Reduction Redux, in which I pick up the Gauntlet

When I posted Reduction Ad Nauseum,  I really just wanted a read on how the educated real estate populace explains and/or reacts to listings that have suffered not one, not two, but three or more price cuts. Still, one commenter Noe Guy said:

“Interesting observations but I wouldn’t put too much stock in them. First, you      picked all TICs. TICs were always more of a speculative area of the market–get financing as a group, hold everything together via legal contract, hope for condo lottery, refinance. Everything about it is more speculative, hence the standard discount of TICs to condos… In this market, that discount should be steeper due to higher risk.

In addition to the more speculative aspect of the TIC market, I’ve always believed that it’s very difficult to accurately price a TIC. It’s not just the property that’s for sale. It’s the property, the actual contract, and the partnership with other owners. Those other two intangibles (from an economic standpoint) make the market less transparent, less liquid, and more difficult to price.

The evidence you’ve sited above clearly makes this case, but keep it in context and look outside of TICs if you want a clearer picture…”
 
Well, geez, what observations? I just observed 3 properties with 3 or more cuts, and opined that buyers (like me, someday, Obama willing) tend to look at reduced properties as Tijuana specials, as in: $500K now? No, no, I don’t think so. Here’s $300K and a pity hug. My final offer.
 
But okay, Noe Guy. See, I love a challenge (else why would I be so sure I can buy a house on an English teacher’s salary, eh?). So here you go, 3 more properties, decidedly not TICs, that have come down more thrice or more in their careers on the market.

Continue reading

Ask an Expert (Sven Lavine), Inner Parkside Weather and height restrictions

“I enjoy reading your newsletter and your blog. Thanks for all the helpful info. Would you mind helping me better understand Inner Parkside w/respect with the weather? We’re looking at a home on the west side of 16th; does that mean we’re doomed to being shrouded in fog? Also, more importantly, is it virtually impossible to build upward (one story) in this neighborhood? Or will we have to go back, essentially eliminating the home’s small backyard?
Thanks,
Pete”
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As answered by Sven Lavine, of Sven Lavine Architecture

Hi,

I won’t get into the weather, but regarding the expansion, technically, you probably would have a 40 foot height limit in Inner Parkside. But what would actually be allowed by planning would depend on the predominant character of the neighborhood. If there are other adjacent houses which are taller than your potential home, you stand a better chance. If not, you may be able to build something that is set back from the front of the house in a way that the perceived mass is reduced. As is always the case in San Francisco, neighborhood opposition can stop the project, so get your neighbors and architect involved in the beginning.

Good Luck,
Sven Lavine, AIA

Ask an Expert, Inner Parkside Weather (Jane Ivory)

“I enjoy reading your newsletter and your blog. Thanks for all the helpful info. Would you mind helping me better understand Inner Parkside w/respect with the weather? We’re looking at a home on the west side of 16th; does that mean we’re doomed to being shrouded in fog? Also, more importantly, is it virtually impossible to build upward (one story) in this neighborhood? Or will we have to go back, essentially eliminating the home’s small backyard?
Thanks,
Pete”
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As answered by Jane Ivory of Hill & Co. Real Estate, www.janeivory.com

I lived on 16th and Pacheco for a few years and the fog is not bad there at all. I successfully grew roses in my back yard and sunbathed regularly! The fog seems to stop at 19th Ave. most of the time. It is difficult to build up or back generally in the city because (1) you have to be cognizant of blocking neighbor’s views and (2) there is a rule in the city about leaving 1/3 of the lot free of construction. It’s best to check with the building department before getting your hopes up.
Best,
Jane

Ask an Expert, Inner Parkside Weather (Todd Wiley)

“I enjoy reading your newsletter and your blog.  Thanks for all the helpful info.  Would you mind helping me better understand Inner Parkside w/respect with the weather?  We’re looking at a home on the west side of 16th; does that mean we’re doomed to being shrouded in fog?  Also, more importantly, is it virtually impossible to build upward (one story) in this neighborhood?  Or will we have to go back, essentially eliminating the home’s small backyard? 
Thanks, 
Pete”

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As answered by Todd Wiley of Zephyr Real Estate

Pete,

As a long time resident of the Sunset and Parkside and having just added 1200 Sq. Ft. to my own home last year while acting as the contractor, I can say that I am qualified to answer your questions about the area and the challenges that lay ahead of you.

