Road to Depression

Home sales crash to lowest level since 2008 as pricing reset gets underway!

on . Posted in Road to Depression

SAN FRANCISCO, Kalifornia (PNN) - November 18, 2016 - 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. 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 $1.4 million.

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

Eulogies

Eulogy for an Angel
1992-Dec. 20, 2005

My Father
1918-2010

brents dad

Dr. Stan Dale
1929-2007

stan dale

A. Solzhenitsyn
1918-2008

solzhenitsyn

Patrick McGoohan
1928-2009

mcgoohan

Joseph A. Stack
1956-2010

Bill Walsh
1931-2007

Walter Cronkite
1916-2009

Eustace Mullins
1923-2010

Paul Harvey
1918-2009

Don Harkins
1963-2009

Joan Veon
1949-2010

David Nolan
1943-2010

Derry Brownfield
1932-2011

Leroy Schweitzer
1938-2011

Vaclav Havel
1936-2011

Andrew Breitbart
1969-2012

Dick Clark
1929-2012

Bob Chapman
1935-2012

Ray Bradbury
1920-2012

Tommy Cryer
1949-2012

Andy Griffith
1926-2012

Phyllis Diller
1917-2012

Larry Dever
1926-2012

Brian J. Chapman
1975-2012

Annette Funnicello
1942-2012

Margaret Thatcher
1925-2012

Richie Havens
1941-2013

Jack McLamb
1944-2014

James Traficant
1941-2014

jim traficant

Dr. Stan Monteith
1929-2014

stan montieth

Leonard Nimoy
1931-2015

Leonard Nimoy

Stan Solomon
1944-2015

Stan Solomon

B. B. King
1926-2015

BB King

Irwin Schiff
1928-2015

Irwin Schiff

DAVID BOWIE
1947-2016

David Bowie

Muhammad Ali
1942-2016

Muhammed Ali

GENE WILDER
1933-2016

gene wilder

phyllis schlafly
1924-2016

phylis schafly

John Glenn
1921-2016

John Glenn

Charles Weisman
1954-2016

Charles Weisman

Carrie Fisher
1956-2016

Carrie Fisher

Debbie Reynolds
1932-2016

Debbie Reynolds

Roger Moore
1917-2017

Roger Moore

Adam West
1928-2017

Adam West

JERRY LEWIS
1926-2017

jerry lewis

HUGH HEFNER
1926-2017

jerry lewis