Should You Rent Or Buy | San Francisco

The debate will go on and on forever, should you rent or buy. Thankfully, some really, really smart people at the New York Times have updated their amazingly interactive Rent versus Buy calculator to help you with your decision, or confuse you just a little bit more.

Following on the heels of our Mid Year Market Report we posted yesterday, I thought it time again to share this, especially since you now have some pretty telling appreciation percentages to plug into the calculator.

As for my two cents…Having lived in San Francisco for almost two decades now, and not bought at the very first chance I had, and having experienced multiple booms and busts in our market, I can still tell you San Francisco is a place to buy. Ideally, buy and hold.

I know most of you are thinking, “Well sure, you sell real estate, so of course you’re going to tell me to buy”, but that’s not true. As many of my clients will attest, I am probably the least pushy agent in the entire state of California, but I make deals happen for those that are ready. What is true, are the many multiples of stories I personally have, and those of my clients that when averaged out amount to an overwhelming majority of “wins” for those that bought as soon as they could, versus those that waited or dragged their feet, or decided not to buy at all.

Sure, some bought at the last peak and were forced to sell during the bust, but those are the rare “had to sell” clients that were transferred because of jobs or other life events that forced them to leave the city at a specific time. Even those clients that had to sell had the luxury of enjoying their own home while they lived in it, and that isn’t something to overlook. The luxury of remodeling a kitchen or bathrooms. The luxury of adding a story, or room. The luxury of redoing floors, knocking down walls, changing cabinets, lighting, paint without asking permission from your landlord.

Other clients that might have otherwise been forced to sell were able to hold on and rent their property out during the bust, because rents are so high. They held on until the next boom, and then sold. Some even cashing out and buying their next home outside of San Francisco all cash with plenty of money left over in the bank.

The long and short of it is this, if you can buy, buy. If you can’t yet, save up until you can, and then look at the bigger (longer term) picture, and make your decision accordingly. If you plan on calling San Francisco your home for many years to come (why wouldn’t you), it is the wise thing to do.

On the other end of the spectrum, if you’ve been wondering when a good time to sell might be, the answer is now. Our market is hotter than it’s ever been, and at some point it will dip. It will come back, but it will dip. Sell now while there is zero inventory, get out on top, let a desperate buyer have your home here, and go buy an island somewhere tropical. Or buy acres and acres of land in Idaho with a creek running through it loaded with fish. Just make sure I get a key to wherever it is you go.

Enjoy your weekend!

As always, The Goods have been updated today with all the best Overbids, Underbids, New Listings, and Recent Sales in San Francisco, so check it out. Get on to have it delivered to you (somewhat) regularly via email.

Contact me if you or anyone you know is looking to buy or sell Bay Area real estate, and get outside and enjoy!


Get The Goods, San Francisco Real Estate Porn []
San Francisco Top Overbids [Alexander Clark]
Fellow Agents…Real Estate Porn for your Peeps [The Goods SF]

Ask Us: Income Property, Foreclosures, Short Sales, Rent Control & Impatient Realtors All In One!

Where readers ask, and we (the community) try to answer:

Dear tFS,

I have been following your newsletters for awhile, now that my husband and I are considering investing in an income property, we are coming to you for advice. A friend of ours has referred an real estate agent and we have worked with him for about a month. The area which we have visited are Ingleside Heights, Oceanview, Excelsior, Geneva or Alemany ( got a bit confuse after awhile) along 3rd St., and original Daly City.

Our original intention was to look at foreclosures and short sales since we thought we might find something closer to our budget, but our agent explained that the process would take a very long time and the price difference is minimal so it is not really worth the hassle.

We are in our 40’s and will sell this income property when we reach retirement age so this will more or less be our retirement nest. We have a pre-approval letter already but we are not sure which locations would make the best option with the following considerations:

Rent control & Tenants rights
Monthly Rental Income
Future prospective of the property

Your insight would be most appreciated.

Yours truly,

We have to say that ALL of your questions generally depend on each individual property in each different location. There is really no “blanket” answer we can provide, especially in regards to rent control, monthly rent, and future prospects of the property. We can; however, comment that it is true a short sale takes much longer to sell, if at all, but the price difference can be substantial, so you might want to corner your agent on that topic and find out where the hassle really lies…with them not getting paid soon enough? ;-) They are a hassle though…no doubt, but it is to your advantage to have an agent with sticktoitiveness (you need a lot of it as well).

Best of luck to you. Thanks for reading, and thanks for writing in!

Ask Us: Color Me Condo!

We get all kinds of questions in every shape and size and this one has got to rank right up top with one of the most off the wall, but we love it nonetheless and will coddle it like one of our own:

Which Condo complex in the City has the nicest hallway color scheme, in your opinion?


One short answer…no frickin idea! We have seen so many condos, so many homes, so many different colors of paint in different rooms that they all blend together. But, we’re not looking at color palettes, we’re looking at numbers, size of rooms, location, proximity to public transport, and so on. Painting can easily change the look and feel of a home or building, so we always try to look past it. With that said, go neutral. Colors that are too wild one way or the other can bring down the overall feel and kill a deal the moment someone walks in the hallway. You might have a look at the Millennium Tower website for a good idea of what we think is a good choice.

