Welcome to the SF Overbidders Club

We have some inaugural entrants into what I am officially calling the San Francisco Overbidders Club. What does it take to make the cut? You need to overbid more than 25% for a property and close the sale.

There are two underlying requirements to make it into the Overbidders Club. The first is wherewithal, meaning you have to have the financial means to pull it off. In most cases, we’re talking half down, or all cash. The second is will. You have to want that property enough to be willing to pay well above what all other buyers may be offering.

And now, here’s a look at the properties that were picked up by our first group of Club members:

227 Central
The Haight

Single-Family Home
4BR/2BA, 2063 sq ft
List Price: $1,095,000
Sale Price: $1,500,000
Overbid Amount: 37%
Closed Escrow: 6/26/13
This tenant-occupied, rambling Victorian on Central at Page was the perfect project house. Sold off market and in a probate transaction, the buyer will undoubtedly be livin’ the dream of renovating a Victorian in a classic San Francisco location. The idea here is that with time and money, the owner will ultimately see a property value of well over $1.5M in the future.

1680 9th Avenue
Inner Sunset

Single-Family Home
3BR/2BA, 2032 sq ft
List Price: $1,275,000
Sale Price: $1,650,000
Overbid Amount: 30%
Closed Escrow: 7/18/13

1680 9th Avenue is situated in the Windsor Terrace section of the Inner Sunset, which is in reasonable walking distance of retail areas and public transportation. The three bedrooms are all upstairs on the same level, and there’s a chef’s kitchen with an island. These are always big selling points. The garage access is via an alley behind the property, and there isn’t much outdoor space. But with only about a dozen homes on this level selling this year in the neighborhood, this buyer gave it all he had to make sure he’d own this one.

364 Crescent
Bernal Heights

Single-Family Home
4BR/3BA, 2725 sq ft
List Price: $1,275,000
Sale Price: $1,600,000
Overbid Amount: 25.5%
Closed Escrow: 7/12/13

Located six blocks south of Cortland and within earshot of 280, this sprawling Victorian at 364 Crescent is unique for a neighborhood with smaller homes. It sits on an oversized, corner lot and didn’t need any work. Excellent period detail, great kitchen, huge garage, and hot tub in the yard. But in the end, this is a big price to pay for this location in Bernal.

Yes, Neighbors Do Affect Property Values

So I had clients who stopped in at an open house recently that I recommended they see. The single-family home was well appointed, renovated, and on a lovely block. They loved the floor plan and overall space. The garden was cute and private. They basically liked everything about it—except for the adjacent neighbor’s rundown house that was ripe for its own renovation.

In a city as dense as San Francisco, it’s important for buyers and sellers to consider the “neighbor factor.” In the case of the aforementioned property, the prospect of living next to the rundown home—or next to a future construction site—was essentially a deal breaker for my buyers.

I remember previewing a property in the Mission a few years ago and seeing an ATM machine strewn on the ground in the yard next door. And there was also the time I checked out a property in Noe Valley with an apartment building across the yard that featured a naked man wandering around inside his unit. Another time, my clients and I were touring a home in Sunnyside and the adjacent yard was covered in dog feces. Not what you want nearby when you’re having guests over for a barbecue.

My point is that buyers and sellers have to be realistic about what’s going on around properties in which they’re interested, or which they’re selling. Buyers should get a sense for whether they’re comfortable with whatever might be present in the yards nearby, as well as the overall condition of the surrounding homes. And sellers need to recognize that negative situations like the ones I’m mentioning can certainly have an affect on the price they can command. The current market may find buyers overlooking certain things, but this frenetic housing climate won’t last forever.

As for the bees? If you’re looking for a great home in the Lake area that also might offer you the possibility of getting to know your neighbors and having a regular source of local honey, give me a call. I’ve got an excellent home for you!

