Strong Appreciation Expected in SF Market

With a 12.7% appreciation expected in San Francisco property values, our city is poised for strong growth in the near future.

Indeed, with 18.8% and 8.6% increases over the past 180 days in, respectively single-family home and condo/TIC prices, it certainly seems as if there’s no stopping the real estate juggernaut here.

We also check out San Francisco’s three most popular neighborhoods, along with recent sales stats in this edition of the Zephyr MarketTracker.

Just Sold: Luxurious Marina Condo


1111 Bay #207 is a spacious 2BR/2BA with an open floor plan and lovely natural light throughout. My clients are going to love the roof deck with views of the Golden Gate Bridge and Alcatraz and multiple seating areas. Included are parking, storage closet and common greenbelt area. A real plus is that the building is one of the rare ones in the neighborhood that isn’t on liquefaction.

The location at Bay and Van Ness is in easy walking distance to Fort Mason, Polk Street, Chestnut Street and the Marina Green. List price: $1,015,000.

New SF Overbidders Club Members for August

We have a few new members of the San Francisco Overbidders Club this month. As some of you may know from past posts, buyers join the Overbidders Club when they pay in excess of 25% of the list price.

August was a big hit for the west end of town, where our newest Overbidders seemed to lurk. Here’s the rundown this month:
254 11th Ave
Inner Richmond

4BR/2BA
List Price: $849,000
Sale Price: $1,275,000
Overbid Amount: 50%
Closed Escrow: 8/21/13

Who doesn’t want a big fixer half a block from California Street? Many buyers vied for 254 11th Avenue, as it was one of those types of properties that appealed to both contractors and “sweat equity” buyers. But one buyer decided that paying 50% over asking and waiving all contingencies would do the trick. And it did! The appeal of this house was that it has four bedrooms on one level upstairs, an attic with expansion potential and a large garage. Having the space already there makes things infinitely easier when it comes to renovations.

18 Quintara
Golden Gate Heights

4BR/2BA, 2053 sq ft
List Price: $975,000
Sale Price: $1,325,000
Overbid Amount: 36%
Closed Escrow: 8/16/13

18 Quintara is basically a house that has it all. It’s detached on three sides, surrounded by landscaped gardens, white picket fence, as well as a remodeled kitchen, large garage and in-law apartment that represents the fourth bedroom but is perfect for an au pair or guests. What does someone pay for a house like that these days in Golden Gate Heights? About $1,325,000. The teaser of a list price was low enough to garner 19 offers, so paying 36% over asking and waiving all contingencies is pretty much what you’re gonna have to do to win in this situation.

762 45th Avenue
Outer Richmond

3BR/2BA, 1826 sq ft
List Price: $849,000
Sale Price: $1,195,000
Overbid Amount: 41%
Closed Escrow: 8/14/13

Featuring an original 1920s kitchen and bathrooms, this basic house at 762 45th Avenue had something unique going for it—a professionally designed garden with a hot tub. And it’s five blocks from the beach. The one, two punch of paying 41% more + waiving contingencies did it again for these new homeowners.

269 Waller
Hayes Valley

2BR/1BA, 1330 sq ft
List Price: $1,195,000
Sale Price: $1,625,000
Overbid Amount: 36%
Closed Escrow: 8/16/13

Purchased by buyers who I suspect had lost out on quite a few homes to maximum overbids over the past few months, 269 Waller is in a more outskirts part of Hayes Valley. But the deep lot, remodeled kitchen apparently make up for the lack of third bedroom, second bath, and presence of a brick foundation. There were contingencies in the contract, but I’m betting an appraisal condition wasn’t one of them.

1BR Condos a Good Bet for First-Time Home Buyers

A one-bedroom condo is typically not the ideal home. Who doesn’t want an extra room for guests or an office? But as prices escalate in San Francisco, first-time home buyers are finding that they can work with a one-bedroom unit, as long as it has reasonable space, isn’t tenant occupied, has affordable HOA dues, parking, and is located in a good neighborhood that’s central to retail areas and public transportation.

