Monthly Archives: January 2011

Kicking Bike Safety Up a Notch in SF

It’s no secret that biking around San Francisco is fun—but isn’t always easy. In this month’s MarketTracker, we take a look at what’s in the works for improving bike safety in the city.

Plus, news on the mid-Market corridor, as well as what the heck is going on in the Mission with a certain restaurant owner’s properties. And the most recent sales across the city, too!

Read it all here in the February MarketTracker.

“Flipping” Makes a Comeback in San Francisco

It used to be that most buyers would meet with their agent and communicate that they’d be ready, willing and able to take on a fixer so they wouldn’t pay for someone else’s renovation. That approach has obviously declined in 2011. Because it looks like “flipping”–purchasing a fixer, renovating it and reselling at a profit–is alive and well again in the San Francisco market. Case in point: 3719 Folsom Street (above)  in Bernal Heights.

Sold only a few months ago in September 2010 as a fixer in a cash sale for $590,000, the property is back on the market for $849,000 and fully renovated, ready to flip.

There are still three bedrooms and two baths, but the house no longer looks like this:

It’s all spruced up with “solid hardwood floors, recessed lighting, landscaping, & stunning new kitchen & bathrooms w/ Grohe fixtures…that together create an overall design that is fresh & modern.”  The master suite has a dual vanity and custom glass rainshower. There are also pano views from the rear, and one-car parking.

The location on Folsom is good; the sellers obviously made the right call taking a chance on a flip here, because you can’t go wrong with proximity to a popular retail corridor. 3719 Folsom is one block from Cortland, and around the block from Maggie Mudd ice cream.

Contrary to buyers’ traditional apathy toward ponying up for a seller’s renovations (and profit), there are apparently lots of people interested in assuming ownership of this home. The listing office has distributed 16 disclosure packages. That means there are reportedly at least 16 separate buyers who are interested in submitting an offer, and who are potentially qualified to purchase home that’s asking almost $1M.

My guess is that the seller will end up with around seven or eight offers. So whoever says that flips are flopping in the current economy is wrong. I think there are plenty of financially secure buyers out there who don’t have the time or interest to do renovations themselves. And if the renovated home is well within their means and they like the property, they’ll make an offer.

Something for contractors and developers to keep in mind as we move through 2011. Readers, what do you think? Is paying for someone else’s renovation something you’d do?

Sutter Trio Searches for Buyers

For buyers looking to purchase a condo in Lower Pacific Heights, it’s possible to see three good possibilities on the Sutter corridor. I thought it would be fun to take a look at the trio that’s currently on the market:

1980 Sutter #317

The 2BR/2BA condo at 1980 Sutter #317 in The Amelia (a complex also shared with a 2185 Bush Street address) is a nicely remodeled home with just under 1300 square feet. The unit faces south, and features two decks and two skylights on the upper level. There’s also a washer/dryer and a wood-burning fireplace. HOA dues are $754/month, and include garage parking. The location of 1980 Sutter is prime Lower Pacific Heights, right on the Fillmore stretch. #317 was on the market at $795,000 in late 2010 and was withdrawn before coming on the market again in mid January for $775,000. It last sold for $820,000 in 2006.

2609 Sutter #3

2609 Sutter #3  is a top-floor, 3BR/1BA condo with 1,690 square feet and one-car parking. Though the building is closer to the Laurel Heights area vs. the Fillmore epicenter, there’s a private deck with city views and obviously more space for the money. HOA dues are $350/month. List price is $799,000.

2488 Sutter

Though this unit recently went into contract, I included it in the event something falls out and a good opportunity arises for a buyer. The 2BR/2BA, two-level condo has about 1,600 square feet and one-car parking, and is very well appointed. There are two master suites on separate floors (great for those who want guest space) and 18′ ceilings. The building was constructed in 2000, and HOA dues are a low $173/month. The downside to this location is that it’s a block from the local housing projects, which is probably why the unit was on the market a while (initially at $999,999) before it finally went into contract with a list price of $899,000. The previous sale occurred in 2004 for $879,000.

How’s The Market In: Hayes Valley

For urban dwellers who want to be right in the middle of everything, Hayes Valley has an awful lot to offer. It’s one of the go-to neighborhoods I recommend when meeting with new buyer clients who tell me they need to be in close proximity to public transportation, restaurants, services, and parks.

