Possible Shift In San Francisco Real Estate Market? Should You Sell Your Home Now?

February 2014 San Francisco Market Report

It is far too early in the year to reach definitive conclusions regarding substantive changes in the market, but there are indications of a number of shifts. From the hurly burly on the street, the word is that the quantity of offers coming in on new listings is declining. Where a new listing might have attracted 10 or 12 offers last spring, 3 or 4 are coming in now; where 3 or 4 offers would have arrived, the seller is getting 1. And, according to Broker Metrics, for every 2 listings that offers in December and January, another listing expired or was withdrawn without selling.

The amount of competition deeply affects home price increases.

There are still a very large number of buyers looking at listings online and at open houses. But more of them appear to be first-time buyers and they are proceeding more cautiously. Some buyers are burned out on the multiple-offer bidding frenzies of last year and are reluctant to participate in them. Though the market remains hot by any reasonable standard, by some statistical measures it is cooling. This may reflect a transition or only a lull before the spring sales season begins.

Recently, the investment-property analysis firm Reis speculated that SF apartment-rent growth — which has been extraordinary by any measure, especially in a period of low inflation — will slow despite intense demand and very low vacancy rates, simply because people can’t pay any more. It’s an idea which may or may not be correct or apply to other types of housing costs. Rent rates do play a role in purchase prices as buyers often compare the net housing costs of the two options.

Median Sales Price Appreciation by Neighborhood

In San Francisco, some of the most affluent neighborhoods — such as the Pacific Heights-Marina district and the Noe, Eureka and Cole Valleys district — started their recoveries in the second half of 2011, well before virtually every place else in the city or country. When 2012 began, prices in these districts soared, while other areas played catch up. In 2013, that dynamic flipped: Appreciation rates in comparatively less expensive neighborhoods surged, while slowing in the most affluent areas.

A big part of this is simple affordability: Priced out in one neighborhood (or city), buyers focused on others, similar in ambiance but less costly. Home prices there looked so good in comparison that buyers were willing to bid them up. The huge decline of distressed sales in areas severely affected, such as in Bayview, has had an outsized effect on median sales prices there. Continuing gentrification, as in the Mission, and increasing “luxury” condo construction in less affluent areas have also played parts in this trend. It’s not as if demand plunged in the Pacific Heights-Marina district (or Noe Valley, for that matter). Quite the contrary: its 9% appreciation rate in 2013 translated into the city’s largest median price increase in dollar terms ($300,000). However, in the previous year, this district saw year over year median price appreciation of 25%.

Note that median price appreciation does not perfectly correlate to changes in home values, as it can be affected by a variety of market factors. It does give an approximate sense of market trends.
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Five White-Hot Districts In A Red-Hot San Francisco Real Estate Market

July 2013 Special Report

Virtually every area of San Francisco and the Bay Area has been experiencing dramatic home-value appreciation in the past 12 to 18 months. Some that were hard hit by distressed property sales, which experienced the largest price declines, have surged in price but remain 20% – 30% below previous peak values reached in 2006 – 2008. As a state, California is still about 25% below its 2007 pre-crash median home price. And in San Francisco itself, many if not most neighborhoods now appear to have re-attained or moved slightly beyond previous high points.

But in this past quarter, a handful of neighborhoods and districts in the city have leapt well beyond the highest average home values achieved in the past. Interestingly, comparing these white-hot areas with one another, there are often huge differences in property type, era and style of construction, and neighborhood culture or ambiance. But all of them have been very affected by affluent – often newly affluent – high-tech professionals of one age group and level of affluence or another. Naturally, these neighborhoods are highly desired by other buyers too – often professionals in finance, bio-tech, medicine and law – but the high-tech-buyer dynamic has generally super-charged these markets in particular.

However, please note that the difference we’re talking about between these neighborhoods and the rest of the city is between white hot and red hot: Quite honestly, they’re all very hot markets right now.

The Inner Mission 

Super hot, super hip, generally young: this neighborhood has seen very dramatic changes since the early nineties as a classic process of gentrification occurred — changes which have recently accelerated. Houses here are often large, classic Victorians, while the condos are mostly modern, built within the last decade or so. This area has a large, vibrant and diverse commercial district centered around Mission and Valencia Streets, but is still close to Noe Valley and the Castro. This chart focuses on the condo market, in which values are approximately 15% above the previous peak.

Noe Valley – Eureka Valley (Castro) – Dolores Heights 

These neighborhoods are part of a district that includes Cole Valley, Ashbury Heights, Clarendon & Corona Heights, Duboce Triangle, Mission Dolores and Glen Park, all of which have seen enormous recent appreciation. Housing here is typically older, built in the first 4 decades of the last century; there are many parks for kids and pets; the streets are tree-lined and the ambiance of the neighborhoods is relaxed and family friendly. This district surged in popularity and price in the mid-late nineties, was one of the last to peak in value in 2008, and has been at the forefront of the market rebound which started early here, in 2011. Among other advantages, it has relatively easy access to highways south to Silicon Valley. The district also has a large condo market, but this chart focuses on house values.

