Realtor Massacre - SFH sales volume down 27.9%

The buzz this morning via sanfranciscoschtuff.com is the new SFAR (San Francisco Association of Realtors) report which shows a stunning 27.9% drop in sales volume as compared to December of 2006.

This is catastrophic for realtors. As I pointed out in the comments in this post on The Front Steps, it is much better for realtors if prices decline then if sales volume declines. You can't collect a commission if the house isn't selling! In this case we have 61 less homes sold within a single month. If all these homes were all priced at the median price of $800k that's $48 million dollars of sales that dissapeared. Which of course translates to roughly 2.5 million dollars in realtor commissions that evaporated out of a total pool of roughly 8.6 million. That's a lot of missing money for a single month!

If realtors had sustained volume by being more successful at encouraging owners to drop their prices they would have fared much better. For example let's say prices had fallen citywide a jaw dropping and unheard of 10%, the realtors would be looking at a loss of only $860k for the month.

So if you are a realtor, and you want your properties to move, I would strongly urge your clients to start dropping prices.