Washington Street Hits New Highs in March

Washington Street in Pacific and Presidio Heights was the site of the most expensive house and unit sales in March, as of this writing. I thought I’d take you through each property so you could get a sense for pricing in the luxury market these days in San Francisco.

3659 Washington was on the market for 27 days when it went into contract with its $7M list price:

The single-family house has 5BR/4.5BAs, 6,000+ square feet and kitchen/family room that opens directly to the garden. The “green” home has solar electric service, solar-assisted hot water, and has also undergone a massive seismic upgrade including a new foundation. Selling price: $6,650,000.

Just up the street at 2000 Washington, the most expensive unit sale of the month took place:

2000 Washington #5 is a 3BR/4.5BA coop in a seven-unit building situated at a Pacific Heights crest. That means there are views galore, as you can tell from the room above that is also filled with a sectional couch. The apartment was built in 1922 by noted architect C.A. Muesdorffer. Initially listed in late 2010, the unit was last listed at $6.8M and sold this month for $5,850,000. Monthly dues for #5 are $4,043.

#5’s neighbor at 2000 Washington #6 is currently on the market for $12M.

How’s The Market In: The Mission

Always a popular neighborhood with urban dwellers who want proximity to good public transportation and hot restaurants, the Mission is continuing to attract new homeowners. The area is a mix of multi-unit buildings and single-family homes, with some lofts and newer construction thrown in. Popular with tech workers who can catch shuttles to the Peninsula by day and cavort along Valencia by night, the Mission is the ultimate urban playground.

Here’s a look at the Mission and its geographical boundaries:

The key with the Mission is being relatively close to shops, restaurants and services. So the streets just off Valencia (or within a couple blocks’ walking distance) usually command higher prices. Additionally, the area around the new Union development on Bryant appears to be in transition mode. Not only did Union sell out rather quickly, but restaurants like Saison, Flour + Water and standby Universal Cafe draw diners from other parts of San Francisco.

Some neighborhoods in the city have definitely been knocked off their highs over the past couple of years. And the Mission has definitely had its soft spots–particularly in the outskirt areas. But a look at the latest stats reveals a pretty solid 2011 market so far.

A total of four houses has sold this year, at an average of $756,250. And 18 condos have changed hands at a $628,056 average. The most expensive unit sold was the $875,000 Victorian 3BR/2BA house with 1700+ square feet on Van Ness at 20th Street.

There are currently 14 condos and three single-family homes on the market, as well as 13 condos and three houses in contract. So it seems like the available condos are keeping pace with those going into contract.

Given that the average selling price points are right in line with the most popular price ranges in San Francisco ($400,000-$800,000), I expect the Mission to hold its own throughout 2011.

Smackdown: Mt. Davidson Manor vs Potrero Hill

I like smackdowns that not only pit neighborhoods against each other, but also specific property types. Today we have a single-family home in Mt. Davidson Manor competing with a condo in Potrero Hill. Both are in the $825,000-$850,000 price range. Which one do you want?

Cute house, don’t you think? 80 Pinehurst is a 2BR/1BA with a family room and second bath down (the latter two are unwarranted). Total square footage on the main level is just under 1500, and the bedrooms are very spacious. Built in 1929, 80 Pinehurst has many original details intact, such as parquet floors and arched windows. The rear deck functions as the yard, and there’s two-car parking. List price is $825,000.

You’re about one block off Ocean Avenue, which is where the K Muni runs. There are also a 24-Hour Fitness and cafe nearby. Lakeside Village is about eight blocks away, and Stonestown Galleria is a bit further. Downside is the weather; Mt. Davidson enjoys the fog. But for a house under the $1M price point, this is not a bad location.

