Several months ago, when I was banging the table on the “unicorpse” ripple
effect on housing, I pointed out in several ad-hoc notes that I was picking up a
sharp jump in house listing price cuts in the San Fran Bay Area, in which I have
extremely granular data.
Finally, the press has figured it out…article below from the SF Chronicle reports
huge price cuts over a short period of time.
Remember, it only takes a few “final sales” to change the prices on all houses
due to comparable sale appraisal science.
This is great on the way up, especially when unorthodox, price insensitive
buyers are driving the ship.
But, it’s terrible on the way down. And on the way down it tends to quicken
and deepen as new comparables keep coming and fear and uncertainty kick
in.
Think “stairway up, escalator down”. Note, I didn’t use the term “elevator
down”, because it doesn’t happen that quickly.
http://www.sfgate.com/business/article/Price-cuts-signal-more-balancedhome-market-10448496.php
Note, middle to higher end sharp list price cutting is happening everywhere,
not just in San Francisco. It just takes a long time for the final sales to occur,
the data to get into systems and house prices indices, and for them to be
reported and analyzed. By that time it’s too late to do anything about it and
full-blown panic sets in.
Mark
SF NEIGHBORHOODS WITH THE HIGHEST NUMBER OF
LISTINGS WITH PRICE REDUCTIONS
Forest Hill
Percentage of listings with price reductions in 2015: 23.08%
Percentage of listings with price reductions in 2016: 42.86%
Percentage point change: 19.78%
Financial District
Percentage of listings with price reductions in 2015: 10.45%
Percentage of listings with price reduction in 2016: 29.82%
Percentage point change: 19.38%
Mission Bay
Percentage of listings with price reductions in 2015: 9.73%
Percentage of listings with price reductions in 2016: 24.25%
Percentage point change: 14.52%
Glen Park
Percentage of listings with price reductions in 2015: 17.96%
Percentage of listings with price reductions in 2016: 31.91%
Percentage point change: 13.98%
Forest Knolls
Percentage of listings with price reductions in 2015: 30.00%
Percentage of listings with price reductions in 2016: 43.24%
Percentage point change: 13.24%
Chinatown
Percentage of listings with price reductions in 2015: 13.04%
Percentage of listings with price reductions in 2016: 25.66%
Percentage point change: 12.62%
Lower Pacific Heights
Percentage of listings with price reductions in 2015: 13.47%
Percentage of listings with price reductions in 2016: 25.85%
Percentage point change: 12.38%
Haight
Percentage of listings with price reduction in 2015: 16.47%
Percentage of listings with price reductions in 2016: 28.76%
Percentage point change: 12.29%
Pacific Heights
Percentage of listings with price reductions in 2015: 11.54%
Percentage of listings with price reductions in 2016: 23.40%
Percentage point change: 11.86%
Lake Street
Percentage of listings with price reductions in 2015: 14.08%
Percentage of listings with price reductions in 2016: 25.69%
Percentage point change: 11.61%
Buena Vista Park
Percentage of listings with price reduction in 2015: 12.33%
Percentage of listings with price reduction in 2016: 23.79%
Percentage point change: 11.46%
Telegraph Hill
Percentage of listings with price reductions in 2015: 11.69%
Percentage of listings with price reductions in 2016: 22.97%
Percentage point change: 11.86%
Nob Hill
Percentage of listings with price reductions in 2015: 13.46%
Percentage of listings with price reductions in 2016: 24.21%
Percentage point change: 10.75%
SoMa
Percentage of listings with price reductions in 2015: 14.01%
Percentage of listings with price reductions in 2016: 24.59%
Percentage point change: 10.58%
Noe Valley
Percentage of listings with price reductions in 2015: 12.78%
Percentage of listings with price reductions in 2016: 23.11%
Percentage point change: 10.33%
Thank you,
Mark Hanson
[email protected]
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