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according to Broker Metrics, for every 2 listings that offers in December and January, another listing expired or was withdrawn without selling.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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Client Testimonials From Way Back

Bear with me while I reorganize my testimonials into individual posts. These are a few put together from way back.

*Alex was very easy to work with. He was straightforward, gave good advice about how the condominium should look when it was being shown, and managed the negotiations with the buyer perfectly. I always felt he was dealing with me honestly, and he kept me fully informed. I will go to Alex any time I want to sell a house in San Francisco. JOHN BARTON

*I don’t know any Realtors in this city [San Francisco] that have a better grasp of technology as it applies to real estate than Alex. His sfnewsletter is a phenomenal resource and great way to begin your home search, or research home sales should you be selling, and he is a pleasure to work with. He seemed to get along great with the other agents involved in our transaction and we’re sure it helped get us the price we want. He negotiated hard, but made everyone laugh the whole way and it was great. Now we live in the suburbs, but if we ever move back, we’ll use Alex for sure. Not to mention he’s a decent golfer too. -Joe Condy

*Carole and I feel that we were very fortunate to have met you at the open house and I am glad we chose you to work with. Be assured in the future when we are ready to look at the market again we will be calling, as well as referring any house hunting friends to you. Read More-Carole and Bruce Derr

*Alex combines an insider’s knowledge of San Francisco, innovative marketingskills and the honesty and integrity of a down to earth guy.-Rich Singer

*Like a lot of SFNewsletter readers, I figured Alex would be either too busy or simply uninterested in representing a first time buyer with a sub-seven figure budget. Ten months of searching and four offers later, we’re homeowners, and he’s still returning my calls…The cool thing about Alex is he’s new-school enough to embrace technology’s influence over his profession, but old-school enough to hold your sweaty hand through every step of escrow. 

Bottom line, if you’re looking to be escorted from property to property in your agent’s Mercedes while being lavishly praised for your exquisite taste and style, Alex ain’t your guy. But if you’re looking for consummate San Francisco market expertise, every tool you’ll ever need to find and evaluate your properties, and a Tiger Woods-like closing mentality – hell, you’re already reading his newsletter, posting to his blog, and god forbid you’re receiving his twitter banter – seriously, why use anyone else?! -Tim Stevens

*We had our condo at the St. Regis listed for close to 8 months with another agent. We hired Alex and he sold it in two weeks! Amazing! Truly amazing and he was fun to work with the whole time, knew the market, knew we should take the offer we received, and knows where I should buy my next place. He is truly a pleasure to work with and really knows his stuff. His newsletter is great too. -Stephanie Morris

*I had been reading Alex’s “sfnewsletter” for over a year, so I knew when I was ready to sell my house in San Francisco, Alex was my choice. His newsletters were very informative and intelligently written. I know this sounds corny, but I really liked his sign-off at the end of each newsletter — “Happy Aloha Friday”. Alex kept on top of all correspondence and paperwork and kept me apprised every step of the selling process. I am happy to say that we accepted an offer after only 2 weeks on the market. I would recommend Alex to anyone in need of a superior REALTOR.-Debra Comstock

*I can and have enthusiastically recommended you to my friends who are looking at purchasing property here in San Francisco. Specifically, I appreciate your diligent work and follow-through, as well as your integrity in working with the seller’s representative and myself that made it possible to get this deal done. Read More.-Larry Singer

*Wanted to let you know how much I appreciated your assistance and help during the purchase of my new [home] in San Francisco. You did a great job of working with me all Summer long trying to find my dream house on my crazy schedule. I didn’t know exactly what I wanted, but by Fall you had identified my criteria and started showing me homes that suited my needs. The house we found has a great ocean view and is close to the beach with a big yard and potential to add on. Read More. -Ryan Seelbach

*Alex and I worked together for over 3 month searching for the right property. He showed me several properties and advised me on the pros and cons of each property. On [my home] he assisted in compiling a very strong offer on property where multiple bids were accepted. I strongly believe it was due to his assistance that I was able to purchase the proeprty despite the other offers being close to or higher than my own. Read More-David Kaneda

*I had met with several real estate agents before I decided on Alex, and it proved to be an excellent decision. He knew the market, had excellent recommendations based on my specific requirements and goals, and most importantly: he knew how to package and position the offer for quick acceptance once I decided on a property. We quickly closed on a condo at 1998 Broadway that was a great fit for me. And I believe the price and conditions make it an exceptional investment. I’d recommend Alex to anybody. Read More-Drew Sechrist

Tenth Avenue Opulence For $277,000 Less. Who Wants To Has It?


