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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Rutgers who wrote (21314)	6/4/2004 12:36:06 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 306849

This is my neighborhood in Noe Valley, SF. Houses in Noe Valley were around 900K-1.1 million for a 2000 sq ft home (fixer- not the nicest by any means) in 2000. As of february 2001, I found this article on the web, which reflects the peak pricing. Would-be Noe Valleyans paid an average of $883,055 for a single-family home during the last two months of 2000, a 7.8 percent decline from the average $952,086 in September and October, according to data provided to the Voice by Zephyr Real Estate. Only 18 single-family homes changed hands during the November-December period, nearly a 44 percent drop from the 32 homes sold in the previous two months. Those numbers are a tipoff that the mania of 19982000 might finally be over, said Zephyr manager Randall Kostick. "We had agents burning the midnight oil for three years in a row. But this year, our agents were relaxing and taking time off during the holidays, because we were having a normal market slowdown," he said. "Now we're having a 'normal' year. The last three years have been abnormal." Still, prices remained nauseatingly high. "It's still a heated market," said Kostick. One holiday buyer paid more than $1 million for a condo on 25th Street. In December, a single-family home on Zircon Place sold for $1.8 million. noevalleyvoice.com Now- fast forward to May 04: Buyers paid nearly $1.5 million for the most expensive home--a three-bedroom, 31/2-bath property in the 4200 block of Cesar Chavez Street. The second costliest purchase, at nearly $1.4 million, was a four-bedroom, 21/2-bath home in the 1200 block of Dolores Street. noevalleyvoice.com So the most expensive home in 2000 sold for 1.8mm, and the most expensive home today sold for 1.5mm in the middle of the biggest RE mania of all time. This is consistent with my experience. If I could sell a home today that I bought in 2000 for 1.2mm at say, 2 million- basically a 20% y/y return for the past 3 years- I'd do it, so would all my neighbors in a heartbeat. Houses at this level have actually DECLINED in Noe Valley in 3 years. And before anybody says this is just the "high end"- when you have a median close to 600K you'd expect at least some appreciation for a 3 year period. There is none. And SF is better off than classic silicon valley.