“Pent-up Supply” in San Francisco Turns into Record Glut of Houses & Condos for Sale. Prices Weaken

Why is everyone suddenly trying to sell their home?

By Wolf Richter for WOLF STREET.

We’re going to look at San Francisco’s housing market in two ways: The Case-Shiller Home Price Index released today, which lags months behind but provides good price-movement data for houses and condos; and near-real-time indicators. First the near-real-time indicators:

“Active listings” in San Francisco skyrocketed by 137% year-over-year to 1,995 homes for sale in the week ended August 16, based on weekly data compiled by real-estate brokerage Redfin, from Multiple Listing Service (MLS) and Redfin’s own data. This is the biggest highest most stunning amount of inventory for sale since the very peak of Housing Bust 1 (chart via Redfin):

Note the normal seasonal surge in active listings after Labor Day through late October. But halfway into August, normally a slow time of the year when supply declines, supply instead exploded. This was “pent-up supply” that is now suddenly coming on the market.

Redfin’s data set doesn’t go back to Housing Bust 1. But according to MLS data, the number of homes for sale in August now exceeds the peaks in August 2009 and August 2010 by about 10%, according to local real-estate site SocketSite.

The number of condos for sale (1,160 condos, based on MLS data, net of all new sales and contract activity) is up by 230% from a year ago; and the number of single family houses for sale (390 houses) is up 110%.

New listings jumped 124% from a year ago to 260 in the week ended August 16, according to Redfin data (chart via Redfin):

Weeks’ supply of homes for sale has more than doubled, from 9.3 weeks last year at this time to 21.2 weeks as of August 16, at the current rate of sales. The spike of supply through early May was a result of sales having collapsed in March and April (chart via Redfin):

Pending sales rise but not nearly enough. In July and August this year, weekly pending sales have ranged from slightly down year-over-year to up significantly. In the week ended August 16, pending sales, at 115, were up 53% year-over-year. The four-week moving average was up 26%. In July and August, pending sales normally decline. But this year, they’re not declining; they’re coming out of a historic collapse that had maxed out at -77% in April. So there’s some pent-up demand, but not nearly enough to keep up with exploding pent-up supply (chart via Redfin):

What would Case-Shiller say?

The S&P CoreLogic Case-Shiller Home Price Index, released this morning, provides a different view and other intriguing insights into the San Francisco market, but lags months behind.

The first difference is the geographic area. The Redfin data above was for the County (and City) of San Francisco. The Case-Shiller Index covers the five-county San Francisco Bay Area (counties of San Francisco, San Mateo, Alameda, Contra Costa, and Marin).

The second difference is the methodology. The Case-Shiller Index uses the “repeat sales method.” It compares the sales price of a house that sold in the current month to the price of the same house whenever it had sold previously. To make it into the index, a house has to have been sold at least a second time.

I like sales-pairs as a method because it makes the index immune to changes in the mix of houses that sold. Changes in the mix can heavily skew median price indices. The Case-Shiller Index essentially tracks price changes for each house in the index over time and then builds an index out of the sales-pair data.

The main disadvantage of the Case-Shiller Index is that it lags massively behind. The price data is collected from public records, whenever it is entered into those records. Then the Case-Shiller Index operates on a “three-month rolling average” basis. The release today, titled “June,” was the three-month moving average for deals whose data became available in the county deed recorders in April, May, and June.

Single-family houses.

Prices for single-family houses declined for the second month in a row in June, down 0.7% over the two months, though normally the index rises during those two months. On a seasonally adjusted basis, the index declined for three months in a row, for a total decline over the three-month period of 1.3%. This whittled down the year-over-year gain to 1.4%:

Sales pairs of single-family houses plunged 40.2% year-over-year in June to just 3,242 houses. The percent-changes in “sales pairs” are an indication of changes in sales volume. In the index, June and July reflect the spring selling season and are normally the peak months of the year, as you can see in the chart below, but not this year:


Condo prices fell 1.1% in June from May, third month in a row of declines, now totaling 1.6%, during what is normally peak season. The index is now down 0.7% from June 2019 and is down 0.2% from June 2018:

Sales pairs of condos plunged 50.5% year-over-year in June to just 707 condos, during what is normally peak selling season:

So what we’re seeing in San Francisco in August…

Is a record onslaught of homes for sale, particularly of condos, that has come out of the woodwork in June, July, and August, per Redfin’s data. Before the Pandemic, there was an inventory “shortage,” as the industry likes to call it, and now there’s a glut, all of a sudden.

The Case-Shiller index is now showing pricing weakness in April, May, and June. This is particularly pronounced with condos, extends back two years, and is now taking on momentum.

Trying to figure out why people are wanting to suddenly sell their homes in San Francisco is going to be an interesting guessing game, and there are likely lots of reasons. Some of those reasons come to mind right off the bat:

  • Investors wanting to get out before prices drop, especially with condos where carrying costs are high due to home-owner association fees;
  • Airbnb hosts that can’t make their mortgage payments off the limited number of guests they might have;
  • People just wanting to get the heck out of dodge, now that they can, since they’re working at home;
  • People who’ve lost their jobs and cannot afford to live in San Francisco any longer;
  • Landlords facing tenants that move out amid dropping rents and high vacancy rates, either to leave the city or to move into a better deal (“upgrades” for the same rent are now a thing for tenants).

I’m standing in the middle of the street to take this photo. Why? Because I can. Read… Haunting Photos of San Francisco’s Desolate Financial District During Morning “Rush Hour”: Visual Effects of Work-from-Home

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  203 comments for ““Pent-up Supply” in San Francisco Turns into Record Glut of Houses & Condos for Sale. Prices Weaken

  1. Just Some Random Guy says:

    JPM announced today that WFH is going to be permanent. That’s the first of many such announcements to come. Facebook said the same as did Twitter.

    SF and NYC are dead cities walking.

    • Paxton Worth says:

      Last one out, turn out the lights.

      • MooMoo says:

        Who was it who said it didn’t really matter…there were too many people in the city anyway????

        • Wisdom Seeker says:

          No one lives there anymore, it’s too crowded – Yogi Berra (paraphrased)

    • Bobber says:

      Also, say goodbye to auto sales. Who needs a new car when you don’t drive to work? It would sit in the garage and lose value.

      • Thomas Roberts says:

        I wouldn’t go that far, but, if work from home becomes the norm. 1 car households could become more popular. That assumes though, that at the current rate marriage still happens and they stay together.

        Also, cars would get less use and be replaced and repaired less often. And people might spend a lot less on new cars, SUV’s sales in particular, could plummet.

        • AlamedaRenter says:

          I drive from Alameda to the Peninsula everyday for work, I still go into an office or meet crews at construction sites.

          I’ve never seen so many new car temp tags in my life.

          Guessing there are deals too good to pass up by the dealers. And people are saving hundreds of dollars a month by not commuting and using that money for a new car payment.

        • Ethan in NoVA says:

          AlamedaRenter – here in Northern Virginia it’s the same. Crazy amounts of 30 day tags on everything from beaters to exotics. Someone pointed out to me that the DMV is way behind on processing tag requests so people aren’t getting their permanent plates in time, but I haven’t verified.

      • Rcohn says:

        I live in the Northern SF suburbs about 30 miles from the city.
        I have seen a number of recent features on the local news stating how housing sales in the East Bay are hot with numerous sales above the asking price.

        • Dan Gourley says:

          I live in the East Bay and was planning to buy this summer in the downtown Concord area. House sales in my target price range ($580-700k) are out of control. Everything we have been looking at is selling in 5-7 days, multiple offers, well above asking. In one of the neighborhoods we have been targeting, which is within walking distance of the Concord BART station, houses are 15-20% more expensive than they were just a year ago. My suspicion is that a lot of tech workers are fleeing SF and and targeting downtown Concord because it is one of the few areas in the Bay Area that is still reasonably affordable and also close to BART. We made offers on two houses this summer and lost both – one was an all cash offer $15k over asking and the other was $41k over asking. As a long term Concord resident who wants to live here for the rest of my life, I’m trying to figure out if this is a temporary and manic spike in demand due to the Covid exodus out of SF, or if these prices will be the new normal. I’ve been a responsible saver, waiting for years for the market to return to sanity, and the Fed has mocked me at every turn. I don’t know what to believe/expect anymore.

      • Bad Karma says:

        so driving a car increases its value?

    • hapy_man says:

      walking around my dfw neighborhood tonight 3 houses with for sale signs in front.

      over the past five years I have only seen 3 other signs – total. Usually the houses sold so fast they never put a sign in the yard


    • DawnsEarlyLight says:

      Last one out of the Bay, close Wolf’s windows. ???

      • BuySome says:

        I heard he lives under the bay in a submarine with a screen door, and smokes a corn cob pipe on the front porch while playing checkers in an old rocking chair. Just can’t trust the rumor mill anymore.

        • SaltyGolden says:

          Funny, I heard he swims 10 laps back and forth from Angel Island every morning then wrestles great whites past the break at Ocean Beach to cool off before dinner.

    • mtnwoman says:

      What is WFH?

