2014 Welcomes New Members to SF Overbidders Club

2013 was the year that aggressive overbidding for San Francisco properties returned in full force. It does appear that, based on January 2014’s numbers, buyers are calming down ever so slightly when it comes to throwing money at houses and condos.

But I did manage to find three homes that attracted buyers who were wiling to pay 25% or more over the last price. Say hello to the latest members of the SF Overbidders Club:

746 South Van Ness #A
The Mission

List Price: $863,824
Sale Price: $1,210,000
Overbid Amount: 40%
Closed Escrow: 1/9/14
We can always count on a 3BR Mission condo to attract a cash buyer who’s ok with paying 40% more than asking. This unit is remodeled, with garage parking and patio, as well as a shared yard among the three units in the building.

237 Sanchez
Eureka Valley

2BR/1BA + in-law unit
List Price: $1,195,000
Sale Price: $1,500,000
Overbid Amount: 26%
Closed Escrow: 1/3/14
237 sanchez
Featuring a 2BR main house with a 2BR in-law unit downstairs, 237 Sanchez captured the attention of buyers who most likely really wanted to be in this Castro/Duboce Triangle location. No garage, but who needs one when you have Muni right nearby?

200 Amber
Diamond Heights

List Price: $1,299,000
Sale Price: $1,670,000
Overbid Amount: 29%
Closed Escrow: 1/10/14
It’s not that often that a cash buyer swoops into sleepy Diamond Heights and bids way up on a home. But that was the case for 200 Amber, an Eichler with a lot of bedrooms. Located half a mile from Safeway and the Diamond Heights shopping center, this house also has hills/canyon views.

Where PG&E Gas Lines are in San Francisco

It’s been a few years since there’s been a high-profile PG&E gas line fire in The Bay Area. The San Bruno disaster happened in 2010, but a street went on fire in Oakland due to a gas line eruption in December 2013.

San Francisco has fortunately not been the site of a similar fire recently. However, the gas lines do run underground in the city, and it’s important to be aware of their locations as part of your due diligence when buying a home. You can easily consult the pipeline map (above) on PG&E’s Web site. Just click on the map, and zoom in on San Francisco until you can see the actual street names and gas lines. You can also type in a property address to see which lines are potentially nearby.

The upshot is that most of the lines run throughout the southeast portion of the city. This includes:
– in and around Potrero, Dogpatch, Bayview, and Visitacion Valley
– through Bernal Heights along Folsom
– along the thoroughfares of Alemany, Cesar Chavez, Bayshore Boulevard.

There don’t appear to be any gas lines running elsewhere in San Francisco.

Lots of Love for Bernal + Latest SF Sales

Is Bernal’s north slope the best neighborhood in the United States? According to Redfin, that’s apparently the case, and you can find out why in this edition of the Zephyr MarketTracker. We also take a look at some of Bernal’s current listings.

And San Francisco is the best place to…have a baby? Yes, as per the folks at What To Expect. No explanation from that group as to why most families seem to move out of San Francisco for the ‘burbs, but I’ll go with it.

Find out what citywide properties sold over the past 21 days, and get the most current sales stats.

It’s all here in the Zephyr MarketTracker!

Attend Our SF Home Buyer Workshop!

Yes, the San Francisco real estate market can be daunting to home buyers. But if you get organized, learn what you can do to make it all happen and put your strategy in place, I guarantee you can get what you want (or at least get what you need). It’s time you consult the experts on how to achieve your real estate goals.

I’ve been the blogger of Inside San Francisco Real Estate since I started the site in 2008, and a Realtor since 2002. I like to step out from behind WordPress every once in a while and talk live and in person to prospective buyers.

My colleague, Mike Koran of Primary Residential Mortgage, is a well-regarded lender with an excellent track record.

Together, we’ll be co-hosting a home-buyer workshop that will give you the foundation you need to approach your home purchase in a strategic and intelligent way.

We’ll be covering:
– what to expect in the current market
– how to secure financing before you start house hunting
– how to compete and get your offer accepted
– the purchase transaction timeline.

Where and when:
Saturday, February 8th
10:00 – Noon
1746 18th Street @Arkansas in Potrero
Office of Primary Residential Mortgage
Refreshments provided!