Hope this helps. Guess we did have an idea after all (since you forced us to think about it).

Get While The Gettin’s Good: Sell Now Or Forever Hold Your Peace

We’ve been on a lot of listing presentations lately where the motivation to call us in off the bench has been, in so many words:

We’re thinking we should sell our place now before it gets any worse.

The media (and certain local real estate blogs) are certainly good at creating panic, and Realtor blogs are certainly good at glossing over all the doom and gloom, but what’s really going on? If you’re a buyer, are you really feeling the urge to buy for fear of missing that boat again? More importantly for this thread, if you’re a homeowner and been thinking of moving (within the next 2-3 years), are you getting that feeling? You know, that one you all keep telling us? “We’re worried if we don’t sell now, we might have to wait years.”

Be honest, be anonymous, and please share your thoughts in the comments below. (NOTE: To be totally anonymous, when asked to enter email use, “”.)

Thanks! We’re very curious to hear what you have to say.

Ask Us: WTF Is Going On With 409 Ulloa (A.K.A Pandora’s Box)?

Where readers ask and we (the community) try to answer:


I have a few questions. I have been looking at 409 Ulloa St in the Forest Hill Extension area. Basically, this property seems to have been on the market since December 2007 as a REO starting at $1.19 Million and then the price keeps dropping [now seeking $689,900]. The issue seems to be that this property seems to have numerous codes of violation in addition to the property size having a discrepancy. In my research, I noticed that the property in 2005 did have a permit to add the 3 bedrooms, 1 bathroom, stairs to connect the basement/garage to the second level in addition, legalizing the existing bedroom and bathroom while converting the existing bedroom to a family room but that permit was never completed and never expired while the latest status is triage. Any idea what that means?

However, I have noticed the property for tax purposes includes the area that was in that permit as it’s listed as 2000+ square feet and 5 bedrooms, 3 baths which was what was used for all the listings through November 2008. The current listing agent only shows the property as 2 bedrooms, 1 bath and 1,065 sq feet which is basically the upstairs. My question is, doesn’t the basement permit have to be completed before it can be taxed because it seems in January 2009 a complaint with the building inspection department was filed for an illegal unit in basement, but if that was the case, why is the house being taxed as such?

Also, how much is the property worth if it’s in perfect condition, as it appears from the pest inspection and home inspection reports a lot of repairs need to be done as the basement level is basically broken and the foundation needs to be repaired. Does anyone know what the maximum cost is to repair an entire foundation for a house that size, as only the non-converted portion of the basement is visible and can be inspected?

Also, the garage is basically about 4 feet under the surface level, would it cost a fortune to have the house lifted so the floor of the house is leveled with the ground instead of beneath it? Thanks!

Looks like an opportunity to purchase Pandora’s Box. We’ll continue the dialog over email with you, and put you in touch with the correct inspectors, because your questions are many, and answers run deep.

We do hope some readers can provide their insight as well, and we thank you for contacting theFrontSteps.

409 Ulloa St [MLS]

Ask Us: Single Family Home On RH2 Lot, Can You Claim The Second Unit?

Where readers ask and we (the community) try to answer:

If you own a RH2 lot with a SFH [Single Family Home] on it, can you claim the second house number? For example: to establish a professional address – no separate unit, kitchen or entry door, just a second mailbox with a second house number?

The regular address number is available (our number + 4), but using “unit A”, “unit B” would also be a valid solution.

Any insight is appreciated.

We have never dealt with this type of issue, so we do not have the answer. Anybody else?

Ask Us: Can Condo Conversion Save You From Rent Control?

Where readers ask and we (the community) try to answer:

This is a doozy of a question, so put your game faces on:

Hi there,

Being fairly new at the SF real estate/landlording game, I am still discovering the fascinating mine field of Rent Control laws through the numerous websites on the subject.
At least somehow manages to make it entertaining. Maybe you can help me with a few beginner questions here.

Here is my situation :
I plan to buy a 2 unit home (both vacant) with a friend as a TIC in SF and subject to Rent Control. After occupying one unit each for a year, we hope to by-pass the lottery and go for condo conversion to own one each. Does this sound like a reasonable plan?

Question 1: During the 2-3 following years needed to complete the conversion, do both of us still need to occupy the units or can we rent one or both?

Question 2: Once converted, is it true that if we rent (to brand new tenants) we will still suffer from Rent Control (because we are the subdivisers) ?

Question 3: If so, why does everybody want to condo-convert? Is it only to make a 10-15% profit by selling the condo just after? Isn’t it to enjoy renting the place free of RC at all?
(I understand that another benefit is to get separate ownerships instead of the TIC).

Question 4: Assuming the answer to 2) is yes, is there any loophole? For instance if I live in my condo and I buy the second condo from my friend, then maybe I can rent this one exempt of RC?

question 5: If I live in the unit and rent 1 room, is it still under Rent Control?

Thanks for your help.

