“Foreclosures Up In San Francisco”, San Francisco Realtors Up In Arms

Yours truly was quoted in this article on the front page of the San Francisco Chronicle on Sunday (thanks for the kind emails and props):

“The San Francisco market is completely different from five years ago,” said Alexander Clark, a Zephyr real estate agent and author of the blog TheFrontSteps.com. “There are definitely distressed properties in every neighborhood in every price range.”

As much as I think the article was well written (not gonna comment on the alarmism), others in the real estate community are up in arms about how it is yet another alarmist article and doesn’t paint anywhere near an accurate picture of San Francisco housing, so I thought I’d share that argument with you as well.
From Patrick Carlisle of Paragon Real Estate:

The Chronicle had another alarmist article on the SF home market, with of course, the usual cascade of reader comments from those who want the world economy and property owners in particular to “get what they deserve.”

The main point of the article is that foreclosure sales are surging in even the better neighborhoods of the city, and bad times are coming.

Here’s a sample quote from the article:

“Still, more people are falling behind on their mortgage payments. Some 1,885 San Francisco households received notices of default, the first step in the foreclosure process, in 2010, DataQuick said. That was down from 2009′s record number, but still more than double the historic average.”

How exactly does a reduction from 2009 = “more people falling behind”? Also, one should note that a notice of default do not necessarily imply a forthcoming foreclosure. It means someone was late paying their mortgage.

Another article quote:

“In San Francisco, the 709 foreclosures represented just 0.052 percent of all households, DataQuick said, while in Contra Costa the foreclosure rate was 2.3 percent. In the nine-county Bay Area, 1.78 percent of all households went through bank repossession in 2010.”

Here’s a salient point of the whole article: the SF foreclosure rate is 70% below the 9-county Bay Area rate. And if you broke off the northern part of the city, it would probably be 88-90 % below the Bay Area rate.

The article makes a lot of comparisons of 2010 with 2007, but we all know the market went through a wrenching change in autumn 2008. The issue isn’t where the market went from its peak, but where it is now, and 2010 unit sales were above those of 2009, and median prices have now been stable for 7 quarters (21 months). And market activity since September 2010 has been quite strong.

Here are some statistics from MLS pulled today:

Out of 465 Active house listings, only 40 are REOs, of which 24 (60%) are in districts 3 & 10 (Bayview to Oceanside). Only 2 are in district 5 (Noe/ Castro/ Haight), and zero are in District 7 (Pacific Heights/ Marina). Those waiting for an upcoming deluge of bank-owned houses in the better neighborhoods of the city (and a downward spiral of prices) are probably waiting in vain.

The number of REO sold houses in 2010 in SF was 291 (out of 2309 sales) down from 309 sales in 2009. Of the 291 REO house sales in 2010, 216 (74%) were in districts 3 & 10. In district 7, there were 3 REO houses sold in 2010, less than 1 per quarter.

Out of 721 Active condo/TIC listings, only 41 (5.7%) are REOs, of which 15 are in district 9 (SOMA/ South Beach), 6 are in district 5, and 1 is in district 7.

The number of REO condos sold in 2010 did go up as a percentage of total sales, coming in at 7.7% of sales up from 5.6% of sales in 2009. But still a relatively small percentage of total sales.

Of the 239 condos and TICs sold district 7 in 2010, 10 (4%) were REO sales.

REO sales have had and will continue to have an effect on the SF home market, but none of these stats from MLS suggest that foreclosure sales in the better neighborhoods of San Francisco in 2011 will have a significant downward effect on current values.

I’ve always said you need to take every bit of information you read about our market, chew on it, then digest it to come up with your own conclusions. A simple glance at numbers certainly will let you know it’s really not that bad.

-Foreclosures up in San Francisco [SF Gate, San Francisco Chronicle]

Buy Now or Suffer 8,000 Consequences?

Today I got this email from a friendly neighborhood Realtor:

Hello everyone,

I wanted to send out a friendly reminder about the deadline to take advantage of the first time home buyer tax credit.  The tax credit expires on Novemeber 30th, 2009.  However, assuming a 45 day escrow period from the time you buy to the time you close and get the keys, you would need to find a house, negotiate a purchase price, and have mutual acceptance by October 15th to take advantage. There are some income restrictions, it must be for your primary residence, and you must not have owned a home in the last 3 years.  If you or anyone you know would like more information about the tax credit, please email me and I will follow up.

Arg! Less than a month to find a house and close escrow?

