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The new Zephyr MarketTracker is ready for your viewing pleasure. This time around, we have an update on mid-Market growth, plus a Battle of the Heights (Bernal vs Pacific) and some words of wisdom from our Zephyr COO about the real estate market.
It’s all here in this issue of MarketTracker.
We’re approaching the busy Fall real estate season, so I thought it might be a good time to give a shout out to all those prospective San Francisco home sellers out there who are thinking of putting their homes on the market in September or October. I’ve been doing my job long enough to recognize good and bad seller strategies and decisions. So I thought I’d round up the bad ones to potentially make things smoother for some sellers this year.
Here are my top five home seller mistakes. Avoid them if you can:
1. Trying to save money by eliminating staging. There was a time when properties were flying off the shelf, whether they were vacant, featured unmade beds in the photos or had someone home watching television during broker tours. Those days are gone. Buyers want to see some effort on the part of sellers. It’s important to take pride in how your home shows to agents and buyers, and investing in things like landscaping, painting and hauling clutter are equally as important as staging. Plus, staging costs aren’t as high as they were when the market was hot. So you can probably get a decent deal from a quality stager.
2. Immediately hiring the high-volume neighborhood specialist as your listing agent. Yes, you’ve seen his or her name plastered all over your neighborhood. But it’s worth noting that sometimes, home sellers take the path of least resistance, which factors into their decision making. Most agents in San Francisco sell in multiple neighborhoods, and know the micro markets well. Your listing agent decisionmaking should absolutely factor in local market knowledge, but don’t forget about the rest. Marketing and technology platforms, solid agent networks and service levels should be priorities. If your listing agent can’t produce an outline of what he or she is planning to do from start to finish, it might be time to consider other options. And more importantly, make sure your agent isn’t the type to railroad you into accepting an offer that may not provide the most beneficial price and terms just so he or she can move on to the next transaction.
3. Pricing your home too high. This seems obvious, but it isn’t. You talk with multiple agents, they essentially show you all the same sets of comparative sales, and you decide that your home should be priced above those averages. Yes, your home is nicer than most. But buyers are looking for value, and homes priced well over the average price ranges in the neighborhood will most likely sit. You’ll then have to go through price reductions and the reality that your listing is getting stale. Keep it fresh from the start with a list price that will attract buyers—and possibly multiple offers.
4. Ignoring the first reasonable offer that comes in. You put your home on the market, and within a week, your agent is presenting you with a solid offer from qualified buyers at a reasonable price. But you think you might want to hold out for more interest, so you take a pass and wait for all those other buyers to materialize. Unfortunately, they don’t, and now you’ve lost your first and only good offer. Of course there’s always a chance new buyers can emerge. But there’s certainly something to be said about seizing the day.
5. Being satisfied with a minimal marketing program. As I mentioned before, marketing strategies are crucial to a successful sale. Make sure your agent and his or her company are in a position to really make a splash when they market your home. Connecting with your targeted buyer demographic is critical; about 90% of prospective home buyers are doing online searches. If the buyers you’re trying to reach aren’t impressed with what they see online, you can bet they won’t visit your home during their crammed open house tours. And they need instant access to relevant property facts (QR codes, anyone?).
I toured a variety of properties in NoPa (North Panhandle) last week on broker tour. Panhandle inventory typically features multi-unit buildings and large single-family homes, many of which are classic Victorian and Edwardian styles. The neighborhood is a bit more urban in nature than, say, Cole Valley, but a lot of the homes are improved when new folks move into the ‘hood. I found a trio of quintessential North Panhandle properties worth looking at:
First up is 715-717 Baker:
715-717 Baker is a vacant two-unit building, which means it’s available as two TICs (at $885,000 and $975,000) or as one entire building for $1,855,000. No, it’s not a screaming deal. But these are two large, remodeled full-floor Victorian flats with grand scale rooms. The lower unit ($975,000) has 3BRs/one split bath; a private deck and garden; garage parking with interior access plus a large bonus room. And the upper flat ($875,000) has 4BRs/one split bath, and also comes with roof rights for a possible deck. The building has a concrete foundation and upgraded electrical/plumbing. There is a cafe and a restaurant right at the corner, and you’re fairly close to Golden Gate Park. Further north is the Laurel Village, which has many shops, restaurants, and cafes.