    • Walter Ego says:

      Not at all what they JSRG:

      Workers in the firm’s corporate and investment bank, an industry heavyweight with 60,950 employees, will cycle between days at the office and at home, keeping the ability to work remotely on a part-time basis, according to Daniel Pinto, head of the massive division and co-president of the banking giant.

    • Another random guy says:

      I wouldn’t buy real estate or sign a rental agreement in New York, San Francisco, Portland, Seattle, etc. until I saw the angry population chasing the mayor and city counsel to the borders of the city with pitchforks and torches. I’ve lived in both New York and San Francisco and I don’t think I would even VISIT these cities again under the current political “leaders”.

    • Michael Gaff says:

      Random guy…, how rude to denigrate these great cities.
      Just because a few hundred thousand Marxists are expressing their feelings, you pronounce their homes dead?
      I am a retired airline pilot, and have spent hundreds of days in SFO.
      That is not to say that i would ever show Fisherman’s Wharf to my granddaughter.

  2. Lasse says:

    #1: air bnb hosts are selling

    • Wisdom Seeker says:

      #0: Much of what people love about cities has been shut down, vandalized or gone bankrupt due to COVID + policy responses + civil unrest.

      And it isn’t going to get better anytime soon.

      Nationally, NEW home sales are at record highs, despite record unemployment. So housing in much of the country is in high demand, but not in the big urban cores.

      • muneshwar budhu says:

        Factor in immigration, the life savers for large cities, its full stop for the rest of the year. In fact H1B’s are leaving, so basically you have new units coming on line, people leaving in record number, this is a disaster in the making.

        • Tony22 says:

          Who would want to immigrate here now?
          Dollar dropping in value means it’s less attractive for Central Americans to come here and send remittances home, plus the cartels in Mexico through which they pass are getting more extreme, then there’s the pre-covid raiding and fining of big bakeries and establisments that could only survive with cheap illegals.

          Anecdotally, I Went into a Harbor Freight and saw lots of younger white males working there where a couple years ago it was Hispanics and much older people. The few jobs that will be left will have their pick of better educated, literate in English, competent employees, now willing to work for peon wages out of desperation.

        • happy_man says:

          tony if you ran a random survey of people outside the USA right now the results would show that about 6 billion people would immediately move here if given a green card

          current circumstances no matter

      • MiTurn says:

        “Much of what people love about cities has been shut down…”

        Per CBSN San Francisco 50% of downtown SF storefronts are currently boarded up. Not inviting nor attractive.

        • Tony22 says:

          54% citywide as of Thursday, per the Chronicle.

          However, the recesssion had already started last fall, North Beach has been a disaster for nearly a decade as construction permitting, Amercians with disabilities requirements, parking costs and other local government quality of life affecting policies, i.e., attracting homeless Americans, have crippled new businesses and business replacements.
          San Francisco may soon be like one of those Italian villages with no one around and only a few businesses that remain open. Wolf will have the streets to himself.
          Heard the Northpoint Safeway is going to close possibly. No tourists, no gym, no one in the low rise office tower next door, plus Trader Joes up the street.

        • Wolf Richter says:


          Store closures have been a huge problem in SF for a few years. What has happened is that landlords increased rents by such an amount when the 10-year lease came up that restaurant and store owners said, forget it. The City introduced a new tax on vacant stores (which I think was paused during the pandemic). So this issue isn’t new. But the Pandemic compressed the process of several years into something like four weeks.

      • Lee says:

        “Much of what people love about cities has been shut down, vandalized or gone bankrupt due to COVID + policy responses + civil unrest. ”

        Yes, lots of cities around the world have shut down, but I know ONLY of cities in the USA that have been hit by continual ‘peaceful demonstrations’ and crime waves.

        Maybe the closest thing to it the riots that happen off and on in and around Paris.

      • Matt says:

        This right here. Lots of folks making their way down to San Diego. Extreme shortage here with prices up up and away. Hope these newbies don’t turn San Diego into the cesspool that San Francisco is.

        • Tony22 says:

          Don’t let the recently arrived carpetbaggers win any local elections. Plan ahead, field strong candidates who represent your interests, rather than some cosmopolitan ideals that have destroyed community after community up and down the coast, starting in the 1980, everything from school boards to planning commisions, the once boring jobs that retirees did. Now these positions are activist central. A tiny minority loves to control everything and wherever they alight, it’s the same script and the same “reforms”.

        • The Bob who cried Wolf says:

          Anything mentioning San Diego catches my eye. The whole west coast is on its way to becoming run like SF at some point. The city’s leadership structure has gone to the dark side of the force but the county is still pretty darn good. The insane jungle primary we have leaves us with bad vs worse for mayor so we have to hold our nose and pick the worse of two evils.
          For a while to come, though, San Diego housing prices will continue up as the folks fleeing the cesspool cities look frantically for greener pastures. Most of these cesspool city types are gonna bring their garbage politics with them and that’s when it all goes bye bye.
          Enjoy it while you can folks.

        • caca says:

          they most certainly will. it’s in their nature

        • noname says:

          This notice needs to be printed NATIONWIDE.

  3. Luke says:

    Also from Redfin, San Francisco is the single major metropolitan area see inventory up, all others place include Bay Area Out of SF city see inventories shortage along with strong Demand to drive home price up.

    • Tbv3 says:

      I disagree.

      According to Redfin, New York County and metro have seen an increase in Active Listings of 46% and 69% YoY, respectively.

      San Fran and NYC are the only two areas in the Case-Shiller 20-City Index experiencing an increase in Active Listings.

      Active Listings for the rest of the nation — All Redfin Metro areas — have decreased by an average of 28%.

  4. RoseN says:

    There is also talk of raising the capital gains tax rate if Biden gets in. Perhaps some of these sellers don’t want to risk facing a less favorable tax environment in 2021.

    • VintageVNvet says:

      Maybe TR on the VP taking over, but with you totally on the bide one as ‘stalking horse’ for others; seems like the dems are in the hands of their recent past couple pres guys.
      So assuming that is the case, it may come down to some kind of total ”backfield shift” with anyone not elected, but rather appointed after the election being shifted into the pres position.
      Always independent voter since 1966, I would really like to see the complete removal of the power of the political parties in favor of electing people on their merit, instead of how connected they are within a party.

    • Petunia says:

      I thought the big switcheroo would be Her but now I see they are fielding Cuomo from NY. Announcement may come as soon as next month.

      • VintageVNvet says:

        Thought the Cuomo ‘float’ was shot down by the old folks home debacle Pet?
        Do you have more recent news regarding him?
        OTOH, it seems if there is much more of the violence, looting, etc., and especially if it continues to escalate, the result will be continuation, eh?

  5. Maybe als watch VC investing? Startups that go bust or sold for lower valuations?

    Job openings for software developers?

  6. Thomas says:

    If you own a nice residence in the San Franciso area you’re lucky. But for how long? The economy is eating all the free currency the Fed can print. How long will this go on? As a long time real estate agent I would prefer an inexpensive home with a few acres. There are many parts of the east, south, southeast that get plenty of rain and warm weather to grow the food you might need. And with home prices STILL very high in the SF area don’t wait until it’s an obvious Buyer’s market. As sellers get anxious they will lower their asking price. If that becomes a trend, look out below!

    • Happy1 says:

      The likelihood that growing your own food becomes a mass necessity in the US is close to zero.

  7. Seneca's cliff says:

    But right now ,I don’t think they are looking to sell so they can buy a new house in Sonoma County and work from home. I told my sister who lives in Healdsburg after the last big fire that she better dump the place while she can still get fire insurance.

  8. 2banana says:

    You still can’t bring yourself to even discuss the main reasons.

    Quality of life
    Law and order
    Power mad mayors and govenors

    And the main drivers. A few main reasons driving all of them.

    Folks can put up with a whole lot if they feel safe in the streets and in their homes.

    Wolf, you are a math and statical genius but you can’t bring yourself to even consider the political ramifications of local/state politics on local economics.

    I can understand why. It usually defys all logic and rational thought to attain and keep power.

    “Some of those reasons come to mind right off the bat:”

    • Wolf Richter says:


      I don’t because it’s bullshit. I live here. I don’t get my info about San Francisco from Zero Hedge.

      • A says:

        I always chuckle at how many people living in Ohio and Florida care so deeply about the local politics in SF and NY.

        I often wonder if they care half as much about the city where they actually live haha

        • Tony22 says:

          Kind of like all the people from San Francisco, NYC, Berkely and Oakland who traveled to backwater towns in the deep south to register voters there?

        • DawnsEarlyLight says:

          I frankly think ‘care’ is the wrong word to describe the attention offered in your comment. More like ‘entertained’, from a distance. It’s a national pastime.

        • nodecentrepublicansleft says:

          I love San Francisco now and always will!

          It’s one of the greatest cities in America for all the obvious reasons. I went there in the early 90s and fell in love with the people, the architecture, the vibe, all the cool old restored motorcycles, the hills, the baby redwood trees, the golden gate bridge. It’s a city oozing with history.

          I don’t get the zero hedge crowd either. If you ever spent some time in Russia, you would run screaming in the other direction.

          Life there is awful, in a 100 different ways… just ask any Russian. The average Russian would trade his Mother for a chance to live in San Fran.

