Residential Sales Down 55% Since Bubble Burst

People are always asking me, "How's the market?" Here's the simplest answer I know. Take a look at the chart, below, which shows the annual value of residential sales in San Francisco over the last fifteen years.

Sale prices didn't peak until the spring of 2007, but sale volumes started falling in 2004 (see this earlier blog entry). Stated in that way, the historical trajectory of the market may be difficult to grasp. The story becomes simpler, however, when prices and volumes are combined: After peaking at $8.0 billion in 2005, residential sales have fallen in every year since. Through the first eight months of 2009, sales are running at an annualized rate of only $3.6 billion. In percentage terms, that amounts to a 55% decline since the housing bubble burst.

That's how the market is doing.