San Fran Home Sales Crash To Lowest Level Since 2008 As Pricing Reset Gets Underway

Tyler Durden's picture

We have frequently written over the past couple of quarters about the bubbly San Francisco housing market that looks set for another epic reversal as home prices have reached staggering new highs just as employment levels seem to be rolling over.  With home prices now implying that only 10-20% of residents can afford the "median" priced home, it's certainly not difficult to understand why demand may be waning.     

San Fran Housing

 

According to HousingWire and a new report from PropertyRadar, home sales in the Bay Area are finally starting to rollover with Q3 YTD volumes down 10.3% YoY, reflecting the fewest number of homes sold over that same time period since 2008.  Perhaps even more staggering is that distressed property sales fell 35.7% YoY so far in 2016, to the lowest level since 2001, as "low-priced" inventory dried up and buyers have found it financially impossible to move up to higher price tiers.

Conversely, non-distressed property sales fell 7.1% on a year-over-year basis. But it should be noted that as a percentage of total sales, distressed property sales accounted for only 7.9% of total sales, compared to 11.1% in 2015 and a high of 56.3% in 2009.

 

“The 35.7% decline in distressed property sales drove the overall decline in Bay Area sales to its lowest level since 2001,” said Madeline Schnapp, director of Economic Research for PropertyRadar.

 

“For several years now, the affordability of distressed properties contributed significantly to overall sales,” Schnapp added. “Distressed property inventory has declined to the point it’s now a drag on overall sales. Bay Area sales will likely remain relatively flat until new, attractively priced, inventory arrives on the scene.”

According to PropertyRadar’s data, the number of homes sold priced from $0 to $500,000 fell by nearly 27% from 2015 to 2016. Homes priced from $500,000 to $750,000 fell by just shy of 9%.

 

Homes priced from $750,000 to $1 million fell by just 3.6%, while homes priced above $1 million actually rose, albeit by only 0.4%.

 

“The outsized decline in distressed property sales combined with the rapid increase in prices and the lack of buyers that qualify for higher priced homes is reflected in the 26.7% decline in the sales of lower priced homes,” Schnapp said. “Income growth in the Bay Area has not kept up with rapidly rising home prices shutting out a significant percentage of would-be buyers.”

Of course, none of this should be terribly surprising in light of the fact that median San Francisco home prices have surged 86% over the past 4 years to a mere $1.4mm. 

San Fran Housing

 

As Paragon Real Estate points out, the only question left to answer now isn't whether San Fran real estate will crash, but rather just how deep the crash will be.

San Fran Housing

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Troll Magnet's picture

That looks like an earthquake epicenter...Oops. No pun intended.

J S Bach's picture

Sorry to offend you Caiifornian readers, but I wish this lost city would defect into its own sort of "vatican city".  They need to be isolated from the united states into their own insane liberal commie distopia until they disintegrate into oblivion.  Then, we can reclaim the territory for the sane humans who hold God's (Nature's) ideals.

AVmaster's picture

Drove around San Fransicko once...

 

My windshield was never cleaner... Looked freakin brand new...

 

^.^

Déjà view's picture

Left My Heart In San Francisco...and an arm and a leg!

caconhma's picture

Subject: TRUMP IS ALREADY DESTROYING ARIZONA ECONOMY

 

Trump Is Already Destroying Arizona Economy

TRUMP could destroy the local Arizona economies. Illegal immigrants are boycotting Arizona by the thousands and moving elsewhere showing their outrage with Donald Trump's proposed law of sending illegal immigrants back to their native countries.

 

In the small town of Guadalupe, AZ, south of Phoenix, Manuel Renaldo is one of those who are vowing to punish Arizona by leaving.

 

As he loaded his stolen car with his taxpayer-furnished belongings and family of ten, Renaldo told this reporter through an interpreter: It's a matter of principle; I refuse to be supported by a state that treats me like a criminal!

 

The effects of the exodus are already being felt by some Arizona retailers, who are reporting dwindling thefts & sales of beer, tequila, spray paint, and ammunition.

 

Also hit hard are the state hospitals, which have reported a dramatic decline in births and

emergency room visits of non-revenue patients!.

State welfare agencies are preparing to lay off staffs that distribute food stamps and unemployment benefits. Tattoo parlors are in an absolute state of panic!

Renaldo told a reporter, through an interpreter, that he and his family are moving to Canada, with a new Liberal government under Justin Trudeau and new higher taxes and hardworking people who will better support him and his family with dignity!

 

 

Kinda brings a tear to your eye, doesn't it?

Déjà view's picture

FED has contracted nearby RotorWay Helicopters of Chandler for upcoming Helicopter Money event.

eatthebanksters's picture

I bet if you plotted a graph that showed demand (sales volume and price icreases) and correlated it with high tech IPO's you would find sales volume and price increases have been very dependent on IPO's.  While the market is still bery strong in SF, down the entire peninsula and in Silicon Valley, we haven't seen the stupid money that shakes loose during big IPO's.  I think I heard we haven't had an IPO in over a year in the Bay Area.  Things will change when Snapchat IPO's...just watch.  We're still humming along.

rickowens's picture

too bad Snapchat is based in LA

this site is dead

0% knowledgeable discussion 

i miss 2010

StreetObserver's picture

Watch rents plunge, used car prices too, crime will go down and the streets will become safer.