Please RSVP to Eileen at ebermingham@zephyrsf.com or call/text 415.823.4656.

We’re planning on leaving time between 10:00-noon for questions, so it won’t just be a talkfest. Join us, what else is going on in early February?!

20 Ways To Cut Your Water Use By 20%

We are in a serious drought situation in California. Not only was last year the driest calendar year in California since recording began in 1849, but the state’s population has nearly doubled since the 1970s. San Francisco is a dense city, and we all have to take responsibility for making sure we don’t use more than our fair share of water.

Gov. Jerry Brown recently called for people to reduce their water usage by twenty percent. I thought I’d share 20 of my favorite ways to save water; when enough individuals follow these sort of tips, it adds up to a lot of water saved:

1. Run the washing machine for full loads only.
2. Flush the toilet only when absolutely necessary.
3. Use a dishwasher instead of washing dishes by hand.
4. Limit shower use to a max of five minutes; you’ll save up to 1,000 gallons monthly.
5. Turn off the water when you’re brushing your teeth, lathering your hands or shaving.
6. Consider buying a dual-flush, low-flow toilet.
7. Water outdoor plants/lawns in the early morning or late evening.
8. Cut your watering to two times a week instead of seven.
9. Plant drought-resistant trees and flowers.
10. Use a broom to clean the sidewalk and driveway, not the hose.
11. Install low-flow showerheads.
12. Run the washing machine for full loads only. Max out at two loads weekly. Yes, it can be done. Not everything has to be immediately washed after you’ve worn it.
13. While you wait for hot water, collect the running water and use it to water plants.
14. Soak pots and pans instead of running the water while you scrape them.
15. When doing laundry, match the size of the load to the water level.
16. Love baths? Keep them to a minimum. A full bathtub requires up to 70 gallons of water.
17. Install water-saving aerators on all your faucets.
18. Check your faucets and showerheads for leaks. Drips are deadly in droughts.
19. Wash your pets outdoors, in an area that needs watering.
20. Water dry spots in your landscaping by hand instead of running the entire irrigation system.

Ror more tips, check out the non-profit organization Water Use It Wisely.

Why Price-Per-Square-Foot Is a Shaky Data Point

People love to talk about the price-per-square foot when comparing San Francisco property values. There’s also a tendency to reference this type of information when making a decision about how much to pay for a home.

But I don’t recommend using price-per-square foot as a reliable data point, because it has its flaws.

The bottom line is that there’s no standardized square footage source. So square footage quoted in the MLS and marketing materials is typically based on either tax records or past seller appraisals.

It’s no secret that tax records can be wildly inaccurate and outdated. Assessor-Recorder Carmen Chu recently visited our sales meeting at Zephyr and talked about how antiquated the city’s computer systems are. Throw in the fact that our tax records go back to the early 1900s, with some having disappeared after the 1906 earthquake. Even if sellers make an honest effort to update their own tax record through city channels—for example, if they’ve added a legal bedroom and bath—the square footage they’re adding isn’t based on one standard source.

Equally important is the fact that San Francisco’s housing inventory varies, from houses with unwarranted bedrooms and units to TICs that represent a percentage of their overall building. Unwarranted, or “illegal” rooms are those completed without permits, and those spaces are not recognized as part of the overall square footage. TICs will not have a registered individual square footage count in the tax records; the number stated usually represents that of the entire building. It’s virtually impossible to compare apples to apples when it comes to this data point.

Past appraisals could be accurate, but I’ve seen cases where there are two or three appraisals on hand that have all had different square footage counts. And as you might expect, sellers and agents typically reference the highest number. As one agent recently commented to me, “The square footage sometimes grows over time.” She mentioned one property in particular that had changed hands three times over a ten-year period, and each time, the square footage increased in the MLS.

Square footage is strongly referenced in new-construction condo developments, because buyers are paying well over $1,000/square foot for such properties. However, there have been cases when buyers discovered that the square footage quoted for a particular unit was more than the actual size. And when you’re paying $1,000/square foot or more, that can make a big difference.

So if you’re comparing values by price-per-square-foot, do so with a grain of salt.