          I can’t take any of the supposed criticism of SF above seriously. You’ll have to try again, sorry. And you know what…RE there was probably overpriced and now the prices are going back towards something that makes more sense. That is a good thing imho.

        • Rosebud says:

          I just moved back to Galt. I certainly care about my birth town.

        • simon77047 says:

          I don’t give a crap about SF or NYC. You all made your choices with the totalitarian party, now live with it. BTW, stay out of Texas. Just sayin.

        • Petunia says:

          I care more about NY and SF because those are the cities that matter the most after DC. NY is the financial center of the world and SF is an indicator of future trends in America, like it or not California always leads the country.

          Right now I’m glad not to be in any of them.

      • Greg C Goff says:

        Be sure to turn the lights out when you leave, that is if they are still on…
        The Cities no longer offer all the amenities that attracts people to them. SF has a football team, baseball team, theaters, dining ect…
        Can’t go to any of them, now entertainment is watching vagrants wander around crapping on the sidewalk or maybe watching looters loot or unchecked fires burn, or watching your Governor erase your rights.
        Go ahead and tell(lie to) yourself it’s BS, many of those sales are leaving California. Check the U Haul one way price out of SF California and into SF California, those facts are not Zero Hedge bullshit, those are the real world facts that cannot be denied, even by you…

        • Wolf Richter says:

          Greg C Goff,

          You’re in a small town in Oklahoma. Does that make you an expert on San Francisco!???

        • 728huey says:

          There’s a reason why people flock to cities instead of small towns, and that has to do with more opportunities for work, leisure, entertainment, food, diversity, etc., IOW stuff that small towns struggle to do even on their best days if they can even do that at all. The cities haven declared dead several times during the past century, whether it was during the Great Depression, WWII, the late 60’s and early 70’s after the riots, the 80’s crack epidemic, 9/11, and the 2008 financial crash, yet all the reports of their demise were greatly exaggerated. Yes, the pandemic has hit cities particularly hard right now, but once this pandemic becomes a distant memory people will flock right back in.

        • nodecentrepublicansleft says:

          If you watch vagrants crap….wow man, you gotta get some better hobbies!

          Listen, they have stamp collecting…you could play the drums. Have you thought about bird watching or bicycling?

          And by the way, in Wuhan, China….people are going to rock concerts and sporting events. Why? Because they dealt w/the pandemic like adults who understand basic science.

          You gotta get a grip. Didn’t you look at the pictures of the pandemic from 100 years ago? It will eventually, like that one, be dealt with by adults who understand basic science and medicine. You gotta calm down and get with reality, bro.

          Please stop your fascination with vagrants, it’s not healthy!! :)

        • Anthony says:

          From a tourist point of view, including the famous business trips, it’s the bad news people see on the news that counts. Then, of course, it becomes a self-fullfilling prophecy, which keeps more and more from going there. The only thing I know about SF, I learnt from the TV show… Streets of SF…which means I know nowt.

        • SaltyGolden says:


          We live in San Diego, right down El Camino Real from San Francisco, and are lucky because we are working and are in a stage of our lives where COVID life has been pretty manageable. Most restaurants are open here now, some have closed (for good) but most of my favorites are open, you just have to order food if you want to have a drink (don’t threaten me with a good time). I can still surf and enjoy the water as much as I want. Parks are now all open and they’re pretty rad, word on the street, and I don’t know if it’s true, is that the SDPD is ignoring open container laws for the time being (not that I was aware of any of those rules to begin with).

          Downtown San Diego is genuinely a shadow of it’s former self at the moment, though on the main drag in gaslamp they’ve shut down the street and extended restaurants on to them. It’s pretty cool. Homelessness is definitely a problem here, not sure how it compares to SF.

          During the post Floyd unrest, there was some mayhem in La Mesa and downtown, but the community of La Mesa was very supportive of affected businesses. When the demonstrators planned on going through our neighborhood, the neighborhood association turned the holiday lights on and left out water for them. They ended up going in another direction.

          There are certainly some issues but overall most of California, most of the time, is pretty rad. Even now.

          You’re free to have your own perception, but the narrative you parrot (speaking of which… actual parrots kick it in our area), is really a caricature.

      • bungee says:

        its over-hyped but it isnt total bullshit. i work all over the city, not just where i want to go. so i see lots. i also have a street-level shop. i had to start keeping the blinds drawn years ago because of the crazies and druggies. the human crap and needles on the sidewalks was a very real thing. and im in security services… its the zombie apocolypse in terms of property crime right now.
        but the thing about sf is that its a port / fishing town, a tourist destination, a banking hub of sorts, AND a technology center (and much more) so its not a monoculture that will be left in ruins. the streets being emptied those precious few months was a beautiful thing!
        a lot of these condos built in the last boom tho are overpriced crap. and the stress of just trying to do the simplest of tasks can be too much for normal working people who just want to park their car within a mile of their house and not find the window smashed in the morning. if the same money can be made by working from home there are a lot of options for quality of life than staying in a big city with sf’s problems.

        • Martok says:

          We went to SF a couple years back, and saw all the good pretty sites, cable cars, Fisherman’s Wharf, Golden Gate, etc and thought it was fabulous.

          Then the bad where hobo’s and drifters were panhandling, people on drugs, winos, folks passed out with all their belongings in a bag.

          Everything was incredibly expensive, hotel, meals, common goods, drinks, etc, and everyone wanting a tip for every and anything, including the cable car guy.

          As I rode on the outside of the cable car the entire route filming, it occurred to me that SF was just a overcrowded concrete “rich person’s” paradise overlooking the sea, while the poor ate their crumbs, with a earthquake ready to reduce it to ruble at anytime – a billion dollar dust storm.

          Also been to NYC several times and for last and will be our final time, saw much of the same as SF, it was dirty, overpriced, concrete world made for the rich, as peasants ate crumbs, the exception was the fantastic visit up the new World Trade Center.

          But reality came to me as I thought back then – “what if a disaster happened, and everyone had to leave?”

          Well this reality has come true as I hear the “high rollers” of NYC are moving to the Hampton’s, or elsewhere.

          I can see the same logic happening in SF, and not surprised, people are getting out while they can, before another COVID or earthquake disaster.

          This is my perspective from the mid-west, and we have ZERO desire to live in any big city.

      • Lee says:

        You may not get your information from Zero Hedge, but how about in the real world outside of San Francisco?

        For example, have you been to Baltimore? Even back in the early 80’s people were told to stick to the tourist areas and not venture out into other areas.

        Have you seen the videos of the place? It was bad in the 80’s and it is even worse now.

        How about San Antonio? When I live there I was told if my car broke down in certain areas not to get out of the car and wait for AAA or road side assistance. That was in the early 80’s.

        I used to jog through the slum areas on the way to downtown to eat along the River Walk and people were concerned about my safety when going through there.

        I told them I was running and if anybody could catch me, well…………..

        And have you seen the crap going on in Seattle, Portland, and most recently Kenosha or any other large cities in the USA?

        I’ll take lockdown Melbourne any day over any of those places in the USA including SF.

        • gnokgnoh says:

          You simply don’t know what you are talking about. Check out FBI statistics. In 1980 there were 16,571 violent crime crimes in Baltimore. In 1995, there were 21,495 violent crimes. In 2018, the most recent available data, there were 11,100 violent crimes. I am so friggin’ sick and tired of this bs meme…I live two hours north of Baltimore and go there all the time.

        • Happy1 says:


          Glad to see Baltimore is only half as terrible as it was in the recent past. Still doesn’t put it in my “must live” column. Almost every city in the US is safer now than 20 years ago.

        • Ensign_Nemo says:

          @gnokgnog: From


          1980 786,741 −13.1%
          1990 736,016 −6.4%
          2000 651,154 −11.5%
          2010 620,961 −4.6%
          2019 593,490 −4.4%

          Part of the decrease in crime is from a decrease in population. Another factor to consider is that once a city is perceived as being mostly lawless, many violent crimes aren’t even reported to the police. It’s pointless to report a crime if the police are too busy to solve any cases other than the worst felonies.

        • Lee says:

          Number of murders in Baltimore:

          2019: 347

          2018: 309

          2017: 343

          2016: 318

          Baltimore rate/US rate per 100,000 people:

          2018: 50.5/5.7

          2017: 57.8/5.7

          2016: 51.4/5.3

          In 1980 Baltimore had 216 murders. The rate was only 27.5 per 100,000 back then. The murder rate per 100,000 people has doubled since then. In absolute terms is has gone up about 50%.

          Really safe, right?

          The Baltimore murder rate is about 10 times of the USA national rate. The crime rate in Baltimore is higher than in 99.1% of ALL US cities.

          The overall crime rate in Baltimore is between5 to 6 times the US national rate.

          People in the USA should be ashamed of the high crime rates, but then again as most of the crime takes place in the large, Democrat controlled cities, well………..

          If those areas were eliminated from teh data then the USA would lokk like other ‘civilized’ countries.

          But was is the most disgusting fact about crime in the USA is that despite the huge numbers of people in jail, most violent crime is never solved and results in a conviction.

          Police in the USA like to target the ‘easy’ crime: marijuana use for example, and get the easy convictions.

