30,000 New Condo Units

I found out about this at a Thanksgiving party. There are about 30,000 new units being built in San Franciso over the next few years. Those builders must be shitting their pants. I wonder how many of them will cut their losses and cancel. It will be better for them in the long run. They all obviously planned this shit during the boom thinking it would last forever and now they are fucked. I can't wait to see them all complete. I looked at a few of their website and they still have the gall to be asking almost 700k for 908sqft lofts.

I encourage everyone to replace the 'W' with a 'T' in every "NOW SELLING" signs they see.

No. of San Francisco homes listed on Movoto: 1270

Number of homes for sale in San Francisco: 1270

Number of homes for sale in San Francisco listed under 600k: 325

Last Week's Open Houses

We walked around the neighborhood again last Sunday with a small list of up to half a dozen listing but ended up walking into about double that. Granted, many of those were outside the price range I was searching for but there are definitely lots of new places on the market. And their realtors are putting their little foldy sidewalk signs farther and farther away in an effort to woo more people into a treasure-hunt like journey to the home.

The 2-level Hayes home is STILL on sale. That's the 3-bd plus gigantic attic. We went in again for fun and chatted a bit with the agent. I was on good behavior because honestly, I like the place. It seemed like it had received no offers though and that the seller was motivated. Shocking when I'm seeing 2 bedrooms in butt-ugly buildings for the same price.

But this strange uncorrelation seems to be the growing norm in the market. I mean, we also saw these two places below. The place on top is a 1 bedroom for 599k and the place below is a 2 bedroom for 589k. They are barely 2 blocks from each other around Alamo Square. They look like they have had the same generic "modern" work done on them. Neither come with parking. Which one would you choose? Mind you, the 1bd is listed as being about 100 sq. ft more than the 2bd but I think they are full of shit.

This week we did go into more shitholes. Places that have NOT been remodeled, one place (see photo at top with lovely air vent in the middle of the floor) even had some pest control problems according to the lister. It is a disgusting, badly laid-out duplex going for something between 800-900k in a neighborhood (near the ghetto at Hayes and Webster) with an elevated risk of getting shot before your ARM expires.

No. of San Francisco homes for sale = 1387

These numbers are from Movoto.com so they might not be the complete number. I'll update these every Friday to track where things are going, not only overall but also on the lower end of pricing.

Number of homes for sale in San Francisco: 1387

Number of homes for sale in San Francisco listed under 600k: 367

"It just feels like there is something happening,"

... said Corinne Lyall, an associate broker at Royal LePage Benchmark in Calgary.

I really thought that Calgary, and Alberta in general up in Canada would be the last place in North American that would feel the collapse... but I might be wrong. If Calgary goes down, this is probably going to be even bigger than I imagined.

Nov. 12 Open Houses

Back to what this blog is really about... observations of the changing real estate market from the streets of San Francisco.

This weekend was a little busy so I wasn't planning on seeing a whole lot. A bit of time freed up on Sunday afternoon so I headed out of the apartment without any list homes in hand. I don't need a list anymore because there are so many signs on every street corner.

The first place I went to is just a block and a half away on Hayes. I was prepared for more lame-ass overpriced places but this one blew my mind... a 3bd1ba+office+dining for 799k. On top of these specs it includes with a huge attic that basically doubles the square footage of the condo. If you've been a close follower of this blog you'll know that the 1271 McAllister 2bd1.5ba+sun room that I saw a couple weeks back was also going 799k. They have not reduced the price to this day.

This is evidence of my theory that as this housing market goes to shit, some people are going to reduce prices much faster than others. And will be based on a number of reasons depending on the person: level of panic, level of patience, original purchase price, amount of money spent on renovations etc... This will lead to huge price mismatches on homes that are very similar, and similar prices on homes that are far apart... like the one I saw today and 1271 McAllister. I think when more buyers see this happening, they won't just jump at the "cheap" units... if they are wise they will just keep waiting. The market is obviously in massive flux and price confusion and I think it's worth letting sellers sweat a lot more until a new equilibrium is reached. Prices are changing so fast, a cheap unit this week could look like a ripoff by the time you close escrow.

Remember, after 1271 McAllister I said that in a year's time we should be able to get an extra bedroom for the same price. I saw one today, plus a whole lot more, only two weeks later.

NARdi Gras

OK I need to take a break this weekend from regular real estate news and local commentary to talk about something that has had me rolling on the floor. NAR (National Association of Realtors) has an annual convention as most industry groups do. This year's is in New Orleans and brilliantly called NARdi Gras. They've got their own news, blogs, links to industry blogs, and lovely photos from the event. It looks like a blast with a lot of cool people as you can see from these pics. Explore for yourself and please bombard the blogs with as many comments as you can get away with:
NARdi Gras Live Blog
Real Estate Blog Squad
TheREALTYgram Blogger

National Association of Realtors PAC was the biggest spender of any in the nation, regardless of industry.

I found this real estate blog from the NAR's "NARdi Gras" website. That is the NAR's hip and cool name for their annual convention in New Orleans. The blog in question is from InmanNews. Here are some tidbits:

"No matter what the outcome of today's elections, the real estate industry had all the bases covered. Although all the campaign spending numbers aren't in, real estate political action committees pumped at least $7.2 million into the midterm Congressional elections."

"According to Open Secrets, the National Association of Realtors PAC was the biggest spender of any in the nation, regardless of industry."

"Many of these PACs, including NAR, spent even more money on state elections."

I had to read these a few times before I realized that they are proud of this. You should all check out the rest of the NARdi Gras site. They even have NAR Mardi Gras beads because when your industry is going to hell you might as well flash each other's fake boobs and have an orgy.

