Zephyr Real Estate First To Go Mobile, Give You (Buyers/Sellers) The Goods

We all know the importance of getting a jump on the competition, and I’m pleased to announce the company where I hang my license continues to lead the way. Zephyr Real Estate’s newly launched mobile website is now fully live.

From your smartphone (iPhone, Droid, Blackberry, etc.), just go to: http://www.zephyrsf.com

Some highlights/features not to be missed:
-The mobile website works from any smartphone, not just iPhone and Droid. You can access it from your Palm, Blackberry, Windows Phone, etc.
-When you visit zephyrsf.com from a smartphone, it automatically detects that you’re on a smartphone (and which one you’re on) to serve up the right version of the site. No other SF brokerage has this functionality…NOT EVEN REDFIN!
-The login/registered user experience is available via the mobile site, so you can search solds, save searches, add properties to favorites, view new matches, change your password, etc. all from your mobile device.
-Zephyr is still the only brokerage to have the very cool ‘home tour’ function, wherein multiple properties can be added to a ‘tour’, a starting address entered, and then Zephyr will generate point-to-point directions from one property to the next creating a fully complete tour of all properties. This is even better on the new mobile website because you can easily take the directions with you right on your phone.

How’s that for setting the bar…

Deciphering The Case-Shiller Index For San Francisco Real Estate Market

Because I couldn’t possibly say it better myself, or make such nice graphs, or pore over the data, I present Paragon Real Estate’s argument against the oh-so revered Case-Shiller Index (I personally can’t stand the index, but I love Paragon and their agents for doing the work for us.)

Word for word copy:
June 2011

The news media regularly reports that the S&P Case-Shiller Home Price Index has indicated large and continuing price declines in San Francisco, not only since the market meltdown in late 2008, but since the period commencing thereafter in early-mid 2009. This is based upon the C-S analysis of home sales in the 5-county San Francisco Metropolitan Statistical Area (MSA), comprising SF, Marin, Contra Costa, Alameda and San Mateo counties. The statistics (and price declines) quoted by the media are almost always for the overall SF MSA price trend.

Unfortunately, the Case-Shiller overall Index is the wrong Case-Shiller Index to use when assessing market trends in the city and county of San Francisco itself (as opposed to the 5-county San Francisco MSA):

· First of all, it should be noted that the C-S Index measures price trends for houses only (single family dwellings or SFDs) — condos, co-ops, TICs and multi-unit buildings are not included.

· Secondly, Case-Shiller tracks not only overall house price trends, but house price trends broken into 3 price tiers: low, middle and high.

· The “upper tier” price range is defined as those homes selling for over $601,000. In the city of San Francisco, over the past 17 months, 67% of all our house (SFD) sales were over $601,000. If we exclude the two least affluent, southern Realtor districts running from Bayview to Oceanview (hit hardest by foreclosures and distress sales), and look only at the 8 central and northern Realtor districts, then 89% of our house sales were over $601,000 and thus in the “high tier.” (Just for the record, the majority of our condo sales is also above $601,000.)

· The 5-county, SF Metro Area SFD housing stock — in all price tiers — in year 2000 was approximately 948,000 SFD units. The city of San Francisco contains about 114,000 SFD units — or only 12% of the metro area total. Thus the overall Index is heavily skewed toward the markets of the other 4 counties. However, the city’s percentage of total metro area SFD units in the high price tier would be significantly greater.

It’s obvious that the Case-Shiller High-Tier Price Index for the San Francisco MSA
is the one most applicable to the real estate market of the city and county of San Francisco.

Which brings us to the chart below:

Looking at the chart of C-S Index “high tier” price points in January of each year since the year 2000, we see the massive appreciation from year 2000 to peak values in 2006 – 2008 (different neighborhoods of the Bay Area and the city peaked at different times within that time period); then an 18% – 22% decline to early 2009, with the September 2008 market meltdown occurring in between. That seems correct as an overall average for the price adjustment that generally occurred in San Francisco’s 8 central and northern districts. (The 2 southern districts, dominated by sales in the lower price tiers and hard hit by distress sales, saw declines typically running from 25% to 40%.)

Post market meltdown, since January 2009 to March 2011 (the latest C-S data published), over a period of 26 months, the C-S Index for “high tier” priced homes shows a further 1.8% decline in value. Even if one refuses to consider a reasonable margin of error in the C-S calculation, a price adjustment of less than 2% comes pretty close to what we’ve concluded for quite some time, i.e. generally speaking, San Francisco has experienced a basically stable home price situation in the city over the past 2 years, especially in our 8 more affluent districts where the median house sales price is typically above $850,000.

Indeed, though not shown on the chart, the Case-Shiller Index recorded a small uptick in high tier home values in March 2011 for the San Francisco Metro Area. And based upon what we’re seeing in the city market, both statistically and in the hurly burly of deal-making — i.e. a significant tightening in the supply and demand dynamic within SF — we believe there is a good chance the Index will indicate further upticks in high tier home prices in April and May.