On the other hand, I heard a rumor that this tax credit may be extended. Hard to imagine we have the money to do so in this country, but still, that’s the gossip from my broker. Nick Timiraos of the WSJ blog writes:

Not only are some legislators (and real-estate industry lobbyists) already pushing hard for an extension of the tax credit, which will expire Nov. 30, but they’re also arguing that it should be increased, to $15,000, and expanded to all buyers, and not just those who are first-timers. The current $8,000 tax credit emerged in the stimulus legislation that Congress passed in February, replacing an existing $7,500 credit that had to be repaid over 15 years.

The questions are not just whether the country has this money available, but whether other issues, such as health care, will push the homebuyer’s plight to the back burner.

In the meantime, we first-time buyers have about a week to buy our homes, people. No pressure.

Generous Uncle Sam, Via Coldwell Banker

If You’re Gonna Relocate To San Francisco, Now You Know A “Best” Blog To Help You

Much to our surprise, we popped up on Relocation.com as one of the “Best Real Estate Blogs In San Francisco”.

We love a good review and you know we’re sharing it with you, so tell your friends:

The Front Steps from Alex Clark [that's me!] is a great guide to San Francisco real estate, including market observations, interesting tidbits on the city itself, nice photography and a snarky style that makes for interesting reading.

This is definitely not your typical real estate agent blog – and we can be thankful for that [Amen!].

Sometimes agents can take the blog thing a little too seriously and never dare show a little leg when writing. Clark has no problem with that. His walkabout category is a particularly fun and insightful read.

Lively comments section as well. It’s the kind of blog I’d read just to see what’s going on San Francisco real estate wise, even if I wasn’t moving there.

We’ll take it! And we thank relocation.com for the kind words. We do tend to be a bit snarky, but at least now I can tell my mom it’s paying off!

-Press release about the best San Francisco real estate blogs too
-Yahoo Finance PR page

Being a Landlord is Such a Drag…

I have to admit, watching the banks, AIG, the automakers, and finally, homeowners get a bail out, I did more than once cry out piteously: “But who the f— will bail out me?”

Answer: Chris Daly.

I didn’t really ask for this kind of bailout, but Daly’s constituents are largely renters; and hey, so is San Francisco. Thus a little protection for us too is a nice gesture.

Specifically, Daly’s proposals, to quote from the Chron, are as follows:

Three laws proposed by Supervisor Chris Daly on Tuesday would bar landlords from increasing rent to more than one-third of a tenant’s income, would expand the rights of tenants who want to add roommates, and would limit the amount of so-called banked rent increases in which annual increases allowed under city laws are saved up and then imposed all at once.

I should embrace this, since I am a renter. However, I’m also aware of the ironic side effect of many “renter protection laws” that actually end up keeping the rental market as expensive and competitive as it is here, even now. So I eye these laws cautiously, though they excite me, if only because I hope they make my landlady unhappy. Because I hate her.

But I digress. Surprisingly, Mayor Newsom, who is by all accounts not a member of the Daly fan club (in fact, I believe he’s probably the founder of whatever club is the opposite of that one), appears amenable to these laws.

It’s not yet clear whether the proposed laws will have sufficient support at the Board of Supervisors, but Mayor Gavin Newsom – who advocates had expected to oppose the measures – appeared open to the ideas.

So, does that mean SF is about to get even harder on landlords? 

In the end, I’m out of my league. My bias is obvious, but I don’t want to rent forever, so I like to undertand long term effects.  I bring this article to you, the educated Front Steps populace, to explain why these laws are a bad idea, a good idea, a crazy idea, or a pipe dream.

Obama Wants to Jump in on the Real Estate Crisis. Which Way should He Jump?


You might have already read Alex Clark’s article on the Bush plan to help homeowners, named optimistically “Hope for Homeowners.” Commenters on that post were less optimistic. Seems a lot of lenders won’t touch the program, though that might be because the program itself is new and everyone is so gun-shy right now.

That leaves President-elect Obama (Hi, Obama, if you’re reading!) in a tough place. He wants to act immediately on this issue, but has multiple, and conflicting voices to listen to as he plans a methodology. I feel for the guy. We want someone to bail us out of a clusterf*** that is 8 years in the making, and we want him to do it yesterday.

Sunday’s Chron outlines the issues Obama will draw from in taking action:

“Unlike his opponent, Sen. John McCain, he did not urge the government to buy up bad home loans and reduce them to the homes’ new values, putting taxpayers on the hook for the difference. But some of Obama’s proposed $10 billion fund would help homeowners who are facing foreclosure ‘through no fault of their own’ by letting them refinance mortgages through the Federal Housing Administration, Fannie Mae or Freddie Mac.