We move on to a good project house at 1960 Golden Gate Avenue:
There are no interior photos available online, but the house at 1960 Golden Gate wasn’t terrible inside. It just needs a gut renovation and a second story. This place is a good example of how the neighborhood gradually gets improved over time; someone will buy and renovate the property. The lot is 25 x 100, which is fairly average for San Francisco. And there’s already a garage, which makes things less complicated. (The home was built in 1889; our Planning Department sometimes has an aversion to allowing garage installations in buildings constructed prior to 1950.) List price is $695,000.
The good part about 1960 Golden Gate is that it doesn’t need to be a two-story home; a new owner could work with the existing space and make it totally livable.
And lastly, we have a TIC at 1031-1037 Divisadero #1033:
I liked this 2BR/1BA space at 1031-37 Divisadero. #1031 occupies the top floor in the carriage house at the rear of the lot. So the noise level from Divisadero is mitigated a bit. The floor plan was open and flowed well, and the rooms were spacious. There are four units in total–two in the front building, and two in the rear. And there’s a very large, shared roof deck for all the units. #1031 gets two-car parking and there’s shared laundry. List price: $549,000.
Whenever I come across good deals, I like to give them a shout out so prospective buyers can recognize good things when they see ‘em. This week, I toured a couple homes that fall into this category.
1145 South Van Ness (above) is a sweet 2BR+/2BA Victorian single-family home listed at $749,000. It’s got a great floor plan that features a large, bright living room with decorative fireplace, nice period details, a cool and spacious downstairs master suite with an updated bath and French doors leading to a yard with a hot tub. There’s a one-car garage with space beyond for more cars, and a laundry room plus additional storage on the garage level. Yes, you’re on South Van Ness, but if you can get past the four lanes of cars, the location at 25th Street is very convenient to BART and the freeways—not to mention to the Valencia corridor and Mission restaurants. You can add value to this property by updating the kitchen.
On the other side of town is 351 Buena Vista East #503E:
I usually don’t initially focus on outdoor space, but the 575-square foot deeded patio for this 1BR/1BA condo listed at $485,000 is pretty amazing. This is an end unit with 270-degree views, and also has deeded parking and wood floors throughout. HOA dues are $577/month, and get you a full-time lobby concierge and club room. Park Hill is a 136-unit association spread across two buildings. It was a former hospital, and you can see it perched atop Buena Vista Park from many locations in the city. This particular unit is situated within the 35-unit second building and has spectacular southern views. Buena Vista Park is just up the hill from the N Judah and J Church Muni stops, and near the Castro and Haight/Hayes Valley. So it’s not only an attractive and desirable neighborhood, but it’s also very central.
It’s a testament to these two properties that there are multiple buyers interested in both of them, and offers are being accepted today in both cases. So if you’re a buyer looking for these types of homes that are well priced, it’s best to get in early so you’re prepared to pull the trigger if need be.
Many buyers in San Francisco either shy away from short sales because they seem too complicated, or gravitate toward them with the goal of getting a good deal. The reality is that short sales can be lengthy, disappointing, and simply facilitate the bank getting market rate for a property.
But properties being sold through short sales can sometimes be decent deals. Lenders want to minimize their losses, but they’re not going to get emotionally involved. So they will typically settle on a price that reasonably appears to be market value—but can sometimes be less than market value, which is good for buyers.
Determining whether you should move ahead with an offer on a short sale property largely depends on many factors. But the biggest one of all is whether the sale has already been approved at a particular price. Take 1885 Jackson #403 (above), for example. The 2BR/2BA Pacific Heights condo with one-car parking was listed in way back in August 2010 for $599,000. It’s seen three price reductions since then, and finally went into contract recently. However, the buyer was not able to obtain financing, so the property came back on the market at the approved short sale price of $425,000. This means the lender had agreed to accept that price, and the next buyer will not have to deal with the long approval waiting time for which short sales are notorious.
In the case of Jackson, the buyer is being asked to pay $15,000 to cover charges and fees that the lender won’t approve. And they’re looking for a cash buyer. But at this price, the unit would make a first-time home buyer very happy, or an investor who could use the property as a rental unit.
So keep your eyes open for approved short sales; they may represent good deals, without the wait.
The SF Park Program is up and running, so get hip to the deets so you know how much to expect to pay for a spot. And some spaces have been bounced in favor of the ever-popular parklets. Check out some of the newest additions. Plus, Mission Bay’s Madrone previews units at its sales office opening and a roundup of latest city sales.
