Jammin’ Into Joice on Nob Hill

The contemporary single-family home above is the result of vertical and horizontal additions made on a two-story house, and the property is tucked into narrow Joice Street in the downtown/Nob Hill area.

Joice is a stretch of street with cul-de-sacs on both ends. It runs from just south of Pine to slightly north of Clay. Though the location is very convenient, the street can be somewhat gloomy in parts, and the buildings generally don’t get much light (or views). But 26 Joice is situated in a very private setting at the end of the south cul-de-sac.

26 Joice features 3BRs/4.5BAs across three levels. The 2805-square foot property has a master suite at the top level, with two decks. The other two en suite bedrooms are on the garage level, along with an office/guest room and private patio. There’s two-car parking, a definite plus in space-challenged downtown. (Joice dead ends in the “downtown” district on the Realtor map, and is not technically in Nob Hill.) The main level has an open floor plan and a snazzy kitchen.

If you’re looking for a contemporary, luxury single-family home in a historical neighborhood that doesn’t often see rebuilt homes coming on the market, 26 Joice could be a real find.

House, Condo Prices Rise in San Francisco

The latest Zephyr MarketTracker reports that single-family home and condo prices have increased by 14.6% and 13.6%, respectively, over the previous 180 days. And the average time on market has also decreased.

We also take a look at what a small corner of the Mission should be named, as well as check in on the status of the Warriors arena in Mission Bay. Plus, more on live/work loft lending.

It’s all here in the Zephyr MarketTracker.

Meeting Minutes Key in Evaluating HOA Financials

Most condo associations in large buildings have a homeowners association (HOA) board or general membership that meet at least annually to discuss and vote on a variety of items. One of the most important aspects to note when evaluating a condo HOA is whether there are any upcoming, approved expenditures.

Upcoming special assessments are always the big question, but you shouldn’t stop there because those assessments won’t be dipping into the current reserve account. A portion of HOA dues typically goes to the reserve account so there’s some money on hand. Lenders like to see healthy reserves in larger buildings, and having good reserves means the HOA won’t immediately be hit up for a special assessment if, say, the roof needs to be replaced. However, it’s not always evident based on the other disclosure documents whether a large expense is imminent. Though there’s a condo financial disclosure, it only asks about upcoming special assessments.

I recently reviewed disclosures for a building, and was surprised to find that the HOA had approved well over $300,000 in repairs for a unit. The only place this was mentioned was in the meeting minutes. Though the HOA reserve account had $400,000-$500,000 on hand, I was told by the listing agent after I inquired that the cost of the repairs would indeed be covered by the reserve account. So it became evident that the approved expenditure would essentially deplete most of the reserves. Granted, there would be some money coming into the reserve account over time, but there wouldn’t be much on hand in the event of an unexpectedly large expense.

So when you’re reviewing condo docs, make sure your agent requests HOA meeting minutes (preferably two years’ worth). There may be financial details in there that will end up pointing to shaky reserves in the near future.

Live/Work Loft Loans: Talk to Your Lender First

You’ve just hit the open house circuit and found a great loft like the one above at 25 Lucerne #1 in SoMa. You want to write an offer and you’re preapproved—a no brainer, correct? Not necessarily, according to my colleagues at Guarantee Mortgage.

A majority of lenders have recently become concerned about “buyback” issues. For example, a lender makes the loan, sells it to Fannie Mae or Freddie Mac, and then is asked by the latter institutions at a later date to buy back the loan because of the live/work nature of the property. Fannie Mae and Freddie Mac are primarily concerned with such restrictions affecting the future value of the property.

As a result, lenders are avoiding lending on live/work properties.

It’s important to know what you’re dealing with. Only “true” live/work lofts are a problem; you identify these by looking for deed restrictions in preliminary title reports and within CC&Rs (the docs that govern the HOA).

Guarantee Mortgage reports that it has at least four lenders willing to lend on live/work projects with deed restrictions. One lender will do so as long as the building meets certain basic Fannie Mae condo requirements. Another lender featuring adjustable and interest-only loans will consider live/work loans on a case by case basis. Yet another two require 30% or 40% down.

