House & Condo Prices Rise, TIC Market Picks Up

Yes, it’s true. Single-family home and condo sales are up 11% in the past six months, with days on market decreasing to 11.5% and 22%, respectively. Good news for those property owners who are thinking of putting their homes on the market in the Fall.

This week’s MarketTracker Report takes a look at these stats, as well as the slow and steady rise of the TIC market. We also highlight three cool TICs and turn the spotlight on NoPa so you can get a sense for what this North Panhandle neighborhood offers.

Plus, the most recent citywide sales and more! It’s all here in the Zephyr MarketTracker.

Calling All Sweat Equity Buyers: West Portal Project for Ya


For buyers looking for a well-located house that would allow them to make improvements and increase value over time, 72 Allston Way in West Portal is a good prospect.

Listed at $675,000, the 2BR/1BA house was built in 1922 and has its original kitchen and bath. The split-level floor plan provides nice separation of living and sleeping space, and two large bedrooms are at the rear of the property. Both feature large closets and bay windows. The split bathroom —toilet in one room, sink and shower in the other—has the original octagonal flooring and tile. There’s a large deck overlooking the garden, which could use your landscaping creativity. The roof has recently been replaced, so knock off about $12,000 from the improvement list.

It’s likely the house will sell for more than its list price, given recent market patterns.

Open Saturday July 28 and Sunday July 29 from 2:00-4:00.

I Liked Armistead Maupin’s Parnassus Heights House


I do have two sets of buyers who would probably like author Armistead Maupin’s charming shingled home at 27 Belmont in Parnassus Heights. (And I read and enjoyed The Night Listener, which was written at Belmont.) So I couldn’t miss seeing the property on broker tour yesterday.

Listed at $1,198,000, 27 Belmont is a 3BR/2BA home with about 1600 square feet across three levels. It’s not ideal for a family, but for buyers looking for a nice master suite, lovely outdoor areas and downtown views, the house works well. There are actually two master suites, one on the second level and one at the very top. The kitchen is on the small side, but nicely done. The home definitely provides the peace and quiet an author would need.

What will 27 Belmont sell for? My guess is that the views, charming and unique setting and celebrity cache will send the selling price soaring above the seemingly low $1,198,000 list price.

Inner Richmond House Sells for Under Asking

A home selling for less than the asking price usually doesn’t make headlines, but in San Francisco’s frenzied real estate market, the occurrence is headline worthy—especially when a single-family home in a good neighborhood is involved.

But that’s what happened at 341 Cornwall, an Edwardian 3BR/2BA house listed in April for $1,349,000. The property had generous living/dining areas and all three bedrooms on the upper level. The kitchen wasn’t huge, but was certainly well appointed. And there was a rear deck with yard, along with two-car garage parking. The block itself isn’t the best possible one in the Inner Richmond, as there’s a smog test center on the corner. But with other homes selling for substantially more in the neighborhood, you end up making your compromises.

The home went into contract, but fell back on the market. And the sale closed recently for $1,232,000.

Condo Spotlight: 300 Berry #904 in Mission Bay’s Arterra

Mission Bay is a great option for buyers seeking sun, easy access to 280 and Caltrain, and proximity to stores, restaurants, and services. One of the premier buildings in the neighborhood is Arterra at 300 Berry. Completed in 2009, Arterra is LEED-Silver certified and offers one-, two- and three-bedroom condos and townhomes with style and cool amenities. The development encompasses three buildings of varying heights that surround a landscaped courtyard.

300 Berry #904 just hit the market for $675,000. This 856-square foot 1BR with den features eco-friendly design finishes, in-unit laundry, and one-car parking. HOA dues are $458.51, and cover water, trash, exterior maintenance, doorperson, insurance and property management. List price is $675,000.

Arterra’s amenities include a view roof deck and bbq, fitness center, community room, private guest suite and 24/7 attended lobby.

The most recent comparative sale for #904 is #804, which was one floor down and in the same stack. That sold for $660,000 in March 2012.

