Below you will find important statistics for the past decade and a half on the luxury markets in District 5. The price point has reached $1.5M for an average home in Glen Park and more than $2M to own a home in Noe Valley and Eureka Valley. Note that the 2014 data are year-to-date, between 1/1/2014 to 7/25/2014.
I’m pleased to announce my clients have successfully sold their Richmond District top floor condominium for $1,200,000 (listed at $949,000), or as I like to point out, $200,000 more than the most recent, closest competitor property on 26th Ave that listed almost the same day as we did.
It’s no coincidence we knocked it out of the park. It was strategy, patience, perseverance, and knowing how to finesse each offer (we received five) to their highest and best without them walking away. Congratulations to my clients that just set the bar for Central Richmond condos – the last area of the city you can still find a deal. Let the migration begin.
I just wrapped up a deal with some buyers in NOPA, and this is what they had to say about working with me:
Great agent. Not only did Alex stick by us through multiple offers but finally landed us our new home even though we weren’t the highest bidders and we were up against all cash offers. By really getting to know us and meeting with the sellers agent at offer time Alex was able to position us as the best fit for the home. His knowledge & navigational skills through this unpredictable market combined with a down to earth sensibility and overall likability are a winning combination. Thanks Alex – we look forward to hosting you at our moving in party!! Lauranne, Mike and Mary
Thanks guys! Looking forward to beers and barbecue. I’ll bring Tequila!
It’s happened again – I did a post Friday about the week’s overbids, and the comments and emails immediately come in, “Is this because the owners are listing for under market prices to crest bidding wars?” or “Why do you always highlight overbids? Aren’t these properties underpriced to begin with?” or “These properties are selling at market price, so why all the hype about overbids?” or “Can you post comps for each overbid you show?”
It’s nonstop, so let me elaborate. The answer is no, most of these overbids are not underpriced, and no, most listings are not intentionally underpriced*. Most properties are “competitively” priced. In a market where buyer activity drives property values up, we have learned (this isn’t San Francisco’s first crazy real estate rodeo) it is best to price a property lower than where you expect it will sell, get a lot of people through the door, and let the buyers set the new market price for any particular property. It is the best way to get the highest price for the seller. The truth is, in this market, we listing agents have run out of crystal balls and simply don’t know what true market value of a property is until you open it up to the hordes of buyers out there, and let them do their thing.
Additionally, buyers have become accustomed to looking at property priced lower than what they expect to pay in the end. So if you list higher than what they’re searching, you won’t get them through the door. For example, a buyer that is expecting to pay $1.2M on a property is likely looking at properties priced well below that (in the $800-995,000 range), knowing they have to bid over. It’s mean, and totally wrong, but it is the way it is. If you bring a property to market at the higher price you hope to achieve, you might get less buyers through the door, no offers in the end, and end up “chasing the market down”, which is not a fun thing.
The last three listings I had blew our (mine and my clients’) minds. We had expectations as to where they might sell, and even entertained the idea of an off market sale, but man were we glad we didn’t go that route. In each situation we received at least 10% more than what we originally thought was “market value”. Did we intentionally price it low? No. We really didn’t know exactly where it would end up selling, so we priced it competitively knowing the buyers will set the market price, and they did, and always do.
It’s frustrating being a buyer in this market, no doubt, but it’s stressful being a seller too. Selling a property for an exorbitant amount of money, regardless of how much over asking an offer might be, is not entirely relaxing. Appraisers strike the fear of God in sellers, because each new appraisal is at a level not yet seen. Hence the draw of accepting cash offers over those with loans. Miraculously appraisals keep coming in at value, but sometimes other things can derail the process too, and then what? Re-list? List at higher price? Are the same buyers still out there? Will you get that magical (through the roof) number again? Do you put the backup offer in (if they’re still there)? So many variables cause so much stress, but that’s another topic altogether.
The bottom line is the overbids that are highlighted here and make headlines are not so much about property being underpriced, as much as they are about the multitude of buyers out there willing to go to astronomical heights to realize their dream of owning property in San Francisco. Arm chair analytics are great for SocketSite, not so great for listing your home on the market, or trying to be the lucky buyer that wins in a market with far too little supply, and over-flowing demand.
So take these overbids with a grain of salt, and if MLS was smart, they’d add a category when reporting sales that will show us all the number of offers on any given property and any given overbid. That’s the real stat to focus on. For every property that gets sold there are usually 10-15 buyers (at least) that just lost and are moving on to the next one, and ready to go crazy big just to be done with it.
I hope that sheds a little light on the matter, and I hope it clears up the air around most of us real estate agents that are simply doing what it takes to get the seller the highest and best price for their property. It’s a bit of a game, but if you know how to play, you can win. As always, I’m here to help you buy and sell, because I do know the game, and I do know how to win.