Let’s see what replies we can get from the readers in the comments below, and we’ll fill in the blanks just as soon as we can. It sure would be nice if David Gellman or Andy Sirkin would provide some insight (and maybe win a client as a result).

Thanks for reading and thanks for this lovely little quote, “At least somehow manages to make it entertaining.” We aim to please, and entertain, so we have to ask, “Have you nominated your sexiest Realtor today?”

Ask Us: Should I Buy A Single Family Or 2-3 Unit?

Where readers ask and we (the community) try to answer:


I have been following your blog with great interest. I have a comment/question and wasn’t sure of the best place to put it.

I was curious to know what you thought of something. Due to family circumstances, I would love to buy something in San Francisco, but something more along the lines of a 2 or 3 unit building. So, I am not just an investor coming looking to do a condo conversion in a year and then sell off again at a higher price. I plan on staying in there for a while, at least a few years and then depending on where I am at that point, renting it out to hopefully have it pay for itself.

It seems that sellers have the philosophy right now that they might not want to sell unless they get the price that they want (and the price they want is the price they would have gotten 6 months ago if they could). So, instead maybe some people are opting to hold on to their houses and rent it out until the market gets better and they could get a better price than right now? Do you see that happening?

If so, then it would seem to apply more to single family homes, no? Because rent-control laws don’t apply to them? But how about 2-4 unit buildings? It doesn’t seem right to apply this same logic to them, because both rent and eviction control laws apply to them, so either they sell at a lower price now (vacant but negotiated price), or a lower price later (because they might have tenants or even protected tenants).

I would be interested to know your thoughts! Anyways it will be interesting to see how it all plays out!


So many questions, such little space to answer. Check the comments below for answers from our insanely intelligent readers. Check your inbox for my reply directly to you, and check back here, because you touched on so many issues, we’re certain to keep coming back with more replies.

As always, thanks for reading and hanging out on theFrontSteps, and thanks for your question.

When Making Comps, is Price, or Price Per Square Foot King?

Where readers ask and we (the community) try to answer:

There is a new listing in my building, which if it sells will be a good comp for my condo. I like the price they are asking, and if it sells anywhere near that, I would be happy because my unit is a better one. Problem is that the area is wildly inaccurate, on the high side, which drives down the price per foot. So in the future will the comp be referred to on strictly price basis, or a price per foot basis? How do you call BS on a listing without interfering with a transaction? What do you do when you are looking at a listing that obviously overstates the area?

Damn good question. As for calling BS, that’s easy, tell us which property and we’ll throw it up on the site, take the heat (like always), and likely be asked by either the Realtor or Broker with the listing to pull it down.

When we do comps, we don’t just look at price per square foot. Some do, we don’t. Price per square foot is not the be-all-end-all. Price and amenities are much more important (at least to us). In San Francisco there are too many individual characteristics of each property to take into consideration than to simply look at price per square foot. Generally a higher sales price would help your unit if your unit is more desirable, especially if the unit is in the exact same building as this appears to be.

As for overstating an area, we have to first ask, was your statement “the area is widely inaccurate” stated correctly? Not quite following that. Generally, if it’s over-priced, it will not sell, and that will be bad for everyone in the building and possibly even the entire area. Give us a little clarification on that statement and we might be able to elaborate.

Thanks for reading, and thanks for writing in.

As a reminder to all of the readers, our email is secure and your privacy is guaranteed. Feel free to email any questions or comments to

Comment du Jour: WTF! Sellers Living in 2007?

Ahhh, we love our readers, especially when they come up with money quotes a lot of you are missing. So, we often take it upon ourselves to bring them front and center. This from “MichelleL” on “Getting Twisted in Cole Valley“:

WTF? Are people still paying 3-million to live in Cole Valley sans view? There is an interesting ‘compflip’ in Eureka Valley on 19th and Douglass for ‘gasp’ 4-million plus…what are your thoughts, are sellers still living in 2007?

We’re going to assume you’re talking about the property we found (we can’t tell you how often we get the question about “that house on the corner”) and linked to above. If not, please correct us.

To begin, let’s help some less than up-on-the-lingo readers with translating your question. WTF means “what the f*ck”. Sans is the french word for “without”. Now that we got that out of the way, on to answering your question.

Yes, some sellers are still living in 2007, which is exactly why many of the buyers we’re working with have been advised to not panic, be patient, and watch properties of interest very closely. Keep in mind many “flips” started a long time ago, and the developers may not have calculated a declining market in their build costs, so they’re hoping for that un-educated Realtor/buyer combo to walk through the door and say, “We’ll take it!”, and save their asses, pop the champagne and make their car payment. However, like everything in SF, it comes down to the property in question, and not necessarily the market as a whole. We don’t know the exact scoop on this property on 19th, so unfortunately can’t provide many more details, beyond a very vague answer of “yes”…some sellers are living in 2007.

We do know first hand of some other very awesome developments that the builder “just wants off their books”, should you be so inclined to get in touch.

Thanks for your comment! We hope to hear from you more, MichelleL.

4552 19th Street, $4,299,000, 6 bed, 4.5 bath [listing details]
Getting Twisted in Cole Valley (1342 Shrader) [theFrontSteps]