TICs fetching the same price as condos?

I’m going to hope the Stammtisch comes through with a quick response to this reader’s question, as I am totally swamped right now. If they don’t I’ll get to your answer this weekend. Thanks for writing in.

In Andy Sirkin’s famous online article on condo conversion in SF, the graph seems to suggest that vacant 2 unit TICs are fetching the same price as condos (Condominium Conversion in San Francisco), implying there is not much upside in condo conversion price-wise. However, I have also heard from some Realtors that condo conversion of duplexes can increase the building value by 10%. What’s your thoughts on this?

Thank you for your sagacious response.

And yes, I had to look up the word sagacious. Keeping me on my toes. I like it.

SF getting hurt by subprime crisis?

A quote and a link from Damion Matthews…to an article that is quite representative of a lot of what is going on in some parts of the city, and not at all representative of a lot of what is going on in many parts of the city. Get that? ;-) Read it again.

In and around San Francisco, where the median home price is about $1.1 million, the tougher financing environment has created a “hesitancy” and has led to some canceled escrows for buyers around the $1 million range, said Rick Turley, president of the San Francisco and Peninsula Region for Coldwell Banker Residential Brokerage.-Rick Turley, president San Francisco & Peninsula Coldwell Banker

-Subprime Mortgage Woes Spreading [Forbes.com]

Just “Wondering”

A reader kindly asks about 2746 Gough #1 in Cow Hollow, and 120 Cherry in Presidio Heights, so I thought we’d give the answers.

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120 Cherry is a home that hadn’t been on the market…ever, since it was built in 1923. (According to the “remarks”.) It is in Presidio Heights, is a trophy home, and it basically flew off the shelf. It most likely fetched multiple offers, and it sold for $3.7M which was $500,000 above asking, and $1243 per square foot. It closed last week, 8/18/07. Click here for details.

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2746 Gough #1, was another property that practically flew off the shelf, was asking $1,295,000 and sold for $1,465,000. It closed escrow 7/17/07, and came out to be $776 per square foot. Click here for details.

As always, don’t hesitate to contact us if you have any questions about San Francisco real estate. We’re glad to help.  And feel free to rip into that kitchen, cuz that’s what $3.7 mil buys you in Presidio Heights these days.

How to buy a foreclosure in San Francisco

by “Dave”…a reader that seems to have just scored a great home. Important detail he left out, and what I’m dying to know…did you use a Realtor?

As I mentioned before, there wasn’t much magic in my purchase. The house was listed on MLS like everything else but was disclosed as an REO. I had an RSS feed set up to track craigslist postings with the phrase “REO” or “bank owned”. (Real estate MLS search engines lack this keyword search capability..)

Once I saw this property show up, I attended open houses like everyone else. I think what scared most people away is the amount of deferred maintenance. 101 years old and not very well kept up. Needs a few big ticket items right off the bat ($75-100k), but I can afford to do these repairs and don’t mind the temporary inconvenience.

Lastly, I presented a very clean offer. I cannot stress how important this is when purchasing a trust sale or an REO. The seller is a bank. (Imagine a room full of dudes in suits in a boardroom, hundreds or thousands of miles away from the property.) They do not want to negotiate with you about the lead paint on the windowsill or the cracks in the plaster. They have probably never seen the property.

They also don’t want lots of contingencies. I waived inspection and pest reports. (I had my contractor inspect it anyway, but not write up a report. This was just for my peace of mind…) They won’t wait on you to sell your home, etc. Money talks, you know the rest of the saying.

We submitted an offer that was roughly $30k below asking (and the house was already listed for almost $300k below it’s previous selling price) but the offer was super, super-clean. There were four offers total. I’m guessing that I wasn’t the high bid, but I was the cleanest. Also had great credit and came pre-approved (harder to do in the current climate).

For those looking to help on property shark or foreclosures.com, I can’t help you. I’ve found those sites kinda useless. To buy at auction on the courthouse steps requires mega cash. Not possible for me, and most of those properties are in crap neighborhoods. There are books (I’ve read them) that tell you how to find people who are in trouble (recipients of NODs) but it’s a creepy notion to me that I should call or send a letter to a distressed borrower, offering to bail them out…

If you’re looking for a deal, I recommend setting up RSS feeds on craigslist and searching for NOD, REO, “short sale”, “pre foreclosure”, etc. If people are desperate to sell, they’ll typically advertise it. Good luck to all…

Construction starts in 2 weeks!

