Duboce 3BR Trips Up Downward TIC Trend

It’s no secret that the 3-6 unit TIC market is softer than it’s ever been. Condo prices are also weaker, and why would a buyer pick a TIC over a condo if given the chance to own his or her unit outright?

So the activity at 2194 15th Street in Duboce Triangle (off the tree-lined stretch of Noe) surprised even me. Last sold in late 2009 for $890,000, the unit was listed earlier this month for $865,000. Yes, this is a great location, but the parking is leased half a block away for $250/mo, with HOAs of $344/mo. And it’s located in a five-unit building supported by individual/fractional financing on all the units.

The property received four offers, and went into contract three weeks after its list date.

That means there were four buyers out there who could qualify for the stringent fractional financing requirements, and who were okay with owning a TIC that will most likely always be a TIC due to condo conversion challenges. But it goes to show you that nice properties in good locations (and priced with the current market value in mind) will sell.

5 Tips for Avoiding Home-Buying Loan Drama

Getting a loan in 2011 is no easy feat. Aside from generally needing a minimum of 20% down and stellar credit, there are some hotspots to watch out for. Here are five tips for navigating the current loan landscape, courtesy of my friends at Guarantee Mortgage:

1. Be prepared to provide asset documentation twice in the process. In the good old days, furnishing the lender with two months of statements showing current balances was acceptable. Now, the lender will expect to see your latest statements at closing time. They’ll want to see all deposits, and verify that they’re legitimate payroll deposits. And they’ll also want to confirm that you still have all the liquid assets necessary to close.

2. Expect the lender to run your credit report twice. A credit report was previously run by the lender at the time a buyer’s loan package was submitted. However, lenders are now running reports at the time of loan funding to ensure that you have no new debt, disputes or derogatory credit issues.

3. Your employer’s going to get a call. Paystubs verifying your employment are no longer enough. Expect the lender to call your employer at the time of funding to make sure you’re still employed.

4. Tax returns will need secondary verification.  Lenders are no longer satisfied simply referencing the copy of your tax returns provided in the loan application package. They now want an electronic recap from the IRS.

5. Unwarranted spaces can be an issue. This sort of thing wasn’t a showstopper in the past. If you’re buying a house with an “illegal” or unwarranted space, it’s key to let your lender know about it. It will be important for your lender and Realtor to work together to address the details so you can avoid a loan crash.

The 5 Best Neighborhoods for NY Transplants

I moved to San Francisco from New York thirteen years ago, and frequently work with many New Yorkers who have relocated here. New York is definitely a world of its own, and I must admit that I was a bit worred when I moved to San Francisco; in my mind, I’d have to drive everywhere, and things wouldn’t be as central. After all, San Francisco’s layout is different in that downtown feels like Manhattan, but everywhere else seems like outer borough neighborhoods strung together—at least, at first. It takes some time to realize that many San Francisco areas are little New Yorks unto themselves.

But as time went on, I found myself gravitating toward certain neighborhoods that either had a New York feel to them, or which had the attributes I appreciated about Manhattan life. For all you New Yorkers thinking about moving west, here are my picks for San Francisco neighborhoods that will make your transition easier:

1. South Beach. Home of more recently developed condo buildings, South Beach has a prime waterfront location and an excellent micro climate. AT&T Park and the Giants reside there, so you get your New York-level crowds whenever there’s a home game day. You can easily walk downtown or jump on the freeway to head south, and the BART/Muni stations are not far away at the Embarcadero station at Market. There are great restaurants in South Beach like Marlowe and Tres, and plenty of bars and design stores. For a Gramercy Park-style respite, you can hang in South Park and visit one of the many cafes or restaurants that line that circular refuge.

2. Nob Hill. Perched above downtown, Nob Hill is old San Francisco at its best. It has the most New York feel of all the neighborhoods listed, and has some excellent little restaurants. It’s also in close proximity to Chinatown and North Beach, and Russian Hill. Big bonus are the views, which come naturally due to the elevation. In other words, if you can’t afford a view condo, you can at least see views when you walk around outside.

3. Mission Dolores. With a more hipster feel to it than that of the other neighborhoods, Mission Dolores is a hotbed of cafes and restaurants. You’ll feel right at home waiting on line behind the cordons for BiRite’s ice cream on a weekend afternoon. Muni rail lines and BART whisk Mission Dolores dwellers to any point in the city. Though you might miss Central Park, Mission Dolores Park is not a bad substitute if you’re looking for a place to lay your blanket. And it has excellent city views from some points in the park. Head east past Valencia, and you’re in the heart of the Mission District’s restaurant kingdom. 