*Some agents do intentionally underprice property, and some agents do use this as a way to brag about getting “$$$ over asking on my latest listing, I can do the same for you.” But those agents are the exception, not the rule, and you should avoid them.
-Last Week’s Top 10 Real Estate Overbids-San Francisco [theFrontSteps]
Recently, I had the pleasure of representing my client in the sale of his condominium in one of the most sought after locations and buildings in downtown San Francisco. Many people refer to this area as SOMA, some refer to it as FiDi (Financial District), some as the Barbary Coast, and others still as Yerba Buena. Regardless of what you call it, I call it a sale that far exceeded my client’s expectations and set a new price per square foot record in his building of $1233 per square foot. In the end, we received 16 offers, all over asking, and settled 31.31% above asking, and well above any recent comparable sale.
My client was so thrilled, he sent me this wonderful testimonial:
Best agent, bar none, in San Francisco
I had the good fortune of working with Alex Clark of Paragon Real Estate on the recent sale of my condo. Alex is extremely professional yet very personable and possesses a keen knowledge of the San Francisco real estate market. My unit was listed for only 11 days and received 16 excellent offers all well over the asking price.
If you are contemplating selling or buying in San Francisco, Alex Clark is a must in your strategy.
A VERY satisfied client.
Many people will chalk this up as simply a sign of the times, but there is an art to garnering tremendous interest, multiple offers, and ultimately a successful, new high water mark sale. It also helps to have your property listed here on the most popular San Francisco Real Estate blog, so it can get press on the more most popular Curbed SF real estate blog. Buyers are online, that’s where I am, and that’s where your property will be.
Congratulations on your sale Peter, and all the success and good times in New York City. I’m definitely jealous of that one way ticket.
-Battle Royale: San Francisco or New York City, If You Had To Choose (Over 100 comments on the matter) [theFrontSteps]
-More Testimonials [theFrontSteps/Alexander Clark]
-Recent Transaction [theFrontSteps/Alexander Clark]
-1 Ecker (16 Jessie) Hits The Market, Monday Open House Was Packed [theFrontSteps]
-A Slice of 1 Ecker Can Be Yours For $495,000 [Curbed SF]
I wanted to share these stats for any and all of you buyers, mortgage brokers, or agents that run into appraisers who feel it is their duty to question the price a buyer is willing to pay for a property in this market. In my humble opinion, appraisers should not ever look at percentages above or below asking price. Actually, I think San Francisco doesn’t need appraisers in a transaction at all, ever. If a buyer is willing to pay $$ for a property and a seller is willing to sell it for that, that’s what the property is worth.
Anyhow, this chart shows the staggering number of overbids in San Francisco for April, and the lengths buyers are willing to go to win.
[Update: SOLD for $1,200,000]
Do you know how much more home you could buy if you just took a look outside of the Mission, Noe, NOPA, Cole Valley, Inner Sunset, or Pacific Heights neighborhoods? Wonder no more, and come visit my newest listing at 741 18th Ave in San Francisco’s Central Richmond District.
Listed at $949,000 this exquisite Top Floor Edwardian 2 bedroom plus sunroom (easily used as 3rd bedroom or office), 1.5 bath luxury residence has it all in a location ideal for outdoor enthusiasts, or urban dwellers alike. Perhaps the last area in San Francisco where you can get a “deal”, this flat features beautiful hardwood floors, formal living room w/ wood burning fireplace, formal dining room, original gum wood details, designer kitchen w/ CaesarStone counters, Bertazzoni range, breakfast area, in unit stackable Washer & Dryer, tons of natural light, views to Marin headlands, lots of closet space, additional deeded storage, landscaped yard, and 2 car parking. Half block to Golden Gate Park, and 5 minutes to Ocean Beach. Easy access to Marin, Napa, Peninsula & Downtown. Multiple public transit options, and front row seats to Outside Lands. Your friends will be asking to visit you all the time.
I will be holding this home open on Sunday 4/27 from 1-4pm, Monday 4/28 from 5:30-7:00pm, Tuesday 4/29 from 11-12:30pm, Thursday 5/1 (My birthday, so come say Happy Birthday to me) 5:30-7pm, Sunday 5/4 from 1-4pm, and by appointment all week. Please do not hesitate to contact me if you, or anyone you know, would like to get in for a closer look.
It’s truly an amazing property in an amazing location.