Hayes Valley is bordered by a laundry list of similarly desirable neighborhoods: Alamo Square; Western Addition; the theatre and cultural district, South of Market; Mission Dolores; Duboce Triangle; Buena Vista/Ashbury Heights; the Haight and NoPa. Here’s a quick look at the ‘hood, courtesy of Google Maps:

Hayes Valley is host to a mix of young professional homeowners, renters and long-time property owners. Though it’s not typically a destination for young families, I’ve had many clients purchase condos in the area and have children there within a couple years. They end up staying a while and not fleeing to the East Bay because of the quintessential San Francisco architecture and characteristics of the neighborhood. Single-family houses tend to be very large in Hayes Valley, and there are plenty of condos and multi-unit buildings, as well.

Hayes Street between Laguna and Franklin is the epicenter of Hayes Valley. It features some of my favorite restaurants such as Absinthe, Italian standby Caffe Delle Stelle, Suppenkuche, and Bar Jules. (I could go on, but this isn’t a restaurant guide.) In short, there’s a reason I believe Hayes Valley is among the top five food neighborhoods in the city. 

Alongside those restaurants are clothing boutiques and specialty stores. For public transportation, you can walk over to Civic Center to catch Muni. If you’re closer to the Haight, the N and J are nearby off Duboce Park. The neighborhood is a magnet for cycling, as many of the prominent bike routes run through it. And let’s not forget that you’re right near the opera, symphony and ballet if you’d like to get your cultural fix.

The housing market has been fairly busy in Hayes Valley. For the most part in 2010, condos were limited to resales. However, the LindenHayes new development at Hayes and Franklin sold all of its 32 units last year. That was about the only new construction in the area. The rest were resales in a blend of contemporary or Edwardian/Victorian properties.

A total of nine condos have sold in Hayes Valley since September 2010, at an average of $702,500. The most expensive was a 3BR/2BA unit with 2075 square feet and two-car parking on Waller, which sold for $1,260,000. There are currently five condos on the market, with the newest being 252 Waller. That’s a top-floor 3BR/2BA Victorian unit with 1761 square feet and one-car parking listed at $895,000.

Only 11 single-family homes sold in 2010 in Hayes Valley. The average sales price was $1,557,318, with the most expensive being 50 Carmelita. This renovated property sold for $2.5M in early 2010, and did so within a month. Houses in Hayes Valley tend to be large and filled with period detail—two attributes that command top dollar.

I’m anticipating that the neighborhood will show strong sales in 2011, as more buyers get off the sidelines and take advantage of the inventory that will be for sale. Given all of Hayes Valley’s selling points, buyers will also find the area appealing from a resale value standpoint.

Can I Turn 2 Units into a Single-Family Home?

How easy it may be to convert a two-unit building into a single-family home with permits was a topic of discussion among my colleagues last week. As I’ve pondered this question for my own two-unit property, I thought there might be homeowners out there who are also curious about the possibilities.

The short answer: It’s a real challenge to get permission from the city for this sort of transformation. This is because the city ultimately does not want to lose housing stock—particularly when it comes to rental units.

One way to potentially get around this sentiment is if you can research your two units and prove that at some point in the building’s past, it was a single-family home. In this case, if you involve a perfect storm of attorneys, city planners, a permit expeditor and spend a lot of time and money, your single-family house dream may become a reality.

You will also have to to go through a public hearing before the Planning Commission.

For more on the subject, click here for the zoning code for the removal of dwelling units.

So there you have it. Don’t buy a two-unit building if a dealbreaker would be the fact that you will not be able to turn it into a single-family home. Some have raised the question about whether it’s a good idea to go ahead and create your house without city permission. My answer to that is that you probably won’t get far once the neighbors report substantial construction happening (work about which they were not notified).

And if you do slip through and physically complete your transformation, there will be a lot of  explaining to do if you decide to sell. This is the sort of thing that can really complicate a sale and result in very negative results for a seller.

Sellers Take Hits in the Heights

Two big sales closed last week, both for substantially less than their original asking prices. Though the sellers of these Cole Valley/Parnassus Heights and Buena Vista/Ashbury Heights properties were probably a bit deflated, I’m sure the homes’ buyers ended up feeling pretty snappy. Here’s how things went down:

226 Edgewood is a 4BR/4BA home (above) that hit the market at the end of October 2010 for $3.5M. The sellers did a price reduction in early December, resulting in a $3,150,000 list price. An offer was accepted shortly thereafter, and the final selling price was $2.9M.

Over in Buena Vista/Ashbury Heights, the 4BR/3BA home at 893 Ashbury came on the market in September 2010:

The initial list price was $1,795,000, and the sellers made a couple major price reductions in the ensuing months. The sale closed last week for $1,385,000. Seems about right for a home with no garage.

