7 ms·

After first decline in years, SF home prices hit all-time high in April 2016

59 points by walterclifford 10y ago

rgbrgb 10y ago
Hey, thanks for posting this to HN. For those curious, our designer/CEO (DEO!) Judd Schoenholtz made the graphs in Sketch (we're huge fans). A little trick from him on making the bars to scale... use the actual values as the pixel heights then scale group to your desired size. Seems obvious but I would have done something dumber and more complicated. As for the data, it's from the SFAR MLS (we're a participating broker member) and was double-checked with data from Paragon RE. If you want it, email datarequest@openlistings.com (I think we need to pull it into its own spreadsheet but I'll post the link here when we do).
- okigan 10y ago
  Statistics are misleading, particularly median [1]. Post the same graph with volume of sales under it (like [2]) to actually make it meaningful. [1] https://www.openlistings.com/blog/content/images/2016/05/Artboard-4-Copy-10-4.png https://www.openlistings.com/blog/content/images/2016/05/Art... [2] http://www.gmatpill.com/images/apple-stock.jpg http://www.gmatpill.com/images/apple-stock.jpg
  - w-ll 10y ago
    Box Charts would probably be the best way to look at it.
- amelius 10y ago
  The graphs look nice, but two things which imho could have been improved: - the y axis doesn't start at zero; - it is not clear exactly when each month on the x-axis starts.
jboydyhacker 10y ago
Median is a tough number to use if a bunch of folks at the high end skew the data during a month- especially if volumes are drying up. To get at what is occurring you probably need to show it in price bands. say top/bottom and middle third of real estate prices. How much volume at each and trends in each.
- nickm12 10y ago
  You have it reversed. The advantage of the median (50th percentile) is that a few outliers at the high end won't skew the data. To move the median, you have to move half of the distribution.
  - jboydyhacker 10y ago
    No read the second sentence. What I'm saying is the real estate market has very different characteristics in the low, medium, and high end. So the top third, middle thirds and bottom thirds should be broken out and you can't use median for the market as one sample set.
- rgbrgb 10y ago
  We actually explored this a bit in our last post: https://www.openlistings.com/blog/sorry-sf-housing-prices-are-only-falling-for-the-one-percent/ https://www.openlistings.com/blog/sorry-sf-housing-prices-ar... I agree that it can be misleading but it's the most common statistic used to describe the health of a real estate market. I think that's because it's rather robust to outliers. But, as we show in the post above, it's not robust to tightening / loosening of the price bands above and below median (e.g. median went down last month but the 1st quartile went up).
  - Dr_tldr 10y ago
    But isn't there a little bit of circular reasoning there? The median is the best statistic because it's the most common, and it's the most common statistic because it's the best. I'm not advocating for any other single-number analysis presentation, nor do I think the median number is totally meaningless, but you're leaving a lot of data out in the name of creating a simple chart without asking if it's informative.
    - rgbrgb 10y ago
      Yes, it would be circular had I concluded that median is best.
matt_wulfeck 10y ago
Don't worry everyone this time it's different.
- snarfy 10y ago
  It is different. In 2007 the bubble was everywhere. Today markets like Los Angeles, San Francisco, Seattle, Vancouver are at or above 2007 levels. Other markets like Phoenix, Atlanta and most others have still not recovered. It's lack of inventory causing the increase, not sub prime mortgages. I just bought a house myself in a hot market. It had 35 offers on it. That week there were about 3 houses available in the entire county of similar price. And every week I've shopped, the outlook was just as grim. They will need to build a lot more to meet the demand, but there isn't enough space.
  - ghaff 10y ago
    The bubble really wasn't everywhere. The areas with a lot of genuine demand because of job growth and other factors (Bay area, prime areas of Northeast, prime areas of NYC) didn't decline to nearly the same degree that locales like Las Vegas did. Presumably, absent the sub-prime crunch, prices would have started rising more and sooner in the popular areas.
deleted 10y ago
[deleted]
pcr0 10y ago
While it's a useful statistic, I don't think home prices by themselves tell the whole story. Would be great to have a median multiple as well. (median home price / median annual salary)
- rgbrgb 10y ago
  Someone mentioned something like this in a reddit thread as well [0]. What conclusion would you be hoping to make from that? According to census.gov median household income was $78,378 in 2014 if that's interesting [1]. [0]: https://www.reddit.com/r/sanfrancisco/comments/4i7wmt/sf_home_prices_back_to_an_all_time_high/ https://www.reddit.com/r/sanfrancisco/comments/4i7wmt/sf_hom... [1]: http://www.census.gov/quickfacts/table/PST045215/0667000,00 http://www.census.gov/quickfacts/table/PST045215/0667000,00
  - pcr0 10y ago
    Cool, thanks. It just gives an income-adjusted figure to be able to compare with other cities in the US, and around the world [0]. It also gives a rough idea of how long a typical household would have to save in order to buy a home (though this depends on tax and other spending). That represents a median multiple of ~16.4 (1.285m / 78378), second only to Hong Kong (19.0)[0], which has topped the survey since its inclusion. [0]: http://www.demographia.com/dhi.pdf http://www.demographia.com/dhi.pdf
PostThisTooFast 10y ago
Don't live there then. And if you're a company, don't put your headquarters there. DUHHHHHH
coldcode 10y ago
How does anyone afford the median 1.2M house price? The income multiplier I always considered was 2X annual income which would require an income of $600K per household. I don't know anyone who makes that much as a programmer, even a dual $300K income seems unlikely. Are there really that many startup millionaires in SF?
- forgetsusername 10y ago
  >The income multiplier I always considered was 2X annual income It's generally 3-5x, depending on rates. I know that in Silicon Valley everyone thinks everyone is "killing it", but I bet people would be surprised how few people are actually making the ~$250,000 required to service a mortgage this size. The median income in SF is less than $80,000.
  - chefkoch 10y ago
    As a european it seems quite unbeliveable that a house should not cost more than 2x your income.
    - leadingthenet 10y ago
      Yes, I also had a similar reaction. Incomes also seem way above what most people could reasonably achieve in Europe.
      - chefkoch 10y ago
        Or houses should be dirt cheap? For douple my ok income i would not get a run down house near a population center in germany.
    - henrikschroder 10y ago
      Also, 3.5% in mortgage interest? That's ridiculously high. Where I'm from you can easily get a mortgage with a variable interest of 1.46%. In completely unrelated news, Stockholm is in a crazy housing bubble as well, and prices are actualy above Silicon Valley levels, yet people sustain that with incomes much lower.
deleted 10y ago
[deleted]
radikalus 10y ago
1. I hate paying so much for a house, this is ridiculous, they need to build more supply. 2. I bought a house for some ridiculous price anyways. 3. I'm now fucked if more supply is added. Vote against any proposition that adds more units to the city. 4. Go to my job where I make the world a better place.
- tachyonbeam 10y ago
  I just moved to the bay area from a large urban center. I live in the far away surburbs right now (Sunnyvale). It's kind of incredible to me how flat and sprawled out everything is. There are almost no buildings taller than 2-3 floors. The bay area has a housing crisis, and it needs to grow vertically. There should be tall apartment buildings being built, especially in the suburbs, there's plenty of space. It's pretty clear that the bay area refuses to grow, because of political reasons, which are often selfish as you pointed out. IMO, the inevitable outcome is that tech will slowly relocate to other areas that are more willing to accomodate (and perhaps welcome) the growth. I think it's already started.

