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.


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.


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.



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).


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.


Hayes Valley Stats (source: SFAR MLS)


Haight Ashbury Stats (source: SFAR MLS)


Haight Ashbury zip 94117 (Median: source Altos Research)

Single Family


Hayes Valley zip 94102

Single Family


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.

comment du jour: Will prices fall in SF?

From Kenny on “What’s Going on in the Mortgage Market”, and indeed something we’d all like to know. Yes, median prices have fallen in some areas (mostly when talking YOY), but we’d like to know what you all think. The million dollar question:

“Whether or not prices will fall in SF…”

Indeed that is the question. What do you think?

[Update: Definitely make sure to read Dave's Comment on this post. Very informative and very well stated. Nice job Dave...now about that foreclosure you picked up. ;-) ]

“…deals can be found now”

From a reader to you. I anxiously await the story, along with a few other readers, I’m sure.

“There’s very, very little to select from in the foreclosure arena in San Francisco. However, I am currently in contract on a bank-owned property. It’s a single family home in a desirable neighborhood. We offered about 25% less than its selling price in 2005 and we got it. (Well, almost. We don’t close for another week…) I have been one of those “sideline guys” since I sold my house in 2006, and this was the opportunity that I’ve been waiting for. Financing is very tough right now, even with stellar credit. My rate is over 7%, despite having a very high income to debt ratio and 800+ FICO. That said, deals can be found now.

I suspect there will be more (better) opportunities in the future. I know a ton of friends and colleagues who are sitting on 5/1 interest-only ARMs right now who never conceived of 7-8% interest rates. Some of them are rolling over into new 5/1 (IO) ARMs; others are riding it out. I opted for a 30 year fixed so I can sleep at night.

Good luck to all.”-Dave

Marketplace Updated

In case you haven’t checked it out yet, I have started a little Marketplace for myself, and my colleagues to do a little promoting. I will not be posting those items here, but I will periodically be doing little posts like this to remind you all about it. It’s what puts food on the table, and that table has a 5 year old, and 1.4 year old. It has to be done. Check it out, and help baby get a new pair of shoes!

-Marketplace [theFrontSteps]

Stump the Stammtisch: Refinancing our 3/1 ARM…

“Hello Front Steppers,

We bought our SFR in 2004 and have a 3/1 ARM of $600K on a $1mil home. We can pay the newly adjusted amount without really changing our lifestyle, but we would like to refinance before the next rate adjustment in 10 months. With all that is going on in the mortgage industry right now, how will that affect a refinance? Both our FICO scores are around 770.

Thanks for any insight you can provide.


My first bit of advice would be to read this post so you have a bit of an understanding of the “true” state of the industry. You might read this post as well.

Then it seems to me from your question you’re concerned about a) being able to refinance, and b) getting a good rate. Given the limited information you provided, I’d have to say you should be okay with a refi as long as you can afford payments at the new rates. All the shake ups in the industry really come down to financial qualifications, whether it be a refi, or purchase.  Money will no longer be lent to people that shouldn’t be borrowing in the first place, and of course rates are most likely a fair bit higher than what you are paying currently.

The long and short is as long as you can provide documentation, have good credit, and deal with the right people (brokers), you should be okay.  But I will be the first to admit I am not a mortgage expert.  The best advice I can give is to pick up the phone and call a few mortgage brokers, or maybe a few will chime in.  If you need numbers, feel free to email me again.

Thanks for reading, asking, and hanging out on theFrontSteps. Hope this helps.


Green Home Tour San Francisco

Continuing the green thoughts, we receive some information from our green experts about a green tour, which might save you some green, and ultimately help green this city. However, you might keep the Land Rover LR3 parked in your green garage for this tour. ;-)

by Tiffany Elston

San Francisco’s first green home tour

Build it Green (www.builditgreen.org), (BIG for short) an awesome non-profit based in Berkeley, will be hosting the first SF Green Home Tour on September 23. The tour is designed to coincide with West Coast Green, the country’s largest residential green building conference and expo from September 20-22.

The tour will showcase 7 green-built and remodeled homes featuring solar thermal and electric systems, green roofs and grey water systems, bamboo and cork flooring, and more.