So you can see how important it is to get lender clearance up front before you write your offer.

Get to Know SF’s Micro-Markets

Just as San Francisco has various micro-climates across the city, it also has multiple real estate micro-markets. Pretty much every neighborhood has its own character, selling patterns, inventory levels and unique attributes. Knowing how to price your house or what to offer on a home in a given neighborhood depends largely on micro-market conditions.

To that end, Zephyr Real Estate has been hard at work updating the stats and market snapshots for every neighborhood in the city on our highly trafficked Web site. And our latest addition has been video micro-market updates. Click on a given neighborhood, and a video will kick in that provides a quick update on recent sales and activity. For example, check out the one for Mission Dolores.

If you’re a buyer narrowing down your neighborhood choices, or a seller wondering what’s really going on with local sales in your area, check out the video updates. They’re informative, timely and highly useful as a starting point for your home search or sale.

What You Can Buy In: Miraloma Park

Miraloma Park is not always at the top of every single-family home buyer’s list. It’s situated kind of in between more well-known areas such as West Portal and Glen Park. Though most homes in Miraloma aren’t exactly in quick walking distance of retail areas beyond Portola’s Mollie Stone/Starbucks/Creighton’s Bakery strip, West Portal and Glen Park are a quick drive away (as are their respective Muni and BART rail stations).

Most Miraloma residents enjoy the quiet, decidedly suburban streets and find that the fog—which can be plentiful at times—adds an air of drama to their surroundings. The neighborhood is popular with young families who appreciate the fact that their kids can play outside, and that there are many schools in this part of town.

Here’s a roundup of new listings in the area so you can get a sense for value there:

530 Molimo
4BR/3BA, 2294 square feet
530 Molimo (above) is a spacious, contemporary view home further up the hill near Mt. Davidson Park. There are four bedrooms across three levels, as well as a family room and office, and decks off two levels. Garage has space for two-car, side-by-side parking. 530 Molimo is situated on a cul-de-sac, which provides a good level of privacy. It’s a challenge finding this much space with views in San Francisco for under $1M, so buyers who value such attributes should certainly consider the property.

36 Juanita
4BR/3BA, 1900 sq ft

36 Juanita (above) is located in the more central part of Miraloma, right off Portola. There’s a remodeled kitchen, and the master bedroom occupies the entire upper level. Natural light is king here, due to skylights and lots of windows. The fourth bedroom and third bathroom may be unwarranted, which means they weren’t necessarily original to the house and were possibly added at a later date without permits.

535 Teresita
4BR/3BA, 2332 sq ft

Marketed as a fixer, 535 Teresita (above) is a fully detached home with city, bridge and Bay views. Along with a large eat-in kitchen, the home features a spacious, top-floor master suite, full-size basement with eight-foot ceilings, and garden with mature fruit trees. One-car garage, plus ample street parking. 535 Teresita is also not too far from the Portola retail area.

Miraloma Park Snapshot
Quiet, family-friendly environment
Many homes have views
Short drive from freeways, Muni, BART
More space for the money

Can be remote when you’re further from Portola
Foggy microclimate
Not in very close walking distance to popular retail areas

More About Miraloma
Zephyr Neighborhood Profile (Plus Video)
Nabewise Profile

Luxury Home Sales Strong, Architecture & The City is Here!

The luxury market in San Francisco is alive and well, according to the San Francisco Business Times’ latest article on the subject. And First Republic reports that the average luxury price is $2,670,000. Properties in the luxury market are also being listed low to attract interest.

September officially rings in the 9th Annual Architecture and the City Festival, which features presentation, lectures and tours throughout the city. And Fall is also a good time to get your gift funds in order if you’re a buyer who will be relying on them for a purchase.

It’s all here—plus the latest citywide sales—in this edition of the Zephyr MarketTracker.

Keep Your Credit Fresh

Though the real estate market has certainly rebounded this year, there are still many obstacles that can get in the way of obtaining a home loan.