"We now have the most favorable market for home buyers in several years"

hahahahahahahahahaha....
I will be regularly coming back to these "updated 2007 forecast" by Mr. Lereah and his cronies because it will be fascinating to compare these to reality. In a nutshell they are saying things will go down but stabilize next year. This includes both new and existing homes. And they are saying prices will still INCREASE, albeit slower than during the boom.

"The market is much better than you might hear or read"

I heard about this a few days ago but I just saw the press release on the NAR site today. It's got many quotes from a different asshole this time, their president Thomas Stevens, not the usual David Dickhead Lereah. The press release has a PDF of an full-page newspaper ad urging people to buy a house! How desperate can pigs get...

Toll Bros. 4Q Home Building Revenue Dips

"We continue to look for signs that a recovery is imminent but can't yet say that one is in sight," Chairman and Chief Executive Robert I. Toll said in a statement.

Please... no shoes inside thank you.

Well things are starting to get interesting in the market. I've been looking hard for a picture of the realtor/agent/bitch that was showing 507 11th Ave but I've been out of luck. She's a catty one especially when you tell her you're waiting for the bottom to completely fall out of the market. That's when she begins her lecture with claims like the rest of the world is going down but she ain't seeing that in San Francisco. And that it's all about pricing properly... later I find out this particuar place (4db $1.6m) has been on the market for 2 months. Time for a price cut??? Apparently she did not think me having an agent in the east bay was a good idea because one really needs someone in the city like her. She hits the streets every Tuesday to be on top of everything. Well her job is gonna get much busier very soon. I'll probably go back in a few weeks to poke at her ego.

Not only am I seeing the same houses up for sale every weekend, I'm seeing the same people go to the open houses week after week. One place I did not see other people at was 579 6th Ave. #201. This is a unit in a 4-unit building from 1982... and it very obviously has not been updated since then. They chose to preserve the historic orange tiles and brown wood panels all over the building. This place was gross. #201 is a small 2bd, low-ceilings, stained carpets throughout (they have the gall to put up a "no shoes" soon outside), and the smell of steamed rice coming from the rice cooker. The chinese couple showing this place had the TV on as we walked through struck in awe that they are asking $650k for this shithole. We had just come from completely remodelled 2bd flats with hardwood floors that are going for 500k. This is one piece of evidence that my theory about price reduction imbalance is actually happening. People are reducing prices so fast and so ad hoc and for all kinds of reasons that we're gonna see really whack pricing comparisons. Some shitholes like this will look way overpriced and some really nice places from more desperate sellers will look like great deals.

Open House reviews

So we did our rounds of local 2bd places that are under 800k. That price is still way too much for us but we're confident those places will be going for much less sooner than expected. The most difficult part of planning open houses viewing these days is not finding places that are somewhat affordable enough, it is keeping track of places we've already seen. The same places are showing week after week. But some of those places are finally lowering their places. Take 969 Hayes #4. We saw it over a month ago. It's right around the corner from our current place. A decent Victorian 2bd, small bedrooms with carpet, hardwood everywhere else, shared laundry, bathroom needs remodeling. They were asking something like 789k. Now it is 739k. Still total bullshit but it's a start. I mean at that price, 1271 McAllister looks like a steal for 799k. But that place is still on the market. That might be because of the freaky looking realtor showing the place, shown here (this is actually a more flattering pic). We saw a loft in the lower Haight. I don't remember the fucking address but trust me I'll be seeing signs for it for a long time. It's a 850 sq. ft 1bd loft for 679k! The chick's dad was showing the place. Nice guy but he's trying to tell us how the price is great because something similar went for over 700k. Dude, all that tells me is that those idiots got ripped off even more than you're trying to rip me off. We were the third group to sign in on his notepad so he probably ended up with 5-6 that day.

First comment!

I know I'm a few days late but I need to publish my comments on open houses from last weekend.
This post is also to commemorate the first comment on this site. Thank you to Anonymous in Sonoma! Yes, wait it out as long as you can. These mofos are just starting to shake in their boots.
I had originally intended to talk about homes without mentioning their locations so as to avoid advertising. But seeing as how these homes are not moving I won't hold back on the addresses. It'd be more fun to draw attention to them so people can see some of these places for themselves.

The market currently is a little lower than expected - Lereah

I watch Marketwatch.com pretty regularly. I could not help noticing yesterday that the latest housing news would drop quickly on the front page until it was gone by the end of the day. And the news was not trivial. In September, pending homes sales are down 1.1% from previous month, actual homes sales are down 14% in the past year, building permits are down 27%. Mortgage applications are down 3% from the week before. Applications for purchase loans are at a three-year low. Whenever news like this comes out you can expect to hear from National Association of Realtors chief "economist" David Lereah. It's hard to edit down this asswipe's quotes because they are all so classic.

"The present level of home sales is relatively high in historic terms, and we can expect generally minor movements around this level," said David Lereah, chief economist for the realtors' group. "We don't expect to see any changes of note until early next year when we're likely to see a modest lift to home sales."

"The market currently is a little lower than expected as buyers try to time their entry," Lereah said. "In the meantime, there's some buildup in demand that will move when consumers realize that conditions are optimal for them."

My god I don't think that needs any more comment. This is the entire Marketwatch article that was not on for long.
And yes that is Jesus-freak Katherine Harris getting her Homeownership Hero Award from Lereah.

DNN no longer broadcasting

This is a bummer... just a week after I found this bullshit mouthpiece for the real estate industry, the website has this on the front page. I was hoping for lots more laughable "news stories" to comment on. I did find one last new story show up on Yahoo Finance though. It had some tips for sellers in today's market. I found it interesting that price reductions were only recommended after the house has been on the market for 90 days. Seems like it's still a taboo. That's consistent with the kind of prices I've been seeing on the market in San Francisco and Oakland. A desperate greed behind the phony happy face.