Trade-offs Key for House Hunters in Trying Times

I came across this toilet in what’s known as a “split bath” in San Francisco recently. For those of you who aren’t familiar with our Victorian- and Edwardian-era architecture, the floor plan often features a bathroom where the shower/tub and sink are located in one room, and the toilet is situated on the other side of a wall, in its own closet. A drawback to this arrangement is that you can’t wash your hands in that closet. This necessitates a visit to the room next door, which may not be convenient if someone is taking a shower.

The “smart toilet” above addresses that issue, though you find yourself standing over the toilet to wash your hands (not a big deal if you’re a guy). In any event, it’s a creative way to consolidate bathroom activities if you don’t have the money for a bathroom remodel at the moment.

This toilet got me to thinking about the types of tradeoffs buyers need to make in order to find homes within their price range. Given San Francisco’s diverse floor plans and architectural styles, nothing is very clear cut. Need a three bedroom but can only afford up to $700,000? Maybe the small room under the stairs really can serve as the office or guest room. Oh, and that kick-ass master suite you’re longing for? The one that usually appears at the $1.2M level? Well, you do have the undeveloped attic space you just saw in the $750,000 condo that may work as a great master. The list goes on.

Most buyers looking for a home in San Francisco are doing so because they appreciate the unique nature of our homes. If you want cookie cutter, ranch-style homes, for example, you’ll have to go to the Peninsula or East Bay for that. But if you’re creative enough—and you let your agent know exactly what functionality you need in your next home—everyone can approach your house hunt in a more strategic and successful way.

You may not be dreaming about washing your hands over the toilet. But you very well could be fantasizing about an easy commute, restaurants within two blocks of your condo, and walking the dogs in the park a few blocks away. For the foreseeable future, buyers need to be flexible and open minded about what they can truly afford.

Preview: Nob Hill 2BR/2BA for $799,000

I previewed a nice condo at 66 Bernard Street #1 in Nob Hill this morning on our Zephyr broker tour.

Located on the first floor of a three-unit building, the property has 2BR/2BA, a deeded private patio and one-car parking. It’s not a huge property–square footage clocks in at just under 1,000 square feet. However, you get a master suite, remodeled kitchen, living room/dining area with deck, and a wood-burning fireplace. Plus, HOA dues are only $200/month and the building was constructed in 1987—so it’s as modern as it gets in Nob Hill without being completely new construction.

#1 was last sold in 2005 for $825,000, so the list price this time around takes the current market into consideration.

For those of you unfamiliar with where Bernard is, click here.  It’s on the Russian/Nob Hill border and you’re therefore close to North Beach, downtown and Telegraph Hill. There are plenty of services and shops nearby, and the Walk Score is 91. Give me a call if you’d like to see 66 Bernard #1, and I can get you in before the property officially hits the market.

Update: This unit was reduced at the end of January to $759,000.

What You Can Buy for $800,000

The under-$1M price range is the most popular in San Francisco, so we’re taking a look today at what you can purchase at the $800,000 level:

2600 18th Street #20
Inner Mission

2600 18th St #20 is a very spacious, tri-level loft with Twin Peaks views. There are two master suites, and easy access to the common roof deck. HOA dues are $412/mo and there are 24 units in the building. You’re within walking distance of cafes and restaurants, and the Potrero Safeway is a few blocks away.

1522 9th Avenue
Inner Sunset

1522 9th Avenue is a good example of the level of house you’re likely to get at this price point in the Inner Sunset. This two-story Edwardian needs some updating, but it’s perfectly liveable as is. There’s a formal dining room on the main level, and four bedrooms are upstairs (with only one bath; therein lies part of the reason for a good update). Muni and the Irving Street corridor are three blocks north, and one more block will lead you in to Golden Gate Park. There’s a low ($3500) termite report on file.

1182 Greenwich
Russian Hill

1182 Greenwich is located in prime Russian Hill. The condo features 2BR/2BA, and parking is leased for $300 two blocks away. The property is on the first floor of a four-unit building and has been somewhat hiply remodeled (not resembling what you’d expect in a 1906-era building). HOA dues are $300/mo.

Richmond Buyers Bag Holiday Deal

The sale during Christmas week at 747 14th Avenue in the Richmond proves that it’s sometimes worth persisting in your house hunt through the holidays. Originally listed in June 2010 for $1,625,000, the 4BR/3.5BA home overlooking the Park Presidio greenery found no immediate buyers.

