Attack of the $1M+ Condos

Is it just me, or are there an awful lot of luxury condos on the market right now?

There are currently 143 condos available in the $1M+ price range, according to the San Francisco Association of Realtors (SFAR) MLS. And of these, 66 are in the $1M-$1.3M range. A total of 27 condos are priced from $2M-$7,350,000.

SoMa and South Beach have the bulk of the inventory, with a whopping 50 condos in the $1M+ range. If you’re a seller in this category, it might be time to revisit your pricing and competition. And buyers, work those negotiations; it’s definitely your market in these neighborhoods.

And that most expensive, $7,350,000 condo? The 3BR penthouse at The Infinity.

Spring Inventory Spikes in San Francisco

I’ve been asked lately about whether there are more properties on the market, now that Spring has arrived. And the answer is–yes.

Real estate in the city seems to be folllowing in the usual footsteps created by seasonal human behavior. Sellers believe their homes show better in nicer weather, school is winding down and it’s time for a move. Buyers are happier to be outside and stopping in at open houses, and feel they can put time aside over the summer to move.

Indeed, over the past week, a total of 64 houses, 73 condos and 14 TICs came on the market. Agents are reporting higher open house traffic, and the number of ratified transactions is climbing at my offices. The second quarter of this year has got to be better than that of 2009, when only nine single-family homes, 10 condos and one TIC were reported sold. I know. Those were pretty abysmal, though not surprising, numbers. Here’s to a better second quarter in 2010.

Haight House Morphs into Luxury Condos on Page Street

The 2BR/1BA house at 1860 Page Street (above) was officially sold in 2003 for $675,000. It appears that permits were issued sometime in 2007 for constructing four units on the site. And it now looks like the project is done:

There are now four luxury condos in a modernist building on Page at Shrader, from a $449,000 garden-level studio to a 3BR/2BA listed at $1,089,000 (the other two 3BR/2BAs are priced at $1,049,000 and $1,059,000). All the bells and whistles are there—radiant heat, “professional” kitchens, white oak flooring, Marvin windows and full marble baths. Let’s not also forget the double crown molding, open living/dining areas with stone-mantled, gas-burning fireplaces, and custom paint.

First open next week, but contact me if you’d like to get in sooner.

Bathroom a Mind Blower in Russian Hill

The 1940s, art deco building over at 60 Bret Harte Terrace boasts one hip guest bath (above). Kinda makes you feel like you’re taking a break from the dance floor.

And the rest of the 2BR/2BA, 1,851-square foot condo on the very cute Bret Harte Terrace is pretty nice, too. There’s a “grand-scale” living room that faces the bay, chef’s kitchen and spa-like master bath. There’s also one-car tandem parking. List price is $1,295,000, and the unit last sold in 2006 for $1.1M.

Open Sunday, 2-4.

GreenFinanceSF Saves Homeowners "Money, Energy and Water"

Private property owners in San Francisco can now finance energy/water efficiency and renewable energy improvements through homes and businesses through the GreenFinanceSF program.

If the property owner is approved for financing, the city will issue payment for the upfront cost of the project, plus interest through a voluntary special tax for the life of the financed improvements (up to 20 years). If the property is sold, both the property improvements and the remaining debt stay with the property and are passed on to the new owner. So make sure you disclose any unpaid “green” debts when you eventually sell your property.

Check out the program, it’s great for things like replacing windows and upgrading heating systems.

SFGate: Foreclosure Activity Down in First Quarter

I spoke with the San Francisco Chronicle’s Robert Selna yesterday about the foreclosure activity I’ve been seeing in the San Francisco market. The upshot of the story: Fewer homeowners in the Bay Area and California are headed down the path toward official foreclosure in the first three months of 2010 compared with the prior quarter and with a year ago.

As I maintained in the article, I’m not seeing a wave of foreclosures on tap in the city that will dramatically affect home prices. Of course, there will be foreclosure and short sales popping up, but compared with the overall number of homes that sell in a given year, the foreclosure numbers are fairly small.

Read the full Chronicle article here.

HOA Delinquencies on the Rise

One of the trends in condo living that I’m seeing is the rise in delinquent homeowners association (HOA) dues. This has become more of an issue over the past three years, as foreclosures and short sales result in HOA members stop paying dues.

The result of HOA delinquencies, unfortunately, is that the HOA financial reserves can become deficient and unable to keep up with operating costs or building repairs. This is particularly important in older buildings that, say, will need a new roof in the next year, or will require extensive elevator repairs. If the HOA reserves will barely cover the basic operating expenses outlined in the budget, it’s likely that residents will have to vote on and execute a special assessment for a large expense, thus increasing costs unexpectedly.