Hey, thanks for posting this to HN. For those curious, our designer/CEO (DEO!) Judd Schoenholtz made the graphs in Sketch (we're huge fans). A little trick from him on making the bars to scale... use the actual values as the pixel heights then scale group to your desired size. Seems obvious but I would have done something dumber and more complicated. As for the data, it's from the SFAR MLS (we're a participating broker member) and was double-checked with data from Paragon RE. If you want it, email datarequest@openlistings.com (I think we need to pull it into its own spreadsheet but I'll post the link here when we do).

okigan 10y ago
Statistics are misleading, particularly median [1]. Post the same graph with volume of sales under it (like [2]) to actually make it meaningful. [1] https://www.openlistings.com/blog/content/images/2016/05/Artboard-4-Copy-10-4.png https://www.openlistings.com/blog/content/images/2016/05/Art... [2] http://www.gmatpill.com/images/apple-stock.jpg http://www.gmatpill.com/images/apple-stock.jpg
- w-ll 10y ago
  Box Charts would probably be the best way to look at it.
amelius 10y ago
The graphs look nice, but two things which imho could have been improved: - the y axis doesn't start at zero; - it is not clear exactly when each month on the x-axis starts.

jboydyhacker 10y ago

Median is a tough number to use if a bunch of folks at the high end skew the data during a month- especially if volumes are drying up. To get at what is occurring you probably need to show it in price bands. say top/bottom and middle third of real estate prices. How much volume at each and trends in each.

nickm12 10y ago
You have it reversed. The advantage of the median (50th percentile) is that a few outliers at the high end won't skew the data. To move the median, you have to move half of the distribution.
- jboydyhacker 10y ago
  No read the second sentence. What I'm saying is the real estate market has very different characteristics in the low, medium, and high end. So the top third, middle thirds and bottom thirds should be broken out and you can't use median for the market as one sample set.
rgbrgb 10y ago
We actually explored this a bit in our last post: https://www.openlistings.com/blog/sorry-sf-housing-prices-are-only-falling-for-the-one-percent/ https://www.openlistings.com/blog/sorry-sf-housing-prices-ar... I agree that it can be misleading but it's the most common statistic used to describe the health of a real estate market. I think that's because it's rather robust to outliers. But, as we show in the post above, it's not robust to tightening / loosening of the price bands above and below median (e.g. median went down last month but the 1st quartile went up).
- Dr_tldr 10y ago
  But isn't there a little bit of circular reasoning there? The median is the best statistic because it's the most common, and it's the most common statistic because it's the best. I'm not advocating for any other single-number analysis presentation, nor do I think the median number is totally meaningless, but you're leaving a lot of data out in the name of creating a simple chart without asking if it's informative.
  - rgbrgb 10y ago
    Yes, it would be circular had I concluded that median is best.

