Tenancy-in-common (TIC) interests have traditionally been popular with buyers who value a more central location in a desirable neighborhood. Because when it comes to affordability, TICs still will get you more space in a better location than a condo will.
And the neighborhoods in which TICs have sold recently read like a who’s who of hot ‘hoods. Here’s where buyers purchased their TICs from October 2013-February 12, 2014:
Noe/Eureka/Cole Valleys; Mission; Lower Pac Heights; NoPa
Marina; Nob/Russian Hills; Hayes Valley; Presidio Heights.
The average cost of a TIC in that time period was $1,035,252. But that high price is largely due to multiple sales in Nob Hill’s newly renovated Park Lane at 1100 Sacramento. Seven units sold in that building, ranging in price from $1,595,000-$7M. With the exception of that unit sold for $1,595,000, the six other Park Lane buyers paid cash for their units.
But if you take the Park Lane units out of the mix, the average price citywide for a TIC was $839,633 vs $1,011,212 for a condo.
Buyers appear to be comfortable owning TICs and assuming the risks that come with them. Group loans are largely a thing of the past. And for TIC groups that have formed over the past few years, it was pretty obvious that they would be owning a TIC for a long time to come due to the backlog in the city’s lottery system.
Last year’s condo conversion legislation that allowed longtime TIC owners to bypass the lottery addressed some of that backlog. But it also banned other condo conversions beyond those properties for the next ten years.
Based on the most recent sales data, however, it doesn’t appear that the legislation is cutting down on the marketability of TICs—particularly in popular neighborhoods. If you’re a TIC owner who’s ready to move on and your building is in a hot neighborhood, give me a call and I can help you take advantage of the current market.