This is not an easy question to answer, because you have to count up all the properties for which we have tax assessor records and compare that to all the properties for sale in the MLS, on bank websites and on for-sale-by-owner websites.

Enter the great Arthur Patterson, a hyper-intelligent, near-mythical creature roaming the Redfin office in his socks at 7:15 a.m., oddly pleasant but always precise, and undoubtedly capable of assembling an atom bomb before breakfast.

Arthur helped put together the table below. He asked me to note that the percentages are probably a little too high, because our tax-records aggregator always misses a few properties but the margin of error is still less than 5%.

What immediately jumps out is how few homes are for sale compared to the number of properties available the city of San Francisco, where there are plenty of rental properties and the inventory of single-family homes is still slim.

At the other end of the spectrum, nearly 1 in 20 homes are for sale in Chicago, so there’s a lot of turnover in the heartland.

[And many thanks to Redfin reader Kim for  her comment on our photo of a Burmese python: "I suspected my x had once again fallen into the hands of the law."]

Since the price drop-data is for November while mortgage rates declined in December, it may be that the market just needs time to respond. But one analyst called the price drop “breath-taking” and “god-awful.” The WSJ quoted an economist as saying that “the housing industry is in the process of reducing capacity to dangerously low levels.” A second economist said that, “outside of distressed properties, the [California] market is nonexistent almost.”

This made us wonder whether it’s really true, in California or elsewhere, that most of the homes for sale are foreclosures being liquidated by banks.

Since Redfin’s database includes virtually all the homes for sale (basically everything except what’s on Craigslist), including bank-owned listings as well as for-sale-by-owner (FSBO) listings, we can measure what percentage of homes for sale are bank-owned. And we can do this with unusual precision because we map all the data down to the level of a city, neighborhood or postal code.

Here’s what we found for nine of the largest cities we cover, sorted from the highest concentration of listings in foreclosure to the lowest, as of December 22, 2008. We measure the ratio of for-sale-by-owner listings as a percentage of the total homes for sale in each city, and then do the same for foreclosures.

And it’s true that in major California cities south of the Silicon Valley peninsula, about 1 in 4 homes for sale have been foreclosed, and others are being sold by sellers trying to avoid foreclosure (short sales). But the number of short sales may soon be decreasing, as banks are now soliciting short sellers to modify their loans at the new low rates so folks can keep their home.

I used to worry that the low rate of foreclosure in Seattle and San Francisco was a disaster waiting to happen. Prices will fall through the floor in those markets if the percentage of listings being sold by banks increases in either place to 20% or 25%.

But because the downturn in Seattle and San Francisco prices started a little late, and mortgage rates fell soon thereafter — unemployment, not increasing mortgage payments, will be the main driver for foreclosures here — maybe Seattle and San Francisco can avoid the huge pile-up of distressed inventory that is dragging down the market in Southern California.

What do you think? Why do Seattle and San Francisco have such low foreclosure rates? And will this continue?

(Photocredit: Ironside on Flickr)

Not much time for Mark Reitman, Chicago market manager and customer-service manimal, to make headway. But now we’re looking to complete at least eight Chicago transactions in November, which for Redfin, in a new market, in a down economy, during the low season — is a lot. Check out what a client said about Mark today in Redfin’s Forums:

Before I first contacted Redfin I thought that, since the commissions were lower, I could expect to receive a lower level of service.

Boy was I wrong about that.  We closed on our house this month, and nothing could be further from the truth.  I actually got better service and everyone on your Chicago team worked very hard, and responded 7 days a week.  Plus, thanks to your awesome website, we were able to select and tour homes we were actually interested in, and saved a lot of time that used to be wasted driving around in the back of someone else’s car to see a lot of homes we didn’t want.  Then, after providing all of those benefits to us, you also gave us most of your hard earned commission.  Incredible!

I am amazed that you are able to provide such a high level of service at such a low commission.  Redfin appears to be single handedly transforming the badly outdated model that residential real estate has been following forever.  What is your secret?

Way to go Mark, way to go Redfin! And thanks to the customer who posted this message. These things whang off the walls at Redfin, and make everyone try a little harder.

(Bonus link: a remarkable essay on why bailout money should go to community banks…)

UPDATE: many thanks to Greg Whelan and Patrick Lusk for being the folks who as much as anyone really made this deal happen, and to Mark for being so generous in sharing the credit.

I hadn’t realized until this week how much we’d all missed expanding. Over the winter, we got a little chicken about opening new markets. But the requests for us to come to Chicago kept piling up (more than 1,200!). And, as nearly all of our markets slid back into the black, our expansion mojo has come back too.

Mark Reitman, who helped beat back an Illinois anti-rebate bill this winter, is running Redfin Chicago. Redfin veteran Rachelle King is coming out from Seattle to get us off to a flying start.

Redfin Search Available Across Most of the States We Serve
And we aren’t stopping there! In fact, the new website increases by nearly 40% the number of homes you can search from Redfin.com, in far-flung parts of Washington, Virginia, Maryland, Massachusetts and Illinois, over 100 new counties in all. We’ll probably never have agents in any of these areas, and so we have no way to make money directly from this traffic today. But we hope that a more national presence will drive more people to our brokerage in the urban centers, too.

And in any event, opening up Redfin Search is a big deal for consumers, a sort of rural electrification project but with real estate data. Because we aren’t just talking about any old YAREW (Yet Another Real Estate Website) coming to Peoria. We’re Redfin dang it! And that means the real-deal MLS listings, with price history, tax records, past sales, days on market and all sorts of other information that far-flung consumers sometimes struggle to get on their own.

Google Street View and Microsoft Bird’s Eye, All In One Site
Meanwhile, we keep striving to make Redfin Search better. The Chicago-version of the site features Google Street View alongside Microsoft Bird’s Eye imagery, so you can zoom around most listings from different perspectives, for a complete portrait of a neighborhood or a property. I think we’re the first ones to do that.

We’ve also fixed up how we search for bank-owned properties. Sue McAllister of the San Jose Mercury News had previously complained that we allowed her to search separately for those bank-owned properties not yet listed in the MLS, but that we didn’t also highight the bank-owned listings that already are in the MLS. Good bust Sue! We fixed that this time around. You can ask for bank-owned listings in the MLS or straight from the bank.

What else? You’ll notice the site now works with Firefox 3.0, a compatibility gap that this whole last week had been embarrassing us. And the details we bring up for each listing should be a lot zippier, too.

Check out the new site, play with the new imagery, see what $1,000,000 buys you along Lakeshore Drive, and by all means tell us what you think!

First photo credit: Today is a Good Day, Flickr