What Obama accomplishes depends, in part, on what the Bush administration does about housing in its waning days.”

Well, that admin is credited with the Hope for Homeowners program, to which $300 billion dollars was allocated. Other moves under consideration:

  1. a proposal by the Federal Deposit Insurance Corp. similar to what it is doing to modify IndyMac mortgages. The FDIC plan would use $50 billion from the $700 billion bailout bill to modify mortgages.
  2. a mortgage-industry proposal to split losses on modified mortgages with the government. Treasury has not confirmed these reports.
  3. In recent weeks, some large lenders including Bank of America and JPMorgan Chase have announced their own mortgage-modification plans.
  4. Rick Harper, director of housing at the Consumer Credit Counseling Service of San Francisco, says it’s becoming much easier for borrowers to get a mortgage modification.

In his address to the nation last Friday, Obama said: “It’s ‘absolutely critical that the Treasury work closely with the FDIC, HUD and other government agencies to use the substantial authority they already have to help families avoid foreclosure and stay in their homes.”

To do that though is not going to be an easy task. That’s why I want to ask the experts out there what Obama, in case he’s reading (and if you are, Obama: Hi!) what he should do first. And then second. And third.

Some conflicting advice and ideas he’s already getting:

  • Dean Baker, co-director of the Center for Economic and Policy Research, says the most expedient thing Obama could do would be changing the law so Bankruptcy Court judges can modify mortgages on primary residences. These judges already can change the terms of other debts, including commercial loans and loans on second homes. On the opposite side of that argument: “Allowing judges to reduce mortgage balances on primary residences ‘will destabilize the market exactly at a time when we should provide stability,’ says Steve O’Connor, senior vice president with the Mortgage Bankers Association. “
  •  a 90-day moratorium on foreclosures (but what would come after that?)
  •  a $10 billion foreclosure-prevention fund
  •  a mortgage tax credit of up to $800 a year for homeowners who don’t itemize  their deductions, but some experts say “the tax credit would do little to stimulate housing because it would mainly benefit people who have owned homes for many years”

It’s all enough to make a President run off to Camp David–only we need this President on the job. How can he maybe do it well?


Photo: Javno.com

In the Spirit of Halloween and Election Season, Scary Technology that “Outs” Your Neighbors

Prop 8 is not one that encourages sedate emotion. People are either vehemently for it, or they are just as vehemently against it. The debate between the two camps, heated as it is, often erupts into full out fighting, which we all know from our rhetoric classes is actually the opposite effect civilized, fair debate is supposed to have. The fights themselves can even get violent, as seen in this article about a Bakersfield man who attacked, punched, and kicked a No on 8 proponent (article and disturbing video here). 
That’s why I wonder whether the Chronicle’s new technology that allows you to see who in your area has contributed to “yes” or “no” on 8 is a good idea. Here you can type in a city, a zip, or even a name to see who has contributed to which side, as well as the dollar amount contributed. I do see the logic of printing the names of corporations who donate to or against the proposition, as you can retaliate by ceasing to spend your money with those companies whose views differ from your own. But how do you retaliate against an individual person? Punching and kicking? And though candid information about campaign contributions helps us understand the actions of our elected leaders, in this case the revealed data seem akin to publicizing people’s ballots after they’ve voted, when by law our votes are supposed to be secret. 
Essentially: I’m happy enough to say I’m voting no on 8; but I’d like the freedom to keep that to myself if some frothing-at-the-mouth Bakersfield psycho is waving a blood spattered YES ON 8 sign in front of my face.

Horn tooting! theFrontSteps gets accolades (yet again)

Nobody likes a jumpclaimer, especially in these here parts, but every now and then you gotta toot your own horn.

Just as soon as The Registry gets their newest edition up and running online, we’ll link to it, but for now, this is what was said in a recent column “Navigating the Bay Area Real Estate Blogosphere”, where they took a look at (IMO) the best of the local real estate blogs (save for a few):

The Front Steps

Founded and maintained by Realtor Alex Clark, who also writes an independent real estate newsletter (sfnewsletter.com) and a column for the San Francisco Examiner, The Front Steps is a down-to-earth perspective on the San Francisco real estate market. It hosts a variety of features-informative charts, graphs and photos-as well as entries on crime waves in certain areas or debates between Realtors on housing inventory. The blog stays San Francisco-based, which endows endless information for anyone who lives in the city or aspires to do so. The blog provides tremendous data on the market and should be on any professional’s and serious market insider’s watch list.

No…they were not paid or wooed into writing that. But we’ll take it.