I set out to find some properties that meet this criteria and which I think are well worth considering for buyers in the $500,000-$700,000 range:

468 Tehama #3
SoMa

$649,000
HOA Dues: $436.78/mo

Blessed with a lovely outdoor patio, 468 Tehama #3 is a loft with just under 1,000 square feet that has hardwood floors, in-unit laundry, and a bedroom with a large walk-in closet. Common areas include a roof deck with pano views, and you also get storage and one-car parking. You can expect a fair amount of street activity in this location, but it’s a couple blocks away from the burgeoning mid-Market district that is growing by leaps and bounds. An excellent choice for downtown or Peninsula/East Bay commuters.

1483 Sutter #401
Lower Pac Heights/Van Ness Corridor

$685,000
HOA Dues: $586/mo

The Sutterfield was constructed in 1993 and has 164 units. So it’s a larger, more established property than some of the other on this list. For the slightly higher HOA dues, you get 24-hour security, a fitness center, and outdoor spa. #401 has an open floor plan, with a pleasant kitchen and spacious bedroom. Storage and one-car parking are included. This location is in walking distance of restaurants and shops in Russian Hill, Japantown, Fillmore, the theatre district and multiple bus lines. Commuting to the North Bay and downtown are also easy from this location.

3453 26th Street
The Mission

$599,000
HOA Dues: $230/mo

3453 26th Street is on the upper floor of a four-unit building that has nice 1920s period details. This unit was updated in 2008 and has an open floor plan with a good separation between the bedroom and living space. Features include in-unit laundry, skylight, and kitchen with breakfast bar. There’s a shared patio, one-car parking and large storage area. You’re not on the best block of the Mission, but I’ve seen worse, and you can supplement your furnishings with visits to the Salvation Army store at the corner. Ideal for downtown and East/South Bay commuters, as BART is a five-minute walk and you can easily jump on 101 or 280. Oh, yeah, and the Valencia corridor is half a block away.

What You Can Buy in August: 21 Days & Counting

New listings got you down? Well, I found two condos and one single-family home that have been sitting on the market for more than 21 days. And that means potentially writing an offer without having to compete with other buyers and pay way over the list price. Here’s what I have to show you this time around:

251 Upland
Mt Davidson Manor

Days on market (DOM): 33
3BR/2BA, 2134 sq ft
2 pkg
List Price: $995,000

Where can you find a 2,000+ square foot house with three bedrooms, two full bathrooms and parking in a nice neighborhood for under $1M? 251 Upland fits the bill. Though it doesn’t have much outdoor space, the home occupies a corner lot and has lovely 1930s period detail. The kitchen is spacious and has a breakfast nook, and the lower level includes a bedroom, den/media room, laundry area and storage. 251 Aptos is right near Ocean Avenue, Lakeside Village, Whole Foods and Stonestown Galleria.

226 Ashbury
NoPa

Days on market (DOM): 24
2BR/2BA, 1300 sq ft
1 pkg
List Price: $899,000

226 Ashbury is a condo that had a brief foray into contract before coming back on the market earlier this month. It’s obviously gotten lost in the newer inventory shuffle. Situated only half a block from Golden Gate Park, this Victorian condo features a large master suite that can also accommodate a sitting area or office, remodeled kitchen, exclusive-use deck and direct access to the common paved yard. You’re on the first floor of a three-unit building, but for the location and overall unit scale, the list price seems like a deal to me.

1244 Jackson
Nob Hill

Days on market (DOM): 25
3BR/1BA, 1,332 sq ft
1 pkg
List Price: $1,299,500

1244 Jackson is located right on the cable car line, which is charming (but could also be noisy). The building was constructed in 1910 and has all the gracious interior details to show for it. Yes, you only have one bathroom, but if you can get past that, you’ll enjoy an eat-in kitchen with Golden Gate Bridge views, and parking.

The Blurred Lines Between Maintenance & Repairs

If Robin Thicke is a homeowner, the blurred lines he should be most concerned about are the ones between home maintenance and having to suddenly do unexpected repairs.

There’s a definite distinction between taking action to repair a component of your building and taking preventive measures to avoid having to make that repair. To be fair, sometimes it’s not so easy to figure out that, say, your roof should be replaced before the next rainy season. Let’s face it: Your job, family, recreational time and traveling all compete for your time, and the likelihood of using a spare moment to look for surface cracks and ponding on the rooftop is slim.