If you’re deep into your house hunt—or in contract on a property—here’s some advice: Don’t buy the BMW just yet.

Lenders are now running “credit refreshes” on the day of funding. This means that before a lender will transfer loan money into the escrow account so that you can complete your purchase, the lender is running a new credit report to see if anything has changed since the credit report at loan approval was issued.

Worst-case scenario is that you no longer qualify for the loan, or the file may have to go back to underwriting, which will delay closing.

The best way to avoid this issue is to avoid buying appliances, furniture, cars or other large purchases using credit prior to recording your new loan. And if you do so after your preapproval is completed and you’re simply house hunting, make sure you update your lender so you have a realistic sense for what you can afford based on your fresh score. (Thanks to my colleagues at Guarantee Mortgage for pointing out this helpful advice.)

Can I Transfer My Property Tax Base?

If you’re 55 or older and are interested in moving within San Francisco or to another county, there’s a good possibility you can take your property tax base with you. That’s a huge benefit, as property tax bases are a large homeownership expense.

Propositions 60 and 90 are constitutional amendments passed by California voters that allow homeowners aged 55 and over to transfer their property tax base when purchasing a new principal residence. Your replacement home must be of equal or lesser current market value than the original property. And you can only do this once. Prop 60 allows transfers of base year values within the same county, and Prop 90 allows transfers from one county to another.

The following eight counties in California have an ordinance enabling the intercounty base year value transfer, as of January 1, 2012:

El Dorado
Los Angeles
San Diego
San Mateo
Santa Clara

For more details, here’s a link to California State Board of Equalization’s Web page on the subject.

And as always, consult your trusted CPA before you make any moves!

“Not in MLS!”: The New Battle Cry

I’ve received about a dozen “Not in MLS!” email flyers for properties being advertised off market by agents across a number of brokerages in San Francisco over the past week. As I haven’t seen this many off-market “opportunities” in a while—and typically don’t expect to in a sellers’ market—I wanted to explore why there’s such a proliferation of sellers willing to promote their homes in this manner. Especially when there are seemingly multiple buyers for every home that comes on the market.

The off-market or “pocket” listing usually gets popular in softer markets, when multiple offers and throngs of buyers aren’t as likely to appear. Why not skip the cost and stress of staging, holding open houses and having a steady stream of buyers through your home, and try to work something reasonable out with a buyer?

But in hot markets like the one we’re in now, a seller’s best bet is to expose his or her home to as wide a buyer pool as possible. Not only will this strategy more likely result in a higher price if multiple buyers are interested, but a seller can rest easier knowing that the other five buyers who lost out on the house may still be around in the event the accepted offer falls through.

So logic would dictate that if a seller wants to aim for a successful sale that yields top dollar, the best strategy is to arrive at an attractive list price, a realistic selling price, and present the property in the best light. (Yes, that means shelling out some money for staging, in most cases.)

But…if you’re a seller who is looking for a price that’s higher than the market will probably bear, why not market the property outside of the Multiple Listing Service? Float your hefty list price and toute an “off-market opportunity” that will potentially appeal to buyers who have been battling it out in multiple-offer situations. Perhaps one or two will step up to the plate.

And if no one bites? Well, you’ve just tested the market without the penalty of your DOM (days on market) increasing in the MLS during your unrealistic list price period.

I saw this strategy in action over the past couple weeks with a house in Hayes Valley. The “Not in MLS!” email blast went out to agents one week, with a list price of $1.5M. Two weeks later, the property was on the MLS, listed for $1.3M. In other words, no desperate buyers appeared. Another email blast for a house listed for $1,750,000 on the outskirts of Noe Valley bore the threat that the price would be raised $50,000 once it officially went on the market after Labor Day. (That is a whole other situation I can’t even begin to figure out.)

If you’re a buyer exploring your off-market options, make sure you consult with your Realtor on values and disclosures before moving ahead. Paying too much for these “opportunities” may not seem like an opportunity at all—just bad decisionmaking.