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October
San Francisco Real Estate Market Update for
September 2005

The San Francisco Real Estate Market for September is definitely changing. This means longer marketing times for homes before they are getting offers. The number of homes sold also dropped significantly from the previous month for all three categories we track and were fewer than the same time a year ago. However, compare the average selling prices this year to the same time last year, and you will see that despite the slower sales, San Francisco Real Estate has shown significant appreciation.

Avram Goldman, President and COO of Coldwell Banker, SF Bay Area reported for the second week of September, "We are approaching... a balanced market line. Inventories are increasing in about a third of our markets, while sales are overall holding steady. Listing inventories at this time of year head downward. Our current pattern is still showing an upward trend.

"Increasingly, pricing is becoming more critical. Open homes again are still seeing good traffic in most locations. (It's) Too early to tell exactly where the market is headed. We should have a clearer picture by the end of the month."

The number of Single Family Homes sold for September was down significantly from August as was the average selling price. Even so, the average listing price was over 107% of the listing price. And compared to sales figures from last year at this time, prices rose over 10% on average.

The number of Condominiums sold in September was also down from August as was the average selling price. Even so, the average selling price was over 5.89% from last month, and the average selling price was over 105% of the listing price. And compared to sales figures from last year at this time, prices rose over 17% on average.

The number of Overall Sales for September was also down from last month as was the average selling price. However, the average selling price was over 105% of the listing price. And compared to sales figures from last year at this time, prices rose over 17% on average.

Jay Bransfield of All California Mortgage submits this article in the San Francisco Chronicle outlined a change in potential lending to TICs.  It looks like there will be one bank coming forward to do what they are calling fractional-interest lending.  The lender will start out and make a limited number of fractional-interest loans to individuals who buy units from developers who got their acquisition/renovation financing from the bank.  They will be like commercial loans 30 due in 10 at 7%.  Other banks are watching closely. The article appears here.

"Most people don’t know what goes into their credit. This month I’d like to take a little bit of the mystery out of what goes into the credit scoring and provide five tips for taking care of your credit. We are all told we should check our credit frequently to make sure someone hasn’t stolen our identity, but aside from the fraud risk what goes into my credit scoring?Credit scoring can be broken down into five categories; Payment history, Amounts Owed, Length of Credit History, New Credit and Types of Credit Used. See the chart below for how the three credit agencies roughly weight each of these categories.

"The three credit reporting agencies are: Equifax, Experian and TransUnion. Each of the agencies will give you a credit score roughly between 300 and 850. A lender will often use the middle score for assessing credit risk. Where do you score? In the chart below you can see the average distribution of credit scoring.

"How does good credit help you?

• People can get loans faster
• Credit decisions are fairer
• Credit “mistakes” count for less
• More credit is available
• Credit rates are lower overall.

Five Tips for Improving Your Credit Score

• Pay your bills on time
• Keep balances low on credit cards and other “revolving credit”
• If you have been managing credit for a short time, don't open a lot of new accounts too rapidly
• Do your rate shopping for a given loan within a focused period of time
• Apply for and open new credit accounts only as needed

Mortgage Rates News

Meanwhile, the debate rages on… will the effects of Hurricane Katrina prompt the Fed to continue to raise short-term interest rates or provide a reason to suspend rate hikes? Comments from Chicago Fed President Michael Moskow yesterday seemed to indicate that the Fed is not ready to stop their series of hikes just yet. There is a very good chance that the Fed will pause at the next meeting later this month. After all, it would appear pretty cold hearted to continue rate hikes without clearly assessing the economic impact of Katrina.

Now for the Numbers

• OIL, BONDS AND STOCKS - As oil prices jumped +14% during the month of August (going from $60.57 to $68.94), the yield on the 10-year Treasury note dropped from 4.29% to 4.01% and the Treasury note achieved a +2.3% total return. The S&P 500 stock index lost 0.9% (total return) during August. The slower growth in our economy that may come about as a result of higher oil prices can make bonds more attractive, pushing yields down and prices up (source: BTN Research).
• INCOME LEVEL - Median household income in the USA is $44,389 (source: US Census Bureau).
• DOUBLE-DOUBLE - The US economy was $3.1 trillion in size in 1981. By 1992, the economy had doubled to $6.2 trillion. Last week the government reported that our economy has doubled again to a size of $12.4 trillion (source: Commerce Department).
• ANOTHER OPTION FOR RETIREMENT PLANNING - The new Roth 401(k) s will be effective 1/01/06 and may be offered through employers. Like Roth IRAs, dollars are invested in a Roth 401(k) on an after-tax basis and future withdrawals come out income tax free. Individuals at least age 50 may invest up to $20,000 in 2006 in either a traditional 401(k) or a Roth 401(k) or can split the $20,000 between the 2 plans (source: www.roth401k.com).
• CATASTROPHIC LOSSES - Insured losses from Hurricane Katrina have been estimated at $26 billion, more than the combined $24 billion of insured losses from all 4 hurricanes that hit Florida in August and September 2004. Property and casualty insurance companies paid out a record $27 billion in 2004 to cover the losses in 22 different catastrophic events during the year (source: AP, ISO, Insurance Information Institute, WSJ).

"I've used SFResidence as my Trusted Advisor when I've bought and sold real estate in San Francisco and I'm honored to be a part of her Trusted Advisor Team" - Jay Bransfield

Don't miss out on your opportunity to buy or sell! San Francisco Real Estate continues to be a great investment!

September statistical market history is now online.

September 2005 **

August 2005 **

September 2004 **

* Includes Single Family Homes, Condo/Coop/TIC and Loft, 2-4 Units, and 5+ Units.
** Figures subject to change as Multiple Listing Service is updated.

Realtor.com is the official site of the National Association of Realtors® (NAR) and is a search engine for real estate nationwide. Realtor.com has all of San Francisco's listed homes and condominiums.