matt_wulfeck 10y ago

Don't worry everyone this time it's different.

snarfy 10y ago
It is different. In 2007 the bubble was everywhere. Today markets like Los Angeles, San Francisco, Seattle, Vancouver are at or above 2007 levels. Other markets like Phoenix, Atlanta and most others have still not recovered. It's lack of inventory causing the increase, not sub prime mortgages. I just bought a house myself in a hot market. It had 35 offers on it. That week there were about 3 houses available in the entire county of similar price. And every week I've shopped, the outlook was just as grim. They will need to build a lot more to meet the demand, but there isn't enough space.
- ghaff 10y ago
  The bubble really wasn't everywhere. The areas with a lot of genuine demand because of job growth and other factors (Bay area, prime areas of Northeast, prime areas of NYC) didn't decline to nearly the same degree that locales like Las Vegas did. Presumably, absent the sub-prime crunch, prices would have started rising more and sooner in the popular areas.

deleted 10y ago

[deleted]

pcr0 10y ago

While it's a useful statistic, I don't think home prices by themselves tell the whole story. Would be great to have a median multiple as well. (median home price / median annual salary)

rgbrgb 10y ago
Someone mentioned something like this in a reddit thread as well [0]. What conclusion would you be hoping to make from that? According to census.gov median household income was $78,378 in 2014 if that's interesting [1]. [0]: https://www.reddit.com/r/sanfrancisco/comments/4i7wmt/sf_home_prices_back_to_an_all_time_high/ https://www.reddit.com/r/sanfrancisco/comments/4i7wmt/sf_hom... [1]: http://www.census.gov/quickfacts/table/PST045215/0667000,00 http://www.census.gov/quickfacts/table/PST045215/0667000,00
- pcr0 10y ago
  Cool, thanks. It just gives an income-adjusted figure to be able to compare with other cities in the US, and around the world [0]. It also gives a rough idea of how long a typical household would have to save in order to buy a home (though this depends on tax and other spending). That represents a median multiple of ~16.4 (1.285m / 78378), second only to Hong Kong (19.0)[0], which has topped the survey since its inclusion. [0]: http://www.demographia.com/dhi.pdf http://www.demographia.com/dhi.pdf

PostThisTooFast 10y ago

Don't live there then. And if you're a company, don't put your headquarters there. DUHHHHHH

coldcode 10y ago

How does anyone afford the median 1.2M house price? The income multiplier I always considered was 2X annual income which would require an income of $600K per household. I don't know anyone who makes that much as a programmer, even a dual $300K income seems unlikely. Are there really that many startup millionaires in SF?

forgetsusername 10y ago
>The income multiplier I always considered was 2X annual income It's generally 3-5x, depending on rates. I know that in Silicon Valley everyone thinks everyone is "killing it", but I bet people would be surprised how few people are actually making the ~$250,000 required to service a mortgage this size. The median income in SF is less than $80,000.
- chefkoch 10y ago
  As a european it seems quite unbeliveable that a house should not cost more than 2x your income.
  - leadingthenet 10y ago
    Yes, I also had a similar reaction. Incomes also seem way above what most people could reasonably achieve in Europe.
    - chefkoch 10y ago
      Or houses should be dirt cheap? For douple my ok income i would not get a run down house near a population center in germany.
  - henrikschroder 10y ago
    Also, 3.5% in mortgage interest? That's ridiculously high. Where I'm from you can easily get a mortgage with a variable interest of 1.46%. In completely unrelated news, Stockholm is in a crazy housing bubble as well, and prices are actualy above Silicon Valley levels, yet people sustain that with incomes much lower.

deleted 10y ago

[deleted]

radikalus 10y ago

1. I hate paying so much for a house, this is ridiculous, they need to build more supply. 2. I bought a house for some ridiculous price anyways. 3. I'm now fucked if more supply is added. Vote against any proposition that adds more units to the city. 4. Go to my job where I make the world a better place.

tachyonbeam 10y ago
I just moved to the bay area from a large urban center. I live in the far away surburbs right now (Sunnyvale). It's kind of incredible to me how flat and sprawled out everything is. There are almost no buildings taller than 2-3 floors. The bay area has a housing crisis, and it needs to grow vertically. There should be tall apartment buildings being built, especially in the suburbs, there's plenty of space. It's pretty clear that the bay area refuses to grow, because of political reasons, which are often selfish as you pointed out. IMO, the inevitable outcome is that tech will slowly relocate to other areas that are more willing to accomodate (and perhaps welcome) the growth. I think it's already started.