The bottom line is that genuine maintenance is best achieved by being proactive. Knowing what to look for well ahead of having to undertake expensive repairs or replacements is key. So I’ve put together a quick and dirty property evaluation guide that you can use periodically to detect red flags and potentially head off having to spend a lot of money unexpectedly:

1. Foundations and retaining walls. Check for major cracking, and if you’re on a brick foundation, deterioration of the material. Also monitor retaining walls, particularly if they’re on property lines. If you see anything really significant, contact a structural contractor who can let you know whether it’s time to take some action.

2. Siding. When you start seeing signs of boards popping out, obvious seams between panels, stucco bulging or pockets of soft wood, consult a structural pest contractor. Dry rot doesn’t get any better over time, and fixing a small section of wood or stucco is a lot easier than having to rip off part of a wall. And very importantly, if you start seeing anything that looks like wood shavings, that is a sure sign you may have to remedy drywood termites. Again, call the pest guy. Best advice, though: Have your building painted every few years. This job typically includes also sealing up gaps in the wood.

3. Water heater. You typically won’t see any signs of water heater failure until the tank starts flooding your garage or unit. But what you can do is replace the water heater before that happens. You typically replace a water heater every ten years or so; if you don’t know how old your unit is, try to find the serial number on the tank. The last two digits usually represent the year of manufacture.

4. Roof. A roof lasts for around 15-20 years, but that life span will depend on how much sun or other weather elements affect the roof. However, you can extend the life of a roof by having someone perform regular maintenance such as patching and sealing. That will protect the roof against heat from the sun that can scorch its surface, as well as water intrusion from rain. And if you can safely get up on your roof after a heavy rain, check to see if pools of water are forming. Have a reliable roofing contractor examine your roof every couple years to make sure you’re keeping up with the maintenance.

5. Flashing around joints. Flashing refers to thin strips of impervious material that are placed around certain areas to protect against water intrusions. It’s good to make sure the flashing around your windows, vents and chimneys are solid and not too worn. The same roofing contractor can check out these components, too.

6. Sewer line. If you have old, clay pipes running to the sewer line and any trees nearby, have a sewer line inspection every few years to make sure there are no roots growing into the line.

7. Decks and external staircases. When you start noticing rotted stairs or posts, it may be time to have them replaced. Best to do this on a regular basis vs. having to rebuild when the whole deck starts to sag. (I’m being dramatic, but you get the point. Besides, you have no idea what I see when I go in and out of properties on broker tour.)

8. Fireplace. Most people never have their fireplace inspected, much less cleaned. Hire a company to do just that every few years. It’s good to know if you have any cracks in the flue that could result in releasing toxic air into your home.

If you need any referrals for the aforementioned contractors, please contact me at 415.823.4656/ebermingham@zephyrsf.com and I’d be happy to connect you with the resources I have. That goes for you, too, Robin, if you can tear yourself away from the latest lady you’re trying to hook up with long enough to do a roof check.

Live the Indoor-Outdoor Life in Noe Valley


My new 1BR/1BA condo listing in the heart of Noe Valley is perfect for those 62 and older who are looking for a convenient home that may also be near family.

3953 24th Street #6 features a large, south-facing patio with pano views, kitchen with stainless-steel appliances, custom furniture, and a common lounge/garden. An elevator services all levels of the building, and there’s a variety of public transportation and car-sharing pods within walking distance.

Best of all, the condo is situated directly across the street from Whole Foods!

List price is $449,000 and the sale will require a cash buyer at this time. Occupants must be 62 or older, but buyer need not meet any age requirements. Please contact Eileen at 415.823.4656 / ebermingham@zephyrsf.com for more details. Showings are by appointment only.

And visit our Web site here.

Linea Releases Pricing, Spotlight on Noe Valley

One of the hottest new condo developments is Linea, a 115-unit property at Market and Buchanan. The building is situated on the cusp of Mission Dolores, Hayes Valley, the Castro and Duboce Triangle. In the latest MarketTracker, we survey pricing on all the various units (hint: we’re talking $1,000+/sq ft).

We also focus on Noe Valley and the variety of housing available there, and give you a snapshot of some cool events and activities coming up this summer in San Francisco.