Thanks for the details, and thanks for sharing.

Stump the Stammtisch: Why do an off-market deal?

This question came to me from Sophie, a very avid reader of both theFrontSteps and the sfnewsletter. I’m hoping we can provide some insight.

Dear Alex,

I’m very puzzled by something that happens more often than I can understand in the SF market.

Why would ANY party agree to an off-market deal? (VIP houses put aside.)

I dont get why the seller would agree to sell to the first [buyer], without trying to get more? And of course, the trick question of “one agent, or two agents in the deal?” If there is only one agent, you could badmouth that the agent gets the whole 6% without having to work? But if there are 2 agents, why would they agree not to put the sale out? Or is an off market deal hiding some % [of the] commission “arrangements”?

And to [expand on the topic]- are some properties sold FSBO in a deal with NO agents at all? Who would even consider to do so? [Taken out to keep the flow of this question.]

Anyway. WHY? I can understand the part of fixing/painting/staging yourself. I could understand the part of FSBO in some market out of San Francisco. But I can’t figure out the off-market deals.

Further more – do your ‘pocket listings’ cover this? If not – what is a pocket listing, and why should a seller learn about the option, and why should a buyer keep his ears open?

Holy hell Sophie, great questions. Lost me on a few of the tangents, but I think I got the gist. I’m hoping some other Stammtisch members will add their take in the comments. Me, I’ll do it here. Continue reading

San Francisco Foreclosures UP!!!!!

Yup, it’s true. Foreclosures in San Francisco are up from a whopping 62 63 notices in 2006 to 65 in 2007, or 3%. Dave, it looks like you were one of a very few to get your hands on a foreclosure in San Francisco. Hats off to you. We anxiously await the story.

As always, we try to find the silver lining to an otherwise very dark cloud. At the same time, we know the market is not immune to national trends, nor do we ever claim to know where it is heading, but we feel some things are important to at least note, especially when we didn’t write it.

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Thanks to JJ for the tip on that.

-“California seeks ways to ease mortgage morass”

Hotel Luxury Condo’s Hold Their Value

by Janet Krahling

Take a look at this comparison:

Downtown Hotel Luxury Condos (St. Regis and Four Seasons Residences

re-sales) vs. Pacific Heights Condos ($1m+ sales).

hotelcondovcondo.jpg

This chart compares average price per square foot in 2006 vs. average price per square foot YTD in 2007, according to MLS data. The average price per square foot has increased for $1m+ properties in Districts 7 and 8 as well as the hotel luxury condo market. In 2006, the average price per square foot for $1,000,000 plus condominiums was $841 and for luxury hotel condominiums was $1,298 psf. Year-to-date, price per square foot increased to $875 and jumped to $1,530 for those respective property

categories. That’s an increase of more than 17%, on average, for luxury

hotel condos.

Exceptional services, such as Private Residences Concierge, state-of-the-art fitness facilities, world-class reputation, fine dining and amenities contribute to the increasing value of these homes.

Additionally, demand for new luxury homes, especially as development of

the Downtown/SoMA district flourishes, continues to rise.

[Editor's note: Not sure about your districts? Here's the map.]

Battle Royale: Hayes Valley or Haight Ashbury, if you had to choose

We’ve been having lots of fun with the other Battles: Outer Richmond v. Outer Sunset and Pacific Heights v. Marina, so today we give you Hayes Valley or Haight Ashbury. The choice is yours. As always, we provide the data, and hope you provide the insight. Have fun. Sorry for the tech difficulties, it’s not us.

Correction on the Outer Richmond/Outer Sunset post. The charts we posted from Altos research were actually median prices for condos, not sfr’s. It is now fixed.

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Hayes Valley Stats (source: SFAR MLS)

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Haight Ashbury Stats (source: SFAR MLS)

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Haight Ashbury zip 94117 (Median: source Altos Research)

Single Family

condo

Hayes Valley zip 94102

Single Family

condo

When looking at these charts, keep in mind that they are based off of zip code, not property type and exact street delineations as in the San Francisco Association of Realtors District Map.