What You Can Buy: 3BR Houses for Up to $1M

Single-family homes with three bedrooms, two bathrooms and one-car parking for up to $1M are popular among San Francisco buyers. There are presently 82 such homes in this price range, so I thought I would highlight a trio of properties in distinctly different neighborhoods:

408 Urbano
3BR/2BA, 2300-square feet
2-car parking
Ingleside Terrace
List price: $849,000

408 Urbano is a mid-century, split-level home that has a formal dining room with fireplace, and a kitchen/dining area that leads out to a deck. You can enjoy the benefits of high ceilings, hardwood floors and plenty of natural light. Though this is not perhaps the best walking location, freeway proximity is good and Ocean Avenue and Muni aren’t far away. Ingleside Terrace has more of a suburban feel, which is great if you’re looking for a low-key environment for your family (while still being able to live in the city).

665 Arguello
3BR/2BA, 1253-square feet
1-car parking
Inner Richmond
List Price: $895,000

665 Arguello is situated on a well-trafficked street, across from Rossi Park and near restaurants and public transportation. The house isn’t huge, but it’s well appointed with two bedrooms on the main level and the third on the lower level. Kitchen and bath finishes are serviceable and totally workable, and the large yard could use some landscaping. There’s also a family room on the lower level. 665 Arguello is an excellent condo alternative, as this price range in the Inner Richmond is typically in line with condo values. There are no HOA dues here, and no one living above or below you.

33 Nebraska
4BR/2BA, 1785-square feet
2-car parking
Bernal Heights
List Price: $950,000

Though the “box” architectural design lacks charm, its floor plan is typically very functional. Such is the case at 33 Nebraska, located on the east slope of Bernal Heights. There are three large bedrooms on the main level, which is a real plus. East-facing windows line the living and dining room walls and frame great views. Downstairs is a media/family room that opens to the huge, landscaped yard. There’s also a fourth bedroom and second full bath suite on the garden level. 33 Nebraska is a little further out than you may want to be in Bernal, but it’s only five blocks to where the shops and restaurants are along Cortland, and about three blocks to the 101. 33 Nebraska was last sold for $850,000 in 2004.

High Rents Spur Interest in Investment Property

With San Francisco rental prices having increased 15% from last year, interest in purchasing investment property is rising. The latest Zephyr MarketTracker takes a look at recent developments in this segment of the market.

There’s also info on how you may still be able to get a deal by considering properties that have been sitting on the market a while, and the latest deets behind parking fines in San Francisco.

It’s all here along with the latest sales data in this edition of MarketTracker.

Let’s Avoid Real Estate Bubble 2.0


The San Francisco market has really kicked into high gear over the past three months. Buyers are coming out of the woodwork, and to be honest, they’re creating a sense of desperation from which sellers are seriously benefiting. A variety of factors that you’ve undoubtedly read about in the media is contributing to this sudden real estate boom—tech job sector growth, astronomical rents, the Facebook IPO, rising consumer confidence. You name it, it’s fueling buyer willingness to lean more on emotions (and fear) and “write high.”

One recent example is 33 Henry (above), a modest 2BR/1BA first-floor condo with less than 1,000 square feet and tandem parking on a nice block in Duboce Triangle that was listed for $699,000 about a week ago. 25 offers later, the unit is reportedly in contract for above $800,000.

33 Henry is far from an extreme example of the current market, however. You’ve probably read about 3928 20th Street, the 3BR/1BA Edwardian listed at $849,000 which sold in May for $1.4M in an all-cash transaction. And I’m sure you may be aware of the purple Victorian at 1164 Church that needed work and was listed for $849,000. It sold for all cash at $1.2M. And let’s not forget 1076 Dolores, a 3BR/3.5BA condo with a deeded carriage house that needed a facelift, listed for $1,100,000. It sold for $1,505,000. Though I’m focusing on the Noe Valley/Mission Dolores area with these sales, many similar outcomes have transpired on properties in all areas of the city.

