanna move fast before more primary residential buyers snap them up first!

edvard2 says

Don't really care if SF is more expensive. We already bought in the east bay so for starters I no longer care in general and secondly, if people want to pay more to live somewhere- let em'. Its their choice.

You sure was bellyaching about it before!

SFace says

Ask SFrenter if prices are falling?

Not in the last 6 months, but we're hoping/expecting that this is a Spring/Summer bump: the bottom that has been called every Spring since 2009.

Apples-to-apples comparisons show an increase. Here is a perfect example:

146 Athens Street Listed 399K, sold 415K http://www.zillow.com/homedetails/146-Athens-St-San-Francisco-CA-94112/15168054_zpid/don't know

138 Athens Street Listed 480K, relisted at 465K, sold for more than 430K (how much we won't know until after it closes, but when we put a lowball offer on it last month (415K per comps) it was rejected, as also was the highest bid of 430K.

Look at it this way:

Inventory is down 45%. Of the 55% of places for sale, almost 30% of sales were all-cash (investors).

Interest rates are lower than they have ever been, so regular folks who are just looking for a place to live have a shot at the remaining 1/4 of properties left. Of course prices are rising. How sustainable this is, I don't know.

Doesn't need to be sustainable. Just as long as it pays a commission and makes the game look legit instead of bankrupt.

Prices have not been falling in SF; nor have they in SC, SM, or Marin over the same period in question. Yes the CAR and NAR are pimping this to all hell, but CraigsList is not a reliable source of information as it does not capture even 10% of activity, and it suffers from self-selection bias (it's only sought out by a particular ilk of realtor or fsbo). I expect prices will stall and that $2mm will likely fall come late autumn, but even at that probably not by much unless we get another full on recession by then.

Also, flyover are the net beneficiaries of subsidization, not net donors. One only need look at aggregate federal tax flows to determine that. This is not a new phenomenon either -- it's been true for over a quarter century.

Randy H says

Also, flyover are the net beneficiaries of subsidization, not net donors. One only need look at aggregate federal tax flows to determine that. This is not a new phenomenon either -- it's been true for over a quarter century.

If it makes you happy, we could go back to the days when railroads controlled the movement of farm commodities.

I don't mind paying for roads in states with high grain-to-people ratios.

Or maybe the blue states could just eat Soylent Green.

Overall, it looks to me, the housing price is kinda hanging there, small drop or small increment depending on your local market. For me, I rather wait until Europe blowing up and then make up my mind.

Well CA is generally a bad place to buy right now, too much speculation and government interference.

Patrick,

Experience should show us that the slowest time for real estate is around December while the hottest would be spring/summer. We should look at why your data does not fit this pattern.

To me it seems your data is very 1 dimensional by focusing only on the price which is collected from craigslist. Without having any meaning behind the price you can't tell if the market is going up or down. The examples that can distort the your numbers would be more high end homes listed or less low end homes listed. Maybe a 30 million dollar property was listed? One way to normalize the data would be to display dollars/square foot.

Do you remove data points that are extreme outliers?

Whether you believe Patrick's data or not, Redfin is showing a month-over-month decrease in the S.F market, the first since February of this year. I've seen other cities in the Bay Area where this is the case too, during a time when RE should be strong seasonally.

If it makes you happy, we could go back to the days when railroads controlled the movement of farm commodities.

I made no comment on the relative merit, only that it is a fact that capital is taxed away from "blue states" (as an approximation) and reallocated into flyover states. The degree to which this occurs is rather stark, in fact. Ostensibly, it is being done for rational reasons.

Good to see the quickness with which conclusions are assumed hasn't changed here over the past 7 years.

I agree that my data is limited because the MLS's won't share with anyone who is not in the business if maximizing debt (and therefore prices).

But at the same time as they forbid you from copying prices from their websites, realtors advertise prices publicly.

How can I get forum users to enter prices and addresses? I'm thinking of something like gasbuddy.com. Just don't know what would make it click and motivate people to do it.

Randy H says

Good to see the quickness with which conclusions are assumed hasn't changed here over the past 7 years.

The reason I was quick: quite a few people use those statistics to claim that the "red states" are deadbeats living off gummint cheese funded by the "blue states."

Much of it is just a testament to the efficiency of modern farming. You don't need many farmers per acre anymore, but you still need the roads to get the crops to market.

Maybe in the future, energy will be cheap enough that the crops can be airlifted. That'd be pretty sweet.

Wow, the return of Randy H! Are you still hunkered down in a rental, or did you buy?
FWIW, redfin (see ducky's link above) does show a month-to-month drop in median price of SF homes (April to May). Note that the condo market has heated up and combined condo & home median is up month-to-month. Also, DQ numbers do NOT show a month-to-month drop like redfin.

My goodness, that's just crazy that house prices can go from $165 to $235 in 6 months. Did they just discover gold in Contra Costa Co? Or does warm weather just loosen wallets?

I'll keep my stable Rust Belt RE market. ;-)

wthrfrk80 says

Did they just discover gold in Contra Costa Co?

You come into my shop. I say I want seven dollars for a cup of delicious frozen yoghurt. You tale me to go to hell, and I says, well. tell you waht buddy. I give you the six dollars what you aint willing to spend on and you pay me back very slowly over time with a tiny bit of interest and suddenly, since it ain't money coming out of your jeans right then that yoghurt starts looking pretty good. and it is hot outside. simple as that.

I can't wait to sign up for voluntary slavery.

NAR data isnt independent, nor has it been verified by independent parties.

Mr Wong speaks the truth