And this is probably not news, but sales prices are up over the past six months from 10-19%, depending on property type. Check out the details and recent sales, too!

It’s all here in this edition of the Zephyr MarketTracker.

What You Need To Know About Waiving Contingencies

It’s no secret that most buyers who are prevailing in extreme multiple-offer situations are submitting contracts that have no contingencies. That means there are no conditions, and that if a buyer changes his or her mind and backs out, there are no “safety nets” that guarantee the deposit money will be returned.

When you have an offer accepted by a seller, the first thing you do is submit your deposit to the title company. This is typically a sum of 3% of the purchase price, and the deposit is the good faith money that covers the seller for what’s known as “liquidated damages.” If the buyers change their mind about the purchase for a reason related to one of the contractual contingencies, the deposit can rightfully be returned.

However, if there are no contingencies and the buyers back out, the deposit can technically be retained by the seller for the aforementioned liquidated damages. The primary contingencies in a transaction are inspections, loan, and appraisal.

So if you’re waiving one or all of these primary contingencies, here’s what you need to be aware of:
Appraisal. The lender will require that an appraisal be done to confirm that the value of the property is at least what you’re paying for it. If an appraisal comes up short—and that’s happening these days—you can either negotiate the difference, agree to bring money in, or cancel the contract. However, if you have no appraisal contingency, you will be on the hook for bringing in the difference between the price you’re paying and the amount of the appraisal. If you’re waiving the condition, it’s important that you have enough cash at your disposal to cover the shortfall.

Loan. The lender needs to approve your financial details, as well as those of the property. If your lender finds exception with any details and decides against lending on the purchase, you can either pull out or find a new lender. But if you don’t have that loan contingency, your deposit money will be at risk. Buyers waiving the loan contingency either have a very large down payment, or they’ve had their file pushed through underwriting to minimize risk.

Inspections. Typical inspections buyers in San Francisco conduct when purchasing property are general contractor and termite. Waiving inspections to compete is not typically advised. Sometimes sellers provide pre-sale inspection reports, which are useful, or buyers do their own pre-inspections if they really intend to compete on price aggressively. If you decide to waive inspections, that means that you are willing to absorb the risk of a post-escrow discovery that may have been avoided had you had the inspections.

If you’re thinking about waiving contingencies on a purchase, discuss the ramifications with your Realtor or lender. Above all, you need to be aware of and comfortable with the risks involved.

The Basics of San Francisco Property Taxes

You’re considering purchasing a property in San Francisco, and want to figure out what your total annual costs will be. A significant portion of those expenses will be property taxes.

The property tax rate for the 2012-2013 tax year is 1.1691% of the purchase price. Property taxes are due in two installments: The first is due November 1st, and is delinquent after December 10th. The second installment is due on February 1st, and becomes delinquent after April 10th.

Sometime after you complete your purchase, the city will send what’s called a supplemental property tax bill. The Assessor-Recorder reappraises property when there’s a change of ownership. They don’t do this in a timely manner most of the time, so you’ll eventually get this supplemental bill that represents the difference between the new and the old property tax base. Keep in mind that in some cases, the supplemental bill can come a year or two later, and you’ll be responsible for paying the tax. It’s a good idea to have some money put aside.

There are a lot of additional fees in your property tax bill that have materialized over time, many of which residents voted to include. These include various annual fees related to education, for example.

It’s a great idea to do your financial planning during your loan preapproval phase, so you can get an idea as to what your property taxes will be as they relate to your price range.

We May Be Seeing “Back on Market” More Often


One of the growing trends in our hot San Francisco market seems to be the “back on market” status. This happens when a buyer needs to cancel the contract, and the seller has to go back on the market in search of a new buyer.

I’ve started noticing recently that a handful of properties seem to come back on the market daily. The numbers are certainly not staggering; of the 285 houses currently listed, only seven came back on the market. And only six of the 247 available condos fell out of contract. The reasons behind the fallout are typically due to financing, though I have come across buyers backing out for personal reasons. And I’m sure there are instances where inspection results didn’t sit well with the buyers.

