Latest SF Sales, Spotlight on SoMa

Who doesn’t love to look at sales reports hot off the presses? This edition of the Zephyr Market Tracker shows you what sold, and for how much above or below the list price.

We also look at what’s for sale in SoMa, and what Project Open Hand recently did for the community.

It’s all here in the Zephyr Market Tracker!

RSVP for Home Buyer Boot Camp!

Get in shape for the Spring real estate market by attending our Home Buyer Boot Camp! Back by popular demand, Boot Camp will whip you through the ins and outs of getting financing, writing a winning offer and completing a smooth transaction. We’ll give you tons of practical, useful information you won’t find anywhere else.

Here are the deets:
Date: Saturday, April 19th
Time: 10:00-noon
Place: 1746 18th Street (betw Arkansas & Carolina in Potrero Hill)
Your Hosts: Yours truly, blogger-Realtor Eileen Bermingham of Zephyr Real Estate, and loan extraordinaire Mike Koran of Primary Residential Mortgage.

We’ll have refreshments and we won’t make you do push-ups. RSVP today to Eileen at ebermingham@zephyrsf.com, or call/text at 415.823.4656. I’ll confirm your reservation. Space fills up quickly, so please RSVP as soon as you can so we can guarantee you a seat.

Where’s 2014 Going in SF Real Estate?

The first quarter of 2014 is history, but the sales stats and other market conditions I’m experiencing give us an idea as to where the market is heading this year.

Let’s take a look at activity for single-family homes and condos first:
Single-Family Home Market
# Sold: 442
Average Price: $1,401,901
Percentage of Cash Sales: 25%
# Homes Sold for $1M or Less: 226
Where to Buy for $1M or Less: Outer Parkside/Sunset; Parkside/Central Sunset; Merced Heights; Ingleside; Midtown Terrace; Miraloma Park; Sunnyside; Bayview; Crocker Amazon; Excelsior; Outer Mission; Visitacion Valley; Portola; Silver Terrace.
Volume Lower, Prices Higher: It was full speed ahead for the single-family home market in the first quarter. Though volume was down slightly from the first quarter of 2013 when 497 houses sold, the average price was up from $1,164,962 (Q1 2013). Of the 109 cash sales, more than half were for homes above $1M, including a $10M home on Green Street in Pacific Heights and a $7M property on Duncan in Noe Valley.

Condo Market
# Sold: 568
Average Price: $1,033,560
Percentage of Cash Sales: 24%
# Homes Sold for $1M or Less: 321
Where to Buy for $1M or Less: Ingleside Heights; Diamond Heights; 1BRs in Eureka Valley and NoPa; Western Addition; Downtown; Van Ness Corridor; Bernal Heights; Mission; Mission Bay; Potrero; SoMa; South Beach; Dogpatch.
Volume Again Lower, Prices Higher: The condo market also didn’t miss a beat where prices were concerned. A total of 546 condos sold for an average of $901,046 in Q1 2013. A year later, the average has broken $1M.

Where Are We Headed in 2014?
I’ve received at least half a dozen calls or emails from clients in the past two weeks asking whether it’s a good time to sell. The concern is that selling now may find them leaving money on the table if prices increase.

I think that if you own a home right now and are in a position to sell it, you should take advantage of this market. For one thing, interest rates are on the rise. And though 25% of buyers are running around with cash, the other 75% of the buyer pool will be sensitive to higher interest rates, and will be watching their offer prices a bit more closely. I also believe that we’re in somewhat of a peak period, and that prices have only so much further to go this year before they flatten. I didn’t feel that way in 2010, 2011, 2012 or 2013. But based on market activity to date, it feels like 2014 will be different.

Another major factor that may keep resale prices even in 2014 is the expected increase in inventory. We’ll see the typical inventory bump in Spring and Fall, as well as many new construction condo projects kicking off sales on many buildings in the city pipline. This means that buyers will have more properties to choose from. And for sellers, that will translate into less offers per property and less intense overbidding.

SF Real Estate Market Strong, Despite Earthquake Risks

I was interviewed for a story that ran yesterday in the British daily The Guardian about the threat of a large earthquake and how that might influence people when they consider purchasing real estate in San Francisco.

Yes, local market is particularly strong right now, and yes, I routinely have conversations with home buyers about the concept of earthquakes and how they can protect their investment. When it comes down to it, it’s important to know what ground you’re on and how solid your foundation and other seismic components are.

The Guardian’s Nate Berg did a great job presenting all angles of this topic. Check it out here:
When, Not If: How Do San Franciscans Live With the Threat of the Next Quake?

And if you’re interested in my take on earthquake insurance, this past blog post discusses that:
Should You Buy Earthquake Insurance?

