I know, I know. I’ve been MIA, but there is a reason. A good one. Or two. Actually three. You see, when I get caught up in this blog, reading comments, and reporting on what I see “virtually” I almost get the sense the market has cooled. It has cooled, but not nearly to the extent reported by every other media outlet out there. When I go out into the “field” with buyers and sellers, it is an entirely different picture.
My first example:
420 Lake, a six unit building asking $1,950,000, in the Lake District. Priced a bit too high for my client who is looking to vacate the building, completely remodel, and sell as TICs, this property had a showing schedule, an offer date (gasp!) and is now in contract. How it pans out, we can only wait and see, but that should be a good indication of something.
My second example:
869-879 Grove, another 6 unit building asking $1,695,000 in Alamo Square. Just hit the market, first Broker Tour was yesterday, and is rumored to be receiving an offer today.
My third Example:
2185 Bush #311, my own listing, a two bed condo in Lower Pacific Heights. Received an offer after only 18 days on the market, with many, many buyers circling. We’re still negotiating the final details, so hopefully I don’t jinx it, but the buyers are there, as is the activity, the loan approvals, and interest.
[Update: Literally two minutes after this went live, we are ratified in contract…with contingencies.]
Alex, good to hear about your examples, and congrats on getting in contract!
Is your Bush St. place on 2 levels? Also, appox how many sqft do you think it is?
I’m interested in looking at more Pac Heights properties. I saw this, and it went in contract in under a week.
http://sfarmls.rapmls.com/scripts/mgrqispi.dll?APPNAME=Sanfrancisco&PRGNAME=MLSPropertyDetail&ARGUMENTS=-N960695593,-N212069,-N,-A,-N10271462
Alex, good to hear about your examples, and congrats on getting in contract!
Is your Bush St. place on 2 levels? Also, appox how many sqft do you think it is?
I’m interested in looking at more Pac Heights properties. I saw this, and it went in contract in under a week. Amazing.
http://sfarmls.rapmls.com/scripts/mgrqispi.dll?APPNAME=Sanfrancisco&PRGNAME=MLSPropertyDetail&ARGUMENTS=-N960695593,-N212069,-N,-A,-N10271462
Can you share with us the typical profile of the $800-1mil buyer, and the $1.5 million buyer in your experience?
thnx!
[Editor’s note: BoomTime: It is two levels, approx 1107 square feet. Let me know when you’d like me to show you some Pacific Heights property. I’m around. Buyer profiles? There really is no typical “type”. They’re all over the map as far as ethnicity, age, sex, etc. Of course, they all have money…enough for at least 20% down, they all have great incomes, secure jobs or own businesses, and they all really want to buy. That is why I don’t see big change anytime soon. I am continually blown away by how many hundreds, if not thousands of interested buyers are out there, and how few properties exactly fit their criteria. I will say, I notice a lot of young couples, and young single women with high paying jobs and PHAT bank accounts. A lot fewer families with kids, which is unfortunate. Now about those Pacific heights homes. ;-) Baby needs a new pair of shoes!!!]
> Priced a bit too high for my client who is looking to vacate the building, completely remodel, and sell as TICs
Since the building shows an income of $111K/yr I assume your client was going to Ellis act the building? I am curious about your client’s thought process here since TICs or Condos in any Ellis acted building cannot be rented out for 10 years…
Buying a TIC is already fraught with risks. Buying a TIC in a large building (6 units) presents even higher risks… Buying a TIC in a 6 unit building with an Ellis act history is riskier still because any TIC partner who can’t make the mortgage cannot even RENT the place out to help make the mortgage. Because of all the risks in this, a lot of first-time buyers tend to stay away from multi-unit TICs with an Ellis act history. I tell my friends who are prospective first-time buyers to only look for 2-unit vacant TICs.
So did your client think he (or she) would be able to find 6 buyers in a reasonable amount of time who would be willing to assume such risks in this market? How much did he think each TIC unit would go for after remodel?
I don’t know. Seems to be a risky move.
[Editor’s note: My client was going to evict, gut, remodel, then resell. Buying TICs can be a tricky proposition for all the reasons you mentioned. We thought each 1bed TIC to be around $500k+/-. We figured you’re in for $2M. Carrying costs, and cost to remodel didn’t make sense for an estimated $3M total sale when all is said and done. Better to buy and hold this building.]