[Editor's Note: It is recommended you watch the video first.]

There is a lot to love about this listing at 261 10th Ave, especially “savings the money”, but I’m not quite sure what’s to love more:

Is it the insanely awesome gold coverlet accented by leopard print throw pillows and zebra print chair?

Is it the built in ballet studio that screams tutus and Baryshnikov? However, the ceiling looks a little low to soar like a Swan…

Is it the animal paintings in the foyer that look to be horses, or maybe at least one Giraffe?

Or could it simply be the recent price reduction to start off the new year? A price reduction from an original asking of $1,675,000 to the New Year’s price of $1,398,000…more than a QUARTER MILLION DOLLARS.

It’s at a juncture like this when (proper) staging comes in handy, as does realistic pricing and shelving any visions of grandeur and opulence. Personal tastes aside, this is a great house, in an excellent location.

Who wants to has it?

-261 10th Ave, 4 bed, 3.5 bath, $1,398,000 (MLS)
-Find me on the Facingbook

What Makes A Room A Bedroom?

What is it exactly that makes that room a bedroom? The question has come across my email enough, and actually I think I even posted on it at some point. Well, it’s resurfaced and maybe time to hash it out, as the opinions on what makes a room a bedroom are anything but concrete.

The initial question:

A few months ago an email was circulated as to what defines a bedroom. There were several responses, but if I remember correctly a bedroom does not have to have a closet to be a bedroom…

And the varying replies from various real estate agents:

-My understanding is it technically must have a window – ideally with a means of egress
-My understanding is two methods of egress. A door, and another door or a window or some way to get out in the case of an emergency. No closet necessary.
-Operable window, that a person can fit through AND the minimum size is 70 square feet, where the minimum for one of the dimensions is 7 feet.
-I believe that HUD requires a closet in order to count it as a bedroom for financing purposes. A lender could probably clarify that.
-I’d suggest using the International Uniform Building code that refers to a specific size of window based on square footage of BR. It needs to have a door and a window and the window has to be the right proportion. Read More.
-The Building Code requires an operable egress window with minimum size requirements as [the other agent] indicated. In addition the window needs to be sized for light and air requirements. If I remember correctly it is 10% of the floor area. A closet is not a requirement to satisfy the building code, but it may be a HUD requirement for financing, as [another agent] mentioned.

Perhaps the most accurate answer?

1. The first bedroom must be at least 120 square feet.
2. If your first bedroom is at least 120 square feet, you get to call your second bedroom a bedroom if it’s at least 70 square feet with 7’ on a side.
3. Required natural light and air: 8% of floor area of natural light, and 4% of floor area of air (operable window). A traditional double-hung window can cover both bases, because when it is open, it provides half the air as natural light.
4. Minimum clear headroom of 7’-6”
5. You need two means of egress. One may be a window. If the second is the window, fire department requires minimum area for personnel access of width 20”, minimum height 24” with net clear opening minimum of 5.7 square feet.
6. A closet is required.

And the first comment from that thread:

What you’ve written here is not entirely correct – I believe you may be conflating Realtor’s rules-of-thumb with actual Code requirements.

1) Sort of. Any habitable room (Living Rm, Dining Rm, etc) can be larger than 120 SF (2007 CBC SEC 1208.3)
2) Correct. Minimum Habitable room size (includes bedrooms) is 70 SF, 7′ minimum width (2007 CBC SEC 1208.3 & 1208.1)
3) These are correct window areas for required natural light (8% floor area) and ventilation (4% floor area), but neither is required if sufficient artificial light and mechanical ventilation are supplied (2007 CBC 1203.4.1 & 1205.3).
4) Correct – Minimum ceiling height for Habitable rooms is 7′-6″, however it is 7′-0″ for bathrooms, storage, kitchen, laundry (2007 CBC 1208.2).
5) Sort of. Only one exit (Means of Egress) is required, the other is an Emergency Escape & Rescue requirement. This is not a Fire Department requirement, it is a California Building Code requirement (SEC 1026.1)
6) Wrong. No closet is required by any State or Local code (Building, Housing, Health or otherwise).