It’s all here in this issue of MarketTracker.
The last-minute, “foreclosure-is-extended” activity at the short sale cottage over at 3066 Market at Hattie in Corona Heights led to positive results for everyone involved. The small fixer property hit the market in April for $710,000 and subsequently had its share of price reductions. Time was ticking, though, and foreclosure was imminent. After being withdrawn from the MLS toward the end of June, the seller brought the home back on the market at $499,000, and the listing agents informed everyone that the only hope for a sale was that a cash buyer would step in and close by July 7th.
It happened! 3066 Market closed earlier this week for $485,500. Not a bad deal at all, and one to note if you’re in the market for a single-family home for under $500,000 in San Francisco (a rarity).
It’s always a pleasure to report sales that have finally happened after umpteenth days on market (otherwise known as “DOM” in Realtor speak). I spotted a couple such sales that closed last week, and wanted to share the deets with you.
We stop out in the Parkside for the first sale–on the Great Highway, to be precise:
The lucky buyers of 2518 Great Highway can now lay back in bed and watch HBO against the ocean view backdrop, knowing that they paid substantially less than the original list price. The 3BR/2BA single-family home at Great Highway and Vicente was first listed in March 2011 for $1.4M. The property had been nicely remodeled and feature three levels with good space. But $1.4M for the Great Highway? Buyers thought otherwise, and the house sat on the market for 112 days before a buyer paid cash and closed the sale for $990,000. You go, buyer.
Next up is 1201 California #705, a condo in the Cathedral Tower:
This 2BR/2BA unit had city, Bay and Golden Gate Bridge views, along with an open floor plan, spacious master bedroom and one-car parking (not to mention leased parking fees of $240/mo and HOA dues of $1640/month). First listed way back in November 2008 at $1,195,000, the economy progressively didn’t cooperate. The sale closed last week for $750,000. Woo-hoo.
But buyers, don’t let these sales trick you into thinking that you can easily write a lowball offer in the first couple months of a property coming on the market. In most cases, sellers with wildly overpriced properties will need much time (see the above cases) to relent. Their situations can change, and other comparative sales can end up convincing them to let go of their pipe dreams. If a home in San Francisco is priced well (i.e., in line with comparative sales over the past three- to six months), that home will likely go into contract and sell within a very reasonable period of time.
QR codes that let you link immediately to a real estate Web site are becoming common and popular. They’re great for accessing more information about a home, and I’ve started including them on property statements. For example, the QR code above links to a recent listing I had in Hayes Valley.
“QR” is an acronym for Quick Response code. It’s essentially a barcode that your mobile device reads; you’re then pointed to a Web site that provides more info and details. Japan, the Netherlands and South Korea have apparently been using QR codes for a while, but the codes began appearing in real estate circles only last year.
I’m starting to see the codes in newspapers, too. For example, The Examiner has been including codes within movie reviews so you can watch a trailer if you’d like. So you may as well download a QR reader so you can take advantage of the codes when you see them.
Here are some of the available options:
iPhone: 5 options, QR Reader being #1 http://gigaom.com/apple/5-qr-code-readers-for-iphone/
Android: Quickmark http://www.appbrain.com/app/quickmark-qr-code-reader/tw.com.quickmark
Blackberry: Scanlife http://appworld.blackberry.com/webstore/content/1102
And when you’re set up, point your phone at the bar code above and see how it all works.
If you’re looking for a 3,000-square foot Craftsman view home in a nice neighborhood, 47 Levant may be for you. There are 5BRs/4BAs across three levels, with two fireplaces, decks and a lovely yard. Plus, a sauna and two-car parking!
47 Levant was sold in 2003 for $750,000. It looked like this:
The property was then renovated and sold in 2004 for $1.9M. Let’s see if the current $2,195,000 list price captures a buyer.
Open Sunday July 10th from 2:00-4:30.
I love to pit properties that I’ve seen against one another, leaving the choice up to you, my readers—and potential home buyers—to decide which home would work for you. Today’s smackdown hones in on two different property types in two very different neighborhoods at the $875,000 price point.
