Seeking “Spot” Condos for FHA Loans

FHA loans are about the only ones out there these days that will let buyers put down less than 20%. In some cases, it’s possible to put down a minimum of five percent. The loan limit is soon to be $729,750.

But that’s for single-family homes, and condos within approved buildings. I wrote a previous post outlining some of these FHA-approved buildings. If you don’t see your building of interest on that list, all might not be lost.

In some cases, the FHA will approve a “spot” condo—i.e., one condo in the building—for a loan. All the condo information needs to be submitted with the loan approval application. The catch? There can only be one “spot” condo in the building. If another unit already has an FHA loan in place, you’ll be out of luck.

Conforming Loans Lead the Way

Conforming loans are about the only option these days for those prospective buyers who have less than a 20% down payment. Though this loan amount is poised to increase to $729,750 soon, it is currently set at $625,500. Along with that down payment, you’ll need acceptable credit scores and incomes.

So what’s available for up to $695,000, assuming you’re working with a 10% down payment? Quite a bit of inventory, it seems. There are 210 single-family houses on the market, ranging in price from $179,000 for a 625-square foot, one-bedroom short sale house that’s tenant occupied in Bayview, to a three-bedroom home in Bernal Heights on College Terrace. In addition to Bernal and Bayview, neighborhood selections include Merced Heights, Ingleside, Outer Sunset, and Sunnyside.

There are 493 condos available, but it’s important to have your lender or mortgage broker review a particular building prior to even considering making an offer. Lenders are hesitant to lend on condo buildings, so there are further limitations to what you may be able to purchase.

I’d recommend considering properties priced as high as $725,000-$750,000, as your chances of negotiating for what you can afford increase the longer the property sits on the market–presuming you have a motivated seller on hand.

No Monster Home For You

14127th When 141 27th Street in Noe Valley (above, left) came on the market in the summer of 2008, I got a little nervous. This is the property directly behind me, and visions of vertical growth danced through my head.

But lo and behold, it appears the owner is doing a radical thing—renovations within the envelope of the existing structure. I took the photo above from my deck, and you can see that the owners are maintaining the scope of the original home. Listed as a major fixer/teardown for $637,500, the property made it to court in a partition sale with the bidding price set at $998,000. The home’s final selling price was $950,000.

The house will be on the market upon its completion, according to the agent who represented the buyers. Workers have gutted the property, replaced the foundation, and are creating a master suite on the garage level.

Neighborhood Spotlight: Merced Manor

Not too far from the West Portal enclave is Merced Manor. This southwestern San Francisco neighborhood is not usually mentioned by prospective buyers when we meet to talk about preferred areas. But Merced Manor actually has a lot going for it.

Bordered by 19th Avenue on the east, Eucalyptus on the south, 26th Avenue on the west and Sloat Boulevard on the north, Merced Manor was largely developed in the 1930s and 1940s, and covers a fairly small geographical area. In the middle lies the Merced Manor Reservoir, which was built in 1936 and was structurally and seismically upgraded in 2006.

Merced Manor isn’t very far from the West Portal retail district and Muni line, and sits just south of Stern Grove. It’s also right next door to Stonestown and the Y. Ocean Avenue runs through Merced Manor, and its own retail area is not far away, either. If you’re a golfer, Harding Park is right around the bend, and you can bring your dogs to nearby Fort Funston. San Francisco State is just south of the neighborhood.

Popular with families due to the proximity to coveted Lowell High School, Merced Manor’s homes typically feature three bedrooms or more. Single-family home averages tend to hover just above the $1M price point. The weather is typically cooler and foggier in the summer.

Get the Skinny on Your 'Hood

ZIPskinny is a great little Web tool to obtain demographic information on the neighborhood of your choice. Let’s say you’ve narrowed it down to the neighborhoods in which you could live. A background check on the areas can help.

I plugged in my own zip code, and found information on social indicators such as education, marital status, newcomer appeal, household income, and occupations of those who live in the neighborhood. You can also get a grasp on the race, age, and gender percentages.

3355 Pacific Goes Off the Wall

pacific After only 19 days on the market, the 6BR/7.75BA residence located on the wall overlooking the Presidio at Walnut Street is pending. The property reportedly garnered four offers, which is no small feat considering the $8.9M asking price. (Word on the street is that the accepted offer price is in the $9.2M range.) What a home this is, though—three spacious levels, nicely presented, and featuring views of the Golden Gate Bridge. I was a fan.

Estates Market: Down, But Not Out

Though the price range from $400,000 to $900,000 has been busy this year, the luxury home market has been much slower. But it’s not a completely dead market segment.

In the first six weeks of the year, eight single-family homes for $1.5M or higher sold in San Francisco. Interestingly, the homes were spread out across neighborhoods that included The Haight, Noe Valley, Eureka Valley, Lower Pacific Heights, The Marina, and Pacific Heights.

A good indication of how the market will fare over the next month is via the number of pending listings. To date, there are six single-family homes pending in this price range, all priced at $1,775,000 or above.

On the condo front, 43 listings sold at $1.5M or higher, predominantly in the north end of town. Four listings are pending.

What credit is available to buyers in this price range? According to my colleague at First Republic, the bank can offer loan amounts between $1.1-$2M. It has a 7/1 ARM @ 5.35%, 0% points, 1% 3 year pre-payment penalty, and a 10/1 ARM @ 5.50%, 0% points, 1% 3 year pre-payment penalty. Minimum down payment is 25%. This quote is for a purchase of a primary residence, and assumes an existing banking relationship with First Republic.