As always, time will tell.

Paragon Real Estate Deciphers Case-Shiller [Paragon Real Estate]

San Francisco Market Focus Report June 2011

Straight from the horses mouth…San Francisco Market Focus Report June 2011.

Fending off concerns of a possible double-dip in housing prices, the local market is slowly on the path to recovery. There are fewer REOs on the market, oreclosures are slowing way down due to government intervention, and employment is inching up.

According to a recent survey released by Move, Inc., an informational real estate company with a growing network of web sites, real estate investors will be more active in their local markets by a 3:1 margin compared to typical home buyers in the next two years. Sixty-nine percent of investors surveyed expect it will be easier to find properties in the near future and two out of five investors believe it will be easier to sell their properties in the next six months.

And, as reported in the San Francisco Chronicle, DataQuick, a real estate tracking firm, says that although the San Francisco Bay Area fell to a three-year low back in April, the portion of homes bought with adjustable-rate and jumbo loans rose, and the share of sales involving foreclosures, investors and cash buyers fell.

San Francisco Market Focus Report June 2011 [San Francisco Association of Realtors]

Ask: I Want To Rent A Home Built On “Those Stilt Kind Of Things”…

This is one for the community:

I love your blog. I just moved here from NYC a week ago and it’s been an invaluable resource.

I just found a rental that I love, [removed]. Gorgeous views, built in 1939 or so. Problem is, a friend from SF pointed out that it’s a “downhill home.” (I’d never heard the term before.) It’s cut into the face of the hill, but it’s partly on those stilt kind of things. The landlord says the hill is safe and the place was “thoroughly inspected” when he bought it…but he owns the place and needs a tenant, after all. :)

I’d love to rent it but want some reassurance that the thing won’t fall down the hill at some point. Like, if there’s a quake. Do renters ever do seismic checks here? How can I find out if this place really is safe? I don’t mind paying myself if the inspector fee is reasonable.

Thanks a lot

Thanks for your email, and I’m glad you like theFrontSteps! Please tell your friends.

I don’t handle rentals, so I’m not one to speak with 100% certainty. I would imagine that you could do any kind of inspection you wanted as long as it doesn’t cost the owner anything.

The fact is, if a big quake hits SF, who the heck knows what will happen. A big rain might be more likely, and more of a concern….landslide.

My advice would be to go ahead and inspect if it will make you comfortable, the owner is okay with it, and you have the time to do so. But, don’t expect any person to tell you without a shadow of doubt that the home is 100% safe. You can thank the litigious society we live in for that.

When you’re ready to buy, let me know! If you have any money for down payment at all, I would HIGHLY recommend buying. Prices and interest rates are crazy low, and your payments would likely be less than rent.

Thanks for reading theFrontSteps!

Ask Us: Death “On” Property Or Not? Should You Disclose?

This just came to me by way of email.

Hypothetical question.

Assume a house burned down and a firefighter died a few days later from his injuries.
Same for a contractor falling from the roof or any other work related accident on the property.
What are the consequences regarding the disclosures of a subsequent sale?

Please do not discuss the specifics of a recent event/specific house, I’m only interested in the “what if that happens to my own house” – such as
does this qualify for a death in said property?
As a Realtor, would you advise to check or not the box?
How would you disclose this information?

What are the others aspects that you’d like you warn home owners (such as hiring only fully insured roof workers)?


My advice: Disclose, Disclose, Disclose. If I know about anything pertaining to a property, I’m going to disclose that. The last thing anybody needs is someone to move into a home, decide to Google their address and find all kinds of information they never knew existed on the property.

I think this opens up the forum to a larger debate as to whether a death that came later from an accident on the property could be classified as a death “on” the property. I leave that to attorneys, but would certainly disclose any and all pertinent information. You see the pattern here? Disclose, disclose, disclose!

If There Is S&M And Leather Sex One Unit Below, You Might Want To Let Buyers Know [theFrontSteps]

32 Hidalgo Terrace Gets Foreclosed, Fixed, And Flipped

Thirty Two Hidalgo Terrace is currently on MLS. No, it’s not the Fixer of Epic Proportions I brought to your attention here, and recently featured on Yahoo! In fact, it’s no longer a fixer, but this is what it looked like a few short months ago:
Lovely Kitchen:


Lovely Bath:


Don’t delay. A Single Family in Mission Dolores? I don’t think it will last…

32 Hidalgo Terrace [Website]
Yahoo! Love
Fixer of Epic Proportions [theFrontSteps.com]

San Francisco Pocket Listings, Not On MLS Opportunities, And Buyers Looking!

I’ve been resisting the urge to continually share the opportunities popping up in San Francisco on my new venture, PocketListings.net, but I can’t hold back. Here is a summary of what is going on “behind the scenes” in San Francisco real estate that we’re gradually bringing to center stage.

Thirty-three hundred square feet in Pacific Heights for $2,875,000:

A “creative buyer looking for development opportunities…flexible on property type and price.