SF Market Sitters: 21 Days & Counting

In a market where new listings get multiple offers within a week or two, it’s important not to lose sight of the rare homes that are taking offers “as they come.” Maybe the list price started out too high, and buyers are fearing that the sellers are looking for a lot more than their asking price. Or maybe there’s something particularly challenging about the location or floor plan (that you may be able to live with). And of course, we can’t ignore the possibility that the seller is simply not genuinely motivated to sell. In any event, here are my picks for three weeks or longer:

405 Arguello #201
Inner Richmond Condo

1BR/1BA, 716 sq ft
1 pkg
Days on market (DOM): 77
List Price: $599,000

Yes, 405 Arguello #201‘s deck above is deeded and exclusive—and, you’re literally around the block from Clement Street’s restaurants and shops. This well-appointed unit is in a building that was constructed in 1991, and it has an open living/dining/kitchen area. Best of all, the unit faces the rear of the building, so traffic noise from busy Arguello is mitigated. There are six units in the building, and parking/storage are included. There’s also a common laundry area. HOA dues are a low $202/month.

243 Romain
Twin Peaks House

2BR/1BA, 925 sq ft
1 pkg
DOM: 21
List Price: $975,000

243 Romain is situated on the block that has the Market Street bridge, which lets you walk directly from your block to the other side of Market and drops you down either into Noe or Eureka Valleys. The house is on the smaller side, with less than 1,000 square feet. But the kitchen and bathroom finishes are reasonable, and there’s a cute yard. Buyers have probably stayed away because 243 Romain is priced at $1,054/sq ft, which is what new construction is fetching these days. However, at the right price, you can get a house vs condo in a walkable location. This is the third coming of 243 Romain, as the seller started out in May with the first of what has now become three listing agents, pricing the home at $1.2M. So technically speaking, the property has been on the market a lot longer than 21 days.

60 Escondido
Pine Lake Park House

5BR/3.5BA, 2956 sq ft
2 pkg
DOM: 24
List Price: $1,329,000

60 Escondido is a big, lovely house on a block that runs parallel to Sloat Boulevard at 34th Avenue. So you’ll hear Sloat traffic, but you’ll also be across the street from the shopping center that has everything from a grocery store to a post office. The house has been updated with a remodeled kitchen, and there are three bedrooms on the main level. Downstairs are two more bedrooms, a full bath and entertainment area. They started out with a $1,380,000 list price, which didn’t help in a neighborhood where the average house price this year has been $1,250,000.

If you’re interested in any of these homes, feel free to give me a shout at 415-823-4656/ebermingham@zephyrsf.com, and I’d be happy to assist you!

My Predictions for the 2nd Half of 2013

It’s been a busy first half of 2013 for buyers and sellers of San Francisco real estate—and the rapid pace hasn’t been without its headaches for the buyers who were hoping to purchase a home by now. Inventory remained low, prices escalated, interest rates hit record lows (but have been on the rise as of late). Most sellers achieved multiple offers on their homes, regardless of neighborhood, and cash buyers seemed to pop up in every extreme multiple-offer situation. New construction returned to the city at a frenzied pace, with new condo developments breaking ground in transit-rich, central neighborhoods, as well as in more remote areas that could certainly use more residential units.

So what’s on tap for the second half of 2013? Here are my predictions:

More sellers will materialize. This summer will be no different, with July and August seeing somewhat of a slowdown in the number of sellers who decide to put their homes on the market. However, September-November will go gangbusters, with homeowners finally deciding to take the leap as they try to follow in the footsteps of their neighbors who received generous prices on their properties after selling in the first half of 2013.

Off-market sales will continue. Though they’re difficult to track, off-market sales have been happening on a regular basis. These are sales that occur without the benefit of the property being listed in the MLS. Some sellers like off-market sales because they don’t have to incur staging costs, have open houses, or be pressured to make a decision immediately. Expect to see a spike in properties being offered outside of the MLS, particularly by homeowners who may not exactly be committed to selling. Perhaps they don’t know where they want to go next or how they’ll get there, and they’re pretty daunted themselves about the concept of being a buyer in the current market. But if they could get even more than their neighbors next door did for the same type of property, they’ll gladly sell—all without incurring staging expenses or feeling the clock ticking in the MLS.

Some buyers will decide to postpone their search. After slogging through the year being outbid numerous times, or simply not finding homes that are in their price ranges, some buyers will hang it up. Maybe they’ll see how things go in 2014, but at least for now, they’ll come to terms with not being able to compete on price or by waiving key contingencies.