5 Things To Know About Negotiating New Development Contracts

San Francisco is experiencing a construction boom these days, with new developments going up in neighborhoods on a rolling basis—with many more to follow in the next five years.

There are two ways to handle contract negotiations if you’ve decided to buy a newly built—or not-quite-finished—condo. You can go directly to the sales office, or work with a local Realtor. Some buyers feel that they can handle things on their own, while others appreciate the guidance of a seasoned professional who’s negotiated contracts on other developments in the past.

Regardless of how you approach your purchase, here are five things to know before you sit down with the sales office to negotiate your contract:
1. We’re in a seller’s market, and developers are not discounting their list prices. Most developments are selling out quickly, and at prices that the developer wants. There will likely be another buyer breathing down your neck as soon as you decide which unit you’d like to buy. Of course, you may be able to negotiate a lower price on a less desirable unit that ends up sitting on the market longer.

2. Most of the contingencies are passive. The San Francisco Realtor Association (SFAR) purchase agreement allows for contingency timeframes that require the buyer to remove the contingency on a certain date. That’s usually not the case for the new-construction condo contracts. If the sales office doesn’t hear from you by the time the particular contingency deadline arrives, the escrow marches on and you technically do not have that contingency to fall back on anymore. I provide an escrow timetable to all my clients so everyone is aware of all deadlines, and no one risks losing a deposit.

3. Make sure the parking details in the paperwork match up with what you see in the garage. Will you own your parking space, or is it leased or assigned? Does your space show up on the condo map? Is there a separate HOA just for parking?

4. You should have a final walkthrough prior to closing. The SFAR contract provides for a walkthrough on the property within five days of closing. You’re able to ensure that what you’re buying is in acceptable condition. New home contracts sometimes omit that walkthrough, which can be particularly problematic if you’ve been promised that certain items will be installed by close of escrow. It’s a good idea to insist on a walkthrough.

5. You may be able to negotiate concessions. If the price is firm, has the developer been throwing in any appliances or upgrades? Typical concessions are refrigerators or upgrades on finishes if a unit hasn’t yet been completed. If you’ve decided to work directly with the sales office, they will not usually be forthcoming about concessions because they’re representing the seller and are trying to get him or her the best deal possible. On the other hand, a well-connected Realtor (like me) can confer with colleagues who have sold units in the building to see what you may be able to request and likely achieve.

Sales offices always require that your agent register with you upon your first visit to the building. So if you would prefer the benefit of working with a Realtor and want to see condos in a particular building, make sure to schedule a time to go to the office together.

There are probably another 20 items I could add to the list above, and I’d be happy to provide my guidance if you’re interested in one of the many new developments that are selling now or will be releasing units soon. Give me a shout at 415.823.4656 or ebermingham@zephyrsf.com if you’d like to talk.

What You Can Buy: Large Condos in San Francisco

San Francisco is a dense city, not unlike other popular urban areas. Many of its single-family homes and condos can average 1,000-1,200 square feet (or less). However, large condos are a fun find, and buyers who need more space typically snap them up quickly. Here’s a look at a trio of spacious units that recently hit the market:

620 Haight
Hayes Valley

3BR/2BA, 1827 sq feet
1-car tandem parking
List price: $1,099,000
I previewed the Edwardian top-floor flat at 620 Haight before it officially came on the market and was quite impressed with the space. This is a highly convenient location within steps to restaurants, bars, cafes and services, as well as a few blocks from two Muni rail lines. The unit features soaring ceilings, great period detail throughout and a nicely remodeled kitchen with plenty of room for entertaining. All three bedrooms are a good size (e.g., one isn’t a closet under the stairs). Bonus: There’s a private deck and shared manicured yard. HOA dues are $343.50/month. This unit was last sold as a TIC in 2005 for $1,110,000, after about $300,000 in renovations were completed.

881 Corbett #3
Twin Peaks

3BR/3.5BA, 2545 sq feet
1-car parking
List price: $1,549,000
881 Corbett #3 is the two-level penthouse in a three-unit condo building. It’s detached on three sides, which translates into great natural light, and there’s also a huge, west-facing terrace. You can also enjoy the stunning view deck off the living room. So this condo is all about views, light, and more space than you’ll get in Noe Valley for the price. There are three master suites, so if you have kids, they’ll appreciate having their own bathrooms. The seller has agreed to pay HOA dues through August ($349/month), and you also have the option of parking a second car in front of the driveway because you’ll only be blocking your garage. Last sold in January 2012 for $1.3M, it will be interesting to see how much this condo has appreciated since then.