Of course, the “list low” strategy is an old one, and it does its job routinely by attracting the attention of a wide range of buyers who are drawn in by the possibility that they may be able to afford a particular property. Part of handling this reality is to know market values in various neighborhoods, so when you see a large Victorian fixer in the Mission listed at $550,000, you don’t get your hopes up that your budget of less than $750,000 will prevail.

But when the listing agent and sellers sit down to set a list price, the strategy in most cases is not to list the property hundreds of thousands of dollars lower than current market value. However, a feeding frenzy can transpire around a popular property in a highly desirable location, and one or more buyers may pay well above comp range just to wrap up their house hunt. After all, it’s no fun spending months seeing properties, reviewing disclosure packages and writing offers, especially when you have a baby on the way or are eager to stop paying your landlord $4500 a month for your apartment. And who knows when the next home will come along that you’ll like as much?

In the end, things get a lot more manageable when buyers and sellers stay rational, keep their heads and do business. I know it’s frustrating “competing” for properties. One good way to get around that is to expand your search and hit up the less-obvious neighborhoods and property types. The key is finding the space you need in a workable location. And you should be able to do that without paying half a million over the list price.

Offset Your Mortgage in a Multi-Unit Building

For buyers who are looking for a home in a centrally located neighborhood, an excellent option is to owner occupy a flat in a multi-unit building and rent out the other units. That’s how I was able to afford to purchase my own property in Noe Valley in 1998; renting out the lower flat afforded us the opportunity to own our home, as well as have a long-term income stream. I’ve had several clients purchase such properties this year, and the purchase price could often be workable when you have at least 20% down and factor in projected/existing rents. And the presently hot rental market is certainly making this housing option more appealing.

Of course, being a landlord isn’t for everyone, and it’s no secret that San Francisco has very specific tenant-landlord laws that you should be aware of if you’re going down the multi-unit building path. I highly recommend at least reviewing some fundamentals; a good place to start is the Small Property Owners of San Francisco. And it’s also best to first consult with your lender or mortgage broker regarding your loan options. Multi-units are a different animal, and loan details vary from that of a single-family house or condo.

I thought I would spotlight two multi-unit buildings I’ve viewed recently, to give you an example of what’s out there:

795-797 Elizabeth at Douglass
Noe Valley
Two units
$1,199,000

795-797 Elizabeth features a large 3BR/1BA upper flat that’s well appointed and has room to add a second bathroom. The kitchen has been updated and has nice outlooks to the park across the street. The 1BR/1BA lower unit has a private entrance and an eat-in kitchen, washer/dryer and newer windows. There’s no yard, but two garages occupy the rear of the property in this corner building. You’re a block from the popular 24th Street corridor, with plenty of restaurants and services in walking distance. Both units are vacant, but as they’re somewhat unequal in proportion, I’m betting that one buyer for the whole building goes to bat for the property. It would be easy to reside in the upper unit and rent out the lower one.

827-829 Fillmore at Grove
Alamo Square
Three units
$1,799,000

I was impressed with the scale and Victorian details of 827-829 Fillmore, which is four levels high and has a solid annual income. The above photo is the large, vacant 1BR/1BA top-floor unit at 827-829 Fillmore. This unit has great space and lovely rear outlooks (though the finishes are a bit dated). The middle and lower units are 3BR/1.5BAs and 2BR/3BAs, respectively, and are getting good rents. There’s also a bonus unit that is currently rented. The basement has a workshop/storage area, and there’s a garden with hot tub. No garage, but there’s leased parking nearby at roughly $80-$150/month. Buyers looking for a perch in a historical, convenient neighborhood within a quintessential San Francisco building will definitely appreciate what this property has to offer.

The Real Estate Boom is Back

It’s a good time to officially acknowledge what’s been going on in our local real estate market, now that we have the first half of 2012 in the bag.

The San Francisco market has intensified since earlier this year, with buyers experiencing multiple-offer situations and properties going into contract within days of hitting the market. Continued job growth in the tech sector and historically low interest rates are fueling this activity, and there’s a palpable optimism out there that didn’t exist in 2011. The competitive market is most suited to buyers who are consistently looking at properties and actively writing offers which are frequently above the list price.