          IMO there shouldn’t be one person in jail in the USA for use of marijuana or possession of a small amount the substance.

        • Wolf Richter says:


          “…in the large, Democrat controlled cities, well”

          Guess what? Democracy. People vote for mayors. And in big cities, people tend to vote for mayors who are Democrats, even in Republican states, such as Texas, where the mayors of Dallas and Houston, among other big cities in Texas, are Democrats, because people voted for them.

      • MonkeyBusiness says:

        ZH likes to focus on only specific areas of SF. But people who don’t live here just don’t want to know that there are still plenty of nice areas in SF.

        • Paulo says:

          My nephew and family love the Bay Area and are there for the long haul. He is 44, bought a house in Novato some years ago and plans to stay there. It wouldn’t be for me, but sounds very very nice and perfect for them.

      • Mark says:

        ” I don’t get my info about San Francisco from Zero Hedge.”

        If you feel that way – why do you allow them to re-print your stories?

        • Tinky says:

          It’s an aggregative site. Some of the content is crap, and some, like Wolf’s articles, is excellent.

          Painting it with a broad brush, in terms of content, is a mistake. The commentariat, on the other hand, is largely cringe-worthy.

    • cb says:

      2banana said:“Some of those reasons come to mind right off the bat:”

      what are the reasons?

    • NBay says:

      I liked the typo “statical genius”, though it’s better if the “al” is dropped.

      Reminds me of Einstein’s quote…..

      “Common sense is a collection of prejudices usually accumulated by about age 18”

  9. The Chinese never buy into falling markets of any type whether it be housing or anything else. The Chinese only buy when something is skyrocketing or has already skyrocketed. We’ve heard all the baloney about the tech industry but alas the housing market on the west coast is 100 driven by the Chinese not by high tech jobs or bogus folklore you read.

    • Lynn says:

      This. Foreign ownership and foreign investment of homes should be curtailed so that citizens can afford shelter and not have to live in the street or the bushes.

      Otherwise we are looking at ghost cities. What a waste. Nothing more incendiary.

      • cb says:

        not curtailed ……………. eliminated.

        • Dave says:

          Than tell the WHITE sellers who make it out like bandits to stop selling it the Chinese for such a high price. LOL, you can’t racially scapegoat the chinese for everything. The Indians, Russians and Even tons of Wealthy South Americans are doing the same thing and paying top dollars (or used to for crappy homes in SF).

    • Educated but poor Millennial says:

      I agree.
      Most of the time . people specially young first time buyers, were out bid by Chinese cash buyers since 2011 until 2016-7. Where cashbuyers were epresenting 30-35% of all RE transactions. Similarly true in Canada.
      BUT. in 2018 slowly it droped to 5%. And prices were stabilized. I could see the turmoil.
      * numbers are ballpark and not exact.

      • dave says:

        I disagree because I was outbid by rich White high tech bandits with lots of stock options.

  10. Mary N. says:

    1) Do you have any data on similar affects on Santa Clara County? Condos as well as SFRs?

    2) Oakland is usually the overflow area for SF condos. What has been the effect of this in SF to Oakland condos?

    Thank you, this was an excellent article.

    • Wolf Richter says:

      I know the Case-Shiller doesn’t include Santa Clara county but includes Contra Costa county and Alameda county — so that includes Oakland. But I cannot separate Oakland out of it.

      In terms of Redfin, it doesn’t distinguish in the data between condos and houses — it’s one summary figure.

  11. Jim says:

    I like the methodology of Case Shiller. But a weakness that never seems to be pointed out is the variable of home improvement. Between the 1st and 2nd sale, much improvements or upgrades might have happened and that gets conflated with other housing inflation. Any idea how much of an error it puts in?

  12. C says:

    Seattle and the surrounding area are on fire. Supply of homes is at the lowest I’ve ever seen. Homes are selling and I’m starting to see “offer review” dates as part of the listing instead of all offers excepted.

    Most are selling close to or bellow asking but I’m guessing this is do to overzealous realtors pumping the price when listed.

    Pricing in general is out of hand and I’m starting to see the outlying areas that have been more reasonable begin to pick up!

    We’re in the market and can’t find a thing worth buying. We’re amazed daily at the crap people are buying and what their paying.

    Great analysis I would love to see one on Seattle!


  13. I’m not that familiar with the Bay Area. To me, it’s this huge metro area, and all the areas near San Francisco are ridiculously expensive. What’s the difference between San Francisco and nearby San Jose, Santa Cruz, Oakland, or Vallejo? To my knowledge, they are all insanely expensive and considered part of Silicon Valley (correct me if I’m wrong). They are all listed in the Redfin Data Center and they all show strong real estate markets with low inventories. San Francisco is the only outlier I can find. Even Sacramento, Fresno, Stockton, Modesto, Santa Rosa, every single metro area I can identify that is anywhere near San Francisco and is listed in the Redfin Data Center has a booming market with hardly anything on the market for sale. I’m just taking a wild guess here, but did people used to pay a high premium for real estate near the downtown business district of San Francisco and are now no longer willing to pay that premium?

    • Zantetsu says:

      I live in the south bay (formerly Sunnyvale, now Cupertino). I have been watching 3 bedroom townhouse prices and sales for years. I can say that the number of townhouses on the market is definitely down considerably (normally there is a flurry of activity in late spring/early summer as families move to get their kids into the school district they want, this year there was ZERO detectable increase in townhouse sales in the late spring/summer), and prices are coming down too. Almost every place I can see (and there are not that many) are listed at a price slightly below what I would have expected a year ago, and every single one of them is sitting on the market and making price reductions. It’s not a huge amount – a $50,000 deduction on a 1.4 million dollar townhouse – but it’s very different from previously where such price reductions below ‘expected’ prices were extremely uncommon.

      I think that most people are just sitting in place hoping to ‘wait this out’ and assuming that if they wait long enough, prices will go back up. I expect they believe that old adage that ‘prices never go down in the bay area’ (at least, not over a span of more than 5 years). They may be right – perhaps sitting on your place for a year or two is better than taking a bad price now if and when the prices go back up. Or perhaps the are wrong, and something has fundamentally changed, and they will have just have to keep reducing their expectations until they finally give up. Time will tell.

      • MCH says:

        Stuck in their houses or house poor would be the words that describe the situation. I think at the end of the day, if one buy a house to live in it. These cycles do not affect one too much.

        However, it still does pay to keep an eye open on the situation. Because sometimes when one leaves an area is not always at their discretion.

        Anyway, as far as Cupertino and Sunnyvale is concerned, as long as they don’t try to kill the golden Goose… Apple… they’ll be fine. They just need to hope the times keep up. And thanks to C19, traffic on Homestead and Wolf isn’t quite so bad.

        • Zantetsu says:

          Owning a home in the bay area requires a high paying job, usually two high paying jobs in the family. That is a precarious position to be in — buying in a market where you have put yourself in a position to lose everything if the steady flow of high paying (over-paying, really) jobs dries up after an economic downturn. Not being willing to take that risk is why I am still renting.

          I don’t envy people who are walking that tightrope, although of course I would still love to own a home.

          I thought maybe I could just give up and buy somewhere in the country in my native state of Ohio in June, I found that the over bidding and price increases had followed me, now that people are trying to escape to rural markets. I just can’t catch a break, whatever idea I have, asset inflation beats me to it.

        • MCH says:

          Renting is a good idea, if you’re willing, get roommates. I think the goal has to be not being in the rat race forever. Try to save up as much as possible. I know that sounds crazy with the Fed driving down purchase power of the dollar, but if you suffer a little up front, that’s something you can make up for later on.

          Actually, you know the funny thing is, you can always take the contrarian position, and buy in SF in a few years. Pricing would’ve come down a bit.

    • caca says:

      you are correct on 1 thing in your post that you are not familiar with the area. so the rest of your post is worthless bc it’s based on your guess (but you think you cleverly ‘analyzed’ it). yeah Fresno is right close to SF and pretty much the same place. as close metaphorically as uranus is to fresno

      • You may be reading something that is different from what I posted. Big Tech has complete control over us now. If someone in charge wants you to dislike me, they can easily add or remove something from my post to make you dislike it. When you look at an item at Amazon you might see a different price than I do. Maybe you or I are a bots posting things here. But assuming none of this is happening, why are you saying that I think I cleverly “analyzed” something? Where did I claim to have analyzed anything? I stated in my post that I’m taking a wild guess, which implies the opposite of “analysis”.

  14. MiTurn says:

    “Trying to figure out why people are wanting to suddenly sell their homes in San Francisco is going to be an interesting guessing game…”

    Perhaps it’s a ‘perfect storm’ and all five of your bullet points are correct.

  15. Clete says:

    “What would Case-Shiller say?”

    No, it’s “What would Larry Yun say?”

    Larry would say “It’s a great time to buy a home in the Bay Area!”

    Good luck, those of you who read here and are trying to get out.

  16. MonkeyBusiness says:

    SF looks bright compared to Miami. In the later …

    “The market now has a glut of 30 months worth of unsold condos and 100 months worth of luxury units (units over $1 million), according to an analysis of Multiple Listing Service data by Condo Vultures Realty.”