111k for $2million.. that’s a decent 5% yield. vs the 10-yr yield at 4.3%.
I assume there is upside to rent too. Hey, may i should go buy this building! :)
There is a three unit on Lower Haight with a good yield that’s been on the market for a while now, $114,600. At $1.55M, for SF, that is solid.
http://sfarmls.rapmls.com/scripts/mgrqispi.dll?APPNAME=Sanfrancisco&PRGNAME=MLSLogin&ARGUMENT=M8gVnxaITtC7kdvPlSohrnTEe1DS5CLXJaZu3zxNl84%3D&KeyRid=1
Ellis’d buildings can be rented after five years, right? Unless something new went through.
Boom, I could be mistaken, but I think that house was actually a pocketlisting on the marketplace page of this site, I think? Keep an eye out there!
Eddy and Boom,
Yes. It was a pocket listing here and on the sfnewsletter. Good eye.
alex
http://dqnews.com/RRBay0907.shtm
SF Median +7.8% YoY. That’s for all of SF. The prices in the better parts of SF are up over 10% this year.
How would you all…off the top of my head, thinking boomtime, eddy, HQ, Dave, Kenny, Ah Boom…who am I forgetting, feel if I were to give you access…albeit limited, to post this stuff on the blog so it shows in the front page, and not the comments? Just thinking out loud here, as I’m pretty busy actually dabbling in real estate, unlike my blogging nemesis.
I’m glad that I’m not the only one that thinks that the market hasn’t fallen into some spiraling cooling pattern. Don’t get me wrong, I have a buyer here or there that is reading all of the doom and gloom, and is questioning whether now is the right time to buy. But for the most part, people are out there buying, properties are selling and the San Francisco real estate market just keeps plugging along. Hooray for San Francisco’s status as an island in the midst of a struggling real estate market across the rest of the nation!
Alex – I’m down to post some key properties i find on my own, but they won’t be during the day time b/c I work.
SF is rocking and rolling, and rental prices are just going nuts.
Buyers have the right to question the market. It’s a big financial step.
[Editor’s note: Cool. Let me sort through the details, and I’ll keep you posted.]
Alex,
I’m flattered, really I am. But I worry that I would be the wrong vibe for your sit. I think you are carving out a niche as a “not so bad” cheerleader for prime real estate in SF, and my interests and inclinations are really towards real estate that would appeal to middle class buyers like myself, and things are decidedly much more mixed in that market. I’m also a bear with regards to SF’s prospects over the next couple years, and clearly that puts me in the minority here, and as a result I suspect my posts probably wouldn’t appeal to your reader base, at least from what I can tell. I can just see the “what happened to this blog?” comments now…
But if you’ll have me, I’m not above making the occasional post in line with my interests. I’ve worked as a professional blogger before believe it or not, so I know how to keep it professional.
[Editor’s note: I swing both ways. Your posts would be welcomed and encouraged. Variety is the spice of life! As I said to boomtime. Let me sort through the details.]
What the F*** is a “professional blogger” anyway???
spare me..
do we have to apply the word “professional” to every activity known to man..or woman?
I think it would be good to have Boom and ‘Ah Boom’ post their commentary. Ah Boom is clearly a play against Boom, and it’ll be interesting to see how things turn out. I’m sure one is an owner, and one is a renter as well.
Blog like Socketsite is cleary for renters, as Adam is a 38-39yrold renter. I think if we can make this site balanced, that would be good for traffic.
I’m down for whatever, to help out, and will try to keep the acerbity down to barely noticeable levels. I was an editor for Web content for a number of years during the dot-com days. That’s right folks. Former dot commer turned realtor. Hate me now.
@duggo:
I thought it was self evident, but since you asked: a professional blogger is somebody who gets paid to blog. I was employed by a megasized corporation to generate posts for one of their very hot blog properties. I was paid by the post, and was one of at least a couple dozen or so on staff. Lots of fresh content=lots of eyeballs=lots of advertising revenue=profit. It was fun for a while, but it wasn’t my main gig like it was for some, and my main gig (I am a business owner) eventually got too busy for me to worry about meeting quota.
I would really like to see eddy participate in this. I follow his posts pretty closely, both here and on other sites, and have tremendous respect for his insight. It would be neat to see what he would choose to post, as opposed to merely comment on.