4. Noe Valley. I’m a little biased on this pick, as I live in Noe now. Actually, I’m in what’s called Upper Noe, which means I can walk to the Mission/Bernal Heights, as well as the 24th Street retail strip in Noe Valley. We’re ten minutes’ walk from BART, and nearby Church Street hosts the J line that runs downtown. There’s also a nice microclimate, particularly when you’re located in the east portion of the neighborhood. Noe is big on kids and dogs, but having them isn’t a requirement.

5. Lower Pacific Heights. Fillmore Street’s retail strip runs right through Lower Pac Heights, and the housing stock is varied. You can find large buildings with spacious floorplans, or Victorian-era properties that smack of quintessential San Francisco. It takes about 15-20 minutes at the most to drive from the area to any other neighborhood in the city, and there are plenty of bus lines that run in all directions. You can walk to Japantown, Pacific Heights and Alta Plaza Park, and even downtown if you’re so inclined.

Give me a shout if you’re in the process of relocating. I handle sales exclusively, but also know some rockin’ leasing agents that could point you in the right direction of you’re planning to rent.

Smackdown: Liberty Hill vs West Portal

One of the ways I get my thrills is by fantasizing about which house I’d buy at a certain price point. (Cut me some slack, I’m a Realtor.) Today I’m pitting two single-family houses in two very different locations against each other. Which one would you buy?

First up is 177 Liberty, atop Liberty Hill in the Noe/Eureka Valley area:

177 Liberty has four bedrooms, two bathrooms and about 1983 square feet. It’s a Victorian that’s had a Euro-style makeover, so that may not excite some purists out there. The main level has two bedrooms, with the additional two bedrooms on the upper level. No garage, but you can lease one nearby. The location is pretty hip, as you’re just up the hill from Dolores Park, the 18th Street gourmet gulch and not far from the Valencia corridor. You can also head in the opposite direction to Noe Valley or the Castro. List price: $1,299,000.

We head over to 201 Vicente, located in the prime area of West Portal (which means you can walk to the retail district):

My initial reaction to this house before I went inside was that it was in a busy intersection and was pretty exposed. However, it has a very gracious feel and nice floor plan. The four bedrooms are located on the upper level, which is perfect for parents who don’t want their kids sleeping on a different level. There’s great natural light on both levels, and the master suite is situated in the rear of the property and away from the busier portion of the street. The main grounds are in the front of the house, so there’s only a sliver of a rear yeard. But you do get an elevator (I know) and two-car parking. The kitchens and baths could use updating, but are perfectly livable for now. List price: $1,300,000.

Give me a shout if you’d like to get in either one. I’d love to hit up both again!

FHA Lending on 2-4 Unit Condo Projects Again

The FHA stopped granting what were called condo “spot approvals” in 2009. This meant that if you didn’t want to purchase a condo that was on the approved list (typically large buildings), you were simply out of luck.

However, the FHA has recently started lending on condos within two- to four-unit buildings again, according to my colleague Trent Hu at Integrated Mortgage. Here’s a rundown on the basics:

– You need a 3.5% minimum down payment for up to a $729,000 loan amount
– At least 50% of the units have to be owner occupied
– No single owner can own more than one unit in the building
– The building has to have a minimum of 10% of the annual budget in HOA reserves
– New TIC condo conversion properties are acceptable
– 45-day closing timeframe is likely necessary.

There are currently 392 condos listed for up to $729,000 in San Francisco, many of which are situated in buildings that are not on the FHA’s list of approved buildings. So here’s your opportunity to take advantage of an FHA loan and expand your housing possibilities.

Buyers Seek Value in SF Homes


Sales in San Francisco these days tend to spin my head in more circles than this spiral staircase at 135 Locust in Presidio Heights. The 4BR/3.5BA single-family home was listed at $3M on March 4th and closed this past week for $3.4M.

Yes, we’re in a buyers’ market. But the reality is that buyers are quick to decide what market value may be for a given home, and they’ll bid accordingly. To that end, there are 563 single-family homes available which have been on the market for an average of 73 days, along with 666 condos with an average of 74 days on market. Thus, a majority of sellers out there aren’t appreciating anecdotes like the one connected to 135 Locust.