Additionally, HOA members sometimes end up deciding to cover another unit’s dues. Something like $450/mo split among 25 units doesn’t seem like much. But if it has to be done for several months—or for more than one unit—the bills can start adding up. Either way, delinquent HOA dues can potentially create out-of-pocket costs.

If you’re considering a condo purchase in a particular building, review the financials—budget and reserve amounts—as well as HOA meeting minutes. Those documents will give you a sense for whether the association is operating in the red, black or somewhere in between. The meeting minutes typically will give you insight into impending problems. And have your agent check out the property for foreclosure activity (preforeclosure and otherwise), which is information that’s been available for a while.

SoMa "Crash Pad" Launches Spring Studio Season

Touted as “the ultimate crash pad,” the 497-square foot studio at 74 New Montgomery #212 has high ceilings, high-end finishes, in-unit laundry, and access to a roof deck with great city outlooks and a bbq area. The unit is listed at $442,000, with HOA dues of $635/mo and optional, leased parking available next door for $475/mo. To soften the blow, the seller will be offering a year’s worth of HOA dues and parking that are leftover from his initial purchase.

The New Montgomery studio is definitely in a prime location for buyers looking for a place to hang their hat in an extremely walkable, central location. (The building has a 100 Walk Score.) It’s half a block from Market Street and all the public transportation options there, as well as a quick jog over to the freeway. And you’re smack dab in the middle of an area with a multitude of restaurants, gyms and other businesses that define the word convenience. And oh, yeah, if you work downtown, you can walk to work. The fact that 74 New Montgomery is approved for FHA loans makes things even easier.

The studio market in San Francisco has picked up lately, with 53 units currently available at an average price of $366,780. And 39 studios have sold in the city since October 2009, at an average of $331,610 (avge $610/sq foot, and 523 sq feet). If you’re open to a studio, my advice is to pick one in a fabulous location and make your life a little easier.

Open House Spotlight: 226 Ritch #302

The weather’s supposed to be pretty nice this weekend, so head on over to the open house at 226 Ritch Street, on the border of SoMa and South Beach. I’ve always been a fan of Ritch Street’s location, as it’s right around the corner from South Park and near some cool restaurants like Bacar, Brickhouse, Tres Agaves, and bars like District. You’re kind of far enough away from freeway overpasses, yet close enough to the ballpark without being wildly impacted by the traffic and crowds that populate the area during baseball season.

But back to unit #302. Two bedrooms, two baths, 1742 square feet (!), four decks, and a huge master suite. List price: $789,000 (that’s $453/sq foot). Even better, the unit last sold for $565,000 in 2001, so it doesn’t appear there will be any financial distress in this sale.

Open 2-4 on Sunday.

Hayes Valley House on Grove Gets Picked Up By Cash Buyer

I toured 554 Grove in Hayes Valley shortly after it came on the market in mid March. The 3BR/2BA, tunnel-entry house had an original kitchen/bath, master suite on the garage level and about 1684 square feet. The termite report was around $7500, and the windows and roof needed some attention. List price was $799,000, which was comparable with condo prices in the area.

One drawback was the house next door—a sort of ramshackle building set back from the sidewalk and filled with cars in the front of its lot. But the location, on Grove between Laguna and Octavia, is just around the block from the heart of Hayes Valley.

Obviously, a buyer liked everything about the property enough to purchase it for $930,000, in an all-cash transaction. So that gives you an idea as to what you can expect to pay for a standalone, single-family home of this size and condition. This is one of the smaller homes in the neighborhood, given that Hayes Valley tends to feature large Victorians or multi-unit buildings. If you’re looking for a condo, the average price for one in the first quarter was $750,929.

Buyer Target: Mission Bay Much More Affordable

The always-developing Mission Bay neighborhood has had its share of suffering in the housing recession over the past two or three years. It’s been said that a good chunk of homeowners in the area have been keeping the Assessor’s office busy, applying for reductions in property taxes due to fallen property values. All told, Mission Bay condos have lost anywhere of up to 20% of their value, depending on the unit size, outlook, building/amenities, and other relevant details.

Indeed, the average reported 2BR condo sale in Mission Bay was $1,084,973 in 2008, but that number declined to $846,787 in 2009. Of course, these numbers aren’t solidly representative of actual sales activity, as the many new developments in the area never reported sales via the Multiple Listing Service (MLS). What this all means is that Mission Bay provides buyers with a great opportunity right now.