323 Mississippi
Potrero Hill

3BR/3BA, 1775 sq feet
1-car tandem parking
List price: $1,249,000
323 Mississippi has a house-like feel, and is situated in an ideal Potrero location around the block from Plow, Farley’s and half a dozen other popular restaurants. The unit was expanded into two floors about six years ago with the addition of a master bedroom on the garden level. Unlike the more contemporary Twin Peaks condo, this one is in a building constructed in 1909. The owners have preserved the picture moldings, coved ceilings and other period details, yet have updated the unit for more modern living. Amenities include in-unit laundry, interior garage access, additional storage and shared yard. And oh, yeah—three bathrooms.

Buyers Snap Up 1BR Condos in San Francisco

San Francisco attracts many single professionals, couples and empty nesters who need the space a 1BR condo offers. They won’t necessarily need a second bedroom. And they would prefer to be in a more central location than their money would buy were they to pursue a 2BR condo.

That makes the 1BR condo market quite strong in San Francisco.

The average 1BR condo price here was $688,120 in the last quarter of 2013. A majority of sales took place in larger buildings in South Beach, along the Van Ness corridor, Mission, SoMa and Mission Bay. Buyers paid an average of four percent over the list price.

Believe it or not, 11 of the 293 one-bedroom condos sold during this time period changed hands for $1M+. The most expensive was an 1800-square foot unit at Millennium Towers that sold for $2,385,000 on Christmas Eve (see above photo).

The most expensive neighborhoods for 1BRs are the Mission, Mission Bay, South Beach and South of Market. Average prices ranged from $729,000-$754,000 in these areas. If you don’t quite have the budget for that, you’ll want to focus on Diamond Heights, Western Addition, Downtown, Van Ness corridor, and Potrero. Plenty of 1BRs sold for $600,000 or less there in the previous quarter.

This type of property is an excellent option for a buyer who wants to owner occupy for a few years before moving up to a larger space and renting out the 1BR. I’ve had many clients do this, and the key is purchasing a place that’s close to public transportation, freeways, and a good retail area.

House/Condo Averages Break $1M in Q4 2013

San Francisco real estate values experienced a big jump in 2013, as evidenced by the house and condo averages in the last quarter of that year.

Thinking of buying a house this year in the city? The average price of a single-family home was $1,348,493; and 25% of the houses reported sold in the Multiple Listing Service (MLS) changed hands for $1.5M or more. A little more than half of the houses sold for less than $1M.

As usual, condo averages are lower. Buyers paid an average of $1,003,990 for a San Francisco condo. Only about 14% of these condos sold for $1.5M+, and 63% sold for under the $1M mark.

The upshot is that you should be aware of the overall averages when you start your house hunt so you have a realistic sense for what you can afford. Most importantly, have your agent bring you up to speed on the activity within the specific neighborhoods you like. For example, the average price of a 2BR condo in Noe Valley or Pacific Heights is very different from that of one in the Outer Richmond or South Beach.

And if you’d like to tap my expertise, just get in touch and we can get you started!

2014 Sunday Streets Schedule is Set

I grew up in a tight-knit community in New York, where we had annual block parties that let us ride our bikes and play games in the street. That’s why I’m a huge fan of the Sunday Streets concept in San Francisco.

Sunday Streets coordinates events throughout the city where streets are closed to cars for several hours so neighbors and visitors can participate in a variety of physical activities such as biking, dancing and yoga. Non-profit and health groups also provide info and activities about their services.

The eight dates and locations for Sunday Streets 2014 have been set, with such neighborhoods as the Mission, Excelsior and Bayview among the lineup. Click here for the full schedule.

Just Sold: 231 Jules in Ingleside

My listing at 231 Jules in Ingleside closed escrow just before the holidays. The property, sold through a short sale, garnered eight offers and was listed for $629,000.