We move over to 685 Carolina, which is back on the market after a brief stint in contract:

685 Carolina has a Marin feel, as it’s surrounded by trees and at the end of a cul-de-sac. For $849,000, you get three bedrooms and two bathrooms across two levels, as well as two-car parking (one in a private garage, another spot just outside). All three bedrooms are on the same level, and the master suite has great downtown views. The unit is located within the Victoria Mews complex, which was developed in 1978. Amenities in the 87-unit property include tennis courts, pool, gym, clubhouse and gardens with waterfall. HOA dues for 685 Carolina are $566 per month, which is about what you can expect with all the amenities included. The unit has been on the market since August 2010, and has yet to find a buyer.

The weather in Potrero is excellent, meaning that when the city is foggy, Potrero isn’t. (There’s a reason they decided that a pool would be useful in the complex.) I think this unit is a good fit for anyone who wants a spacious home in an area with good weather that’s also near the freeways.

So which home would you prefer?

Checking In At One Hawthorne

I’m on the board of the SF Young Professionals Network, a Realtors-only group that operates under the California and San Francisco Realtor Associations. We had a networking event at One Hawthorne last week, and I also had a chance to check out the remaining inventory in the building.

The 165-condo, 25-story property is about 30% sold out. Here’s a breakdown of what’s available:

Jr 1BRs: start at $469,000; HOA average is $515 (no parking available for these units). Square footage approx 487-794.

1BRs+den: start at $589,000; HOA average $540. Square footage approx 809-952. (I believe the 1BRs that are eligible for a parking space start at $659,000.)

2BRs + den: start in the high $800,000s; HOA average $630. Square footage approx 1241-1556.

There are also eight two- and three-bedroom penthouses (1560-1995 sq feet) that are located on the 24th and 25th floors.

There is a separate parking charge (valet parking only) of $273.51 for those units that are eligible for parking (mainly the 2BRs). So the target demographic for One Hawthorne is more of the downtown worker. Or, you can just arrange for a parking space.

So now that we have the basics out of the way, I’ll move on to the background. The first release at One Hawthorne was up to the seventh floor; they’re about 85% sold out of those homes. The second release took place a couple weeks ago that has provided inventory up to the 16th floor. Units above this floor have not yet been released. So most of the remaining units are above the 16th floor.

My most recent tour kicked off with the all-important roof deck:

There’s quite a view from up there. We moved to the tenth floor and walked through the models. I liked the finishes, which include Studio Becker soft-close cabinets, grey polished quartzite and limestone countertops, mosaic-tile backsplashes. Floorplans were very functional and spacious. I particularly liked unit 10C, the 2BR with nice city views listed at $1,135,000. Also quite appealing was unit 10A, with north views that’s listed at $749,000. The Jr 1BRs were pretty cramped; these would be best as pied-a-terres for folks who would rather have their own slice of the city vs a hotel room.

Services and amenities include the roof terrace with outdoor kitchenette, eating and dining areas, along with a fitness center (with outdoor terrace) and an attended lobby. There’s 24-hour valet parking (because how else could you get or drop off your car at 2AM?) and three high-speed elevators. HOAs pay for all this and more, such as water, gas, trash, exterior and interior building maintenance and a property management company.

I continue to like One Hawthorne, and am excited about the higher-floor releases. The building’s location allows for excellent north and south views. And I hear there’s definitely room to negotiate those list prices. So if you’re interested in taking a look, please contact me and I can arrange for a tour!

Here’s the Latest on FHA Condo Loans

There’s been a lot of discussion among my colleagues and buyer clients about what condos might be available to buyers with FHA loans. So I thought I’d share the highlights, based on my recent conversations with lenders.

FHA loans are relatively straightforward for single-family homes. But for those buyers who can afford a property in the $400,000 range, a single-family home is typically not an option unless these buyers are extremely flexible on location. So many buyers in this price range seek condos, which can be a little more restrictive and challenging to purchase with an FHA loan.

The FHA allows a maximum loan amount to $729,750, with a 3.5% down payment, according to Gil Mora at Bank of America. But many buyers end up borrowing far less than the maximum limit, which lands them in the condo price range.