So there you have it…the jury is clearly still out on this one. My advice, get used to living in closets if you’re living in San Francisco.

A Dream Buyer Carrying $2,500,000 Cash, Looking For A Good Home

Are you a San Francisco Realtor with a Lake District or Sea Cliff home one of your clients would be willing to sell? Well…we just found your dream buyer:

Very motivated all cash buyers looking for a SFR that meets the following requirements:

-$2.5M or less
-3 Beds/2 Baths+
-Around 3000 sq. ft.
-Large bedrooms
-Good condition w / some original detail
- Lake Dist., Laurel Heights, Jordan Lake, Inner/Central Richmond, or Sea Cliff

We keep telling you, there is opportunity galore showing up on PocketListings.net all across the country. If you’re not on there yet, you’re missing out, and you’re going to miss the boat. Mark our words on that.

-Lake District Buyer Need around $2.5M [PocketListings.net]

Marina Has The Hotties, Inner Richmond…Apparently None

I was just clued in to a new startup website that is striving to allow you (people on the move from city to city, ‘hood to ‘hood, house to house) to learn about a neighborhood based on the reviews, comments, and opinions of locals. It’s a simple concept and easy to see the value. Hell, I tried going block by block to clue people in on the different San Francisco Neighborhoods in my Tour De San Francisco (real estate), but I only made it halfway through. Hence, the value I see in NabeWise.com.

It’s a startup, so the site is pretty lean with content at the moment, but I expect that will change over time. Regardless, how can you resist checking out a site that ranks where San Francisco’s Most Beautiful People hang out. Surprise, surprise! It’s the Marina! Sorry Inner Richmond (no really I am sorry cuz I live here), you are last on the list.

For the record, it is ABSOLUTELY imperative that you take such criteria into consideration when buying or selling a home in San Francisco, but you should not base whether you work with one particular Realtor over another on looks alone.

Speaking of hotties…check out the NabeWise Team.

-NabeWise.com [Website]

BFD Price Reductions

A post wherin I look at price reductions that seem to be pointless.

1. Courtesy of SF Schtuff, 1001 California St., #3 is a super lux condo in the old Hitchcockian San Francisco splendor. (MLS gallery offers house porn to die for, here.)

The original price here was $7,250,000. Now it’s $6,950,000. Indeed, one could argue a $300K price break is nothing to sneeze at. But really, the person who can afford the new price could also afford the old price, especially since this home includes an HOA of $5886 per month. So, $300,000? Big  ****ing deal. The monthly payments are still going to top the GNP of certain third world countries.

Here’s another reduction I don’t think makes any difference. 2421 Clement St. This is a 10 unit building, “fully rented,” originally priced at $1,435,888. More than 50 days later, it’s reduced to $1,398,000.

In this case,  it’s not so much the amount of the reduction. I just wonder who would ever want to buy a 10-unit building in SF when every other day a law here makes being a landlord a bigger headache than it already was. In fact, this Examiner article highlights the dubious joys of landlords who are currently suing the city to block such laws. Good luck.

So I wonder, in the world of real estate, if price reductions aren’t sometimes just not that much of an incentive after all.

—————

Photo of 1001 California, #3 via listing agent Betty Brachman, Brachman Group.

Quote Du Jour: Inner Richmond Is STweet (That’s Sweet In Twitter Speak)

Sometimes you just gotta go looking around the web for the information you need to draw a conclusion about where to plant your roots in San Francisco. Today, we turn your attention to Brittney G of Eye On Blogs, who had this to say about the Inner Richmond:

innerrichmondbrit1

Hanging in the Inner Richmond. It’s great. Virtually hipster free and no waiting for drinks in crowded bars.

We could just ReTweet this, but thought it deserved a little more attention than that. Nice work Inner Richmond! You got props for not having to do a thing except be yourself.

