What You Can Buy: 2BR Condos

Two-bedroom condos are one of the most popular options for first-time home buyers in San Francisco. I thought we’d take a look at a trio of new listings that offer good space, cool locations and nice amenities for their price points:

1099 23rd Street #19
2BR/2.25BA, 1904 sq ft
1-car parking
HOA dues: $641/month
List Price: $850,000

I’m digging 1099 23rd Street #19, a spacious tri-level loft with multiple skylights, soaring ceilings and a wall of windows. The updated kitchen has stainless-steel appliances, granite counters, and maple cabinets. There’s a large bedroom upstairs, and the lower level has the master suite with a second gas fireplace. Nice closet space and laundry room, too. HOA dues are on the high side for a 21-unit building in Dogpatch, but they include outside management and grounds maintenance. This is a solid Dogpatch location, in easy walking distance of all the restaurants and shops on and around 22nd Street, as well as near the Muni line and freeways.

3236 17th Street #1
2BR/2BA, 1534 sq ft
1-car pkg
HOA dues: $200/month
List Price: $899,000

Another spacious condo, 3236 17th Street #1 is situated on the first floor of a three-unit building constructed in 2008. The open floor plan has a remodeled kitchen, and the main living spaces are nicely separated from the bedrooms by a long hallway. There’s side-by-side parking for one car, a storage room, and shared rear yard. 3236 17th Street is right in the thick of it all in the Mission, with a bike lane outside its door and plenty of restaurants, shops and cafes a few steps away.

899 North Point #1
Russian Hill
2BR/2BA, 1171 sq ft
1-car pkg
HOA dues: $312/month
List Price: $949,000

899 North Point #1 is an excellent option for buyers who want to be in a convenient location close to The Bay. The unit is located on the first floor of a three-unit building, and it’s another contemporary property that was constructed in 2009. As is typical for more recently built condos, the living/dining/kitchen areas are open and provide good space for entertaining. The bedrooms are a decent size, and the master has a bath with a stall shower. Amenities include radiant heat, hardwood floors and views of Mount Tam and The Bay from the living room. You’re a stone’s throw from iconic Ghirardelli Square, Aquatic Park, Fisherman’s Wharf and North Beach. And the cable car stops one block away!

Yours Truly, Quoted on KQED About TIC Legislation

The San Francisco Board of Supervisors Land Use and Economic Development Committee was scheduled to vote today on legislation that will potentially allow some TIC homeowners to bypass the condo lottery and pay a one-time fee to complete their unit’s conversion. As is typical with any legislation that affects homeowners and tenants, the issue is controversial.

And the vote has been delayed by a month, as Supervisor Mark Farrell reportedly wants additional time to talk with tenants’ rights groups.

I am, of course, a homeownership advocate (and former renter). And there are two sides to every issue. But I’m thinking that there’s something to this TIC legislation that should be able to work. In a city where two-thirds of all residents are renters—and property taxes help subsidize many things here—the Board of Supervisors should take a balanced view of the condo conversion issue and update its position so we don’t have a bunch of homeowners languishing in the lottery.

Check out the story (with link to the original audio broadcast) here: “San Francisco Struggles With Decision That Could Help Some Homeowners—And Hurt Renters.”

The Best Day to List a Home in San Francisco

The Wall Street Journal recently ran a piece on the best day of the week to list a property. Data was provided by Redfin, and The Journal focused on New York and the east coast. The conclusion was that Friday was the best day to list a house.

And I agree that in San Francisco, Friday is the best day to enter a property into the Multiple Listing Service (MLS) and have it go live on sites like Redfin, Trulia and brokerage sites.

Why Friday? Most buyers gear up on Fridays to house hunt on the weekend, and when a listing hits the MLS on Friday, it’s as high profile as it gets. In San Francisco, our Tuesday broker tours for the following week have a Friday/noon deadline, so agents enter most properties by that day and time so they show up on the following week’s tour. I send my clients Friday afternoon new-listing roundups, and also plot my buyer tours for the weekend on Fridays.

And people are apparently happiest on Fridays, according to The Journal, as the work week is ending. They’re more energetic and engaged, and will be more active in looking at the newest listings.

However, if you’re aiming to focus your marketing on landing private appointments, I do believe that listing a home on a Monday or Tuesday is best. Weekend open houses are done, and serious buyers are aiming to take more focused looks at properties. What I’m seeing in San Francisco, though, is that most agents and sellers time their first showings for the weekend or first broker tour.

In our busy San Francisco market, sellers could probably list their homes at midnight on a Wednesday and have 25 buyers in line the next morning outside their door. But sticking with a Friday listing is a great rule of thumb.

Know Your Home Insurance Basics

When you’re in the midst of buying a house in San Francisco, there’s a lot going on. One of the key escrow activities is nailing down your insurance policy and provider. So it’s important to know what you’ll be looking for in terms of coverage level and annual cost.