There are two ways you can go with an FHA loan in this case:

1. Purchase a condo in an FHA-approved building. There are many buildings in San Francisco that are currently in this category. You can see the list by clicking here, selecting California in the state drop-down box, and typing in San Francisco in the city field.  About 25 buildings have resales on a regular basis, such as 199 New Montgomery, Symphony Towers, and certain Diamond Heights Village units. If you are interested in a unit within one of these FHA-approved buildings, things can be relatively smooth. However, some lenders will not grant FHA loans within buildings wherein more than, say, 30% of the units have been purchased by such loans. In Bank of America’s case, their temporary limit is 50%.

However, BofA will grant an exception if certain conditions are met (project is complete and not under construction; 100% of the units have been sold; no entity owns more than ten units in a large project or more than one unit in a smaller building; owner-occupancy ratio is at least 50 percent; control of the homeowners association is in control of the building; the building’s budget provides for the funding of replacement reserves for major expenditures in an account representing at least ten percent of the budget). So if you’re dealing with a building that’s not new construction, it’s likely you’ll be able to get the exception.

2. Write an offer on a condo and request approval for an FHA loan. Obtaining approval for a loan typically takes about two weeks, according to Gil Mora. Some lenders charge a fee for this process (BofA does not). It’s important to understand exactly what the FHA needs in order to approve a condo building. Here’s the current list that Gil shared with me:

HOA certification:  To verify presale, occupancy, completion, special assessments. This is a 12-page document that the property management company or HOA representative needs to fill out. There is sometimes a charge for completion.

Full condo name:  Condo ID and Association TAX ID number

Condominium declaration (recorded):  “AKA” Master Deed “AKA” CC&R’s.  Must be submitted as electronic PDF required

By-laws:  Executed copy required

Articles of incorporation:  Filed and endorsed copy required

Budget:  Proposed or Current Fiscal Year required with an itemized line reflecting 10% reserve allocation and all HOA financials

Reserve analysis:  Less than 12 months old.  Note:  Only required if budget does not reflect an itemized line for 10% allocation on the budget

Executed management agreement or Self Management Statement on the association letterhead

Evidence of insurance:  Hazard, Liability and Fidelity bond (AKA crime or employee dishonesty, 20 units or over need Fidelity Bond)

Condominium plat map:  That shows the exact location of the building and utilities on-site.  Map must include lot, block and plat number.  Recorded copy required.  Reduced 8.5 x 14 copies also required.

Condominium plan:  Recorded copy required (may be one in the same as Plat but if not, both are required)  Reduced 8.5 x 14 copy required.

FEMA flood map:  We will order at branch level

Litigation, if applicable:  Copy of Litigation and Attorney Summary.

As you can see, there’s quite a package of documentation required for FHA approval. It’s really critical that your real estate agent, listing agent, title company and lender are able to communicate frequently and easily in order to pull together everything necessary. FHA approval of the building will be, of course, tied to your financing contingency. So the faster your group is able to assemble the package and submit it to the FHA, the faster you’ll obtain approval and have your financing cleared.

It’s also key to understand that some of the aforementioned conditions and documents may not exist for smaller, more casually run buildings. For example, many two- to -four unit buildings don’t have much in reserves (and don’t have 10% of the budget in a reserve account), nor will they necessarily have a thorough budget or reserve study on hand. So if that’s the case, you may move on to a unit in a building that will be able to satisfy the FHA requirements.

Some Sellers Eventually Do Get Serious and Sell

Not every home that goes on the market is owned by sellers who are ready to part with their property. But eventually, certain factors may fall into place, and sellers hit upon that moment when they successfully work with an offer and accept it. Case in point last week was the sale at 2416 Gough (at Vallejo) in Pacific Heights.

The 6BR/3.5BA, 3500-square foot single-family home was listed in August 2010 for $2,775,000. (The property was last sold in July 2008 for $3,025,000.) After a series of price reductions, the list price ended up at $2,125,000, when it finally went into contract. The sale closed last week for $2,075,000.