    I still remember my last trip to Miami a couple of years ago, tall buildings everywhere as far as the eye can see. And then I took a look at the types of jobs in the city and I was thinking : “who would be able to afford all these? Outside investors?”

    I was too optimistic.

    • Clete says:

      Yeah, the skyline is really striking. Lots of cool architecture. Too bad it’s mostly empty buildings with big “special!” banners hanging.

    • David G LA says:

      Rich Latin Americans and Europeans were buying in Miami. The Brazilian Real was very strong – – until it recently tanked. (last 2 years)

  17. Have heard landlords are using the crisis to evict tenants. California is going to be rent control central, so you want to push through increases before the laws are written. Wonder how many residents are having their residence sold out from under them? How many are going to get higher rent bills?

  18. CZ says:

    Some good comments here about how people will never live in cities again.

    In the aftermath of the Global Financial Crisis people like Altucher were proclaiming that people would never own houses again. Maybe this housing downturn is Altucher’s prophecy coming to pass, a decade later.

    Seriously tho, flight to the suburbs has happened before, it could trend again. And individual cities rise and fall. But people have lived in cities for millenia, for good reasons, and will continue to do so.

    • MiTurn says:

      “But people have lived in cities for millenia…”

      CZ, you are spot on. In fact, if things really hit the fan, there’ll probably be a mass movement to the cities.

    • SaltyGolden says:

      COVID hit at what was peak city in America. I love cities, but a lot of them got too rich, and too many of the cool people had left.

      It seems as though most people’s prognostications are exclusively driven by their own position: ie my friend that lives in a nice little town in Upstate NY thinks those types of places will boom, conversely my friends in NYC think everything will go back to the way it was. Everybody thinks they’re right, but I’m confident that neither Seinfeld or Altucher completely are.

      My BS prognostication, and I hope it happens: enough of the rich people will leave cities so some cool people, artists, and ‘normal’ people can move back in. What a dream.

      • poop says:

        you mean so more homeless “cool people, artists” can move to the city. Newsflash, they are already there

      • nodecentrepublicansleft says:

        Your comments are echoed by David Byrne, the famous musician from the band “The Talking Heads”.

        I believe he still rides a bicycle around NYC and has long complained that rising RE prices killed the creative spirit and cool subculture that made NYC such a great place to live in the first place. His criticisms seem to come from a love and respect for NYC.

        Most of the people badmouthing cities should move to or stay in their “safe” little towns. As somebody originally from a small, rural community, I would choose death before going back to live in such a backwards place, but hey….to each their own!

        • Ethan in NoVA says:

          This is usually the case. I was up in Baltimore hanging with friends and one of them commented that so far the cool stuff hasn’t been priced out.

          It’s a shame that the commercial real estate that is sitting idle isn’t accessible for turning it into cool things. When I ran a makerspace/hackerspace in Norfolk the one thing that enabled it was access to low cost downtown space. Then our landlords went to prison as part of a bank failure and the building was turned into “luxury” apartments. Hopefully the makerspace made a positive impact on peoples lives, I’ve heard that it did.

          ~6 years in Northern Virginia and the 6 cool things near where I lived have all gone out of business. Boring town it is, and I don’t want to pay rents to help change it. If I could score a building dirt cheap though…

    • Thomas Roberts says:


      The talk of never owning homes again was definitely hyperbole, but, working from home will have very large dramatic effects on America. So while we might not know what will happen yet, it will be a very big deal. As for the cities, I expect that in the biggest cities a substantial amount of amount of residents will leave, but, I’m not expecting LA or NYC to be mostly empty anytime soon. It could be the case that something like 5 to 25% of residents leave the very biggest cities, but, afterwards while there will be a big adjustment, eventually those cities will adjust, hopefully, I would expect property prices to drop quite a lot in that case.

      Also, if you can work from home companies will start to hire across America and many people in smaller cities might move to small large cities (100,000ish+ mainly the 200,000 to 500,000 size cities maybe). They might move to many of the same places as those leaving the biggest cities.

      All of this could be against a backdrop of massive automaton and potential office work outsourcing, and switching full time employees to part time and gig positions, so ANYTHING could happen. This won’t be anything like last time.

  19. Spencer Hall says:

    The recent rush to buy homes is being propelled by the drop in long-term rates (which if the FED continues to increase the maturities it purchases), this might continue for a little bit more (from 2.33% in January to 1.39% lately). But longer term, AD will fall and with it real gDp. Inflation on the other hand will outstrip any increase in real growth.

  20. Nathan LeClaire says:

    Nice article Wolf. Interesting times indeed. Makes me wonder if the contrarian play is to buy a house in SF in the next 12 months or so. SF housing market badly needed to let some steam off anyway… and as I know from you it’d been going on since before COVID.

    • Macro Investor says:

      Companies just learned they never needed all that expensive office space. Employees just learned they can live in their dream locations and still keep the better-paying city jobs.

      The trend of movement is just beginning. It will be long term.

      • Thomas Roberts says:

        If those companies can hire anyone anywhere in America, that big paycheck will have a lot of competition and be bid downwards.

    • Wolf Richter says:

      The last housing bust took about four years to hit bottom in SF. These things are slow-moving.

      • SNK says:

        I agree with Wolf. In NY suburbs, we bottomed in March 2012. So from 2008, that would be 4 years. However, I think that sales collapsed even earlier. I’ve found that the best indicator is to watch for continued sales improvement for 3 straight quarters. 1992 felt like the bottom after 1989, but sales collapsed before that. Assume a 4 year wait after a reversal due to the illiquidity, policies to keep people in their homes, and reluctance to take the hit on implied equity.

  21. kitten lopez says:

    Thank you, Wolf. this article was soooo good, i had to squeeze my knees together like when my best friends and i would read Penthouse Forum stories aloud to each other in high school into the wee hours of the night.



    • DawnsEarlyLight says:

      What articles?

      • NBay says:

        I remember them, but never read them. I guess I’ve always been a picture person. It started with the Sears women’s underwear section.

  22. TownNorth says:

    I hope the listing glut come soon to a metropolis near me.

    The smart money will be buying in the cities as everyone is leaving. I had a friend that bought a condo on Park Avenue in 1974 when there was an exodus out of the city. People couldn’t wait to leave. Garbage strikes and NYC bankruptcy talk by ’75. Cost less than a suburban house in the south.

    Biding my time…

    • Mike G says:

      Security and quality of infrastructure is a bigger issue in cities. Hong Kong real estate was once cheap in the early 80s when the shock hit that British rule would not continue after 1997. One investor said he knew it was time to buy when penthouses cost less than apartments on lower floors — because the local sentiment was when China takes over they won’t maintain the elevators properly.

      • Happy1 says:

        This is very true. NYC declined from 1960 until the 90s largely because it was unsafe. There was a similar dynamic in almost all of urban America during that time.

        Things improved in NYC under tough law and order mostly Republican mayors and “broken window” and “stop and frisk” policing. NYC is now a much safer city and Disneyland for the rich and upper middle class.

        Pandemic aside, the threat to NYC and large cities is that everyone has forgotten how dangerous they used to be and is pushing back on aggressive policing. This will inevitably result in less safety, this is already a trend over the last year or two, and it is especially accelerating in this era of BML and rioting and looting. This is a mortal threat to the viability of cities has a place for upper middle-class people to live. If the trend is not controlled, there will be major problems.

        Taxes are the other major long-term threat. This mostly relates to the very rich. Cuomo gets it. De Blasio doesn’t. On either count.

        • RightNYer says:

          Which is also why gun and ammo sales are surging nationwide. Too bad that in deep blue states, you really don’t have any 2nd Amendment rights beyond what the government is willing to grant you…

        • NBay says:

          You are right, RightNY. If we walk around in public here in North CA with our dicks hanging out we will get laughed at and/or arrested. But at home or out in the hills it’s absolutely no problem at all here….honest.

  23. MonkeyBusiness says:

    An old colleague was saying: “when I lived in the Inner Richmond area back in the days, the rent was 950, and I had the whole unit to myself!!!”

    I am looking forward to the day when I can experience that, like somewhere in Japantown would be nice.

  24. Lynn says:

    Might start to see another exodus out of California in general. The fire in Santa Cruz county burned to the coastline. It used to be that the coastlines were fairly safe, but with climate change they may not be going forward.

    And it’s not on most people’s radar, the coast further north of SF is overdue for a 9m+ quake with a very long rupture zone. The Cascadia fault system. It would effect Mendocino county and north and may even effect Sonoma county to a large degree. We’re talking all bridges down and slides on all major highways and roads. A lot of us store 6 months supply of food and portable water filtration.

    • 2banana says:

      When the Spanish first discovered California, most of it was uninhabitable due to fires. And they built their missions out of mud for a reason.

      Fires are a natural part of the California ecosystem and have been for hundreds of thousands of years.

      “It used to be that the coastlines were fairly safe, but with climate change they may not be going forward.”

      • Anthony says:


        If I remember rightly, California had a drought in the 1600s lasting almost 100 years………this was the same time that Europe and much of North America had a mini ice-age to cope with………..