The easy answer is regarding your question about the fog. There is no perfect answer only perfect optimism. You must be optimistic about the weather, or at a minimum work outside of the avenues so that each night when you return from work in the summer you are greeted with a cool layer of fog. Sometimes it is not bad at all to be greeted by fog when you just suffered a 100+ degree day in the valley somewhere. Each year we have a mixed bag of weather in the avenues and the fog cannot be predicted. Some years are wonderful and some years you cannot believe you have not seen the sun for four weeks straight. Just last year we had a wonderful summer and the year prior made me absolutely wonder why I live out here. When the weather is nice we have it all. The beach is right there and the parks in this area cannot be beat. In my opinion, I love it out here. It is a great place to live as long as you are not stuck working from home every single day between the months of June-August, which tend to be the most plagued by fog. In the fall, fog is an on-and-off occurrence, but the winter is almost always clear. We did have two foggy days just last week on Saturday and part of Sunday, so you never know.

Additions and adding on to your home. Since I recently added on to my house I can tell you that the only real issue you face when making such an addition is your neighbors. If you plan on adding a floor and going up you may have some challenges ahead of you. First is City Planning, and the other is Building. You must pass planning before you can move on to building. It “always” helps in the eyes of City Planning if others on your block have already done so. You can bet that you will have complaints that will hinder or squash your dreams if you are planning on going up high enough to block someone’s view. If you are on the west side of an avenue and perched well above the lower avenue you will likely have no issues whatsoever. You must submit your plans and engineered drawings to Planning. Planning will then assist you in circulating the information to your neighbors and give them an opportunity to resist your plans. After the mailer goes out I believe they have ten days to do so. If nothing comes up, you will then be granted a permit and you can begin work and then a whole new challenge will begin. I went out and not up. Going up is very expensive, while excavation (if needed) and lengthening your property is much less so. Consult an architect and have them draw you a few scenarios. Submit them to Planning and start from there.

Further information can be attained by searching the website at www.sfgov.org/dbi.

Good luck!

Todd Wiley

Ask an Expert, Inner Parkside Weather (Eddie O’Sullivan)

“I enjoy reading your newsletter and your blog. Thanks for all the helpful info. Would you mind helping me better understand Inner Parkside w/respect with the weather? We’re looking at a home on the west side of 16th; does that mean we’re doomed to being shrouded in fog? Also, more importantly, is it virtually impossible to build upward (one story) in this neighborhood? Or will we have to go back, essentially eliminating the home’s small backyard?
Thanks,
Pete”

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As answered by Eddie O’Sullivan, of Hill & Co. Real Estate, www.buysellmySFHome.com

It’s foggy but I have friends who live there and they don’t seem to mind. SF has a 40ft height limit so you will be able to build up but there are restrictions. Your neighbors need to be ok with it first of all and then the city does not want the second story to be visible from the street so they will require a set back. They also limit its size. I have a friend who is doing this type of project right now near parkside and they were only able to build 500sqft. As for building out, if it only has a small yard the city will probably not let you cover anymore of your lot because full or almost full lot coverage is a big no no for them.

Good luck,
Eddie O’

Ask an Expert, Inner Parkside Weather (Alexander Clark)

“I enjoy reading your newsletter and your blog. Thanks for all the helpful info. Would you mind helping me better understand Inner Parkside w/respect with the weather? We’re looking at a home on the west side of 16th; does that mean we’re doomed to being shrouded in fog? Also, more importantly, is it virtually impossible to build upward (one story) in this neighborhood? Or will we have to go back, essentially eliminating the home’s small backyard?
Thanks,
Pete”

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As answered by Alexander Clark, of Hill & Co. Real Estate and sfnewsletter

Inner Parkside can have some pretty dodgy weather, indeed. Foggy in the summer, windy in the spring, but beautiful in the fall. Regardless of whether you’re on the west or east side of the street, it will be foggy. It’s the wind that will get you, both in summer and spring. That is why, in my opinion, the east side of the street is better. You may not get ocean views from there, but at least your backyard is blocked by your house from the wind. You can be back there on the windiest day, and if it is sunny, you’ll think you’re in SoCal. Plus, the morning sun in SF feels much warmer than the afternoon sun, thanks to the wind. But being on the west is not the end of the world either. It’s all how you play with the wind. If you build a nice deck, just make sure you build it to block some wind. Don’t think fog, think wind, and think positive. It could be worse, you could live in Sacramento where it frequently hits 100+, without West Portal out your back door.