But the sellers obviously had to move on, and the market dictated the price of this home. So buyers, if you see a property you like and it ends up sitting on the market, give it a shot and write an offer. If the first offer doesn’t succeed, circle back and try again if you think it’s worth it. That seller may finally be ready to sell.

What You Get For: $850,000

The $850,000 price range is one of the most popular in San Francisco. Buyers in this range are typically looking for either a house or a very centrally located condo or TIC. So I thought we’d take a look at one of each:

32 Sutro Heights Avenue, Outer Richmond

32 Sutro Heights is located in the Sutro Heights neighborhood of the Outer Richmond district. The area covers the blocks that surround Sutro Heights Park and the Cliff House. Homeowners in Sutro Heights like the proximity to the ocean and parks. This property has three bedrooms and two baths across 1,429 square feet, and features a well-appointed kitchen and master suite on the top level. There’s one-car parking, too. 32 Sutro Heights was sold for $805,000 in March 2010, and doesn’t appear to have undergone any changes in the interim.

4358 23rd Street, Noe Valley

4358 23rd Street is situated in a good Noe Valley location, just west of the heart of the 24th Street retail strip. The Victorian, top-floor unit has three bedrooms and one bathroom, with about 1138 square feet. There’s also a remodeled kitchen. HOAs are $300/month.  No parking, so you can be the judge of how easy street parking is in this location (it’s not that bad). Firefly retaurant is around the corner, as is the Douglass park. This home was sold for $810,000 in 2007.

2332 Greenwich, Cow Hollow

2332 Greenwich is a TIC in a two-unit building, which is the next best thing to a condo. It’s the lower of the two flats, and includes two bedrooms, one bath and 1267 square feet. I think this 1930s property has nice period detail and a very functional floor plan. There’s one-car parking under the building, as well as another space around the corner on Service Street in a separate structure. This unit has a private patio, as well as space in the rear of the garage to develop another room. This is an excellent location for buyers who want to be near either the Union or Chestnut street retail areas–plus, easy access to Marin and wine country. 2332 Greenwich was on the market last year for a much higher $950,000. But the price has come down since then, so it might be time to get a deal.

Walk Score Winners: West Portal, Sunset, Bernal

I made it a goal today to find three single-family houses with excellent Walk Scores. There are plenty of condos with great scores, but houses are sometimes a little more challenging. So here are three homes that’ll give you the shelter you need and also wean you off your car a little. (And please note that property links go to the corresponding Zephyr site page. These are not all Zephyr listings; we provide details on all properties, regardless of the brokerage. The reason I link to Zephyr is because in addition to providing property detail, we also feature neighborhood and market trend info that are pretty helpful.)

First up is 325 Wawona in West Portal:

325 Wawona has a whoppin’ 95 Walk Score, as it’s only half a block from the West Portal strip. The home also has an 81 Transit Score; the L line stops right nearby and takes you downtown. Listed at $1,090,000, 325 Wawona has 2BRs/2BAs, two-car parking and 1570 square feet. The owners bought the home in 2007 for $1,025,000 and stripped it down to the studs (with permits). The kitchen and baths have been remodeled, and the house is nicely done inside.

We move to the Inner Sunset, where 1291 5th Avenue has just come on the market:

1291 5th Avenue is steps away from Irving Street and has a 92 Walk Score. The 3BR/2.5BA Edwardian is listed at $1,249,000 and has loads of period detail. The kitchen has been remodeled and leads out to a sizeable yard, and all three bedrooms are upstairs. There’s a corner produce market literally next store, so if you need a quick shallot, you don’t have to go far. The 76 Transit Score means you’re right near the N Judah and multiple bus lines. And you’re only a few blocks from the heart of the 9th and Irving retail area, as well as Golden Gate Park.