      • Stephen C says:

        Nowadays one must say that the Spanish “discovered” California.

      • VintageVNvet says:

        Mission Hayward was plaster on both sides of redwood framing and sheathing 2b, not ”mud” although no doubt there were others made out of adobe earlier,,, not really fair to call adobe ”mud” though that is the basic material in a sense.
        Adobe construction was a result of very careful attention to local conditions, besides being very available. If done correctly, according to local conditions, dwellings with adobe walls are cool in the very hot day time, and warm at night as the heat of the day works through the adobe.
        14 inch thick adobe walls worked very well in most parts of Mexico, including parts of what are now called TX, NM, AZ, and CA that I am familiar with, possibly others.
        BTW, the virgin heart wood redwood planks at the Hayward mission, which I watched being taken apart piece by piece, were rough sawn between 1 inch and 1&3/8 inch thick , random widths up to 30 inches, and random length, and by the saw marks had clearly been sawn by manual labor.
        As to the fires in CA, there and throughout the North American continent, the first peoples regularly burned the prairies, aka meadows, and most likely the wooded areas too for at least several thousand years, maybe tens of thousands according to the latest discoveries.

  25. Lee says:

    Well at least there enough sales pairs there in the SF area to do calculations.

    How far back to they go for the records? Does a house that was sold 10 years or 20 years ago or longer make it into the data?

    We have some streets in the little area where we live that have had only two sales in the last 40 years or so. Lot of people that bought the original houses when the land was subdivided are still there.

    • Wolf Richter says:

      The index data points go back to 1987. So there must have been some years before then that are included in the sales data to get 1987 sales pairs. This could go back many decades, given that county public records go back all the way to the first property deeds.

      • Tbv3 says:

        Case & Shiller said this about San Fran in their 1987 paper “Prices of Single-Family Homes since 1970”:

        1. {Between 1970–1986} “The {house price} increases recorded in Dallas and San Francisco stand in marked contrast {to Atlanta & Chicago}. Property values in Dallas rose an average of 2.2 percentage points per year faster than the CPI while real increases in San Francisco averaged 4.3 percent per year. Such high and sustained real appreciation rates are remarkable. Real home prices in Dallas increased by 43.0 percent. In San Francisco they nearly doubled” (page 50).

        2. “Between 1970 and 1975, housing price increases {in Dallas, Atlanta, Chicago, & San Francisco} were modest and fairly uniform. In all four cities, price increases totaled between 39 and 54 percent over the five years while prices in general rose 38 percent. San Francisco led the pack with real increases of 2.2 percent per year. {However} The period 1975 to 1981 shows anything but uniform increases across the cities. The well-known California boom is evident. Over the six years {1975–1981}, annual appreciation of homes in the San Francisco sample averaged 9.4 percent in real terms” (p. 51).


        So, it appears San Fran’s real estate boom began around 1975.

      • Lee says:

        So the data will be there, but the ordinary peon would have to go look up the actual records if not the the MLS.

        The lockdown here has finally hit the number of listing in my area. The last currently built house listed for sale on the big RE web site was 6 days ago.

        And there are only 23 places with prices of 7 figures or more now listed in the entire suburb.

        Only 7 properties sold (everything completed and title transferred) in the past seven days.

        Two of those were 7 figure jobs and one unknown. The one closest to us last sold in 2009.

        It is quite interesting to look at the sales history of the properties and wonder why in the world did that one go up so much or why didn’t that one go up as much.

  26. Tony22 says:

    Wolf, Your first four charts, should there be January 1 at the far left and December 31 at the far right? Or, am I missing something?

    Hallelujah! The occupying beast in city government is becoming partially starved of tax revenues, except for those 1% transfer fees, if, and when the houses sell, plus the Prop 13 reassessment which must occur in a few of those houses. Smart people are sitting tight, like my father who is the fourth generation to occupy his home.

  27. Auld Kodjer says:

    I like the irony that “people wanting to get the heck out of dodge” might actually move to Dodge (population 27,340), or places like it.

  28. Bobber says:

    I find the price charts for SF houses and condos very interesting. The charts clearly show the last bubble popped about two years after prices quit going up. There was two years of leveling, then prices dropped like a rock.

    This time around, we may be seeing the same thing. Prices have leveled for about two years now. Does this mean huge price drops are right around the corner?

    I think this fear explains why lots of homes and condos are being offered for sale at this time. Given the high prices in SF and the amount of wealth tied up in homes, nobody can afford to watch prices fall.

    I agree with the earlier comment that the AirBnB owners are very worried. These people are using a lot of debt leverage, and they can’t afford to sit on properties that aren’t generating revenue. I also agree the lack of Chinese buyers is likely a problem. Not only are home prices stagnating after a huge run, which makes investment less palatable, there seems to be anti-China sentiment brewing, which might be a concern for some Chinese buyers.

    • SNK says:

      My experience has been that price bottom is 3-4 years after sales collapse. Eg. March 2012 was the bottom after the 2008 financial crisis. One could argue that sales collapsed earlier than 2008. Usually takes a while because of the illiquid nature of real estate and policies in some states to keep defaulted buyers in their homes.

  29. SNK says:

    This trend is very hard to reverse. Even with a dramatic turnaround in policy and a commitment from businesses, this could take 4-5 years to stabilize. Given the politics of these cities, I’d say that this is a long term (10 year) problem. Nothing good will happen in the short term. Buying opportunities for those who even want to live in these cities will be available around 2024. No reason to catch a falling knife.

  30. Tom Stone says:

    San Francisco has had a Boom and Bust economy since its founding, this Real Estate downturn or return to sanity if you prefer is happening more quickly than most have, but it is in itself not unusual.
    The long term economic effects of Covid -19 have yet to materialize and there’s a lot of uncertainty about how that will play out.
    In the short term, not good for any market dependent on international tourism, not just Real Estate.
    Inventory and expectations are what drive Real Estate prices.

    Sonoma County just had another sudden decline in its housing stock, the exact number won’t be known for several weeks ( My house survived and I was able to return today).
    And the fires will affect demand, both internally and from around the State and farther.
    Many parts of California are ready to burn, if those lightning strikes had hit Marin instead of further North and East we’d be looking at a much larger loss of life and property.
    Interesting times indeed, the fire season won’t end until the rains come…

  31. michael earussi says:

    I think the fire’s closeness to SF made people realize the the city itself could be vulnerable–1906 without the earthquake. Move before you burn. And with global warming it’s only going to get worse.

    • jon says:

      Housing market is on fire every where
      Its gonna interesting to see how long it would go up with 20 percent unemployment rate

      I know everything is going up but we also know that economy is in shambles

    • Happy1 says:

      This is laughable. There is almost no threat to SF proper from wildlife. The problem areas are mostly exurbs and some of the steeply hilled and densely forested suburbs like Oakland Hills, which have burned catastrophically before.

  32. DR DOOM says:

    I was in the military in the late 60’s and the earley 70’s. Had Santa Cruz buddies that took me to the Haight Asbury scene . My Compass still ain’t pointing North after only a few trips. I will remember it like I found it. Weird and great. Commander Cody and Quicksilver et al at Philmore West.

  33. The Bob who cried Wolf says:

    Escape from New York…San Francisco, Chicago, Los Angeles, etc. See a trend here? The five bullet points you mentioned are pretty certain to be drivers of the exodus, but I would say that the most obvious sixth bullet point should be fear; plain and simple fear of where you live. Everyone can determine what their version of that fear is but I would suggest that the most basic type of fear is in play here (the kind where you can actually get really hurt while simply minding your own business). Watch what’s happening in these riot/loot central places: mob rules, steal what you can, burn the rest, and above all, get rid of the police. Who in their right mind would want to stay?
    Arguably, though, SF isn’t a dangerous place like these others so I would say it’s probably mostly insane politics as the chief driver there.

    • Lynn says:

      It’s really not that much different in most rural areas in Northern Ca. It’s cleaner on the whole, but lots of homeless in down towns and further out the break ins are just more widely dispersed and done by people who can afford 4wd vehicles and guns. Not quite as many say “get rid of the police”, but, OTOH we just don’t have as many. Read the local papers or online news blogs for at least a week.

      No matter what the chambers of commerce would say, I’d suggest a good dog and a gun for people moving into unfamiliar rural areas. Also a small gas generator. There’s a reason many people have them. Especially now.

  34. tom10 says:

    Can’t remember when I found this site. But it has been awhile.
    It has always been posts hoping for doom & gloom so they could finally get that SF home for under 1.5m. Or the hope for people to leave.

    There should be rejoicing going on.

    • MooMoo says:

      Ahhh, they always think they can dial demand up and down…

      …and then the reality hits.

  35. X says:

    Hi Wolf,

    Not sure if you have missed my email. Understand that you are still holding on to your SPY short positions currently. You previously mentioned that your short horizon is less than a year. May I know what are the trigger conditions for you to cut loss on your shorts? Is it determined by time or a specific S&P level? Looks like S&P can’t go down for now with constant sector rotation and the tech companies propping the index beyond unthinkable valuations.

    • Wolf Richter says:

      I’m still good. The market is moving at a snails pace on very low volume. That’s not indicative of anything in particular.