Definition of jumpclaimer: Somebody who always points out their best tricks.

Ask us: “When should I refinance, or purchase?” ABC7 News is listening!

Where readers ask and we try to answer. This one we’re actually doing for ABC7 News. David Louie is running a story tonight at 6pm, and was hoping we could help him and their viewers out. So….readers, and real estate peeps, don’t disappoint! ;-)

Given the fact that interest rates took another dip recently, and the stock market has rallied, when does it make sense for homeowners to refinance (assuming their loan will soon adjust), and interested buyers to finally purchase? We were wondering what the difference in some of your readers’ payments would be (up or down) should they refinance today, and if they watch rates religiously, hoping to time their decision perfectly.

Let’s see if we can get a good discussion going here.

The most recent mortgage rates:

6.0% for a 15 year Jumbo (loan amount >$417,000)

6.5% for a 30 year Jumbo

5.625% for a 5/1 Jumbo

5.875% for a 7/1 Jumbo

These numbers are from New Source Financial, and here’s a mortgage calculator to help you get started.

As we’ve said before, theFrontSteps is getting noticed, and Realtors and Mortgage Brokers involved with this site are seeing the benefits. Tim Wood is thanking us for referring him to David Louie and ABC7 News. No worries Tim, it’s our pleasure.

Readers…we turn the floor over to you.

-Interest rate cuts can save money [ABC7 News.com]

A Hot Property and Great Quote

by Alex Clark

From a reader, who I like to refer to as “El Dunno” regarding my mention in today’s San Francisco Chronicle Business section:

san francisco chronicle

Good Job, you made the Chronicle. I read about your Firehouse analysis.

Too bad you weren’t quoted about your opinion of the value of the property if it were utilized as a hydroponic grow house.

Had she (Carolyn Said, the reporter, not “El Dunno”, the reader) asked me about that, $3.3M would certainly be a good price.

There is also a lesson here on staging and making your property look top-notch, especially, if you want a top-notch price.

-For more on the Ocean View district, where this firehouse is located, read sfnewsletter’s take in the Tour de San Francisco (real estate). [tdsf.blogspot.com]

-Will S.F. fire tour business turn into a hot property? [San Francisco Chronicle]

Coming Soon: “The Registry”

Having just been interviewed by a new publication in town, “The Registry”, we thought we’d pass the information along to all of you real estate obsessed readers out there, that there is, in fact, yet another avenue for you to get your fix. Look for us in the February issue…or maybe January, if we make the cut.

What do they hope to accomplish, and what will they be? Look to The Real Deal New York for some hints.

-“The Registry” [website]

We Made the Papers! But I must add…

Maybe my interview that ran in this article on SFGate, which will also be in the Sunday San Francisco Chronicle, wasn’t necessarily the best spin on what I actually said over the 45 minute conversation with Carol, but a little publicity is always good, and Carol does, for the most part, do a very good job reporting on the market and its idiosyncracies, and I thank her for it. However, there are a few things I must add based off of a lot of emails, and all the comments I’ve read around the internet regarding that column.

Yes, I firmly believe the market is still good, but nowhere in that very sentence or article did the words, “it’s always a good time to buy” come out of my mouth, so don’t jump to that conclusion about “all Realtors”. If you’d read the “walk down Lake Street” in its entirety, you would have seen it does represent what is happening in our market…some properties are selling quickly with multiple offers, some are getting stale, and some have had multiple price reductions and still not sold, and that is in a prime area like Lake St. That is what’s happening now, and you’ll never, ever, ever see me predict where things are going. I have no idea, nobody does, but if things continue the way they are, the future doesn’t look all that gloomy. However, to call my mood about the market “cheery” is a stretch, to say the least, but I’m cool with it Carol, really, I am.

Realtor haters (I read the comments on the SFGate article and get a fair bit of your animosity via email and in the comments, so I know you’re out there)… I’m determined to show you that what comes out of this site and the sfnewsletter is not Realtor talk and is truly the most accurate picture of what is happening in this market. By “this market”, I mean San Francisco. If you think all Realtors are created equal, you are so wrong. Any Realtor worth their weight would likely tell you the majority of their business comes from referrals, and you don’t get referrals if you do a shitty job. Continue reading

Redfin reboots, or at least adds a SF Bay Area Page

This is all it really takes to get on our good side, and get us to check out a site…again, “We added you to our real estate blog links because we think your site is a great place for people to read up on the SF real estate market.-Redfin” That and cocktails at any reputable watering hole in the city is a straight shot to our heart.