Overbidding isn’t unusual, but it’s typically been happening with homes that are listed below the average selling price of comparable properties. (For example, word on the street about Locust was that it was priced low.) But what will keep the market moving will be active negotiation and reasonably priced homes.

Plenty of Inventory at NoPa’s Petrini Place

The 134-unit Village at Petrini Place complex at 2001 McAllister and Central experienced a burst of inventory last week, when four condos went on the market almost simultaneously. Those units joined the three that were already on the market. So if you’re a qualified buyer, the sellers at Petrini Place would love you to stop by.

The complex was constructed in 2002, with a grocery store located just around the block and close proximity to Golden Gate Park, restaurants and the Divisadero corridor. The Walk Score for the property is 89 (Very Walkable) and the transit score is 83 (Excellent). Petrini Place suffered a bit over the past couple of years with HOA litigation, but that was settled last year. Throughout most of 2010, most of the six sales had to be completed with cash, as lenders won’t approve of properties with litigation involved.

Seven condos have sold in the building since January 2010, one of which was a short sale and one that was a foreclosure. The building has been submitted for FHA approval, so if all goes well, Petrini Place will be able to expand its reach to FHA buyers.

Here’s the complete lineup of available inventory:
#135 1BR/1BA $490,000
South-facing corner unit, one-car parking

#238 1BR/1BA  681 sq ft   $515,000
Top floor, one-car parking

#237 1BR/1BA 681 sq ft $515,000
Top floor, nice upgrades, tenant occupied, one-car parking

#D150  2BR/2BA   $649,000
South-facing unit, private patio, two-car parking

#126 2BR/2BA 1018 sq ft $649,000
Inner courtyard location, two-car parking

#312 2BR/2BA 1040 sq ft $715,000
Top floor, south facing, two-car parking

#C142 2BR/2.5BA 1373 sq ft $749,000
One of four townhomes in building; corner unit with good light; two-car parking

There’s currently only one other unit in contract, a two-bedroom property that was on the market for 347 days and was last listed at $549,000 (it’s a short sale). A quick check on foreclosure activity in the building yielded no results, which is a good sign. HOA dues for the above units range from $534-$562, and cover water, trash, building/grounds maintenance, insurance and property management.

Mission Bay’s Madrone Moves Ahead

Remember Mission Bay’s Radiance development? The first building was constructed and sold, but then work on the sidekick ceased due to the faltering economy. Construction is moving ahead on The Madrone, which will be a lower-story property adjacent to Radiance.

Read the latest about San Francisco’s upcoming new development, as well as check out the latest sales in the current issue of MarketTracker.

Checking In At 829 Folsom

The awesome roof deck is my favorite part about 829 Folsom, the 69-unit development on Folsom between 4th and 5th Streets (and across the street from one of my favorite restaurants, Zero Zero). The sales office has been up and running since last year, and has experienced an uptick lately in buyer activity. That’s not surprising, as 829 Folsom and One Hawthorne are about the only new-construction properties on the market at the moment.

I visited 829 Folsom this week with clients to look at one-bedroom condos. Though the units are not huge, they are well appointed and have efficient floor plans. The kitchens feature European cabinetry, polished slab granite counters, and gas cooktops. Bathrooms have marble flooring, wood cabinetry and designer-polished chrome fixtures. (Plus Toto toilets!)

Here’s a breakdown on pricing for some of the units that remain:

One Bedroom:  This home has an open floor plan with a galley kitchen.  The bedroom is privately nestled off the living area and features bathroom en suite. Some levels offer breathtaking views of downtown.  #512: $441,850 / 505 sq. ft./ HOA $462.71 per month

One Bedroom + 1 Car Parking  This plan features an open living area. The bedroom and bathroom are nicely separated by a closet featuring a washer/dryer.  The floor-to-ceiling windows face east, offering great morning sunlight.  #706:  $557,100 / 675 sq ft / HOA $524.45 per month

One Bedroom + Den + 1 Car Parking: This home has an open den at the front of the home which creates an entry into the living area.  The bedroom features bathroom en suite.  Facing Folsom Street, it features a partial city view and offers natural sun light in both the living and bedroom areas.  #702:  $573,850 / 757 sq ft / HOA $534.23 per month

