From the San Francisco Chronicle S.F. feels the pain of real estate meltdown
The downturn that slammed other parts of the Bay Area and the rest of the country didn't really begin inflicting serious pain on San Francisco until the second half of this year, real estate experts said. And while no one expects San Francisco to see the kind of foreclosures and bank sales that have become common in the East Bay, the city's real estate market is clearly suffering.
"San Francisco had managed to fool itself through most of 2008 into thinking that it wasn't going to suffer the same sort of issues that have hurt other places in the state," said Christopher Thornberg, an economist with the consulting firm Beacon Economics. "The last four or five months of the year, San Francisco has seen price declines that have been quite prominent. You can't have prices fall as much as they have across the bay without some impact on San Francisco itself."
The median price of a single-family home in San Francisco fell 16.6 percent to $702,000 in October, the most recent month for which data are available, according to the real estate information service MDA DataQuick. The October drop compares with $842,000 in October 2007. The median price is now 22 percent below its peak of $900,000 in May 2007.
ME: This is less of a geography-specific shift and more of a price-range event. Higher-end communities across the Bay Area are seeing prices tumble at a faster pace.
…The meltdown in the stock market has eroded wealth and instilled fear in buyers, while tighter lending standards have made it much more difficult to get loans. Add concerns about the economic recession, and it's a lethal combination, Moore said.
One of his top agents approached him recently after listing a home that she was convinced would sell quickly.
"She thought it was a run-don't-walk situation that would go over asking (price) with multiple offers," Moore said. "Two weeks later, she showed it to a buyer who offered less than the asking price and got it. There's a new, lower benchmark."
ME: The pool of buyers to qualify for high-end homes is simply smaller. Even though there are a lot of wealthy people here, many of the buyers for million-dollar-plus homes over the last 6-7 years were stretching themselves too thin.
…"I'm thinking about surviving these turbulent times," Moore said. "I'm not thinking about thriving any more. It's a new mind-set."
And it's a glum outlook from a leader in an industry usually known for its relentless optimism. The goal isn't to be depressing, just realistic, Moore said.
"If you are the sole counselor to your client, you had better talk credibly, and you had better tell the real story," he said. "It may be a depressing story, but it's your job to tell it."
ME: Telling the real story is what this blog is all about.
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