Finally, we have 15 Eugenia in Bernal Heights:

The kitchen of this 4BR/4BA home listed at $1,195,000 is going over well with buyers. This is a bit higher than the normal Bernal price point, but the house is big (2380 square feet) and has two-car parking. The Walk Score is 91, and you’re about a half block from the Mission corridor (which translates into an 84 Transit Score). 15 Eugenia was purchased in 2005 for $965,000 and the current owners did extensive renovations. There’s a formal dining room, view deck, family room and huge master suite bath.

If you’re interested in seeing any of these homes, please don’t hesitate to contact me. I specialize in selling homes in central, walkable neighborhoods!

Make Sure Your Home Looks Good Online

Of all the decisions sellers need to make when they are getting ready to put their home on the market, property presentation is one of the most important. Yes, this is Real Estate 101, but based on the showing condition and photos of some homes I’ve recently seen, I believe it’s time for a refresher on this topic.

Take the photo above, for example. It’s one in a series of dismal and somewhat threatening photos of a property currently on the market. That’s the yard, which smacks of child abduction more than children playing. If you’re selling your house in today’s market, it’s critical to give it your best shot. You are competing for a narrower pool of buyers who are the only ones left able to get loans or pay in cash. If you skimp on property prep, staging and professional photography costs, a couple things will happen.

One result is that buyers won’t even visit your property. They’ll look at unfavorable photos online and move on to the next place. I know from my own buyer base that people are busy, have limited time to see homes, and only go to the ones that look good. Another result of poor presentation is that buyers will feel that if you’re skimping on presentation, they, too, can skimp on an offer price.

So do yourself a favor if you’re planning to put your home on the market this year: Do the best you can within your budget, and make sure you don’t have any Mystic River-esque photos in the MLS. Hire a Realtor who will put a bit of thought into how you can best position your home to attract the most qualified buyers possible. Combine those efforts with a reasonable price, and you’ll have the best possible chance of completing your sale.

The 8 Most Common TIC Group Disputes

The waiting time for condo conversion has lengthened from three or five years to more than 20 years over the past two decades. That’s a lot of waiting time for TIC owners who have gotten involved in shared ownership and its risks, thinking the arrangement would only be temporary. And unfortunately, some such owners have experienced their share of unexpected disputes among TIC partners. 

I thought it would be a good time to round up the most common TIC partner disputes, courtesy of my friends at Goldstein Gellman (G3MH).  Their recent FAQ on TIC Dispute Resolutions (1/11/11) was a great source of information that I thought I’d share. If you’re considering purchasing a TIC or are in contract to purchase one, make sure you pay attention to the following eight critical areas:

1. Noise and nuisance. Goldstein Gellman points out a very good fact about Victorian and Marina-style buildings, which are the most common TIC buildings in San Francisco. Sound transmission can be an issue. Though renters tend to be more tolerant of their neighbors, owners often have a heightened expectation of peace and quiet as their reward for paying mortgages and property taxes. Make sure everyone is clear on how much of those hardwood floors should be covered with area rugs, and whether you’d all prefer not to hear each others’ clanking heels across the floors.

2. Parking and storage. Make sure you all test your cars and examine the storage available—and are comfortable with the spaces that are “deeded” to you.  

3. Window maintenance. There are some common components of a building that are typically shared expenses (i.e., roof). Goldstein Gellman says that in TIC arrangements, it’s a common assumption that the individual owners are responsible for their own windows. If you and your group want to clear up any confusion, have the details spelled out in the TIC agreement.

4. Unbalanced TIC financing. There are cases in which a TIC group will buy its building with one partner paying all cash and the others using loans. With a shared mortgage, the all-cash partner could assume more risk than everyone else. Should the value of the TIC property decline to the point where the partner who purchased with a loan chooses to walk away from the loan and property, the all-cash partner could be stuck repaying the defaulting partner’s mortgage. Yikes.

5. Sale of TIC interests. Reselling your TIC interest depends on the ability of the entire group to refinance. Things can get messy if any of the other group members can’t qualify for the refinance.