This is a good opportunity to view the emergence of SF’s green housing stock first hand. Also worth checking out is the homeowner day at West Coast Green on the 22nd, where homeowners can come to learn about the various green building products available to them.

For more information on the Home Tour follow the links in this post.

I’ll be sure to post more details leading up to the events.

-First SF Green Home Tour [website]

-West Coast Green [website]


“the place was crawling with people” (1422-24 14th Ave.)

Deferring to our readers on this one. I have not seen it. Thanks “anon8mizer” for the tip.

3293501.jpgHi – Just an update on this building. I saw it on Sunday. The place was crawling with people. I thought i was back in 2004 when I was house hunting. Three types of visitors: 1) young couples/families starting out. 2) whole families thinking of buying the whole building and 3) immigrants who needed translation from their realtor. Both kitchens have been remodeled with granite tops and stainless steel appliances. The bedroom layouts are kind of awkward but still usable. Top unit kitchen has a beautiful view of St. Anne’s church. Both are in move-in condition. The only things that need to be updated are the bathrooms. I think it will easily go over asking. Offered at $1.195, my guess is it will be sold around $1.3.

-1422-24 14th Ave. [MLS]

What’s going on in the mortgage industry

by Miles Grant


I have been getting calls from Realtors and principles asking if we are still going to be able to fund loans, and other questions. Following is a list of questions and answers.

What is going on? Most lenders sell to Wall Street and Wall Street stopped buying loans. Prices for these lenders went up 1 to 1.5%. Portfolio lenders, lenders who lend their own money, are unaffected by this change, except for the fact that the volume of their business has greatly increased. Most of the portfolio lenders that we work with are not getting overwhelmed by the volume, although the time it takes to get an approval is now 3 or 4 days, and that is expected to go up to a week shortly.

What is a portfolio lender? A lender that lends their own money. These are local or regional banks. Chances are good that if you’ve heard of a lender, it is not a portfolio lender. Continue reading

comment du jour: 520 Clipper and being “green”

We get such a kick out of some of the comments that go un-noticed, we thought we’d grab a few from time to time. Today’s “quote du jour” comes from Joe Schmoe on “Go Green” regarding the Lorax Development Clipper House.


Important to note before you see the quote, this home had features like “the first approved rainwater catchment system in San Francisco, new Ultra-Touch® Recycled “blue jean” insulation and hardwood flooring reclaimed from 100-year-old railroad ties, [s]olar panels power[ing] the entire house and then some, and hydronic radiant heating keep[ing] the home cozy in the winter months without incurring fuel costs.”.

Because we know you’ll ask, it sold 4/20/06 from an asking price of $1,899,000 to a selling price of $2,150,000. But it’s what’s apparently parked in the garage that caught our eye.

“The clipper owners have offset the green-ness of their house with a nice shiny new Land Rover LR3.

No doubt hybrid.”

Congrats on the “comment du jour”. True or not, we got a good laugh.

-520 Clipper [mls]

-Go Green [theFrontSteps]

-Lorax Development Clipper House [Lorax website]

Verbatim: fewer than 1% of all residential mortgages in foreclosure

“…. There are some $10 trillion of residential mortgages outstanding in America. Only 15 percent of those are subprime mortgages, and only some 12-13 percent of those mortgages are delinquent (payment overdue for more than 30 days), with even fewer, perhaps 5-6 percent in foreclosure. That is fewer than 1 percent of all residential mortgages….”

-Bernanke to the Rescue – A surgical strike by the Fed chairman [the daily Standard]

Pardonnez moi monsieur, mais vous avez dit “+79.7%”?

We often compare trophy cities (London, Sydney, Paris, Tokyo, etc.) of the world to San Francisco, and in my humble opinion, we’re not quite trophy, but on our way. If we got rid of Chris Daly, maybe we could get there. Regardless, a reader sends us this quote and link:

“And we thought prices were expensive here! A neat flash-based map of Ile-de-France property prices (that is Paris and its suburbs). Price rises of over 100% in the past five years aren’t uncommon, it seems. Click on the circle in the middle, that’s central Paris. The colors speak for themselves.”