There are currently 16 condos on the market in Mission Bay, with a bulk of them in The Beacon (250-260 King). However, there’s an 1175-square foot 2BR/2BA in one of my favorite buildings, The Radiance, listed at $749,000, as well as a 1268-sq foot 2BR/2BA at 255 Berry #606 listed at $869,000 (the latter likely a tad high in today’s market). And there are 23 Mission Bay condos currently in contract, at an average price of $545,405/$572 per sq foot. So it’s quite possible for all those first-time home buyers in the $500,000 ranges to find a decent property in what I believe is a very vibrant part of San Francisco.

State of the TIC Market: Q1 2010

It’s always interesting to check in on the tenancy-in-common (TIC) market in San Francisco. And it just so happens that this segment of the housing market continues to be very popular.

A total of 67 TIC interests sold in the January-March timeframe, at an average of $576,140. All but a handful were located within 3+ unit buildings. The least expensive was a standalone garden cottage on 7th Avenue in the Richmond, which sold for $250,000, and the most expensive was a 2BR/2BA TIC in a six-unit building in Cow Hollow. Hayes Valley, the Lake district, and Russian Hill led the way in sales volume.

The average price in Q1 2009 for the 49 TIC interests sold was $710,582. Prices have definitely come down since then.

There are currently 73 TICs in contract—a healthy number that bodes well for the next quarter’s sales. But 189 TIC interests are on the market right now. But with 702 condos also competing for buyers’ attention, it seems to me that the TIC market will slow down a bit in the Spring. I believe the Spring will bring out many new buyers—I’m getting referrals on a daily basis for new buyers aiming to make a purchase in the next three months—and most would rather take advantage of the lower condo prices than get involved in more complex ownership scenarios.

I think the TIC market has decreased in risk with the advent of fractional financing. However, the open question is how long fractional loans will be available, which may or may not bode well for those who own properties through this method of financing. Resale prospects are limited for TICs with fractional financing, as the pool of buyers that can qualify and afford fractional loan program is small.

If you find yourself considering a TIC purchase, please do yourself a favor and have an attorney review the TIC agreement and other critical documents before you remove your document review contingency. Work with your agent to investigate all the details so you know what to expect going in to the purchase. The bottom line is that TICs can work well for buyers who are looking to get into the more popular neighborhoods where condo prices have escalated. But it’s still important to do your due diligence at all turns.

Cool Stats for Q1 2010, San Francisco

Just got my hands on some great new stats for single-family homes, condos and TICs for the first quarter of San Francisco, so I thought I’d share them with you.

This will keep you busy while you hide from the rain this weekend. Here’s a breakdown of the median price by property type and key neighborhoods, as well as a drilll down on price categories, days on market, units sold, and much more:

Q1 2010 San Francisco Stats

A few observations: Prices are up a bit in some neighborhoods in comparison to this time last year. This is true of the Noe/Eureka Valley area, as well as the Richmond/Seacliff. But median prices have generally fallen a bit (most notably in the Nob/Russian/Telegraph Hill neighborhoods).

And the under-$1M price range was king in all property type categories. This range continues to be the most popular in San Francisco.

Mission Dolores Mega Home Returns to Market

The last time I tried to get in to see 48 Linda on broker tour in July 2008, the home had already been sold (for $2,205,000) before there was time to cancel the tour. There was nothing to do except walk back up the narrow street to my car and move to the next property.

Flash forward to April 2010, and 48 Linda is again on the market—this time for $2,249,000. Billed as a “4BR family home,” the property has 3,000 square feet, two-car parking, a minimalist fireplace, and nice finishes throughout:

For those doubters who think a family wouldn’t choose to take up residence in the heart of the Mission, I beg to differ. There is a contingent of young, wealthy and hip parents out there that would love to tote their kids to Tartine, appear at 5:00 to eat a family dinner at Farina, or quiet down a crying child with sea salt caramel ice cream at BiRite. Sure, it’s an urban area, but the house does have four bedrooms upstairs, a playroom downstairs, and I’m guessing it has a pretty kick-ass security system.

As the 21 Villa Terrace Turns

Featuring almost as many twists and turns in its floorplan as there are in its property history, 21 Villa Terrace hit the market again today.

The 4BR/4.5BA has four levels and 4,051 square feet, and was constructed in 2001 when it sold for $2,125,000. It then changed hands two years later for $1.9M. The current owners listed the home for $3,350,000 last year, and the price sunk to $2,950,000 before the listing expired. But it’s a new year, and 21 Villa Terrace is now listed at $2,795,000.

The home does have good space and fabulous views, but the kitchen is small and circular, and there are some odd angles involved:

As we’ve noted before, there are several luxury homes currently available in the Clarendon Heights/Twin Peaks area, so the competition is fierce. But I think that 21 Villa Terrace will work for a view hunter, as well as someone who needs a lot of square footage. Open Sunday, 2:00-4:00.