Here are the main items for comparison that should be standard in your home insurance coverage:
1. Dwelling Replacement: This is the amount the insurance company will cover if your home is damaged or lost due to fire or hurricane. (You need separate policies for earthquake/flood insurance). The coverage is based on square footage, location, and other factors such as attached/detached garage, fireplaces, etc. You essentially want sufficient coverage so that if you had to rebuild your house, the insurance would pay for that. Insurance companies have their own formulas for calculating replacement cost, and it’s important to note that the number is not based on the market value of the property. It does not include the value of the land.

2. Personal Property: This portion covers personal items and household contents due to theft, fire, vandalism or other perils outlined. It’s advisable to take an inventory of all your belongings so you have an idea regarding how much coverage you’ll need. Better yet, have receipts, photos or other proof of ownership for these items in case you need that information.

3. Loss of Use: This is coverage that provides for your living expenses in case you have to relocate due to a claim while your house is being repaired. Standard policies usually provide coverage for about 20% of the dwelling coverage.

4. Personal Liability: In the event that someone has an accident on your property, you’ll want coverage against lawsuits. A standard policy typically covers $100,000 for each liability claim occurrence. If you have anything on the property that might increase risk in some way (i.e., a pool) you might want additional coverage.

5. Medical Payments: This helps cover the cost of medical payments for which you might be held responsible if someone gets hurt on the property, but doesn’t want to sue you.

An important tip: Don’t go with the least expensive policy you can find. Because if you compare coverage side by side among the providers you survey, you may find that you’re falling short on necessary coverage when you’re trying to save a few bucks.

Buyer Goes Bonkers Over Mission Dolores Units

Proving that Mission/Mission Dolores homeowners basically can’t miss in our market these days, the modest two-unit building at 3643-3645 19th Street (at Dolores) sold for what I would describe as a stunning price recently.

The main-level flat (living room, above) was vacant and unstaged. There were two bedrooms, an updated, eat-in kitchen with basic finishes, and a dining room. Downstairs was a very small, tenant-occupied studio with a sleeping alcove.

Listed at $1,225,000, the building sold to an all-cash buyer from the neighborhood for $1,510,000.

Unfortunately for a majority of buyers, it’s a challenge to compete with cash buyers who are not wildly concerned about the prices they’re paying. After all, when a loan isn’t involved, neither is an appraisal. My guess is that a formal appraisal would not have come in at value on this building, knowing the comps. But this isn’t the first instance of buyers paying too much for Mission Dolores properties; this sort of reckless real estate behavior has been happening since early 2012.

Wanted: San Francisco Home Sellers

It’s a seller’s market in San Francisco at the moment. Inventory remains flat, there are anywhere from five to 40 buyers for every home that goes on the market, and mortgage interest rates are still very low. And oh, yeah—rents are at an all-time high.

What this all means: If you’ve been considering listing and selling your home, now is the time to do it. And if your home has any particular challenges—lack of parking, a not-so-functional floor plan, no yard, for example—we are in a market where multiple buyers will be more willing to compromise and accept homes with such drawbacks.

If you own a single-family house, condo, multi-unit building or TIC (supported by a fractional loan), I recommend consulting with a Realtor this month to get a sense for your options. Maybe you have an investment property, or are an owner occupier who doesn’t know where to go next. It helps to have a chat for an hour with a Realtor to discuss your details:

1. How much is my property worth?
2. Can I sell and then have some time to stay in my house after the buyers are the owners, to figure out where I’m going next?
3. How long will the process take?
4. What pitfalls might I encounter?
5. What would I need to do to prep my property for sale?
6. What am I looking at in terms of net proceeds?

As many of you know, I have been helping homeowners sell their properties for more than ten years in many neighborhoods across San Francisco. Client reviews don’t lie: I have the experience, knowledge, marketing platform and strategies in place to net you the most money possible with the least stress involved. It’s all about knowing what to expect, anticipating pitfalls and navigating to the finish.

Please contact me if you’re ready to have that conversation. I would be happy to stop by and put your future in motion.

What The Heck is HO-6 Condo Insurance?

Condo buyers will typically be told shortly after going into contract that their lender requires them to purchase HO-6 insurance. Otherwise known as hazard or individual unit coverage, HO-6 insurance provides personal property and liability coverage for whatever happens within your unit’s walls.

Yes, a portion of your monthly HOA dues does pay for building insurance. But that building policy doesn’t cover anything that might happen inside your unit.

HO-6 coverage costs anywhere between $400-$600 annually, and will end up being part of your closing costs. The provider will typically need to know what year the building was constructed; the number of stories and units in the property; unit square footage and roof type. Your agent can get you started by giving you all these details so you know what to respond when asked by the insurance agent.

Smackdown: Midtown Terrace vs Bernal Heights

Our single-family home inventory comes in many architectural styles and floor plans. I try to regularly spotlight a variety of homes that appear to provide good value and which are located in central areas. Here’s a look at two cool houses listed in the $900,000 that are very different in style and location:

223 Anderson
Bernal Heights
List Price: $899,000

223 Anderson is a sweet, two-level Victorian that features two bedrooms, two baths, and living areas on the main level, as well as two more bedrooms and bathrooms down. Of course, you’re valuing bedrooms and bathrooms over parking, because there’s no garage. But 223 Anderson is situated in a prime Bernal location, on the north slope and half a block to the Cortland Avenue retail area. The kitchen and baths have been remodeled, and there’s also a small outdoor space that could be supplemented with potted plants. (There’s enough room for a grill.) 280 is a shot away, and you’re not far from the Mission Street bus line to BART (or the J Church at 30th & Church).