But let’s get back to the “personal” reasons. I think these can stem largely from buyers feeling rushed to make decisions in order to meet offer deadlines; in many cases, the deadlines are set for within a few days of the first open house. There is a lot of information to get through when you’re considering writing an offer, and I have to believe that not everyone can be as thorough as they’d like when given a day or so to get through all the decision points involved. (For example, I noted that the condo at 226 Ashbury, above, went pending after about five days on the market. Two days after that, the property came back on the market. I don’t know the official reason behind the backout, but a fallout after only two days in contract typically involves second thoughts and a contract cancellation.)

As such, I’m guessing that we’ll see an upswing in the back-on-market rate as 2013 marches on. Remember, buyers: It’s highly recommended that you review all disclosures and comps before writing your offer. Consulting your lender on an ongoing basis (vs popping up peridically when you want to write an offer) is a great way to avoid last-minute surprises when you finally get into contract. And ideally, you’ll want to visit the property at least twice to make sure it’s the right fit.

Plan for Your Sale During Dog Days of August

August is traditionally a slow time of year with respect to new inventory coming on the market. Statistically speaking, we don’t seem to have a problem with transactional volume right now. But I can tell you that I have about five sets of active buyer clients, and we aren’t finding much of anything to look at this week.

But I do know that many homeowners are planning to put their homes on the market in the popular Fall selling season, which kicks off right after Labor Day and tails off around Thanksgiving. If you’re at all considering jumping into the game this Fall, it’s really important for you to start planning now. You may not know how your relocation logistics will work, how best to present your property, or how much it’s realistically worth. You’ve seen steadily rising sale prices in your immediate neighborhood, but you haven’t seen these properties in person; so how does yours stack up?

This is the month to consult a real estate agent who will be your advisor and hopefully someone you can trust to act in your best interests. Ask your neighbors, co-workers or friends who they worked with in their home sale (and if they were happy with the services), or perhaps you can contact your favorite experienced, well-connected Realtor-blogger with the built-in ability to attract buyers. :) In any event, call or email that person, and schedule an hour meeting to have your property evaluated and your options discussed. Particularly if you’re going to need staging, it’s key to start getting on the calendars of all the real estate professionals involved.

As always, give me a shout at ebermingham@zephyrsf.com or 415.823.4656, and I’d be happy to meet with you.

What You Can Buy: 21 Days & Counting

I found two single-family homes and one condo that have been sitting on the market for more than 21 days. As active San Francisco buyers know, decent properties that don’t garner multiple offers within one or two weeks of coming on the market are worth considering. If anything, there will be less competition, and you may actually be able to negotiate with the seller.

Here are my picks this week:
1424 Wawona
Parkside

Days on market (DOM): 23
3BR/2.5BA, 2106 sq ft
2 pkg
List Price: $1,188,000

1424 Wawona is one of those houses that doesn’t have the classic San Francisco charm, but it has a very functional floor plan and quiet location on a cul-de-sac across from Stern Grove. All three bedrooms are on the upper level, there’s a nicely remodeled kitchen, updated bathrooms, and a unique yard with a deck on the upper level.

1853 Filbert
Cow Hollow

Days on market (DOM): 23
2BR/2BA, 1,048 sq ft
1 pkg
List Price: $1,185,000

Boasting a prime Cow Hollow location near Union Street, 1853 Filbert features a remodeled kitchen and baths and opens onto a lovely shared patio and landscaped garden. The building was constructed in 1909, so 1853 Filbert has period detailing throughout. There are six condos in the building, and HOA dues are $375/month. Two storage units are included, as well. The property was on the market in 2012 with a last list price of $1,125,000 (down from $1,185,000) and the seller withdrew the listing. But we’re in a new market now, so they’re going for their original price this time around.

381 San Leandro
Balboa Terrace

Days on market (DOM): 32
4BR/2.5BA, 2995 sq ft
2 pkg
List Price: $1,399,000

Looking for a four-bedroom home in a family-friendly neighborhood for under $1.5M? 381 San Leandro Way may be the one for you. The two-story home has it all, including a banquet-sized dining room and remodeled kitchen with breakfast area open to a deck, and all three bedrooms on the same level. Did I mention that the master bedroom has ocean views? The only drawback is that there’s no yard—just a rear easement that allows for a garage and off-street parking. But the space and stately architecture are all there. 381 San Leandro was initially listed for $1,549,000, and the current $1,399,000 price represents a reduction that happened this past week.