Hyper-Local Neighborhood Inventory Statistical Trends

The beginning of September and we’re returning from the Labor Day weekend and gearing up for what is traditionally one of the busier seasonal real estate markets. The Spring market, March and April, were the busiest months we’ve seen all year so we’re on the lookout for higher activity.

The latest statistics give us some indication of what we’ll be looking at as the ‘market’ is hyper-local and neighborhood driven. The August numbers haven’t come up yet so to get in the groove in anticipation I’m re-visiting the trends thru July. The overall San Francisco County single family home inventory increased from 3 months to 3.7 months – still very healthy – but my prediction is that number will increase a bit when we see the August figures. The same can be said for the overall condo market which went up from 4.4 months in June to 5.6 months in July. I’m prepared for it to hit 6 months of inventory as the condo market definitely deteriorated in July.

I’ve been closely watching the breakdown of the individual neighborhood single family home markets throughout the summer. The best recovery was in District 7 (Pacific Heights, et. al) which started out the year with 5 months of inventory but has fallen to skip around under 3 months – this is a very stable market.

Likewise, District 9 (the Mission, et al) started with a tight supply but has increased and stayed around 3 months – again a very stable market.

The problem child has been District 5 (Noe Valley, et al). When the overall numbers are viewed it increased from 2.5 months to 4 months by the end of July. This isn’t bad. Break it down into segments however and there is real deterioration going on in the $2mil+ market. This market has gone from bad to worse ending July with 24 months of inventory and my guess is it will show an increase in the month of August and September both. I do not see this coming down soon as more inventory is slated to come on and buyers are not rushing to purchase. This is the best market for a buyer to get a ‘great’ deal.

I believe this segment of the market is slated to take a 20% haircut before it’s over. Watch and wait. I’ll keep you posted.

All the Best,

Lance