98 Midcrest Way
Midtown Terrace
3BR/2BA, 1650 sq ft
1-car pkg
List Price: $899,000

For those who love mid-century modern, 98 Midcrest is a great find. The home has been stylishly remodeled, and offers excellent space and views. There are two bedrooms on the main level, and a master down. There’s a lovely yard accessed by stairs off the rear, and a hot tub is there, too! This house has amazingly remodeled bathrooms, as well. I really like the exterior, which features Brazilian teak, copper and smooth stucco. The thing about Midtown Terrace is that it’s not in great walking distance to shops, restaurants and services; however, it is in the geographical center of the city. So you’re not very far from wherever you might be going in our 7×7 city.

So which house would you choose, readers?

What You Can Buy for $1M

Condos and single-family homes listed for $1M or less typically attract many buyers in the current San Francisco market. Here’s a look at what you can buy at the $1M price point in three desirable neighborhoods:

341 Presidio
Presidio Heights
2BR/1.25BA, 1307 sq ft
1-car parking
List Price: $998,000

341 Presidio is a spacious 1920s condo that features hardwood floors, a remodeled kitchen and bath, and best of all, a large private yard (above) that’s deeded to this unit. Such exclusive outdoor space is not typical for a condo in a three-unit building. The property is situated around the block from the Sacramento Street shops, is near Laurel Heights Village and is about 3.5 blocks to The Presidio.

575 Magellan
Forest Hill
2BR/2BA, 1343 sq ft
1-car pkg
List Price: $995,000

575 Magellan is a remodeled Spanish Mediterranean home located on a lovely, tree-lined block in the quiet and stately Forest Hill neighborhood. Though it’s missing that third bedroom everyone typically wants who looks for a home in Forest Hill, the main level offers a living room with fireplace, formal dining room, kitchen with eat-in area and a family room. The master bedroom has a walk-in closet and bath with skylight and heated floors. Just outside the family room is a walk-out patio, as well as a landscaped yard with Magnolia trees, lawn, hot tub and outdoor shower. 575 Magellan is a short distance away from the West Portal retail area and Muni station to downtown, as well as about a ten-minute drive to 280.

2152 Grove
North Panhandle
1-car tandem pkg
List Price: $999,000

2152 Grove is another spacious condo, this time in the Craftsman-style vein. The floor plan includes two large bedrooms in addition to a sunroom overlooking the yard. You also get two full-sized bathrooms (one is split), which is nice. The kitchen has been remodeled and the dining room offers floor-to-ceiling custom built-in bookcases and cabinetry. Buyers may pause at the fact that the parking is tandem, meaning you have to move one car out of the way to get in and out of the garage. And the property backs up to USF’s School of Law. But if you can get past the last two factors, this is great interior space and excellent proximity to Golden Gate Park. 2152 Grove strikes me as a good bet for parents looking to invest in a San Francisco property that their USF student child can live in while attending school. It’d be a fine prospect for a future pied-a-terre or rental property after graduation.

Buyers Turn to TICs in Tight Market

As condo prices climb and low inventory persists in centrally located neighborhoods, San Francisco buyers appear to be more willing to take on TICs.

A total of 66 TIC interests sold in the last quarter of 2011, at an average price of $594,127. However, buyers snapped up 94 TICs in Q4 2012, and the average price shot up by about 9% to $645,091.

In a city where the average condo price is almost $1M, TICs still represent a more affordable path to home ownership—particularly where 2BR units are concerned. Almost half of the TICs sold in the last quarter of 2012 were 2BRs, with 1BR TICs representing 32% of the total sold. The least popular TIC type was the 3BR+ unit; only 22% of buyers purchased those.

The TIC market has always been a niche one, with far less units selling than that of condos. (For example, 671 condos sold in Q4 2012 in comparison to those 94 TICs sold in the same time period.) But those TIC numbers could increase in 2013, particularly in neighborhoods such as the Mission/Mission Dolores, North Beach, Lower Pacific Heights and NoPa, which represented the most popular areas for TIC sales late last year.

I checked out a few TIC offerings on my broker tour last week, and in most cases, listing agents reported distributing multiple disclosure packages to interested buyers, as well as offer deadlines. There was a time when TICs would sit on the market for an average of 90 days, but that doesn’t seem to be the case in the current market.

TICs still carry unique risks. For example, the type of financing they require (fractional) lets you avoid a lender foreclosing on the entire building. But you’re still on title with multiple owners, which requires everyone to share responsibilities such as paying property taxes. And fractional financing is only offered through adjustable-rate loans, which can increase over time and leave you vulnerable to higher mortgage payments in the future. Additionally, your lender pool will be small. So if you’re looking to refinance, you’ll be limited to the interest rates those two or three lenders will be offering.

But a TIC is a bonafide homeownership opportunity in a city where rents have managed to hit all-time highs, and where a 2BR condo costs an average of $919,796.