…and it gets better, “The Inner Richmond, I enjoy your soundtrack very much.“-Brittney G.

241 7th Ave…Make An Offer!

Signs of a real estate rebound? We’re getting various tips to confirm the reports and it is definitely good news. So why the hell have you not told your friends about this great single family home at 241 7th Ave in the Inner Richmond? (NOTE: Tax records are not accurate on square footage…Curbed. ;-) )

2417thfront

We have been told to encourage buyers to “bring a reasonable offer”. That means, tell your friends. This is a chance to have a single family home at a condo price and the seller is extremely motivated. What you might be reading on tax records is pretty much useless. There are two large bedrooms and a sunroom that can be a third small bedroom or office. There is a formal dining room, formal living room, Edwardian details galore, and the entire lower level could either be a large media room, office, playroom or anything really. There is tons of storage space, a huge front yard, the home is detached on all sides and full of light, and it is a wonder this house is still available. The lot is zoned RH-2. We have reduced the price 5% already, and we’re encouraging any reasonable offer.

You know we rarely plug listings on this site, but this is truly an opportunity that will pass someone by if they don’t make a move. Make an offer on this home, or tell your friends about it!

-241 7th Ave, SFR, 2+ bed, 1.5 bath, 2pk, $1,129,550 [listing details]

…and It’s Gone: 2730 Fulton Flips and Flies

You might remember our post not too long about about the seemingly quick flip at 2730 Fulton, where we saw this property sell in March for $1,605,000, come back on the market (cosmetically modified) mere months later for $793,000 more, and we scratched our heads as to the outcome.

Before:

After:

Well, we needn’t wonder anymore. It has closed escrow for $2,415,000 (slightly above the $2,398,000 asking price) but well above the “most recent sale” in March. We’d have to say that was a pretty damn successful flip in an otherwise unsuccessful market. If you can’t agree, you need help.

Maybe the new Academy of Sciences a stone’s throw away had something to do with it?

-2730 Fulton [MLS Details]

When Neighbors Get in the Way…

If it’s not the city, it can be neighbors in San Francisco hindering property improvements. This home on 18th ave @Fulton is a perfect example. It’s been stopped for at least a year due to “neighbors didn’t like the exterior.”

Sound familiar?

Posted from iPhone.

Stump the Stammtisch: What is an “Edwardian” House?

“Other than ‘a residence built between 1902 and 1910,’ I have found no consistent definition despite asking several RE professionals and ‘googling’ the question for about an hour. Are there are any style elements that all ‘Edwardians’ have in common?”-TC

That’s a good question. I know Janis Stone has been selling homes in San Francisco for quite some time, so maybe she can shed some light on the matter for you.

2740green.jpg

[2740 Green]

I, personally, prefer this type of Edwardian, but some of you might prefer the taste of a “Stalefish” Edwardian (Started off in October 2006 at $1,495,000 and can now be yours for only $1,349,000, and the “SELLER MAY CONSIDER Installment Sale, or Seller Financing.”), or perhaps a “Prime Inner Richmond Three Unit Edwardian”.

Either way, you have choices, but still no answers. Stammtisch!?

-2740 Green St. [Sothebys]

-10 Imperial Ave. [MLS]

-681-685 7th Ave. [MLS]

Adios Coronet!

16121.jpgIt took them ages to get there, but they’ve finally destructed the Coronet Theater on Geary St. “This Streamline Moderne cavern is San Francisco’s Church of the Big-Budget Blockbuster. Both “Star Wars: Special Edition” and “Phantom Menace” made their debuts here, with people camping for weeks in the dumpster-strewn parking lot. Despite its massive appeal, gigantic screen, and state-of-the-art sound system, the Coronet was closed in March 2005 and is slated to be razed for a senior-care facility.”

The facility, the Institute on Aging is now officially under construction and doing some heavy destruction:

corenet.jpg

coroonet.jpg

If you hurry, you might still be able to project a few hand shadow dogs and bunnies, maybe even a butterfly, on the big screen.

coronet.jpg

What it will be (photo from SFgate):

willbe.jpg

Thanks to our reader, AC, for sending the photos!