A couple of price reductions in September led to a $1,495,000 list price. But still no takers. However, by Thanksgiving, the house was in contract. And it sold on December 21st for $1,435,000—quite a hefty reduction from what the sellers were asking.

Not bad for a 3,000 square foot house in a desirable part of the Richmond. Keep it in mind if you see a home you really like that’s out of your price range (or that’s listed for more than you want to pay.)  The sellers may not be ready to take substantially less than asking right away, but there could be a time and place when some negotiating is acceptable. That’s when the term “good deal” comes into play.

Noe Valley Teardown is Back Up

It was 2005 when the small single-family home above at 1409 Sanchez in Upper Noe sold for $868,000 as a major fixer/teardown. Three years later, it was sold through a short sale for $870,000, and then came back on the market in 2009 for $970,000—and ultimately, for $895,000—as a “ready to break ground building project” for two units. The listing was withdrawn, but the development moved ahead.

Just listed at $2,575,000 as a 5BR/5.5BA single-family home (or two condos), here’s what we have today at 1409-1411 Sanchez:

Loaded with everything the discerning tech family will need (radiant heat, networked audio systems, media room with 105″ screen), the latest incarnation of this property also features high-end finishes and views. The lot isn’t huge, but there’s enough of a patio and yard for the kids & the dog. And maybe the next owner can get a little more creative with the exterior paint job. Marketing this property as a single-family home or two condos is an interesting one. I thought the lower unit’s efficiency kitchen was pretty skimpy for the $1,150,000 price tag, and the subterranean bedrooms are on the dark side (though the home theatre is pretty cool).

I liked the upper unit, but the lack of a good dining area may chip away at the $1,425,000 price tag. However, direct access to the roof deck is sweet.

The Five Biggest Reported San Francisco Sales of 2010

Sixteen properties were reported as sold in the MLS for more than $5M in San Francisco in 2010. (Though there are a fair amount of homes which sell off market in the upper price ranges.) Here’s a look at the most expensive ones listed in the MLS:

1. 2342 Broadway
List price: $14M
Sold: $13.5M

Renovated to take advantage of the Bay, Alcatraz and Golden Gate Bridge views, 2342 Broadway is a 4BR/6BA home with a spa, gardens, terraces and loggia for outdoor entertaining. It’s situated right near the most prestigious schools in the city.

2. 2935 Pacific
List price: $12.9M
Sold: $11.5M

This 8BR/7BA home was under development for almost a decade, and was on the market for 278 days before it sold. Included are a family apartment, elevator, and 2500-square foot roof terrace with outdoor kitchen and hot tub/shower. 2935 Pacific features a facade composed of French limestone. The buyer paid cash for the property.

3. 2939 Vallejo
List price: $8.5M
Sold: $9.5M

2939 Vallejo went on the market in September and was pending by mid November. The 4BR/5.5BA home was sold together with the lot at 2921 Vallejo. (Price for the lot was listed at $2,250,000.) The cul-de-sac location bordering the Presidio and Lyon Street steps is prime, and the same family had resided there since 1981.

4. 2830 Pacific
List price: $9,995,000
Sold: $8,350,000

2830 Pacific was the site of the 2009 Decorator Showcase, and boasts 7BRs/6BAs, a ballroom, pent room with terrace on all four sides, and Golden Gate Bridge views. The sellers provided a lease with the option to buy.

5. 2831 Divisadero
List price: $8.5M
Sold: $7,581,250

2831 Divisadero was technically not the fifth biggest sale of the year. That honor actually goes to 2350 Broadway, which was sold off market for $7.8M. But the Divisadero property was right up there in price. Newly constructed in 1992, the home has 5BRs/5BAs across four levels and bedroom suites with Bay/Alcatraz/Bridge views. There’s also a home theatre and elevator to all levels.

A few off-market sales were found at:

2600 Pacific   $15.5M
2786 Broadway $12,759,000
3311 Pacific $11.7M

My Ten SF Real Estate Predictions for 2011

Now that we’ve slammed the lid on 2010, it’s time to look at the year ahead. I thought I’d gaze into my Realtor’s crystal ball—the black one with the “8” on it—and let loose:

1. Inventory will remain high all year. Loans still aren’t easy to obtain with less than 20% down, so the buyer pool is still narrower than it once was. And many sellers are having a difficult time adjusting to market realities when it comes to price (as the more than 3200 expired/withdrawn single-family home, condo and TIC listings in 2010 indicated).