Sellers will get greedy. We’ve seen steady increases in values across all neighborhoods up to this point, so why shouldn’t that pattern continue? Some sellers will get a little overconfident in their homes and will start really stretching it where list prices and intended sales prices are concerned. I’m starting to see signs of this already. The result will be more properties sitting on the market a little longer, and perhaps more “as they come” offer situations.

Interest rates won’t get any lower. The market will adjust to the increase in 30-year fixed-rate loans, which will cut buyers’ purchasing power and contribute to those aforementioned homes sitting on the market longer.

New construction won’t be a bargain. Condos in new developments will continue to fetch $1,000-$1,200/sq ft, particularly in popular neighborhoods such as Russian Hill, Hayes Valley, SoMa, and the Castro. And qualified buyers attracted to shiny, new and centrally located will snap up these units.

Just Sold: Inner Richmond & NoPa Condos

I just listed and sold two great condos for my clients. 472 12th Avenue (above) is a 2BR/1BA unit in the Inner Richmond with lovely period detail, a remodeled kitchen, formal dining room, one- to two-car parking and shared landscaped garden. List price was $799,000 and we received five offers.

1300 Fell #3 also closed late last week:

1300 Fell #3 is a top-floor, spacious unit with three large bedrooms, two full baths and private garage parking. We received about a dozen offers on the property, and it was also listed for $799,000.

Contact me if you’d like more details on the selling prices!

Top 10 Questions to Ask About a Condo

Our current loan landscape is more complicated than ever, and it’s important to vet a particular unit and HOA alongside your lender before you even submit an offer. To that end, our team at Guarantee Mortgage assembled a list of key questions you and your Realtor should have answered (either through the disclosures or the listing agent) before you get your contract going. Lenders have many restrictions these days, and they’re related to these key areas:

1. Is the project a live/work, with any deed restrictions?

2. Does any one entity own more than one unit in a project that has less than 20 units?

3. Is there more than one short sale or foreclosure happening in the property?

4. Does any one entity own more than 10% of a project with more than 20 units?

5. Are there any special assessments coming up in the future?

6. Are more than 15% of the HOA dues delinquent?

7. What is the percentage of owner occupancy in the building?

8. What is the percentage of square footage that is allotted to commercial space?

9. Was the building recently condo converted?

10. Is there any litigation pending?

Knowing the answers to these questions will also make you more confident about your purchase (or give you a reason to move on).

Underbidding in this Market? Why, Yes!

It’s not news that most properties in San Francisco have been selling for more than their asking prices. However, I managed to find three properties that sold in the past two weeks for substantially less than their list prices:

1070 Green #1501
Russian Hill Condo

3BR/3.5BA, 2456 sq ft
1-car pkg
HOA dues: $2315/mo
List Price: $3,400,000
Sale Price: $3,075,000
Days on Market: 29

Green Hill Tower at 1070 Green is the first condo project built in California. #1501 occupies the entire north side of the building and has stunning views from every room, along with two balconies. This is all about the views, as the finishes in the kitchen and baths are pretty basic. The building offers a door person, security service, and elevator. The unit closed on 6/21 for $325,000 under asking in an all-cash sale.

751 10th Avenue
Inner Richmond House

5BR/2.5BA, 3,000 sq ft
1-car pkg
List Price: $2,349,000
Sale Price: $2,300,000
Days on Market: 40

751 10th Avenue is an award-winning, designer-owned home with four levels on a nice tree-lined block in the Inner Richmond. The home features a chef’s kitchen, three fireplaces, and guest quarters. No big drama here; the property simply sat on the market a bit, priced at the top tier for the neighborhood. But even with the $49,000 knocked off the original list price, 751 10th Ave is the most expensive house to sell in the Inner Richmond over the past year.

1 Clarence Place #9
South Beach Condo

1-car pkg
HOA Dues: $630.55
List Price: $1,499,000
Sale Price: $1,410,000
Days on Market: 103

Initially listed in February for $1.6M, 1 Clarence #9 is an end unit with a private attached garage and own entrance. The unit has nice finishes and approximately 1700 square feet, as per tax records. Six weeks after the $1.6M debut, the sellers reduced the price to $1.5M, and ended up accepting $90,000 less. This is a good example of a condo finding its property value in the market.