Promote this meme: hoard your cash so as not to spend it in the Obama economy. Wait until the first reporting month of Trump's presidency, February, then spend, spend, spend.

Also, educate your fellow citizens that the depression was going to happen with or without Trump.

debunker's picture

So who's gonna clean your dirty dishes, cars, offices, laundry and work menial construction, pick your fruit, etc., etc, etc.

Oh.  Your children. 

Riiiiighhhht.

http://www.theatlantic.com/politics/archive/2015/10/immigrants-arent-ste...

migra's picture

The people who are welfare now are going to wash the dishes. And you can take that pussy ass atlantic and shove it up your liberal ass.

Libertarian777's picture

so why doesn't the left, supposedly a champion of immigrants, propose a temporary visa instead of a path to citizenship? They had their chance in 2010 to do some real reform, instead they like to have illegal immigrants since its a strong base they can set their agenda on, instead of actually resolving any issues.

Why have they not proposed say 500,000 agricultural non-immigrant visas, so Mexican labourers can enter legally, do jobs americans are not wont to do and can prevent being exploited?

It has to be said.. ILLEGAL immigrant is the correct term. They have violated the law. They might not be violent criminals but they have violated immigration law. Just becase there are a lot of them and just because its impractical to deport 11 million, it doesn't mean we just ignore the law. We don't have to round them up but we do have to stop catch and release.

That being said, the right wingers (not saying all trump supporters because most of the ones i know are rational people) who are saying racist things need to know 2 things:

1. Trump said he'd deport ILLEGAL immigrants, NOT ALL immigrants (how the right and the left doesn't get this is beyond me)

2. Unless if you're native american, you can't tell anyone to fuck off to anywhere.

Secret Weapon's picture

The left only cares about illegals because if given the vote they will vote democratic.  If they were not allowed to vote for 10 years after becoming citizens or given welfare the left would not give a shit about them. 

New_Meat's picture

It is willful mis-hearing and willful mis-understanding.  None of the snowflakes has read Trump's book, after all, it is written at an eighth grade level, far beyond their training and indoctrination.

I can't play poker worth a shit, I'd love to play with Our Dear "now, don't call my bluff" President.  Like, yeah, the opening proposal is close to what the final deal will look like.

Someone in the news said it: "Trump detractors take his statement's literally and his intent figuratively, Trump supporters take his statements figuratively and his intent literally."

- Ned

AVmaster's picture

Too bad he never said he was gonna deport illegals except for the ones that get caught/felons/etc....

 

But this is still good nonetheless.

Byte Me's picture

Excellent post.

(You DO have a source for this wonderful snippet, yes?)

Butchard's picture

LMAO...Genius article....kudos to the reporter!  We need more of these types in the media.

Badsamm's picture

That is a lie. Our homeless just sit and ask for money with clever signs, they don't work for it

migra's picture

Unfortunately this so called housing crash has yet to make its way to south to Sandy Eggo. The prices here are still going up although not a lot of suckers left paying them. Yet the prices don't go down, ever.

Chris Dakota's picture
Chris Dakota (not verified) Troll Magnet Nov 19, 2016 7:32 AM

The reason why it is so expensive is there a JOBS here.

I saw this video of a guy in front of a Trump rally in the rust belt saying

as a drywall hanger he can't keep himself working for $8 per hour.

A barista in SF makes $15 plus tips.

This is the reason housing is expensive.

ZD1's picture

The fact that there is limited land in SF to build along with draconian zoning laws and punitive development fees make housing more expensive than other areas.

San Franciscans started passing referendums that established "sunset zoning," making it illegal for tall buildings to put any city park or public square in shadow for more than an hour after sunrise or an hour before sunset. Other referendums made it easier for communities to prevent the development of tall buildings near residential neighborhoods, effectively cutting off major expansion outside of the downtown area.

Some areas aren't being developed in order to preserve San Francisco's historic buildings. In the South of Market area, there are a number of old buildings that used to serve as warehouses for the city's powerful industries. While they're beautiful to look at, they were built for a purpose that demanded lots of lateral space, not building up.

As with everything in San Francisco these days, this situation has been exacerbated by concerns about gentrification and inequality. When there is development, it can face backlash for targeting the high end of the market.

buzzsaw99's picture

the coming twitter layoffs should help. /s

Yen Cross's picture

 Buzz is on the roll! Me Likey ;-D

Chris Dakota's picture
Chris Dakota (not verified) buzzsaw99 Nov 19, 2016 8:33 AM

Twitter only employes 1500 people.

largest employer in San Fran is the city with 26,000

Wells Fargo has 15,000

buzzsaw99's picture

that's 1400 more than they need. besides, it was a joke son.