All joking aside (on second cocktail now), Redfin’s new SF site is pretty slick. Will it help them make more sales in San Francisco? We’re not quite sure, but the site is loaded with information like new listings, neighborhood data, school information (not that it really matters in San Francisco), restaurants, grocery stores, a Forum, and on and on.

Overall, we’d give the site a thumbs up for ease of use, wiz bang features, and general data mashing goodness.

However, they use Zillow for property estimates. In case you didn’t know, Zillow is just a big marketing machine that keeps churning out garbage that really doesn’t help or effect San Francisco and our market. We think Redfin would be better off having a “contact us for an accurate property estimate of this home” button instead of using Zillow. Capture that lead, don’t send them to Zillow. Better yet, direct them to us! (Sorry, had to throw that one in there.) Go check it out.

-Full disclosure: this is in no way shape or form a paid post. Not yet anyway. Depends on what kind of tab we can run up at the bar.

-Redfin [website]

-60 Minuets, $60 billion, and one Redfin lurking in the waters [theFrontSteps]

-Redfin Drowning in Red [theFrontSteps]

-It’s for sale, I saw it first! [theFrontSteps]

-John Colins Cocktails [website]

#88 out of 1,247,612 (top blogs)!!

excellent.jpgIn a very short month and a half, we appear to be gaining a bit of a following, and we thank all of you who are stepping up to theFrontSteps.

We were recently notified of a very interesting stat that has nothing to do with real estate, and everything to do with us and you, our valuable reader.

There are currently 1,247,612 blogs worldwide on WordPress.com (our blogging platform), and we recently ranked #88 on their “top blogs” list.

Who beat us? A lot of blogs beat us, but this blog in particular caught our eye, for no other reason than the name, “I Can Has Cheezburger?”!? If you’re a feline freak, check that site out.

Thank you, thank you, and thank you for reading. Please continue to spread the word about us, as we think it will make your real estate discussions much more invigorating and enlightened.

-Plugged by “Curbed”, You Gotta Love It [theFrontSteps]

Plugged by Curbed…you gotta love it!

It is not everyday you get a mention on Curbed…so we’re tooting our own horn. I guess this would be “just quotes”? ;-)

“From the re-invented real estate blog (we’ve already forgotten what it used to be called) now called The Front Steps comes news and pics of what’s happening in the formerly-empty lot at Clayton and 17th Street. Condos! Shocking. Four four-story townhouses with big bays hanging over 17th Street, possibly giving views downhill to the Bay, and top floor terraces facing south. From the framing they’ll probably lay out with garage/services on the ground floor, two bedrooms and bath on two, living spaces on three with high ceilings, master bedroom and bath with terrace on four. Elevators? Looks quite smart. Who’s the architect?

The Front Steps looks to be a blog worth watching, with a roster of real estate professionals contributing on an ad hoc basis. Welcome to the blogosphere!

Thanks for rolling out the red-carpet…we feel very welcomed! We’ll see about the architect. Now about that link….

[editor's note: This just in...Architect is Michael Levitt]


“The Definitive Blog on San Francisco Neighborhoods”

We didn’t say it, but we love when other people do. Of course…we do use their graphs and charts on our sfnewsletter, so maybe they’re a bit biased, but hell…it feels good nonetheless.

“Lots of pictures, a highlighted neighborhood map, and commentary on the homes currently on the market. Just outstanding. I’d encourage our realtor friends in all cities to undertake this kind of approach. Alex at SFNewsletter is really building the definitive San Francisco neighborhood tour with this site.”

-The Definitive Blog on San Francisco Neighborhoods [Altos Research blog]
-Tour de San Francisco (real estate) [www.tdsf.blogspot.com by sfnewsletter]

Fast Track to Staledom ™

Over on the sfnewsletter we have this little list we call our Stalefish ™. (Properties on the market 100+ days.)  Of course there are ways around hitting our list (“Resetting the DOM to sell Stalefish”-sfgate), but generally, we’ll find them. 177 17th Ave. (TIC) is on that list, but if you take a look at a couple of these pictures, you’ll surely see it is not the property, but the price.  The other unit in the building, 175 17th, is in contract and just waiting for you to help them out. 

Current price: $1,360,000

Previous price: $1,428,000

3 bed, 3 bath, 2150 square feet, lower unit

Offer date now set for March 21(not too sure how smart that is)

Beautiful Kitchen. 

The good thing about finding a Stalefish ™…there are deals to be had, and anxious sellers, especially on a two unit building like this that has the potential for condo conversion.

[pictures taken from property profile, photographer not stated]