Ingleside has proven to be a popular options for buyers looking to get into a neighborhood that provides access to a growing retail area and a Muni rail line. It’s also near the Balboa BART station and 280. For more on Ingleside, check out the Zephyr neighborhood profile here.

Ten SF Real Estate Predictions for 2014

Welcome to another exciting year in San Francisco real estate. If you’re reading this, there’s a good chance you’re interested in buying or selling property. So it’s important that you understand what to expect in 2014.

In 2013, we experienced the return of extreme multiple-offer situations, consistently low inventory and many homes recovering equity after the economic downturn. New construction began blanketing the city and many new developments are in the pipeline.

So what’s on tap for the new year?

I have a few ideas:
1. We’ll be seeing a more balanced market. We hit our peak in the summer of 2013 with wild buyer behavior and sellers flabbergasted at the prices they were being offered. But with the holidays cooling things down and buyers gaining some perspective, I’m predicting I’ll have fewer entrants in the SF Overbidders Club this year. Higher mortgage rates are widely expected, and more supply created by new construction and fewer underwater homeowners will keep things even.

2. Inventory will hit the market right away. “After the Super Bowl” has traditionally been the timeframe that has ushered in new inventory. However, January 2013 offered new inventory immediately, and I predict that January 2014 will be no different. I’m already seeing off-market listings being promoted among my colleagues for early January showings, and many agents are reportedly holding new listings back until mid January. Sellers want to capitalize on the strong market presented in 2013.

3. Home values will experience modest increases. The average citywide price for a single-family home was $1.3M+, and just above $1M for condos—well above the averages of most other cities in the United States. But demand continues in San Francisco, especially in popular, central neighborhoods near public transportation, retail areas and services. We’ll see appreciation in the 3-6% range.

4. Competition will still be fierce among buyers. There will be multiple offers on most homes. A whole new crop of buyers will be entering the market this year, and there are only so many properties available. I’ve already met with half a dozen prospective buyers in late 2013 who are ready to get going, and I’m sure my experience as a Realtor isn’t isolated.

5. The luxury market will make a strong showing. More than 350 houses and 120 condos sold for more than $2M in 2013, and one TIC even sold for just under $4M. San Francisco attracts local and foreign luxury buyers, and will continue doing so this year.

6. The “list low, sell high” strategy will prevail through 2014. Houses sold for an average of five percent above their list prices in November-December 2013, and condos for approximately four percent over. (Buyers frequently paid 20%+ for homes with all the amenities in hot neighborhoods like Mission Dolores/The Mission; Noe/Eureka Valleys and Bernal Heights.) This activity is the direct result of sellers listing their homes below true market value in order to create bidding wars, and the strategy paid off handsomely in most cases. There’s no reason to think it won’t continue this year.

7. The TIC market will remain stable. The restrictive condo conversion legislation passed in San Francisco in 2013 didn’t seem to have had an impact on the number of tenancy-in-common (TIC) units sold. A total of 341 TIC units changed hands in 2013, which was only slightly less than in 2012 (357 sold).

8. More southeastern neighborhoods will have their breakout years for owner-occupier buyers. Though neighborhoods such as Bayview, Visitacion Valley, Portola, Crocker Amazon and Silver Terrace aren’t typically where most home buyers start out looking, the reality is that these are the neighborhoods where you can still purchase a single-family home for well under $1M. My clients purchased their first house in Crocker Amazon last month, and they used an FHA loan so they could reserve their cash for fixing up the property. We had to prevail over 18 other buyers who submitted offers, so it’s clear that the southeastern portion of San Francisco is catching on.

9. Cash sales will continue in notable volume. About a quarter of house and condo sales in the city were sold in cash transactions in 2013. Foreign investors and the tech sector will again drive cash sales in 2014.

10. New construction condos in central San Francisco neighborhoods will cost you well above $1,000/sq foot. Several condo developments along the Market corridor and in Hayes Valley sold out quickly with prices averaging $1,000/sq foot or more. In the hot Mission district, it was more like $1400/sq foot. These sales results will set the bar for 2014 new development pricing. After all, there are plenty of people who love new, shiny finishes, not having to worry about maintenance and transit-rich, central locations. And they will pay a premium for the opportunity to live in a building that delivers all three of those qualities.