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.
It’s Friday, that means it’s time for the Top 10 Maximum Overbids of the week. As usual, there are some doozies, but nothing I would consider ultimate shockers like a few of the last weekly Top 10’s we’ve seen. The number one spot goes to the “Contractor’s Special” on Nevada in Bernal Heights that fetched 65% over (totally in line with market sales price, and not easy to price this type of property). The number 10 spot goes to my clients that finally won after so many years searching – 538 Baker in NOPA that was “only” 32% over asking and the winner out of 15 other offers, two of which were actually higher than ours and all cash. We had a loan. But we “won”.
Anyhow, on with the show. The Top 10 Overbids for San Francisco this past week:
|270 Nevada St||1/1.00/N/A||14||$530,000||$876,000||65.28%|
|866 Cayuga Ave||4/3.00/N/A||20||$928,000||$1,380,000||48.71%|
|27 Day St||3/1.00/N/A||43||$895,000||$1,310,000||46.37%|
|1271 15th Ave 1273||4/3.50/||13||$1,795,000||$2,550,000||42.06%|
|307 Parker Ave||3/2.00/N/A||13||$1,250,000||$1,710,000||36.80%|
|25 Miraloma Dr||3/2.00/N/A||10||$1,050,000||$1,420,000||35.24%|
|1150 Holloway Ave||2/1.00/N/A||35||$889,000||$1,200,000||34.98%|
|320 Castenada Ave||3/1.50/N/A||26||$1,695,000||$2,250,000||32.74%|
|471 Hickory St||2/1.00/N/A||5||$1,060,000||$1,400,000||32.08%|
If you’re curious what your property might sell for, give me a shout.
Have a great weekend!
-Top 20 Overbids Delivered to Your Door (Inbox) [sfnewsletter.com]
-Are Overbids A Result Of Intentional Underpricing? It’s Competitive Pricing [theFrontSteps]
-Top 20 Underbids [sfnewsletter.com]
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.
Before we get down to the top 10, I thought you all might like a bit of first hand story to ponder over lunch or dinner with your friends.
This property: 1850 Church, technically in Glen Park, practically in Noe Valley.
It is a top floor, three bedroom, two bath, down to the studs remodel including moving the bedrooms from the back of the house to the front, moving kitchen to the back, blowing out walls, opening up space, adding a deck, and basically making it awesome…and it has two car parking and a yard. For all practical purposes, it’s pretty sweet. It is however bordered by a shack on the right and left of the property, which can either lend to its appeal or detract, depending on your tolerance for jungle overgrowth. But enough about that. What happened?
Listed for $1,195,000, maybe a bit low, but probably pretty fair, all reasonable comps suggested a sales price in the high $1.2s to mid $1.3s. Single family homes are selling for that, and this is a condo! After all the dust settled, there were seven offers. My clients wrote at $1,350,000, my colleague’s clients wrote at $1,410,000 (You doing the math? That’s already $215,000 over asking.), and neither of us won. Go figure. So any day this property is going to close at $1,435,000 with a cash offer that came with zero contingencies, which equates to $240,000 over the asking price, and right into the range of insanity. Exact square footage is not known, but a ballpark would put this property to at least $1000/psf, and at 20% over asking, it doesn’t even get on the top 10 list!
Isolated incident? Sadly no. The pattern is the same. Buyer loses once. Buyer loses twice. Buyer loses three times or more. Buyer gets fed up, goes crazy big, blows our minds, blows everyone else out of the water, and sets the bar that much higher for the next. It’s a vicious cycle we’re in.
In case one anecdotal sale isn’t enough for you, I present San Francisco’s top 10 Overbids of the week.
|2820 Sacramento St 2822||2-4 Units||11||$1,825,000||$2,550,000||39.73%|
|360 Guerrero St||1/1.00/404||11||$599,000||$780,000||30.22%|
|1013 Rhode Island St||2/2.00/N/A||9||$1,099,000||$1,410,000||28.30%|
|125 Bella Vista Way||3/2.00/N/A||42||$749,000||$960,000||28.17%|
|664 Teresita Blvd||2/1.00/N/A||9||$699,000||$891,000||27.47%|
|26 Pleasant St 30||2-4 Units||75||$2,395,000||$3,020,000||26.10%|
|1335 31st Ave||2/2.00/N/A||14||$795,000||$1,000,000||25.79%|
|415 Missouri St||3/1.00/||19||$995,000||$1,250,000||25.63%|
|3380 22nd St||3/1.00/||70||$849,000||$1,060,000||24.85%|
|2446 17th Ave||3/2.00/N/A||15||$729,000||$908,000||24.55%|
So when will this madness end? I’m guessing not anytime soon. I’ve been saying it’s a great time to be a seller, but if you’re a seller needing to buy in San Francisco and stay here, not so fun.
To you out of town readers that have waited for your time to unload your SF property, are you going to keep rolling the dice and bet things get hotter, or get out while the gettin’s good?
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.
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.