Bay Area Sweet Digs

January 2, 2010

Biggest Discounts by City in November

Let’s check in on our stats to find out where buyers are currently getting the biggest discounts off asking price. If you are a potential buyer, this will help you to know which neighborhoods may be softer in terms of sale price discounts off list price, and help you know where to look for potential bargains.

In the charts below, we have taken all sales data from the month of November in the Bay Area and sorted it by city.

Methodology
First, we compiled a list of every sale that took place in the month, calculating each sale’s sale-to-list ratio (based on the final list price). Next, we simply take an average of every individual sale’s sale-to-list ratio to calculate an entire area’s sale-to-list ratio. Any sales that came in with a sale-to-list ratio above 150% or below 50% are excluded from the calculation, and areas with fewer than twenty sales are excluded from the top and bottom ten rankings. Interested readers may download the full data summary in Excel format (xls).

Here are the top ten areas with the largest overall discount:

SF Sale to List most 2009 11 Biggest Discounts by City in November

The overall discount rose slightly from our last update (based on August sales), but still remained negative, moving from -1.0% to -0.8%.

Here are the ten areas with the smallest discounts:

SF Sale to List least 2009 11 Biggest Discounts by City in November

I’m not really sure what’s going on in Bay Point and San Lorenzo, but sellers there appear to be under-pricing their homes by a pretty good margin. In the 53 areas we ranked, the median discount was -0.2%.

Is the area you’re shopping not on either the top 10 or bottom 10? No problem, just download the full rankings in Excel format and check out the appropriate “Full” sheet.

Of the 4,891 sales we tracked in the 1-month period, 867 homes sold for 5% or more off the asking price, while 1,114 homes sold for 5% or more above the asking price.

Posted by Tim Ellis on January 2, 2010 5:35 PM | del.icio.us | Digg

  • Rick
    The Bay Area is a unique place to study real estate for a variety of reasons. The core area is San Francisco itself. Fortynine square miles without any open space left. Real estate prices seem to stay consistent for a long period of time because people were not required to move - most purchased their property in the 80's and early 90's when prices were still reasonable. If you decided to trade up you have to think about tripling you tax to secure a another 300 square feet or better view. Property listings have gone way down in the City over the last year - 75% down. Now, think about the businesses that have left the City in the last ten years. Chevron moved to the east bay (-25 K jobs), BoA moved to East Coast (-45K jobs), ATT has moved the bulk out of SF (-20k) Bechtel moved east (-20K) -- SF has lost 150K middle class jobs which will never be replaced or return. This alone should have killed the real estate market, but it didn't until now in 2010-11.

    But, it's a sign that coming because as the 'short sales' escalate, there will be less buyers or speculators to take up the slack. With all the lost jobs, there isn't a middle class left in the bay area to make a difference when the real estate takes a turn down
  • Djh
    These data support historic trends: the fortress areas drop later than outlying or less desirable areas.

    Recovery in prices in areas like Richmond and Union City is completely dependent on FHA/Fed backing of the secondary mortgage market, and we don't know how bumpy the transition will be once the Fed begins to withdraw supports and raise rates. Worst case would find the current "bottom" to be actually a bear trap, with current buyers looking at a painful loss.
  • joan Smith
    If you look at the ORIGINAL list price you will see drops of $10-20%. It only looks so close to listing because no offers were made until the original listing price was dropped quite a bit. You will see 1-2 million at a time lopped of some Woodside homes. $150,000 drops in Redwood City in under a million price range. AFTER the sellers drop their price the offers get made and look like not much is discounted.
  • ns
    I am a little confused.
    for example, Los Altos, the average list is 1,503,070 and average sold is 1,568,136. the overall discount is 3.92%

    then for Fremont, the average list is 585,864 and average sold is 593.103 but the overall discount is -0.14%

    in both cases, the sold price is higher than the list price but the discount is positive vs. negative. can someone explain why?
  • David
    All areas marginal to the 'core' Inner East Bay (Oakland, Berkeley, Alameda) dropped first and dropped hardest. They also have had a relatively large REO/short sale inventory. It got to the point earlier last year that there were many bidding wars on lower end properties in San Leandro and elsewhere as there were prices that were literally the same as 1999. There is always a bit of a lag effect on sellers' pricing and I think that there's also an element of ginning up auctions, so I think that, yes, the banks and 'regular sellers' are underpricing their properties in areas like SLo, El Cerrito etc.
  • Interesting info. I am not seeing tons of discounts in San Francisco. In fact, the market is pretty healthy (I know, spoken like a true SF Realtor). Here's my two cents on our city market:
    http://insidesfre.com/2010/01/...
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