Saturated in the Marina

If you’re in the market for a condo, a good place to check out is the Marina. I toured a number of available units this week on my broker open. The properties on the market range from $955,000 for a 2BR/2BA unit with about 1200 square feet, to a 2,000 square foot property on North Point listed at $1.8M.

The bottom line is that deals may abound. My favorite property in the area is actually not a condo; it’s a renovated, two-unit building at 3514-3516 Pierce. The owner renovated both units and are offering them as TICs. Both are 2BR/2BA units with dining rooms, wood-burning fireplaces, and two-car parking. While the lower unit has 1340 square feet, the upper has 1,535 square feet, plus a 470-square foot, exclusive use roof deck with an outdoor kitchen and, of course, Golden Gate Bridge views. 86 days on the market and counting. At the right price, this TIC arrangement could be a nice deal.

New Listing: 590 6th Street #309

lr1One of the benefits to writing a blog is being able to showcase my own listings. Welcome to 590 6th Street #309, an absolutely beautiful, pristine 2BR/2BA loft located at 6th and Brannan, in the highly regarded Flower Market Loft building.

The property includes a loft area that’s perfect for a home office, a deeded patio, in-unit washer/dryer, plasma-screen television, one-car parking and storage. List price is $714,000, and I will be hosting our first open house this Sunday, February 15th from 2:00-4:00PM. Stop in if you are in the neighborhood!

What You Can Buy for $300,000

Have prices fallen so significantly that the once unattainable $300,000 price range in San Francisco now has more to offer?

Here’s the breakdown:
Condos: There are currently 20 studio or one-bedroom units available in neighborhoods such as Merced Heights, Western Addition, Potrero Hill, Bayview, and South of Market.

TICS: There is a mix of one bedrooms in neighborhoods such as Mission Dolores, Hayes Valley, Mission, and South of Market.

Houses: Most available in this range are located in Bayview.

Teresita Trio Spices Up Miraloma Mkt

I took a look at three homes in Miraloma this week. Since I’ve sold two homes along Teresita and also have prospective buyers for the area, a trip was in order.

80teresita80 Teresita is a pleasant enough 3BR/2BA home, on a large lot. But at $1,125,000, I was expecting a remodeled kitchen and bathrooms. A couple comparison points: The most expensive 3BR/2BA home sold in Miraloma since November was 584 Teresita ($1,045,000), which wasn’t comparable in lot size but was nicely renovated. And over the past year, the 3BR/2BA average was $880,389.

526teresita526 Teresita’s got the whole Tudor-style thing happening, and there’s nice curb appeal. You’ll need to update the kitchen and bathroom in this 2BR/1BA home, but I liked the overall package here. List price is $749,000.

80 Marietta is the third home, and Teresita is its cross street. There are no photos online, so I can’t show you anything. Suffice to say it’s a 2BR/1BA property being sold in a trust sale. Kitchens and bathrooms are in need of updating, and there’s a large garage. List price is $719,000.

The average 2BR/1BA sold average in the past year was $752,171.

Shrader Snaps Into Contract

If you can look away from the gloom-and-doom media for a moment, allow me to tell you a quick tale about 1510-1512 Shrader, a two-unit building in Cole Valley.

First listed at $1.2M in September 2008, the property went into contract, fell out, and then was withdrawn in November. But it was relisted in January at $1.1M, and quickly went into contract within a week.

Given the fabulous Cole Valley location, overall good condition of the building, and agreeable tenants occupying one of the units, it’s not surprising that a smart buyer snatched up Shrader. For those savvy investors out there, the current San Francisco market has much to offer.

266 Romain: Twin Peaks Gem

As sellers adjust to the new economy, homes like 266 Romain come back on the market looking like the good deals they are.

Initially listed last Fall at $1.4M and withdrawn in December, 266 Romain is back on the market at a much more pleasing $1,150,000 list price. This 3BR/2BA home with bonus office space has almost 2,000 square feet, nice views, and a low-dollar termite report. There’s also a beautifully landscaped garden.

Though the location might be considered a bit remote, there’s a walking bridge that lets you cross Market and drops you down into Eureka Valley.

Take Your Pick of Luxury Properties

With 68 single-family homes and 37 condos listed at $2M or more, the San Francisco luxury market has a lot to offer. Unfortunately, there’s a limited number of individuals who can afford an average of $5,332,763 for a house, or $3,407,770 for a condo.

On the house front, neighborhoods rich in luxury properties are the usual suspects—the Marina, Pacific and Presidio Heights, Lake District, Russian Hill in the north end, and Noe Valley and St. Francis Wood on the south side of town. Most expensive properties in this category continue to be 2845 Broadway at $65M, on the market for 1069 days, and 2901 Broadway at $48M, on the market for $48M.

Luxury condo listings are dominated by the Four Seasons, St. Regis, and Ritz-Carlton. The most expensive condo listing? 2006 Washington #4 at Octavia, a 5BR/5.5BA unit with two-car parking priced at $15M and on the market for 127 days.

Condo Prices Adjust in New Year

The past month’s sales figures for citywide condos are an open window to the general state of the condo market in San Francisco. Of the 39 condos sold, 33 sold for less than the asking price. (These figures do not include new development sales, which are not published in the MLS)

However, the average sale price of $822,453 was nothing to sneeze at, though it does seem like condos are taking longer to sell. They averaged 87 days on market. Additionally, all but seven of the condos sold were under the $1M price point.