2. Sideline buyers will take action. Everyone who stood on the sidelines throughout 2009 and 2010 waiting for prices to fall significantly in the city will realize that opportunities are passing them by. They’ll check in with their lenders in January or February, get a realistic price range, and will be out by Spring looking at open houses.

3. Condo conversion will get slightly easier. Our Board of Supervisors gets a facelift this January, and many incoming Supervisors are a lot friendlier toward homeowners. First order of business will be baby steps toward increasing the number of units that win the right to condo convert from tenancy-in-common (TIC) ownership.

4. SoMa will get even hotter. Things cooled off for a while South of Market. The neighborhood had its share of condos and lofts in foreclosure, properties with water intrusion issues, and HOA litigation. But with a limited number of new developments on tap for San Francisco and buyers looking for deals, it’ll be natural for them to turn to SoMa. HOA dues are lower than that of pricier South Beach and Mission Bay, and new businesses and restaurants continue to proliferate. (Thank you, Bar Agricole and Zero Zero.)

5. The $400,000-$900,000 price range will rule. It certainly did last year, when 1600 of the 1692 condos sold were in this range. Expect more of the same.

6. Properties with leased parking will sell. The rise of car-sharing availability in San Francisco has finally given some city dwellers an excuse not to have a car. A total of 170 condos sold in 2010 without deeded parking, and I expect that number will increase this year.

7. Buyers and sellers will get creative. That 2,000-square foot, tenant-occupied Pacific Heights TIC that couldn’t sell in 2007? It’ll get the green light this year, maybe with buyers who can live with a few tradeoffs and sellers who can throw seller-financing into the mix (for example). With financing still a challenge to obtain, 2011 will witness the sale of many properties that won’t necessarily have all the amenities.

8. Flips will fade. There was some flip activity last year, but most people who purchased property last year didn’t do so to make a profit. Those who did so more than likely didn’t make nearly as much money as the effort was worth, or lost money in the end.

9. America’s Cup? World Series Champions in the hood? Pied-a-terre sales will pick up. Those who have been sitting on their money since the most recent stock market crash will figure out that a reasonably sized condo in a walkable neighborhood will be an excellent way to invest. Expect sales in South Beach, Yerba Buena and Mission Bay to bump up, with special thanks to the San Francisco Giants. And who wouldn’t want to use their view pied-a-terre to watch the America’s Cup in 2013?

10. The ultra-luxury market will flourish. There’s lots of international money pouring into San Francisco, and much of it goes toward real estate. A total of 230 houses and condos sold for more than $2M in 2010 (twelve of which sold for more than $5M), and I’m betting that number will double by the end of 2011.

Roller Coaster Real Estate in 2010

The San Francisco housing market had its major ups and downs in 2010.  The good news is that interest rates remained low and sales volumes increased over 2009. In many cases, buyers were pleased with the values they were getting, and sellers were happy to complete a sale and move on.

But there were also plenty of homes that went unsold, or managed to get in contract and then fall out. I’m hard pressed to find an agent who hasn’t had to cancel at least one escrow this year. “BOM” (back on market) became a common refrain.

In the end, though, 2010 was a reasonable year in spite of our country’s continued economic woes. A total of 2,268 houses, 1962 condos and 269 TICs sold last year—slight increases above 2009 volumes. And in the last quarter of 2010, the numbers and averages were certainly respectable, with 566 houses selling at an average of $1,009,585. Only 438 condos sold (condos typically outsell houses) at an average of $768,313. And even 60 TICs changed hands, at an average of $576,802.

Going into 2011, there are almost 200 houses pending (meaning they’re in contract with all buyer contingencies removed), but only 15 are above the $1M mark. Add to that 140 condos and TICs, and you have a good start to the year. (And hopefully, the 166 houses; 172 condos; and 45 TICs in contract and waiting for buyers to remove contingencies will come to fruition.)

What made me stand up and take notice was the volume of expired and withdrawn listings last year. A whopping 1197 houses, 1497 condos and 533 TICs were reported in these categories. This real estate roadkill definitely sends a message to sellers, who should not reach for the stars when it comes to exceeding reasonable comparative sales levels for property types and neighborhoods.

San Francisco was no stranger to foreclosure activity in 2010. A total of 741 properties were listed as being in pre-foreclosure (not necessarily with notices of default). And 766 were listed as bank owned. Yes, there could be an impact on city home prices, but a look at the addresses involved tells me that many are not in what you’d call prime San Francisco locations.

Get in touch:

Eileen Bermingham

Zephyr Real Estate


BRE# 01352627

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