March and 1st Quarter 2009 Statistics

Fun with numbers.

Our monthly report on sales and listing activity in San Francisco has been published on our website: www.boldsf.com/Statistics

The quarterly report is also available at the same site.

Hightlights:

• increasing inventory, especially condos
• very low sales levels, especially condos
• combine the two previous bullet points -- definitely a buyer's market, especially for condos
• both inventory and the number of sales were up in March compared to February -- as you would expect for this time of year
• average selling prices are down across the board

Realtor Association Doing It's Part

Last week the California Association of Reatlors announced a program to provide some peace of mind to prospective buyers in what continues to be a very nervous real estate market by launching a "Mortgage Protection Plan".

To help provide first-time home buyers with peace of mind when purchasing a home, the California Association of REALTORS® Housing Affordability Fund (CARHAF) is offering a new mortgage protection program to first-time home buyers.

Through the Housing Affordability Fund’s Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month for up to six months to help make their mortgage payments. A qualified co-buyer also can participate in the program, for a monthly benefit of $750 per month for up to six months. Program benefits also include coverage for accidental disability and a $10,000 death benefit. CAR’s Housing Affordability Fund is dedicating $1 million toward its Mortgage Protection Program this year, and estimates that up to 3,000 families will benefit from the program throughout 2009.

To qualify for the Mortgage Protection Program, applicants must:

• Be a first-time home buyer—someone who has not owned a home in the last three years
• Open escrow April 2, 2009, or later, and close on or before Dec. 31, 2009
• Use a California REALTOR® in the transaction
• Purchase the property in California
• Be a W-2 employee (cannot be self-employed or military personnel)

First-time home buyers must request an application for the HAF Mortgage Protection Program from their REALTOR®.

SF Revenue increasing -- but costs increasing faster

According to a story in the Chronicle and a recently released report from the City looking three years ahead we're facing increasing city deficits assuming nothing is done.

Next year's projected deficit is $438 million, which is higher than budget analysts had projected. Newsom said that with midyear cuts made to balance the current fiscal year budget of $6.5 billion, he'd hoped to see next year's deficit fall below $400 million. But those midyear cuts, which were supposed to save the city $115 million next year, will save about $87 million.


The Chronicle report goes on to say that the cause is largely because "the city continues to struggle through an economic recession that has gutted revenue from property taxes and other sources".

But it turns out that the City's report shows that tax revenues are actually projected to increase over the next three years, including property tax revenues. The only major source of tax revenue for the City projected to be down is the real estate transfer tax (down $31 million). Overall, the City is projecting total revenues will reach over $3 billion in 2010-11 up from this year's (2007-8) revenues of $2.8 billion.

So it's clearly incorrect to attribute the projected budget deficits to "gutted revenue from property taxes". The real culprit is alluded to by the Major who is quoted as saying that property tax revenues are only going to grow at 1% per year compared to previous years when they grew at more than 10% per year.

The conclusion has to be that we've built a budget based on obviously unsustainable growth in property taxes and other sources and we've committed to costs that continue to grow at a rate that outstrips our slower growing revenue. Although clearly an oversimplification, in theory it ought to be possible to continue providing the same level of service as today by simply freezing all of our costs at current levels.

In the current economic environment, I suspect that most cities would be thrilled to have the problem of revenues increasing "only" 1%.