      • X says:

        That’s assuring to hear. Just curious, are you looking at a particular level to cut loss? Or a deadline which you will close your position should the index fail to decline?

        • Wolf Richter says:

          There is no particular trigger. Once the loss moves into the double-digits (not yet), I’ll get more nervous. The thing is, the day that I cover the short at a loss will be the day the market turns ?

  36. Ghassan says:

    I would live in SF any day if I could afford it, it’s a wonderful place to live even with Covid-19. People coming and going is just part of life, sometimes more entering, sometimes more leaving but one thing is certain ; SF remains a prime location.

    And for those who keep bringing up safety as a reason for leaving the city I would say you all own firearms in the neck of the woods that you are living right now while ppl don’t need guns to live in SF or NYC or Boston. Plus majority of you can’t afford living there so you just fooling yourself /rationalizing how bad those places are.

    • two beers says:

      “[…] prime location”.

      Only realtors use those words.

    • Another random guy says:

      I moved from the Bay Area (first Noe Valley then Moraga, across the hills from Berkeley) to San Diego about 2 years ago. For the same money I got a house down here that is twice as big, much newer, and has a pool. The climate is better here, the downtown area is very vibrant (until Covid), crime rates are much lower, and there isn’t much of a homeless problem. I also like that San Diego is more politically diverse. Now that people can work from home I wouldn’t be surprised if a lot of people leave the Bay Area for San Diego. The beaches are awesome!

  37. FinePrintGuy says:

    Insured unemployment rate in SF could be higher than 33%… Jay Cheng of the chamber of commerce says there’s been 193,000 UI claims. Divide that by a labor force of 570k (according the Fed)….yikes. Real estate in SF is going down down down…

  38. RickV says:


    You don’t mention that the Case-Shiller Price index for San Francisco started in 1987 at 47 so has increased to 270 by June 2020, a 570% increase, and I thought prices were outrageous in the late 80s when I lived there and looked for a place. I guess the SF housing market is due for a correction.

  39. RedRaider says:

    We all can see the short term cycles but often ignore the megatrends. What if what we’re all experiencing is the end of the Industrial age. Don’t be afraid. That doesn’t mean the end of the world. Just the beginning of a new age.

    Aren’t large cities merely centers of industry during the Industrial Age and hives for the worker bees? Do they have any other purpose? Sure you might like the life style of the big city but that’s not why they exist. What happens to them at the end of an age? One might expect something cataclysmic might happen. Think of all those who have a vested interest in the cities? They might not take kindly to the drop in asset prices occurring currently. I hear the Pelosi family is a wealthy political power if the SF area. How much local commercial real estate do they own? Wolf just reported office occupancy just dropped 85%. Does that translate into 85% decline in the real estate asset values? I don’t know. But I do know I don’t want to own SF real estate right now. Have the Pelosi’s realized it yet? Perhaps that explains Nancy’s bizarre behavior. Perhaps that explains all the sh*t going on in major cities.

    BTW. Did you notice the recent escalation today.? I think it happened in Kenosha. Rioters entered a residential neighborhood and a resident(s) fired warning shots. The rioters fled in a panic. I’m sure next time they bring guns. Then we see who the best shots are… See who has the best reasons for risking theit lives.

    • Rcohn says:

      Pelosi s husband has a number of sweetheart deals for US Post Office real estate. so any deals with more speculative real estate.

    • MCH says:

      Hint, Pelosi is 80, she doesn’t care at this point about what her net worth is. She’ll go out on top, which probably means she’ll die in office.

      For her, the $$$ is irrelevant, it is all about power. And she has a ton of it. And SF will go on with or without her. As for her real estate holdings, I would guess that her family probably accumulated it over years, and so the cost basis is low. Lose 50% of the value, and she’s probably still up over 200%…. so, who cares. I don’t think she does.

      • Tony22 says:

        Our local member of congress and representitive of the People™ ?

        “The Democrat’s net worth in 2018 is estimated at $120.0 million. Pelosi owns a Napa Valley vineyard worth at least $5.0 million. Her real estate investment paid off, and it was estimated that the political leader’s assets were worth $42.8 million in 2014. Nancy Pelosi’s house in Norden, near Sugar Bowl Ski Resort, was estimated to be worth between $1.0 million and $5.0 million in 2015.”

        “As she rose in politics, so did her wealth; by the end of 2015, it was calculated that Pelosi had a whopping $13.5 million in liabilities!
        Since the Trump administration took over, Nancy Pelosi’s salary was estimated at $193,400 in 2017.
        Based on her 2014 finance report, Nancy Pelosi was named the fourth richest Californian in Congress. ”


    • kleptomaniak says:

      Yes, the age of aborted growth, population shrinkage, attrition, tech Neo-Feudalism, state capitalism (Nazism). Throw in some climate change, massive inequality, financial instability, moral, intellectual, and informational decay, collapse of civil society. The new world order will be radically simpler, the New Dark Ages.

    • tom says:

      Poor Evers, he thought cheesers would lay down & cower like the coasts.
      Now the match is lit. Ammo is going to cost more than gold.
      I’m guessing the media will not classify us as “peaceful protesters”.

    • Happy1 says:

      Urban living now isn’t about the industrial age, it’s about lifestyle and critical mass of knowledge and creative workers. There is a temporary reset right now because of a pandemic. If there were blogs in 1918 I’m sute they would also say nonsense like “no one will ever live in cities again”. History suggests cities will quickly rebound and become even stronger.

      I think the larger threat to cities is tax policy and the breakdown of civility and policing. Places like Chicago are just as few more riots or lootings away from a mass exodus of the wealthy. And taxes are reaching a critical level in NYC and SF.

      • c_heale says:

        There is very little industry in many cities now. That was the original reason for cities. Lifestyle workers and creatives aren’t gonna save citiew. I think it’s more likely that our cities will go the way of the Mayan ones. They will depopulate as people go back to the land.

  40. MCH says:

    I asked this once before a few months ago. Back then the answer was “I don’t know.”

    Wolf, what would it take for you to move from San Francisco?

    Discounting things like natural disasters, and retirement. It would be curious to hear if your opinion would evolve over time. Having lived in the bay area for the last 20 years or so, I find that it would take a bit for me to consider leaving. There is a lot that the region has to offer, Tahoe in 4.5 hours, Yosemite in about 5 hours, then there is Santa Cruz and Monterey, and that’s not even counting anything north of SF.

    I think leaving would require major life changes for me.

  41. Rcohn says:

    The SF Area is one of the most amazing places in the world
    in terms of natural wonders .Big Sur, US # 1, the Sierra Nevadas,Yosemite,Carmel.
    But the commute from many of the suburbs, is a disaster although less than before Covid-19.
    And it is easily the most expensive place in the country , even more expensive than the suburbs of NY. with median housing prices over 1.25 m and sales taxes, gas taxes and income taxes in the stratosphere .

    • Mammalian Cell Culture says:

      Hate to break it to you buddy, but US 1 is not natural, it’s man made.

    • c1ue says:

      To be fair: NY counts the space within 4 walls as square footage while CA counts actually empty, usable space.
      But yes – I moved to SF from Tokyo in 2002 and was displeased by having to pay *more* for rent despite the “get 2 months free” offers at that time.
      It stabilized for a long time and even dropped during GFC, but my rent more than doubled in the past 4 years thanks to the flood of VC money (and despite the building of over a dozen 40+ story condo/apartment building towers in my area in that period. So much for supply being the factor).

  42. George W says:

    WFH, and the end of networking…
    WFH, and the end of the hidden job market…
    WFH, and you may never work again…

    So everyone works for big tech Google, FB, MSFT, etc, how convienent.

    The exodus from big cities will have a huge impact on so many industires. Certainly some of you must support the likes of Starbucks, 7-11, Hilton, Hertz, GM, Ford, Delco, Exon, Boeing, Delta, Chevron, etc.

    A permanent exodus to rural America would be disruptive to all.

    • pharmer says:

      If you can work for Facebook from Oklahoma, your job can and will be outsourced to Bangalore. Or they’ll just give it to the AI who lives in the basement and all it needs is electricity.

    • MooMoo says:

      the green crowd wanted the world de-industrialized….now they’ve got it. The permanent exodus you speak of will make perfect sense when the disrupted supply lines and lack of finance send food price 300% higher.
      Sure looks like homesteading for the next ten years…not that I’d like it. Cities mean civilization

      …the lack of means the reverse.

      • California Bob says:

        re: “The permanent exodus you speak of will make perfect sense when the disrupted supply lines and lack of finance send food price 300% higher.

        Maybe, maybe not. But, run all the ‘illegals’ out of the country and I guarantee it.

        A Farmer

      • Trailer Trash says:

        >the world de-industrialized

        No, only Uncle Sam Land de-industrialized, and it started long before the global warming madness took hold. Now there will be huge numbers of abandoned malls and condo towers and office towers added to the landscape of abandoned industrial sites, bad highways and dangerous bridges.

        It occurred to me some years ago that Our Dear Leaders on Wall Street made a conscious decision to simply abandon the country after they squeeze out as much profit as possible. Chain Saw Al Dunlap slicing up company after company and driving them into the ground comes to mind.

