December 30, 2007

SF: Data Crunching…Carefully

In real estate, Altos Research has quickly emerged as one of the most often relied on and referred to resources for tracking the state of the market.  However, whenever we look at such data, we need to read the fine print, consider the sample pool, and otherwise be critical thinkers. For although Altos Research’s December housing market update offers interesting and valuable information, it cannot tell the whole story for this city.

Perusing the pdf in its entirity, you will see graphs for average DOM, listing inventory, and price reductions among other analyses. These data are gathered from major metropolitan areas, and a brief summary shows us that:

• In SF, the November average DOM in was 83 days on the market. That makes us the third lowest of the 20 cities listed, but it also shows that November DOM was higher than both September and October.
• in SF, the number of listings with at least one price reduction was third highest with an average of 8.6% increase in price reductions over the past three months (we were also third highest in Sept. and Oct.). Yet the median price for homes sold is still among the highest in the country.

Data, like The Bible, can be interpreted any way you like: you could use the above to paint a rosy picture, or you could use it to paint doom.  In whatever way you use Altos Research’s report, however, note that the data are not complete for San Francisco. SFHomeBlog points out:

“the data is [sic] significantly flawed, at least for San Francisco being as they excluded condo and new home inventory.”

Still, although “without condo stats, it’s impossible to get a true picture since that accounts for such a large percentage of the overall housing in our fair city,” the information is “more fuel for market watchers to debate and worthy of keeping an eye on.”

So yes, certainly, especially if you are interested specifically in single-family homes, Altos Research is an excellent resource. And we always like to see how our city performs compared to other major US cities. Just keep in mind that performance is just that: a performance- and each member of the audience will  see it in a different way.