With respect to building up, check out Sven Lavine’s comments from the last “Ask an Expert” response, Building up in Outer Sunset.
For more of our take on the Inner Parkside check out our Tour de San Francisco.
Perhaps the best person to consult on the weather is Bill Martin of KTVU Channel 2 Weather. He surfs at Ocean Beach all the time and tends to be pretty good with the micro-climates.
Lastly, you might want to rent “An Inconvenient Truth” by Al Gore…the Inner Parkside could soon have the best weather around. ;-)
Thanks for reading, and thanks for asking.
alex

Ask an Expert, Is it worth the money in Inner Parkside?

Because of the length of this question, we are not going to do individual posts for each reply.  We will list the question above and each experts answer below.  Thanks, sfnewsletter

“What do you think of a property like this? We checked out the open house on Sunday:

MLS Listing #320874

Listing #320874
$898,000 (LP)Price/SqFt:  589.24
2518  15th Ave,  San Francisco, CA  94127     Active 
Beds: 3 Baths: 1.50 Sq Ft: 1524* Lot Sz:
District: 2-G Yr: 1948*

There’s no picture. But it looks something like this listing picture below (MLS #320769):

3207691.jpg

Here’s the question:

  • House appears to be in move in condition. Area is good. In Inner Parkside, on border of West Portal, just half a block from the Muni L line.
  • It is in need of much updating, however, kitchen, bathroom, etc.
  • The second bathroom is in a closet in one of the bedrooms!
  • The basement/garage is huge and the same footprint as the house. Plus it has one of those ridiculous tunnel entrances which is a huge waste of space.
  • So, it seems that the basement could be recaptured for a master suite, office, family room at a minimum, particularly if you get rid of the tunnel entrance and add that to basement space.
  • I have no idea if the permits would allow it and such work would cost at least $200K
  • Also, the north foundation wall of the house is also a retaining wall as there is a hill on that side.
  • So, is it worth to pay $900K, and add $200K to house like this in a neighborhood?”-David

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As answered by Mary Laughlin Fenton, www.marylaughlinfenton.com, Sothebys International Realty

If your intent is to move in, renovate it to your family’s needs and remain for 5 years, I would say, it appears to be in the ballpark of recent closed sales.  I would advise you to get a good agent to work with you to walk you through all of the nuances that might be involved since this  1. is a probate sale. 2.  will require proper inspections  3.  your decision will be based on the cost of remodel, so you’ll want accurate estimates of the cost to do so.

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As answered by Shanendoah Forbes, sforbes@a-c.com, Arroyo & Coates

David,

My answer is no.  From what you have described the property has too many questionable characteristics.  The neighborhood is OK at best.  I think you would be better served by staying patient and finding something with better “bones”.  Good luck.

PS. If the weather was better, then you might reconsider.

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As answered by Alexander Clark, info@sfnewsletter, Hill & Co. Real Estate

David,

Here are the comps.  Make sure you take a close look at them.  I would even suggest taking a look at this home on the Fastrack to Staledom ™.  It’s been on the market a lot longer, has more square footage, price reduced, and the beez buzzing to the listing you’re talking about have already forgotten about the sweet nectar to be found in this alternative. 

If you are planning on flipping, forget it.  You’re right at the mark of where you will either break even, or lose money.  Probably lose money.  If you are planning on purchasing to live in the home for a while, then yes…go for it.  Gut it, do it right, see our posts from yesterday for great examples of how, live in it, enjoy it, and barring any major disaster, you should do just fine.   The weather in that area in the summer is less than ideal if you hate fog, but is great if you love fog.  I believe the home you are asking about is on the east side of the street.  If so, that is a HUGE plus as even in Spring when the prevailing North Westerlies start howling, your backyard will be sunny and warm.  For a look at what we had to say about the Inner Parkside, check out our Tour de San Francisco.

So the answer.  Yes, if you plan on living in it for a while.  No if you plan on flipping it.