        The refusal to properly control the epidemic while at the same time destroying the economy even as billionaires get fatter and fatter adds much support to my conclusions.

        Welcome to Coronastan, whose passport is welcome nowhere. You probably won’t enjoy the ride.

        • MooMoo says:

          True that.
          The industrial powerhouse of the world is China…and they will soon control the vast majority of it. How stupid was it de-industrialize. The Greens will soon starve soon starve to death and then they will realize (maybe) that industrialization is what made their previous world so enjoyable and free… and the lack of it their undoing.

          …who knows, maybe the old union bosses will realize it too, and admit their lazy rapacious behavior played a huge role in America’s de-industrialization.

          Ah well – too late now. It’s over.

    • Paulo says:

      Rural people like myself don’t actually want any exodus inflow. In fact, we discourage it. :-)

      Seriously, in our house we gave up long ago having a potluck and drinks night to welcome new folks. They usually leave in 2-3 years after they see it won’t be just like___________, but only smaller and quieter. You can pretty much tell right away if they will fit in. It isn’t at all like moving to a suburban subdivision. Newcomers have to want to be here and be willing to learn about the area’s past and respect the old time residents in order to fit in.

      The reverse is true as well, but you can remain anonymous in a larger centre and who your neighbour is doesn’t really matter as bylaws will curtail the differences and conflicts.

      Some hints: If you move to logging country don’t complain about the logging back in the bush. Farming, don’t complain about the smell of cowshit. Mining, ……. It’s like moving to the city and complaining about the crowds and parking.

      Every year or two there are articles in Vancouver media about folks who live in Richmond complaining about jet traffic noise. hmmmm, airport been there 75 years, you buy on a approach/departure path and….

      • Glass Half Empty says:

        Born and raised in Long Beach Ca. and moved to Medford Oregon right after 9/11. Decided I wanted out after the Rodney King riots but it took awhile. Now I want to move from here because the Rogue Valley is being ruined by said “exodus” . I am seriously considering Antarctica, less people, no traffic, low taxes and I love cold weather.

      • California Bob says:

        re: “Every year or two there are articles in Vancouver media about folks who live in Richmond complaining about jet traffic noise. hmmmm, airport been there 75 years, you buy on a approach/departure path and….”

        Very common MO (usually near smaller ‘feeder’ airports): Buy a house at a discount because it’s near an airport, then get to work trying to shut the airport down and subsequently raise your house’s value. It’s happening right now–well, it’s been happening for years–at Reid-Hillview airport in San Jose (Zoe Lofgren got her political start raging against RHV).

  43. Hernando says:

    Are the buyers outside of cities just speculators looking for yield since interest rates are so low that savings and other investments look unattractive? If people are moving away from the city, do they not need to sell the houses they live in to purchase a house in the suburbs?

    Just a bunch of nonsense yet again.

    • Wolf Richter says:

      Anecdotally, I have seen people buy a new home and move in before they sell their old home, if they can work out the mortgage or if they pay cash. This means, you will see buying pressure at their destination location first, and then later selling pressure at their departure city.

      I’m not sure how often the sequence happens that way — buy the new home before selling the old home — but if it is a bigger factor, it will show up in the numbers (more selling pressure at the points of departure) over the next few months.

      • Hernando says:

        That is interesting. It seems though that this is a national trend, not a local trend, away from the cities. Even with defaults in the shadows, businesses shuttering, and unemployment at record highs. In the past few months, my savings account went from 2% to less than .75%

        I’m not investing in the market, I’m not going to buy gold, how about land? Not now.

        10 years ago the mantra was there is only so much land and water, foreign investors are buying everything, buy, buy, buy. Today the requirements for a loan are a bit tighter but it seems very similar; and I’m sure there are some very clever lenders still out there.

  44. Mark says:

    Alternate reason : Greed turns to fear

  45. Bagholder says:

    Hi All,

    First time poster here. I’ve been in the valley for a long time. I’ve had multiple chances of buying my own place but being a pessimist I have always been uncomfortable with taking on debt. I’m slightly regretting it now. I’m embarrassed that I’m the only renter left out of my circle of friends and coworkers.

    I’m kind of in a quandary here. I’ve saved enough to be a able to afford a 2br place (townhome/condo) in a nice area (currently looking at the peninsula) without taking on too much debt. I know the most logical thing to do is to wait until at least next year. With real estate prices being very slow-moving, what if by the time prices start dropping, it will be at a higher point?
    Another of my concern is, with the political environment as it is now, what if they do something drastic (like banks bail-in or hyperinflation) to steal my savings?
    Also, I’m guessing that I’m not the only one who thinks this way. If people don’t see prices dropping by next year, some may be impatient and start spiking prices again. I don’t think bay area prices will drop for another decade after this.

    A big unknown factor is, what is the effect of COVID on tech companies? Unless the effect is big enough to cause layoffs in FANGS and startups, demand will always be high here. People will still want to be here even if WFH is allowed.

    I’ve always had the worst luck. If I start FOMOing, it’s likely the top. I’d appreciate any comments persuading me from taking / not taking the plunge.

    • Bobber says:

      The FOMO you should be worried about is not having capital when the markets drop 50% to 70%.

      With all the flip-flopping and panic-driven moves the Fed has done, does it seem like a knowledgeable organization, with a long-term plan to support the economy?

      • Bagholder says:

        That’s precisely the reason I’m concerned. The Fed appears to want to support asset prices at all costs. They will support the housing + stock market even if in doing do they sacrifice all savers.

      • MonkeyBusiness says:

        Markets dropping 70%? Won’t happen.

        There’s tons of willing buyers in the States. Give them more money and they will buy.

        I just honestly can NOT see how the market can drop 70%. I’ve seen conspiracy theories from all over the place, from Deep State actors wanting to dump Tr*** to the Chinese being able to do whatever to cause a market drop.

        Some people have mentioned a change in sentiment as a possible cause. Not sure what will cause the change either.

    • Jon says:

      If the general economy is suffering with 20% plus unemployment rate, tech companies would be one of the dominos to fall.

      Unless the consumers are able to have money to spend, I see problem in the future.

      Just think about the domino effect.

    • Tony22 says:

      Skip the Peninsula and buy a condo in Marin.
      Your better off in a small condo among the elite, where schools, police and nature are superb, than a nicer condo among the eroding middle class. Plus the San Andreas is a lot closer, just west of 280, than it is in Marin, west of Stinson Beach.

      Check those reserve requirements!! You don’t want to buy in a place where major repairs are just ahead and there’s no money set aside.

  46. Rosebud says:

    I’m wearing a SF tourist t-shirt. This is my favorite borrowed garment from a family member. It is navy blue. The emblem is circular, outer ring: City By the Bay, Rugged and Durable Authentic Brand. inner ring: Historic San Francisco, since 1850, registered trademark.

    Any lifecycle marketing people out there?

    • Tony22 says:

      Made in China, illegally sold by Guatamalans set up at the Twin Peaks tour bus stop. That’s globalism man.

  47. c1ue says:

    I would note that another possible factor is the VC spigot turning off.
    Yes, there is still funding going on but it is simply not going to return to 2015 heights.
    Here are some numbers for SF Bay area startup funding:
    2018: $63.6B
    2019: $45.9B
    2020: ? but I’d bet less than 2019 by a significant degree.
    March 2020 worldwide funding dropped to $27.5B vs. the $39.2B for 2019.
    US March 2020 was actually up: $12.5B vs. $11.8B last year, but deal flow dropped from 1,951 (2020) to 1,186. A disproportionate amount of 2020 flow was ongoing funding to existing lossmakers as opposed to new startups.
    Then again, this is March – before the meat of the COVID-19 lockdowns hit and also Chinese investors are pulling back/pulled out.

  48. wkevinw says:

    For those areas where the “limited supply/Malthus” model of the real estate applies, it’s hard to know the true demand. Cities like SF and NYC are a lot smaller than most people realize.

    There were a lot of reasons for the average person to live in cities (and various places) in these big states with big cities- several decades ago. The only reason I go to CA is 1. mountains/climate 2. a few family members left there. The rest is a bad joke.

    Remember the High Speed Rail project? 3x cost over runs, corrupt studies on financial sustainability, and last I checked a majority of Californians think it’s a good thing. (Full completion was put on indefinite hold by Gov Newsom ASAP so everybody could forget Gov Brown’s incompetence- Further note- I once voted for Gov Brown- fool me once).

  49. Jennie says:

    How long do low interest rates keep all the prices propped up? Did the interest rates in previous recessions drop enough to keep the housing market afloat?

  50. c_heale says:

    There is very little industry in many cities now. That was the original reason for cities. Lifestyle workers and creatives aren’t gonna save citiew. I think it’s more likely that our cities will go the way of the Mayan ones. They will depopulate as people go back to the land.

  51. Yertrippin says:

    Wow. After reading many of these comments, y’all some scaredy cats.

    Mr. Richter being one obvious exception…

  52. Michael Gaff says:

    As a big fan of Wolf, for at least ten years, I have been saddened to witness the degradation of his once erudite and witty comments.
    I mostly see ribald and hateful comments.

Comments are closed.