“Pent-up Supply” Floods San Francisco Housing Market, Most Since Housing Bust

“Pent-up Supply” Floods San Francisco Housing Market, Most Since Housing Bust

Sellers are suddenly coming out of the woodwork. Housing market is having a moment.

By Wolf Richter for WOLF STREET.

There is a lot of discussion about the low levels of inventory for sale, as potential sellers have pulled their homes off the market or are not wanting to list their homes at the moment, waiting for the Pandemic to blow over, or waiting for more certainty or whatever; or their mortgage is now in forbearance and they don’t want to make a move.

These discussions cite buyers who, after being kept out of the housing market for a couple of months due to the lockdowns, are now swarming around out there, stumbling all over each other, looking for homes to buy, jostling for position, and engaging in bidding wars with each other.

And then there is the widely reported move to the suburbs, or to small towns, and away from big densely populated cities, by those who have shifted to work-from-home, to work-from-anywhere, which blatantly contradicts some of the other stories of big cities being overrun by buyers engaging in bidding wars.

Those are some of the narratives we’re hearing, and they all make some intuitive sense. But this is not the case everywhere. So we’re going to look at San Francisco, one of the most expensive housing markets in the US, based on weekly data that was compiled by real-estate brokerage Redfin, from local multiple listing service (MLS) and Redfin’s own data, updated at the end of the week.

San Francisco is now flooded with homes for sale. “Active listings” surged to 1,344 homes in the week ended July 5, up 65% from the same week last year, and the highest number since the housing bust, amid a 145% year-over-year surge in “new listings.”

There normally is a seasonal surge in active listings after Labor Day that peaks in late October. But this month, the surge of active listings (1,344) has already blown by those peaks in October, including the multi-year peak of 1,296 in October 2019. This is “pent-up supply” coming on the market at the wrong time of the year when supply normally declines (chart via Redfin):

Redfin’s data doesn’t go back that far. But the 1,344 active listings would be the highest since 2011, during the final stretch of the San Francisco Housing Bust, based on MLS data provided by local real-estate site, SocketSite.

Supply of homes for sales has more than doubled, from 7.8 weeks last year at this time to 16.6 weeks now, at the current rate of sales. Note the spike of supply in May, a function of sales that had collapsed (chart via Redfin).

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Wolf Richter

In his cynical, tongue-in-cheek manner, he muses on WOLF STREET about economic, business, and financial issues, Wall Street shenanigans, complex entanglements, and other things, debacles, and opportunities that catch his eye in the US, Europe, Japan, and occasionally China. WOLF STREET is the successor to his first platform… TP-Title-7-small-200px …whose ghastly name he finally abandoned in July 2014. Here’s the story on that. Wolf lives in San Francisco. He has over twenty years of C-level operations experience, including turnarounds and a VC-funded startup. He earned his BA and MBA in Texas and his MA in Oklahoma, worked in both states for years, including a decade as General Manager and COO of a large Ford dealership and its subsidiaries. But one day, he quit and went to France for seven weeks to open himself up to new possibilities, which degenerated into a life-altering three-year journey across 100 countries on all continents, much of it overland. And it almost swallowed him up.