Ile-de-France website

C’est vrai, mon ami. C’est vrai! Ce n’est pas la meme pour San Francisco, but we could be there in a few years.

For the French challenged: “Variation sur”=variation over.

-Ile-de-France Interactive webpage

Stump the Stammtisch: “Have buyers become more conservative in their offers…”

I am only one small fish in the sea, and only represent a tiny portion of the real estate transactions taking place in San Francisco on a daily basis (yes, properties are still trading, and trading briskly). To assume that my experiences are an 100% accurate depiction of the market would be plain foolish. I rely on my colleagues and Stammtisch when writing a lot of what I write, so I digress to them again. Colleagues!?

Hi Alexander,

I’m an avid reader of your newsletter and blog. I’m curious what changes in loan contingencies you’re seeing as of result of tighter lending. Have buyers become more conservative in their offers and are sellers more open to longer loan contingency removal periods?


My reply (with updates): Continue reading

Find your way to the Mid-Century…modern (429 Burnett)

Sometimes you just have to show some pictures, and dream. Five bedrooms, 4.5 baths, 3 parking spaces, 3600 square feet, listed for $2,790,000 about a month ago, into contract about 10 days ago, and “very nice” (say that like Borat). It is indeed an “Entertainer’s Dream”, so don’t forget we make a great fresh lime margarita, oh Mr./Mrs. buyer. ;-)


We’re working on a place to stash some surfboards, maybe at Burnett we could stash our telescopes.

-429 Burnett [MLS]

-A rectangle on end on the Great Highway [theFrontSteps]

Various Updates (Alhambra, Sea Cliff, 22nd, Sacramento, Douglass, 27th, and more)


Our readers have been asking in various places about some properties we featured as of late. Since so many have asked so nicely here you go:

3280 22nd St @ Valencia, the “green” building that all the blogs were all hot about and many claiming wouldn’t sell. Guess what? Last week, in the middle of all the mortgage market meltdown drama, all three condos had offer dates (very ambitious) and all are now in contract. The two bed, two bath units were priced at $849,000 and $899,000. The top floor, two-level, three bed, two bath condo was asking $1,399,000. Photos.

318 27th St featured in Greg’s “Sittin’ on the deck by the Bay” was indeed apparently a good find. From what we can tell, it went into contract within the first weeks of being on the market, fell out, then went right back in. (Unconfirmed and according to MLS.) Photos.

689 Douglass is still “pending”, but flew into contract. 2679 Sacramento is getting stale withdrawn (possibly to avoid staledom and thanks Pete and Eddy for the tip).

245 Alhambra…no tengo nada! Lo siento “Boomtime”!

In case you missed it, all the properties in this post are as follows: 1330 Chestnut (pending); 2255 Washington (active); 2249 Washington (pending); 2745 Laguna (pending); 3042 Jackson (in contract); 2865 Jackson (sold for $1.7M asking $1.59M); 2130 Beach (pending).

25 Sea Cliff sold $4,550,000, asking $4,095,000.

In summary: 13 of these 15 properties are on track to sell, and sell quickly, if they haven’t sold already.

If we missed any, or you have any questions about our market or real estate, just drop us a line.

What’s been happening locally

by Meagan Levitan

I’m not even going to start speculating on where the San Francisco market is heading after this week’s mega-headlines about the loan market. Needless to say, though, difficulty getting jumbo loans COULD affect the San Francisco market but it is too soon to tell.

So…I’ll just talk about what’s been happening locally of late. And just looking at the last seven days you would have to ask, “What loan crisis?” Granted, many of the deals that closed this week were in escrow prior to the super-crazed loan madness, but nevertheless, we’re still seeing quick closes and considerable over asking prices. This is especially so in the single family homes category. The condo and multiple unit buildings are also still seeing healthy over asking sales prices.

As for new inventory: it could be my imagination but of the 100 or so new single family home listings this week, I thought overall the prices weren’t quite as high as they’ve been this summer. Same goes for the condo market. It is certainly possible sellers are going to take a wait and see attitude with aggressive pricing during these remaining days of summer and instead opt for safer, more predictable price ranges that will result in a certain sale.