Lighten up Francis. [/Sgt. Hulka, Stripes]

Whoa Dammit's picture

Wait till their federal funding gets cut. Homeowner's and car insurance doesn't cover damages for civil unrest.

1980XLS's picture

Die snowflakes, Die.

New_Meat's picture

Die is such a harsh word,

"Melt, snowflakes, Melt."

There fify

SILVERGEDDON's picture

All that hot money being swindled outta China must have dried up.

Sum Ting Wong.

Good - tired of hordes of Borg Collective Entitled Peoples Republic Special Snowflake student visa wankers cruising around in packs anyway. No parental investment money floating them will dry up the crop a bit.  

Shlomo Schwartzman's picture
Shlomo Schwartzman (not verified) Nov 18, 2016 9:48 PM

San Fran smugness is also tanking due to excess reserves flooding the market. 

6 million % off retail prices.  Its an oven sale, er fire sale.

LetThemEatRand's picture

I don't think many people truly understand the extent to which northern CA, Seattle, and Portland represent the real world version of revenge of the nerds.  Once you see that dynamic, it all starts to make sense.   It's somewhat similar to what occurred with bankers after WWII.  If real estate values in the West fall and currently rich guys start to lose their economic power, we may start to see some actual change in their perspective.

snakehead's picture

and they're all near major fault lines and subduction zones, with a couple smoldering volcanoes tossed in.

HRH of Aquitaine's picture
HRH of Aquitaine (not verified) snakehead Nov 18, 2016 10:49 PM

Get to know your local volcano. There are lots and lots of them. All the way from Alaska, thru British Columbia, Washington, Oregon, California and Mexico.

They don't call it the Ring of Fire for nothing.

https://www.volcanodiscovery.com/north-america.html

There was an article last year about what would happen if Mount Ranier went off. Basically about 250,000 people would die and 3 to 4 million would be left homeless and wearing rags. Mount Ranier going off would make 9/11 and Hurricane Katrina look like kindergarten for emergency responders. http://endoftheamericandream.com/archives/the-most-dangerous-mountain-in...

Freddie's picture

All those fjords or water inland bays around Seattle would turn to jello in a big quake and mud would flow everywhere.

Bay of Pigs's picture

I went to college in Bellingham at WWU. Mount St Helens went off when I was there and I will never forget the sonic boom that arrived that Sunday morning. Literally shook my dorm room.

"Where were you when the mountain blew?"

Stone Junction's picture

Agreed on the possible (and likely) consequences of a major eruption. Alas, with modern techniques of volcano monitoring, chances are relatively small that a major eruption would hit us by surprise, and without at least having initiated evacuation procedures (if not concluded, but that might depend on the number of people in the area).
What could happen more easily, in my opinion, is that a major earthquake triggers one of them volcanoes ...

chubbar's picture

Hell, that's nothin, google what happens if Yellowstone erupts. Now THAT is some real DOOM!

Stone Junction's picture

Yup. No googling necessary, and, for that matter, no evacuation either. Waiting for that one .... ;-D

Zarbo's picture

Mt Saint Helens was not the first volcano predicted to erupt, it was Mt. Adams.  Mt. Hood has hot spot(s) on top.  Three sisters are a possibility.  And for the kicker, right in East Portland is Mt. Tabor, a once-active cinder cone.  A complete list for Oregon alone is: https://www.volcanodiscovery.com/oregon.html

KingTut's picture

As a fouth generation San Franciscan (who now lives in tax free Nevada), this is all quite humorous.  SF is the orginal Boom and Bust town, and it just never stops booming and busting.  Just ask Carol Doda  I think its great, don't ever worry about SF, because it will always be a great place to live for everybody.  Social Justice warriors, right wing business men, gays, artists, bond traders, unreal estate agenst, and Martians.  Gotta love it.

Chris Dakota's picture
Chris Dakota (not verified) KingTut Nov 19, 2016 8:30 AM

Carol Doda has died.

I know her, she was actually a really nice person.

nightshiftsucks's picture

I live in the SF East Bay suburbs,lots of houses coming onto the market and not selling like they were a year ago.It's obvious that something is going on.

Freddie's picture

I remember the old tech bubble 2000.  Companies that manufactured run of the mill stuff aka old economy had joke valuations.   The stocks were almost worthless.  REITs were cheap too.  Then tech burst.

I think people are going to realize a lot of the social network companies are crap. Twitter is the first.  I thik Elon Musks shit will blow up if Trump does not give him billions.  Also less Chinese money.

Archive_file's picture

I live in my van in San Francisco now for 3 years. I've noticed a lot of "for lease" signs up too. Commercial real estate is in the crapper too. Thank god. Take the chinks with you too....

smrstars's picture

Isn't there some place along the "fault line" that can be compromised by hitting a tuning fork and amplifying it through a 1 trillion watt sound system?

New_Meat's picture

Snowflake tears and melt water will lubricate the fault and turn off the static friction.  I'll bring the popcorn.

Magnum's picture

With all due respect this is kind of a joke anyway, SF home prices are sky high so any cyclical downturn still leaves real estate prices astronomical in any scenario.