I heard the next big thing is small. Are you dot comers>bloggers>realtors going to get molecular on us next? ;-)
I know a guy who gets paid to blog by the music industry. Hyping up bands that need help and stuff.
[Editor’s note: Where do I sign up for that?! And to the others. Let me figure out the logistics and we’ll make it happen. Boomtime, you’ll have to email me a legit email though.]
Since it seems most of you also read socketsite, and I know this comment would get axed over there, I thought I’d do it here. Regarding their “Belcher” scoop. I was betting the listing agent as either Greg Lynn, Fred Allardyce, or Jeffrey Castaldo…bam! Fred Allardyce! Who’s sleeping with who around there.
Socketsite actually has a couple blogges on their payroll. One of which is named Badlydrawbear. You will see him posting on Socketsite to help support Adam’s opinions, and you will see him post on many other sites all day long. Adam is very clever. Socketsite also bans any posts which are deemed counter to Adam’s mission. Socketsite was very informative, but has become overly biased to the downsound, which makes it lose it’s appeal. When they start highlighting why this SOMA condo doesn’t sell for $1,200/sqft and how this SOMA condo ‘only’ sold for $1,100/sqft… it starts losing it’s credibility fast.
It is amazing how Socketsite ‘misses’ so many great examples of properties in the city selling for new record prices. I do feel sorry for Adam, renting at 39 yeas old, and his followers who’ve seemingly waited forever. Anybody trying to buy a remotely desirable property in SF is going to be in a BIG surprise about how stiff the competition is.
BoomTime
Yeah, right. Real estate is booming. That’s why sales are down by a quarter.
And prices are up? honestly man. Figure it out for us. We’re waiting.
Gimmeabreak. The NUMBER of sales has nothing to do with the strength of the market. Take any nanomarket where there is no move – say, only 2 sales a year. If you have a waiting list of 200 people to buy at any cost, this is a STRONG market.
The opposite is equaly true. Take another nanomarket where there are 200 units for sale, and only 2 sales a year (so we could assume no waiting line to get in). For the same 2 sales, this nanomarket is extremely WEAK.
San Francisco is made of many nanomarkets – which somehow CHANGED over the past years. If not all nanomarkets are extra strong, many of them are, and the list of people who are CRYING, BEGGING, TANTRUMING, DREAMING to buy in some of those nanomarkets is and will remain long (down times can be for example after an earthquake – altho I’m sure many of us are planning to buy in the weeks after the next earthquake to flip properties, the same way that many are trying to flip properties in NewOrleans – so we cant even garantee a down time after the next earthquake [even if prices do fall]). I’m not judging those buyers.. hey, I had my own tantrum to buy my house!
For me (as a buyer), I measure the strength of a market in the discipline imposed on the buyer’s tantrums. If the buyer cannot buy anything s/he likes anytime s/he wants, then it’s a strong market.
To be more precise. If you are one of the 10 rejected offers on a property, and it’s the 5th time your offer is rejected, and your agent confirms that your offers were reasonably priced and strong – then the market DENIES you your desire – and from frustration, people just make an even higher offer the next round – upping the prices – BECAUSE the number of closing IS LOW. (the exact opposite of gimmeabreak believes)
The less properties on the market, the more frustration of time and rejected offers and so it spins upward.
Now if you want to analyse WHY the number of closing (and of general inventory BTW) is low… just think… MAYBE there are not enough foreclosings forcing properties on the market (weak market? nuhhhhhh). MAYBE there are not as many people who prefere cash over location and are happy to stay put in san francisco (weak market? nuhhhhhhh) MAYBE there are not as many people who are flipping houses and creating an artificial bubble on “fake” mortgages (weak market? nuhhhhhhhhhh). and so the list of maybes can go – most of them being symptoms of STRONG market….
And if you want a black and white proof that numbers are plain stupid – run the stalefish With and Without the 65M oddity – and compare the “averages” and “medians”. San Francisco IS MADE of “oddities” – so no condensed/average/statistics/numbers reflects anything at all… beside nanomarket full listings (see http://www.tdsf.blogspot.com/ for a VERY GOOD tour of not the past, not the future, but the present picture of SF).
Anybody using those numbers for Bible truth has an obvious need of reality check (or is just writing to be payd by the word by a newspaper).