Lending World Lurches On

We had quite a spirited discussion in the Pacific Union Market Watch meeting this morning about loans, escrows, and new lender regulations. In a nutshell, it’s key that buyers and sellers set their expectations for delayed or even cancelled escrows.

Though loans funding smoothly in 30 days or less used to be the norm, there’s a landmine of issues to navigate in the current market. And that’s slowing everything down. There’s the lender who funded a loan and then reversed the wire to the title company on the day escrow was scheduled to close, subsequently deciding not to fund. Banks are requiring multiple appraisal reviews, which are sometimes resulting in denied loans. Loans are being rejected due to a particular property characteristic (i.e., an unwarranted unit). A second loan review is often being ordered shortly before closing, delaying the close of escrow. Even buyers with as much as 50% down are enduring the scrutiny.

And to add to the fun, Regulation Z—which implements the federal Truth in Lending Act—takes effect today. This regulation will impose timing restrictions and disclosure requirements that may affect the speed with which buyers can secure their loans at any financial institution.

What it all boils down to is that buyers and sellers need to be prepared for serious delays in closing transactions. My advice these days to clients is not to count on a sale closing on time. In other words, if you’re in contract on a purchase that is dependent on your home first selling, you might want to consider renting in the interim and pursuing a purchase after you have your sale proceeds in hand.

And buyers moving from a rental to a new home may want to consider delaying giving notice to their landlord until, well, their purchase sale closes. That might mean paying an extra month’s worth of rent, but the alternative could be joining the ranks of the homeless if your loan doesn’t close until two weeks after the initial close of escrow.

Living the Life of Luxury at the Fairmont Heritage Place

maseratiFor the out-of-towners dreaming of the luxury life in San Francisco comes the Fairmont Heritage Place, Ghirardelli Square.

The development is located on North Point and Polk, and features 53 one-, two-, and three-bedroom vacation residences sold through fractional ownership. For example, the one-bedroom listed in the MLS being offered at $185,400 entitles you to stay a certain number of days per year. HOA dues for this interest are $675 per month. A 2BR/2BA interest ($830 HOAs) is listed at $276,187; a 3BR/3BA with $967 HOAs is being offered at $377,407.

Along with the touted high-end finishes and luxe design, you get a long list of amenities—not the least of which is a Maserati Quattroporte (above) as your house car. Tool around in that while the housekeeping staff is cleaning your unit and you’re on the horn with your Fairmont-supplied personal shopper or scheduling an in-residence dinner cooked by a private chef. Economic crisis, be damned. Take the Maserati up to the top of Twin Peaks and crack open a bottle of Cristal. Everybody’s doing it.

Sold: 2074 45th Avenue

2074 45thAve LR1My 3BR/1BA listing in the Outer Parkside sold on Wednesday for $673,500. List price was $668,000, and we received a total of four offers.

Good news for buyers out there: The new owners of 45th Avenue came in with 3% down and obtained an FHA loan. The transaction went through without a hitch. This is the second sale I’ve closed over the past several months that involved an FHA loan. I haven’t encountered problems yet, despite what you’d think in the current economy.

2nd Quarter Averages Hold Up

It’s always helpful to check in on quarterly price averages and market activity in San Francisco.

First off, prices are down. However, properties are selling fairly briskly, and the single-family homes, condos and TICs located in desirable, centrally located areas are not exactly being given away.

Here are the basics:
Single-Family Homes
# Sold: 541
Avge Price: $1,022,238*
Avge Price Per Sq Ft: $529
*There are at least 23 homes which sold between $2M-$6M in which confidential sales were requested. So the average would be altered if those sales details were reported.

Most Expensive House Sold:
2712 Broadway
7BR, 7,000-square foot home listed at $7,750,000.

Least Expensive House Sold:
1348 Palou
3BR house in Bayview, sold for $220,000 in a short sale.

Condos
# Sold: 386
Avge Price: $787,326
Avge Price Per Sq Ft: $610

Most Expensive Condo Sold:
1009 Francisco
4BR condo sold for $5.5M.

Least Expensive Condo Sold:
195 7th #410
A 341-square foot unit sold for $232,000 in SoMa.

TICs
# Sold: 102
Avge Price: $600,837
Avge Price Per Sq Ft: $571

Most Expensive TIC Sold:
1549 Francisco
2BR condo sold for $1.4M.

Least Expensive TIC Sold:
2725 Harrison
1BR unit sold for $230,000.

Single-Family Smackdown: 440 Teresita vs. 847 Oak

It’s time to pick your favorite between two very different houses in the $1.2M range.

In one corner, we have 440 Teresita, in Miraloma Park:440teresita

This 3BR/2BA, 2200-square foot property has a whole Miami Beach thing going on—though ironically, I think it’d be out of place in Miami Beach. There seems to be a disconnect between the interior style and the exterior (with the exception of pastel paint colors). You’re not far from the Mollie Stone’s/Portola corridor, but as you’d imagine for Miraloma, the Walk Score is only a 77. But the large lot is a huge plus. List price: $1.2M.

847 Oak sits squarely in the other corner:oak

This 3BR/1.5BA, 2200-square foot Victorian is the quintessential San Francisco property. The architect-owner has done a superb job updating the home. Yes, it’s located on Oak, a notoriously busy Hayes Valley street. But if must have an iconic single-family home, this could be for you. There’s also the 92 Walk Score to crow about. List price: $1,175,000.

So which is it, readers?

38 Lusk #1 Gets Jiggy with the Price

luskliving
A one-bedroom loft at 38 Lusk #1 just came on the market, for a cool and rather extraordinary price of $1,499,000.

Is it the two-car tandem parking, remodeled kitchen and baths, enclosed “extra” room for guests/office/dining, or small terrace that are jacking the list price up well above where normalcy would reign? Maybe it’s the fact that the location is more South Beach than SoMa (between Townsend and Brannan, and Third & Fourth Streets). Even so, I’m not sure where $1.5M for this space has any bearing. (Size is a matter of opinion; square footage is showing 1359 in the tax records, but a “prior listing agent” measured 1850.)

#1 has had a busy recent past. In August ’03, it sold for $948,000, followed by a sale in April ’06 for $875,000. And then in May ’08, the current buyers paid $1,250,000, when the unit was in its post-remodel phase.

So the current sellers are counting on $250,000 worth of appreciation in a little over a year…in South of Market, which has been one of the hardest-hit neighborhoods in the loan crisis.

I leave you with a shot of the high-end kitchen, which would work for me because I don’t have kids and my dogs don’t put paw prints on surfaces:
38lusk

Hayes Valley 3BR/1.5BA for under $1.2M

847oakThe classic Victorian over at 847 Oak features almost 3,000 square feet of living space and three levels. My favorite room is the French Country kitchen, which involves a handmade tile backsplash, built-in breakfast bar and honed granite countertops. The door from the kitchen leads out to a deck and peaceful garden patio. There are three good-sized bedrooms and a bathroom upstairs, with the master bedroom located at the rear of the property. And let’s not forget the two fireplaces, or the bonus room on the garage level.

Compared to other properties of this scale and appeal, the $1,175,000 list price seems very reasonable. The biggest drawback is the fact that Oak is a very busy street in terms of traffic. But once you’re inside the house, it’s pretty quiet. You’re a short walk from both Alamo Square and Duboce Park, and the house is getting a 92 Walk Score. Check it out if you’re a buyer looking for a lot of space with quintessential San Francisco architecture, in a hip location.