One Bedroom + Den + 1 Car Parking: This plan features a proper entry with the living area and bedroom on opposite sides of the home.  The living room, facing Folsom Street, offers partial city views while the bedroom looks out into the courtyard. #600: $577,100  / 812 sq ft / HOA $542.33 per month

Two Bedroom / Two Bathroom+ 1 Car Parking: This plan is “T” shaped featuring a proper entry with the bedrooms on opposites sides of the home separated by common space.   Both the living room and master bedroom are south-facing oriented towards Shipley Street.  This home offers views from the living area and master bedroom, which features an en suite bathroom.  The second bedroom faces the interior courtyard.  #618: $739,000  / 931 sq ft / HOA dues $557.83 per month

HOA fees cover water, garbage, grounds maintenance, door person and property management. You have the option of refusing parking and taking a certain amount off the purchase price.

829 Folsom is in a location that allows for easy public transportation and freeway access, and the building has a 94 “Walker’s Paradise” Walk Score. Whole Foods is right around the corner at 4th and Harrison, and there are tons of restaurants nearby. You can also easily bike or stroll to the Embarcadero and Ferry Building, or stroll around the corner to the Museum of Modern Art.

Give me shout if you’d like to tour remaining inventory.

Government Shutdown May Hit FHA Buyers

Update: Looks like the government shutdown has been averted! But in case anything else arises to shut down the government, here’s how your FHA loan can be affected.

Politicians are scrambling to avoid a potential government shutdown, which would affect many aspects of everyday life. The primary effect the shutdown may have on the real estate industry is that FHA loan processing may be substantially slower.

For buyers who are already in contract, there should be nothing to worry about. But if you’re on the verge of making an offer on a property, here’s a heads up on what you may encounter:

Obtaining a case number. The FHA assigns a case number to each ratified contract. All three lender reps with whom I spoke say the shutdown should not result in the limited ability to get a case number. It’s apparently assigned via an automated system; however, if there’s a conflict (i.e., the number assigned is connected to a previous property, and the number hasn’t be released) your purchase may stall.

Underwriting will continue. Once your documents are assembled and it’s time for final loan approval, the lender is the entity that gives the green light—not FHA staff. Good news.

Get your tax transcripts now. Loan approval requires tax transcripts from the IRS. If the IRS is closed, you won’t be able to order your transcript. It’s best to do that before the shutdown.

Identity checks may be halted. Part of the FHA loan process involves what’s called a Credit Alert Interactive Voice Response System (CAIVRS) check. The federal government has a database that lists people who owe it money or have federal liens against them. The FHA runs a check on all parties involved in the transaction, and ensures no one is in the database. If the FHA is down, it won’t be able to complete the check.

Bottom line? Proceed with your purchase, but try to get as much upfront work done as possible before the shutdown. And give yourself plenty of time in your financing contingency so you can work through what hopefully will not be a lengthy government shutdown.

How’s The Market In: Midtown Terrace

Developed in the 1950s, Midtown Terrace is situated on the western slope of Twin Peaks. Most homes are detached and the area is as suburban as you’ll get in San Francisco. But unlike the suburbs, Midtown Terrace is located in the center of San Francisco—which means it’s the most central neighborhood many buyers don’t consider when they begin house hunting.

Midtown Terrace is not the best neighborhood for a walk to a retail area, but you can certainly hit its parks and trails. You’re a short distance from pretty much everything, such as Mollie Stone’s on Portola, the Forest Hill Muni station, Diamond Heights shopping center and West Portal. There’s also Clarendon Elementary nearby, and many families are attracted to Midtown Terrace because of that factor. Here’s a snapshot of the general area:

The neighborhood is large and its streets boast some of the highest elevations around. And that means many of the homes have great views, as indicated by the names of the streets: Marview, Dawnview, Glenview, and the like. Buyers purchasing homes in Midtown Terrace typically appreciate the quick rides to all the surrounding stores and retail areas. But more importantly, they like the prices.

The average single-family home price for the first quarter of 2011 was $927,008, but Midtown Terrace’s average in the same timeframe was $686,192. A total of 18 homes have sold since October 2010. (The most expensive houses top out in the $800,000s; most sell in the $600,000-$700,000s.) The least expensive home sold in November at 428 Dellbrook, a 2BR/1BA with a remodeled kitchen that changed hands for $520,000.