Three bedroom Potrero Hill Condominium For Sale, but not on MLS.

Telegraph Hill Buyer looking to be on the East Slope, and desiring views. Price up to $2,000,000.

One bedroom condo in Dolores Heights, very much for sale, but also “not on MLS”.

-Should you find yourself itching to move to Marin, here is a nice 4 bedroom, 4 bath home with 4 Car Parking, also “not on MLS”.

-If you want to get way the hell out of dodge, perhaps this Daytona Beach, Florida “family compound” is for you.

I could go on and on, but I’ll stop there. The moral to the story is that what you see on MLS is not close to the entire picture, AND PocketListings.net is pioneering a platform to give the buyer a voice. We plan on completing the real estate circle, if you will. Think of the countless properties that could be marketed before MLS, thousands that get withdrawn or expired from MLS, bank foreclosure inventory, and so much more. If you’re an agent, I’d encourage you to use it, and if you’re a principal, I’d encourage you to browse it, then tell your agent to join!


Real Estate Market Reality A La Redfin…

[Editor’s Note: I couldn’t possibly say any of this better myself, so why bother. The below is a direct copy of Redfin’s Newsletter (sign up here)]:

Time for the latest round-up on real estate prices! But first, we want all of you to drop everything and upload your gorgeous photo to your new Redfin profile, so we can welcome you back to our site in style.

We Were Wrong

Now to the numbers! Let’s get this out of the way right off the bat: we were wrong. In February, we wrote that we expected prices to start bucking up in March and April. The March Case-Shiller numbers out Tuesday showed a .8% drop nationwide. But then we were right: a day later the numbers used by the Federal Reserve came out for April showing a .7% increase. Crazy, right? As we wrote last month, after nine months of falling prices, the next six will probably be up and down.

Few Buyers, But Few Sellers Too

It’s a bumpy ride because supply and demand are racing to the bottom. Our website added a million users in the first three months of 2011, then went flat, as buyers began to pull back. But new listings are falling too: bank-owned listings declined 6% this spring, and the regular stuff declined by 14%. Would you sell right now if you didn’t have to? If a pretty house does hit the market in one of the big cities, there’s usually a bidding war.

And when sellers won’t sell and buyers can’t buy, summer sales volume goes down the drain. From March to April, closed transactions declined .8%, and pending sales fell 11.6%. That’s the bad economic news. The good news is that even if prices are up and down, they aren’t going to drop another 9% from May – December, as some have claimed. We think the second dip isn’t going to be like the first one.

And No, We’re Not Lying Scuzballs

But before making our case, let’s remind everyone we’re not lying scuzballs.

When prices were still rising, Redfin went on national TV last June to say that the market would become like a fat man who couldn’t get up. In September, we emailed all of our customers in Seattle to say prices would decline another 10%. Many of our customers changed their minds about buying a home back then; it cost us a lot of money but we’re glad they did. So as John Kerry would say, we were for the double dip before we were against it.

How Do We Get Off the Bandwagon?

Now that the band-wagon is rolling downhill fast, we want off of it. The New York Times front page published a glum report on the Case-Shiller index likening the slump to the Great Depression, the day before the numbers came out. A day later, same newspaper, same reporter, but the headline was now: Bottom May Be Near For Housing Slide.

If you’re getting that here-we-go-again feeling, maybe it’s because you’ve just forgotten how sickening that feeling once was. In the West, check out how steep the drop was from 2007 – 2009:

Now focus on the last two years:

It’s the same story in the East and Midwest. The first dip was a doozy:

The second, not so much, at least not yet:

Now past performance doesn’t predict future results but does this look like the middle of a roller-coaster ride, or the end? Bubbles last longer than you’d think, and so do declines, because of the market’s emotions, what Robert Shiller calls “animal spirits.” So figuring out when greed trumps fear is never an exact science.

The Banks: Bleeding Out Inventory, Not Gushing

However much the market wallows in its misery, the truly catastrophic drops were driven the first time around by banks determined to liquidate assets at any price. There’s still plenty of shadow inventory, but new foreclosures hit a 40-month low.

Why? Foreclosures are now taking an average of 400 days to complete, compared to 151 in 2007, mostly because of loan-modification regulations, not the robo-signing scandal. You could build a house, using crude stone tools, in the time it takes a bank to repo one. So most banks are shifting toward short sales, which hold their value a lot better than a foreclosure.

Sure the whole economy is getting scary again and the stock market run ended a month ago; all heck could break loose in employment, government credit and consumer confidence. But when there are reluctant sellers, bidding wars, declining distressed inventory — and mortgage rates just now dropping to 4.55% — we just don’t see what else could drive a steep drop in prices.

Feel free to disagree. We’ve been wrong before and you’ve been right. Just leave a comment below and give us your take.

Have a good June and thanks for your Redfin support! [We at theFrontSteps have been fans of Redfin for a while.]

Best, Glenn

[Thanks Glen!]

The First Dip As Tragedy, The Second As Farce [Redfin]