South Beach & Yerba Buena 

After the Embarcadero freeway came down in 1991 and then AT&T Park built in 2000, this area changed from a place for B-class offices and car stereo installations to the home of some of the most dramatic and expensive condo and loft buildings in the country. More condos are now sold here than anyplace else in the city and high-floor units with staggering views often sell for millions of dollars – one sold for $28 million. It’s popular with a number of demographics – high-tech and bio-tech workers working in offices nearby in SoMa and Mission Bay, financial district professionals, and empty-nesters who want to enjoy city life and have all the amenities, but without the responsibility of maintaining a house. Affluent foreign buyers are also a significant segment. Its neighborhood ambiance is very urban. This chart is for condos below the price of $1,800,000, but the dynamic for ultra-luxury condos is also white hot, with an average dollar per square foot value of over $1200.

Bernal Heights 

Like Noe Valley and Glen Park, Bernal Heights was originally a blue-collar neighborhood filled with Victorian houses. Noe Valley soared in value first, becoming wildly popular, and now people who want a similar family-friendly neighborhood ambiance, but at a more affordable cost, have increasingly turned to Bernal Heights. It also has easy access to highways south to the peninsula.

 

Hayes Valley-North of Panhandle (NoPa)-Alamo Square

This condo market is made up of two totally different types: Edwardian flats that have been turned into condos and brand new, ultra-modern condo developments. The Hayes Valley commercial district is very hot and hip, similar to, but still different from the Mission’s Valencia Street. Buyers who are priced out of the nearby Cole Valley-Haight Ashbury condo market often look here for a similar neighborhood ambiance at lower cost. Hayes Valley is also close to the Civic Center cultural cluster of museum, opera, symphony, ballet and other performing arts, which appeals to another buyer demographic as well.

To put all of these charts into one simple suggestion: It’s a great time to sell your property in San Francisco, and our market desperately needs the inventory!

If you have questions or would like information regarding a neighborhood not listed above, please contact us.

Mid Century Modern With An Emphasis On Modern

Are you a lover of Modern (particularly Mid-Century) like me? Are you looking for a home that you just can’t seem to find anywhere else? Do you have a budget up to $2,200,000? If so, I have found the home for you. I have been asked not to share any photos of this particular home online, because it is not listed on the local Multiple Listing Service (MLS) and is a pocket listing, but it is on par with something like these:





The home is 3 beds, 2 baths, 2 car side by side parking, in an A+ Noe/Castro/Liberty Heights area. It is up on the hill, has tremendous views, is totally open, bright, minimal, and amazing. Re-designed by Ogrydziak Prillinger Architects, it also has custom designer wall finishes throughout, SubZero, 6-burner Thermador range, Limestone, Calacatta marble & Thassos stone finishes, integrated sound with built in speakers, outdoor built-in Viking grill with granite counter, and did I mention views, views, views!

It’s one of a kind, and it could be yours.

I do not hold the listing, but can definitely bring a buyer. Principals Only Please. Contact me for details.

-PocketListings.net
-Completely remodeled Noe Valley Home with High Definition Views (More on this one later) [theFrontSteps.com]
-Contact For Details

Winner: The Best Coffee (House) In San Francisco, And The Rest

Congratulations to Philz Coffee! You have been voted Best Coffee (House) in San Francisco by the people of the internets. The competition was linked to around the world, and we have to say Philz not only got tons of nods during the first round of nominations, but they also swept the voting when thousands more hit the polls.

It’s all good stuff and we can’t wait to get a cup. We appreciate everyone’s participation and the countless links that sent people this way.

The Rankings:

1. Philz Coffee
2. Bernie’s
3. Blue Bottle Coffee
4. Four Barrel Coffee
5. Martha Bros Coffee
6. Contraband (Coffee Bar)
7. Ritual Coffee Roasters
8. Farley’s Coffee
9. Java Beach
10. Sightglass Coffee
11. Peet’s Coffee & Tea
12. Caffe Roma
13. the Beanery
14. Intelligentsia Bar (In Specialty’s)
15. Caffee Trieste
16. Stumptown (Ma’velous)
17. Henry’s House of Coffee
18. Simple Pleasures
19. Barefoot Coffee (Epicenter Cafe)
20. Café La Taza
21. Starbucks (Really?)
22. Caffe Puccini
23. Trouble Coffee (De La Paz)
24. Velo Rouge Cafe
25. Caffe Greco
26. Verve Coffee Roasters
27. De La Paz Coffee (Trouble)
28. Hearth Coffee Roasters (Brown Owl Cafe)
29. Graffeo
30. Bello Coffee and Tea
31. Quetzal Coffee
32. Jeremiah’s Pick Coffee
33. Coffee to the People
34. Piccino Cafe
35. 7-11 (Humoring you)
36. Progressive Grounds
37. Showplace Caffe
38. Castro Coffee House
39. La Boulange
40. Matching Half
41. Wicked Grounds
42. Farm:Table
43. Blue Danube
44. Cafe Reina
45. Toy Boat
46. The Coffee Bean & Tea Leaf
47. The Summit SF
48. Curbside Coffee
49. Rancho Parnassus (Thanksgiving Coffee)
50. Tully’s
51. Capricorn Coffees
52. Cavalli Cafe
53. Equator Coffees & Teas
54. Muddy’s Coffee House
55. The Coffee Roastery
56. Cup of Blues
57. Cafe Encore
58. Ecco Caffe
59. Stella Pastry & Cafe
60. Coffee Roaster
61. Manning’s
62. Dash Cafe
63. Javalencia Cafe
64. Cafe La Stazione
65. The Grove

We’ll just go ahead and stop there. There were another 25-30 one vote coffee (houses) that came in, but we gotta stop somewhere. Thank you everyone!

12 Offers On One Property In This Market?

The story for 214 Dorland is not something you’d expect to hear in this market. More than 20 disclosure packages were handed out, an offer date was set (on April Fool’s Day no less), and contrary to what most would think, the offers came streaming in…12 of them to be exact.

214dorland

To counter those that will be quick to jump and say, “The deal hasn’t closed yet,” if this first offer falls out, there are 11 others to fall back on.

Would that mean this two bed, one bath condo in Dolores Park, priced at $629,000 is defying the odds, or starting a new trend? We leave that debate to you, and the powers that be.

[Update: Last sale April 1999 for $745,000 for the entire 2-unit building. The 2-unit building just condo converted this week.]

-214 Dorland, 2bed, 1 bath, $629,000

Comment du Jour: WTF! Sellers Living in 2007?

Ahhh, we love our readers, especially when they come up with money quotes a lot of you are missing. So, we often take it upon ourselves to bring them front and center. This from “MichelleL” on “Getting Twisted in Cole Valley“:

WTF? Are people still paying 3-million to live in Cole Valley sans view? There is an interesting ‘compflip’ in Eureka Valley on 19th and Douglass for ‘gasp’ 4-million plus…what are your thoughts, are sellers still living in 2007?

We’re going to assume you’re talking about the property we found (we can’t tell you how often we get the question about “that house on the corner”) and linked to above. If not, please correct us.

To begin, let’s help some less than up-on-the-lingo readers with translating your question. WTF means “what the f*ck”. Sans is the french word for “without”. Now that we got that out of the way, on to answering your question.

Yes, some sellers are still living in 2007, which is exactly why many of the buyers we’re working with have been advised to not panic, be patient, and watch properties of interest very closely. Keep in mind many “flips” started a long time ago, and the developers may not have calculated a declining market in their build costs, so they’re hoping for that un-educated Realtor/buyer combo to walk through the door and say, “We’ll take it!”, and save their asses, pop the champagne and make their car payment. However, like everything in SF, it comes down to the property in question, and not necessarily the market as a whole. We don’t know the exact scoop on this property on 19th, so unfortunately can’t provide many more details, beyond a very vague answer of “yes”…some sellers are living in 2007.

We do know first hand of some other very awesome developments that the builder “just wants off their books”, should you be so inclined to get in touch.

Thanks for your comment! We hope to hear from you more, MichelleL.

-4552 19th Street, $4,299,000, 6 bed, 4.5 bath [listing details]
-Getting Twisted in Cole Valley (1342 Shrader) [theFrontSteps]

Casa Cielo is a done deal…with an asterisk (3690 21st Street)

They asked $3,745,000 and they got….? We’ll just never know. It’s another one of those deals that closed with an asterisk (meaning sales price not disclosed). Something tells us it was close to that. It only spent 8 days on the market.

-

In case you’re wondering what’s all the fuss, here are the marketing remarks:

Atop Liberty Hill, Casa Cielo is one of San Francisco’s best known homes. A rich local history and a location perched on top of the city make it a true once in a lifetime opportunity! The opulent interior features a massive formal living room with vaulted ceilings, multiple sitting rooms, a large deck with 180 degree views of the city and bay, 3 bedrooms and 3 remodeled bathrooms. Surrounded by lush mature gardens and several patios with fountains. Detached one car garage with guest apt above.

And only one RealSpeak thrown in. You see, that’s how you get it done.

-3690 21st Street [sfnewsletter listing detail]