The average price citywide for a single-family home in the second quarter of this year was $1,144,824, and for a condo, it was $822,129. So prices have clearly not toppled in the city. Centrally located neighborhoods have done particularly well, as buyers increasingly seek homes that are in walking distance of public transportation and retail areas.

I’m predicting that as competition continues to heat up for these areas, buyers will start considering less obvious neighborhoods. These would include neighborhoods such as Ingleside, Westwood Highlands and Midtown Terrace, for example. The holy grail in San Francisco is a single-family house, and there are only so many of them in prime neighborhoods.

Condo buyers are out in full force, especially when it comes to new developments. Both the Mission’s 299 Valencia and Dogpatch’s Millwheel South sold all of their units within weeks, prior to rolling out formal marketing programs. And Mission Bay’s Madrone has been rapidly selling condos while still under construction. Investors are out in full force, picking up units in these and other buildings to capitalize on the hot rental market, as well.

What You Can Buy In: Potrero Hill


Boasting great weather and views from the top of many of its hills, Potrero is one of the most popular neighborhoods in the city. It’s admittedly not as central as some other areas, as it is situated in the east end of town. However, there are two cute retail/restaurant strips on 18th and 20th Streets, a Whole Foods and the design district nearby, as well as proximity to 280 and the Third Street rail to downtown. In the end, Potrero is better connected to the rest of San Francisco than people may give it credit for.

The average price of a single-family home in the second quarter of 2012 was $841,545, and for a condo it was $623,320. Buyers in these price ranges will definitely get more for their money in comparison to neighborhoods such as Noe Valley, or even the Mission. That’s not to say the Potrero market isn’t competitive; the most expensive property in the second quarter was a 5BR/4BA single-family home built in 1927 at Kansas and Mariposa that traded hands for all cash at $1.5M. And the least expensive was a 456-square foot 1BR unit in the Potrero Court complex at 24th and Kansas that also sold for all cash at $191,000.

Current Potrero inventory includes four single-family homes, eight condos and one TIC. Here’s a look at a couple such properties that I think are good examples of what you can buy in the neighborhood:

380 Connecticut
4BR/3.5BAs
$1,675,000

380 Connecticut is an extensively renovated, tri-level single-family home with almost 2500 square feet. Location is prime north slope Potrero, within walking distance of neighborhood restaurants, cafes, and shops. The home features high-end finishes throughout, downtown views from three decks, and a chef’s kitchen. No garage, but there’s leased parking nearby for $200/month, and parking here isn’t highly challenging. 380 Connecticut was last sold in August 2011 amidst six offers for $900,000 in cash. The current owners are hoping their renovations will yield them a nice, updated price.

1629 18th Street
2BR/2BA
$650,000

This loft is also in an excellent Potrero location, and has two levels, a private patio and office mezzanine. The master features a lovely remodeled bath. There’s also an in-unit washer/dryer, soaring ceilings, great natural light and one-car parking. HOA dues are $485.49/month. There are 65 units in this 1995-built property. 1629 18th Street is currently tenant occupied. It was initially listed for $589,000 and went into contract, but fell back on the market and has now been relisted at $650,000.

Potrero Hill Snapshot
Pros:
Nice weather
Views from many homes
Nice retail districts
Proximity to freeways, rail line

Cons:
More remote San Francisco location
Mix of industrial/commercial can detract from charm
Residents rely more on bus lines than BART/rail
Crime can be an issue due to nearby housing projects

More Potrero Resources
Zephyr Neighborhood Profile
Nabewise Potrero Profile

Just Sold: 380 14th #504 in The Mission


My client just closed on a beautiful 2BR/2BA condo at 380 14th Street, otherwise known as 299 Valencia in the Mission. #504 boasts sunny southern exposure and views of downtown and the San Francisco hills. It also has lovely finishes such as CaesarStone counters, stainless-steel appliances, and wood floors. Included are in-unit washer/dryer, one-car parking and storage room. List price: $840,000.

It seems like every other day there’s a new business setting up shop along Valencia, so my client is thrilled to be moving to such a convenient location.