The average days on market for Midtown Terrace since October has been 92. So the neighborhood is not as go-go as some of those which are in walking distance of more services and retail areas. There are only four homes on the market at present, and five in contract. My favorite deal at the moment is at 61 Marview:

61 Marview is a 3BR/2BA home with 1272 square feet; it’s been cleaned up and is totally habitable. A probate sale and court bidding are involved, so you’ll first have to overbid the current offer and then contend with any other buyers who show up. Marview has partial ocean views, and its roof is newer. They started out at $749,000, but got down to the $712,500 list price before an offer was accepted subject to court confirmation.

Buyers can expect more competition for the lower-priced homes in the $500,000-$700,000 range. But that competition may be a little lighter these days, so if you play your cards right and take the right approach, you can certainly land yourself a comfortable and affordable home here. And keep in in mind that Midtown Terrace is also a a good bet for FHA buyers, as the average prices tend to fall within the acceptable loan limits.

SF Market Snapshot: Q1 2011

The first quarter of the year is under our belt, and it’s a good time to evaluate the San Francisco real estate market.

I’m not the type of Realtor who sugarcoats my industry. Though lots of homes are selling in the city, let’s face it: We’ll never see the go-go years of the mid-2000s again. Lending is a whole different ballgame, and there are simply less buyers who can qualify for mortgages. Many individuals are electing to spend hefty amounts of money per month on rents that will let them live in the neighborhoods they like, without needing top credit scores or 20% down for a comparable owned property.

The job market is better than it was a couple years ago in The Bay Area, with tech companies like Apple and Google hiring and others opening headquarters in San Francisco. (And Peninsula tech shuttles are still the hot mode of transportation for Silicon Valley works who insist on living in southern neighborhoods like Noe Valley and Mission Dolores.) But it will take longer for other industries to catch up and offer high-paying positions to large numbers of individuals.

Buyers and sellers, however, are doing steady business in the city. A total of 468 houses sold in the first quarter of this year, at a rather high average of $927,008. 109 of those houses sold for more than $1M—and 38 even changed hands for more than $2M—but the rest were under the $1M mark. That tells you that the sweet spot of the market continues to be the tried and true $400,000-$800,000 price range.

There were 477 condos that sold for an average of $696,326, with the most expensive being a unit in One Rincon for $2M. Again, the bulk of condos sold were less than $1M, with a condo in Bayview selling for as little as $108,000.

The withdrawn/expired segment was somewhat consistent with the first quarter of 2010, though the 433 houses and condos that sellers pulled from the market was a slightly higher number than the 428 withdrawn or expired properties in Q1 2010. I’m guessing that many of the sellers in this category are still disappointed with the current values of their properties, and have decided to take the “I’ll-sell-if-I-can-get-$X” approach vs. selling for what the market will bear.

There are currently 631 condos and 560 single-family homes available, with 372 condos and 398 houses in contract. Surprisingly, a modest number of those homes got into contract via multiple offers. However, in those cases, the strategy involved setting a list price below comparable values. That still seems to lure buyers in, particularly with properties that have central locations and independent parking.

It’s important for homeowners who are considering selling their properties this year to pay close attention to the comparable sales from the first quarter. These sales are the ones that will genuinely dictate where the market is at the moment.

New Price: Hayes Valley Condo

My 2BR/2BA condo at 228 Scott Street just had a major price reduction, and I’ve been fielding phone calls and emails ever since. We came on the market at $825,000, but have just adjusted the price to $779,000. The unit is in a phenomenal location that borders Hayes Valley, Duboce Triangle, NoPa and the Lower Haight. It’s an excellent fit for a downtown or Peninsula shuttle commuter, as both forms of transportation have stations a couple blocks away.

My favorite feature is the remodeled open kitchen/dining area at the rear of the unit, which open on to a deeded deck that overlooks a lovely garden with a large pine tree. Two other bonuses are a second bath and in-unit washer/dryer; both can be elusive in this price range. There’s garage parking that’s shared with the upstairs unit, but if you’re the type to ride your bike or take public transportation on a daily basis, this is actually not a big inconvenience. Each of the three units in the building has a large, deeded storage unit that can easily fit recreational equipment and other large items. The building is well-maintained and has nice neighbors, to boot.

We’ll be open this Sunday 4/5 from 2:00-4:00, so stop by and say hello!