First up is 95 Seward, just up the hill from Castro Street and situated in a very charming part of the neighborhood:
I really loved this condo when I saw it on tour this week. 95 Seward has two bedrooms, one bath, and approximately 1259 square feet. As you can see from the above living room photo, you can enjoy downtown and Bay views. The eat-in kitchen is spacious and nicely done; there’s no discrete dining room, but if you’re not heavy into a dozen people coming over, you’ll be okay. The unit could benefit from some new, stylish windows as an alternative to the existing metal-framed ones. But there are more perks: in-unit laundry, two-car parking, hardwood floors, no HOAs (owners pay as they go). There’s only one other unit in the building. 95 Seward was last sold in 2006 for $901,000.
In the other corner is 3106 Turk:
If you have your heart set on a single-family home, 3106 Turk in Lone Mountain might be a good fit for you. The home is located on the border of the Inner Richmond and Lone Mountain, so you’re in reasonable walking distance of the Clement Street restaurants and stores, and only a few blocks from Golden Gate Park. The property features 3BRs/2.5BAs and a bonus room down. The kitchen and baths could use updating, but are perfectly workable for the near term. There’s a good-sized deck off the main level, as well as a yard that has potential to be a lovely garden. There’s room for two-car parking, as well. 3106 Turk was initially listed in mid May for $899,000, so $875,000 isn’t that much of a difference. You may be able to pick this one up for less.
So which property would you prefer?
The first half of 2011 is in the bag. Our San Francisco real estate market has been seeing its share of ups and downs–and so have its buyers and sellers.
I’ve observed a fair share of what I like to call “mood swings” in the market. On the one hand, there are properties that are sitting on the market and ultimately selling for far below their original list prices. This outcome has been most common among luxury properties.
But on the other hand, some homes are garnering multiple offers and sales prices for well above their list prices. For example, a single-family home on a coveted block in Cole Valley was recently listed for $1,095,000 and ended up selling for $1,350,000. (And it needed updating.)
A total of 622 houses sold in the second quarter of this year, at an average of $991,747. Only 176 of the homes sold for more than $1M. On the condo side of things, a total of 573 units sold at an average of $792,797. The takeaway? Prices aren’t plummeting in San Francisco.
Multi-unit buildings seem to be very popular these days with buyers looking to owner occupy and invest for the long term. A total of 99 two- to four-unit properties sold in the second quarter across all price ranges. Some buyers are paying top dollar for the opportunity to own such buildings in desirable north end neighborhoods such as Pacific Heights and Russian Hill.
There are currently 568 single-family homes, 652 condos, and 158 TICs available. And 411 houses, 363 condos, and 62 TICs are in contract. Inventory is actually a bit light due to the summer months. But I’m anticipating that the usual flood of activity will occur in September and October.
San Francisco continues to see its share of rapidly selling foreclosure properties, as well as an increasing number of short sales. However, only a handful of neighborhoods are seeing the bulk of these sales.
There’s a glut of homes available in the $1M+ price point in popular Noe Valley. I thought it would be interesting to hit up the $1.5M offerings so you can compare what’s out there:
First up is 780 Elizabeth:
780 Elizabeth is a 3BR/2BA Victorian home in the desirable western part of the neighborhood. It’s just around the block from the 24th Street corridor (and one of my favorite restaurants, Firefly). The home has almost 3,000 square feet across three levels and one-car parking. It was listed in 2009 for $1,629,000 and was ultimately rented. But it’s back on for a more reasonable price.
Next up is 4280 26th Street:
Up the hill and also in the western part of Noe, 4280 26th Street features 3BRs/2.5BAs plus an office/sitting room and two fireplaces. The bathrooms and kitchen have been remodeled nicely, and there are rear decks with city views (and a hot tub). The downside is that there’s no parking, but finding a spot in this location tends to be less challenging. You instead have the very charming front garden and entrance. You’re about five blocks from the 24th Street corridor, with plenty of retail within walking distance.
654 Elizabeth
Finally, we have 654 Elizabeth, which is being sold through a trust sale (without court confirmation). The 4BR/2BA house with 2418 square feet is clean and has a large garage for the car lovers out there. Three of the bedrooms are upstairs (though the one bathroom is in the master suite). But there’s 1BR/1BA on the main level that’d be great for guests. The home has been in the same family for 80 years. By the time you’re reading this, the property could be in contract due to strong interest and an offer date set for yesterday. In terms of location, 654 Elizabeth is in a prime spot, just around the corner from the heart of the 24th Street shops and restaurants.