-741 18th Ave, 2+bd, 1.5ba, 2pk, Central Richmond $949,000 [Property Details via MLS]
-Photos by Rob Jordan, Whistle Photography
You may have already seen the press my good friends over at Curbed gave to this awesome condo in the heart of downtown San Francisco (Financial District/Yerba Buena), but if not, here you go: 16 Jessie (1 Ecker) #406, Junior 1br/1ba, $495,000
Sustainable down to its very foundation, this century-old building (1 Ecker) was painstakingly restored and updated with brand-new modern interior fixtures and finishes. This top floor, Junior 1br, 1ba unit features soaring 12′ ceilings, exposed brick, open kit/liv area, bamboo floors, Cesarstone kit countertops, espresso cabinetry, stackable Whirlpool High Efficiency W&D, Bosch Energy Star appliances, addl. storage, bike parking, & shared roof deck/bbq area. Furniture is negotiable. Walk to shops, restaurants, public transportation, Ferry Building, and so much more. This is the perfect Urban dwelling for anyone.
On a side note, this was the first ever Open House I’ve done on a Monday evening and the traffic was through the roof. Perhaps this could be the first step to getting buyers, sellers, and agents their Sundays back! Many, many of the people through the door preferred the Monday evening showing over the standard Sunday 2-4pm window for open houses, citing their inability to do anything on Sundays because this window falls smack dab in the middle of the day. My vote is to get our weekends back. What about you?
I’ll have it open again:
Thursday 4/17 from 5:30-7:30pm
Saturday 4/19 from 2-4pm (my colleague will be there)
Tuesday 4/22 from 2:30-4pm
Offers, if any, will be reviewed Wednesday 4/23 @ noon.
The San Francisco real estate market grew increasingly frenzied as the first quarter of 2014 progressed, leading to another surge in home prices in virtually every neighborhood in the city. The high-demand/ extremely-low-inventory/ competitive-bidding situation is similar to what occurred first in spring 2012 and then, to an even higher degree, in spring 2013. After the market seemed to stabilize in the second half of last year, we didn’t expect to see it turn this fierce in early 2014, but right now it appears to be every bit as ferocious as last spring’s.
Of major metro areas, the new Gallup-Healthways survey ranked SF-Oakland second in the nation (behind San Jose-Santa Clara) on their index for “well-being.” Though already the second most densely populated city in the country (after NYC), San Francisco simply has many more people wanting to live here than there are homes available to rent or buy.
Sales over Asking Price
The heated competition for new listings coming on market has resulted in an astounding percentage of sales occurring above, and often far above, list price.
This chart below breaks down, by neighborhood, the average sales price to list price percentage for the 90% of homes selling without price reductions. Of the areas assessed, Bernal Heights came out on top with sales prices averaging an incredible 21% over list prices over the past 2 months.
Median Sales Price Spikes
Typically, the first quarter of the year does not show a dramatic increase in median sales prices over the previous quarter – in fact, a decline is not unusual due to holiday market dynamics. But the first quarter of 2014 saw large spikes in median prices for both single family homes (houses) and, especially, condos in San Francisco.
Way back on October 15th, 2007 I wrote a post: Battle Royale: San Francisco or New York City, If You Had To Chose. It was, and still is, an extremely popular article that has garnered over 100 comments, and still ranks incredibly high on search engine queries of the like. For a small shop like mine, that’s pretty impressive. Our readers shared some incredibly good points about both cities, and it is a debate that will likely go on well after I have physically left this Earth, and well after my kin have parted. There will never be a correct answer.
Like I said back then, San Francisco has a ton of things to offer that New York simply doesn’t (immediate access to outdoor recreation probably falling top of my list), and there are things New York has that San Francisco simply never will (snowstorms and brutally cold weather come to mind). But it is what it is, and it will always be.
That said, there were a couple articles written recently that I wanted to share with all of you that take a different approach to the topic, because I frequently get clients from out of town wondering what the heck San Francisco is all about. These two articles are not a question of whether one is better than the other, more a question of whether one has BECOME the other. In the end, they can certainly help you draw a conclusion about the city you’re buying into, and the city you might be leaving.
In my humble opinion, San Francisco will never be New York, and New York will never be eclipsed by San Francisco. New York conjures up the image of power to me, it is the EMPIRE STATE after all. It moves fast. It never sleeps. It’s gritty. It’s tough. San Francisco (and I’ve lived here a while) brings to mind freedom, outdoor living, really smart people changing the world, getting rich, having fun, and living life to the fullest, but they will never have the power and image of the EMPIRE STATE. San Franciscans can puff their chests, but deep down they are fragile. We’re golden boys and girls living in the GOLDEN STATE, and that’s just fine.
I could go on and on, but I digress. Both cities are amazing in their own right. Both cities have pluses and minuses. But if I’m not mistaken, Tony Bennett did not make famous a song about losing his heart in New York City.
-Is San Francisco New York [New York Times, Kevin Rose]
-Why San Francisco Is Not New York [New York Times, Nick Bilton]
-Battle Royale: San Francisco or New York City, If You Had To Chose [theFrontSteps, Alexander Clark]