6. Eligibility for condo conversion. Many TIC agreements require that the owners occupy their units until condo conversion is achieved. But if  a TIC partner moves out too soon, complications can ensue. The agreement may specify a certain amount of dollar damages owed to the other partners, or may not mention the subject at all. Goldstein Gellman says there’s no universally accepted standards as to the dollar value of the loss of anticipated condo status.

7. The post-condo conversion period. The more clearly your TIC agreement details items such as which unit gets a parking space or how conversion costs will be allocated, the less chance there will be of a dispute after the conversion happens. Another thing to note is the possibility that one TIC partner can’t qualify for a refinance into a condo loan. With a group loan, the entire balance must be paid off before any units can be deeded out to their respective owners (or sold to new buyers). If one partner can’t refinance, no one else can, either. Many TIC agreements include a provision forcing a partner to sell if he or she is unable to refinance. Of course, enforcing this provision is up for grabs.

8. Reserves. May TIC groups have agreements that mandate a reserve fund that can eventually be tapped for maintenance and repairs. The problem arises when TIC partners decide to adopt a pay-as-you-go arrangement, and no provision is made in the agreement for handling partners who are short on cash.

Smackdown: Eureka Valley vs Sea Cliff

When it comes to a single-family home search, buyers don’t typically consider the Castro or…Sea Cliff. For one thing, they’re two totally different neighborhoods both in character and geography, and for another, they typically aren’t parallel in price.

However, I found two homes currently on the market in these areas that are in the same price range. So I thought I’d serve up a single-family home smackdown. Which home would you prefer?

First up is 533 Noe, between 18th Street and Hancock in Eureka Valley:

This brand new listing has 4BRs/2.5BAs, as well as a family room. It’s about 2850 square feet and has a large one-car garage (or room for two small cars). The kitchen is comfortable and has an adjoining family room leading to a deck and garden:

533 Noe is located in the heart of Eureka Valley, and is in easy walking distance to all the shops, restaurants and public transportation in the Castro. List price is $1,895,000.

And in the opposite corner is 134 32nd Avenue:

Featuring 4BRs/3BAs and a free-standing garage that can also potentially accommodate two cars, this Edwardian home is listed at $1,849,000. It has four levels, and has a pentroom level with two decks, home office, family room and views of the Golden Gate Bridge, Presidio and city. There’s a lot of period detail woodwork, box-beamed ceilings, and a wood-burning fireplace with Craftsman-era wood paneling:

134 32nd Avenue was listed later last year for $2M, but has since gone down in price. It’s located opposite a playground, which may be a negative for some folks. But you’re practically on top of the Presidio, which is great for recreation.

So readers: Which home would you choose?

New Listing: 2BR Hayes Valley Condo

My new listing at 228 Scott Street hit the market this week. The 2BR/2BA condo is located on the border of the Lower Haight, Duboce, NoPa and Hayes Valley. So it’s perfect for buyers who want to enjoy the cafes, restaurants, shops, and public transportation available in any of these neighborhoods. The property has an 88 Walk Score, and a 98 Transit Score.

The two things I like the most about Scott are the fact that it has two bathrooms (that’s right, you won’t have to share your bathroom with guests) and the open chef’s kitchen/dining area. And by the way, that beautiful armoire opposite the dining room table is included in the sale:

Both spaces lead through that French door above to the deeded rear deck that overlooks a lovely shared garden. The unit also has great Victorian period detail throughout, such as very high ceilings, large windows, a built-in decorative fireplace in the bedroom. There are hardwood floors throughout, in-unit laundry room with stacked washer/dryer, and lots of closet space. Plus, one-car tandem parking and additional deeded storage in the garage. List price is $825,000.

We’ll be open for the first time on Saturday 3/5 from 2:00-4:00 and Sunday 3/6 from 1:00-4:00. Stop in if you’re in the neighborhood! Visit our Web site at 228Scottstreet.com for more photos and details.