Spotlight on Mission Dolores Park, SF Conserves Water

The latest Zephyr MarketTracker gives you the scoop on Mission Dolores Park’s renovations, and also takes a look at a couple properties on the market in this very popular neighborhood.

We also congratulate San Franciscans for leading the way where water conservation is concerned!

You’ll also see recent sales and a market overview. It’s all here in the current edition of the Zephyr MarketTracker!

Spring a Good Bet for More Inventory

We’ve been operating at a very low housing inventory to date in 2014. It seems like there are anywhere from five to twenty buyers for every property that comes on the market, creating consistent multiple-offer situations and substantial overbidding.

I do expect this activity to continue throughout the year. Our economy is strong in the city, and there is seemingly no end to the number of buyers who are materializing and willing to pay very high prices for homes. But I believe there are many homeowners who are in the process of either planning a move or seriously considering one. It’s hard to pass up an opportunity to cash out, especially if you own a home in a very “hot” neighborhood.

As a result, we can expect a spike in inventory as soon as April, which will scatter buyers around a bit more. Coupled with new construction condo projects beginning sales in the Spring, the pressure should ease a bit on the resale market.

What’s the takeaway? If you’re a buyer who’s planning to start looking in the Spring, it’s important to get sorted out now with your financing. And if you’re a homeowner, this is the time to start preparing your home with painting, repairs and staging so it stacks up well against the competition.

Pricey Prospects for New Condos in SF Pipeline

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It’s been quite a year for developers of new construction condos and houses in San Francisco. After an economic downturn during which very few new projects were built in the city, construction lurched ahead again—particularly along the Market Street corridor, in Hayes Valley, the Mission and many other popular neighborhoods.

And oh, what a reception these new developments received! Projects such as 300 Ivy in Hayes Valley and ICON in the Castro sold out in record time, and at record prices. Buyers seemed very willing to pay a premium of $1,000-$1200/sq foot for new and shiny, particularly in transit- and retail-friendly communities. And 3500 19th Street at Valencia took advantage of the tech-buying boom and Mission mania by largely selling out all of its 17 condos with sales prices in the $1.3M-$2.3M range.

There are 1800 new construction units on tap for 2014, with more than 50,000 new units in the pipeline for the next six or more years. But if you’re a buyer who’s thinking about holding out until a unit in a particular building becomes available, be aware that prices will only go up from here. For example, currently being built is 35 Dolores, the former car repair warehouse across the street from the recently built rental building with Whole Foods as its anchor. 35 Dolores will likely finish construction in the summer, but will start selling in April. A majority of the units will be two bedrooms, and pricing for premium units will be $1500/sq foot.

Another very high-end project is 1645 Pacific, which is focusing on its handcrafted construction style that mimics an old-world, north-end-of-town architectural style. Final pricing hasn’t been released, but $1200/sq foot+ would seem to be the minimum starting point. The ultra luxury Park 181 at 181 Fremont will be asking $6M-$8M per unit, and Lumina (a.k.a. Infinity 3 and 4 at 201 Folsom) expects a $1B sellout by the time buyers finish snapping up all 651 units.

Not everything will be as stratospheric in price, though. But you can expect buildings like Fifteen Fifteen in the Mission, Onyx in Potrero, and Millwheel in Dogpatch to be in that $1,000/sq foot range. I believe upcoming Hayes Valley projects such as 400 Grove and 450 Hayes to be in the $1100+/sq foot range, based on 300 Ivy’s sales.

So if you’ve got you’re heart set on shiny and new, be prepared to pay a premium. If you want more space for the money, set your sights on the resale market. And if you have any questions on what’s in the works for new condos in any part of the city, please get in touch. Keeping track of all these cranes is a part-time job, and I can get you the scoop on whatever interests you.

Excelsior in the Spotlight, SF Gets Dynamic

The latest Zephyr MarketTracker shines the spotlight on the Excelsior neighborhood. Recently profiled in The Chronicle for its residents’ desire to build up the retail area along Mission, the Excelsior continues to attract first-time home buyers.

We also take a look at which American cities are considered to be the most dynamic based on a variety of factors. Guess which city tops the list?!

Plus recent sales and stats. It’s all here in the Zephyr MarketTracker!

All About Location for TIC Sales

972Dolores
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.

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?!

Buyers Snap Up 1BR Condos in San Francisco

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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

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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!

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.

Modest Price Increases in SF, Spotlight on Potrero Hill

The new Zephyr MarketTracker is out, and the biggest news is that prices in the single-family home and condo markets are only up 2.8% and 3.8%, respectively, over the past six months.

We also take a look at some properties in Potrero Hill (average price, roughly $950,000 for a home), as well as note that the move-in date is coming up for Nob Hill’s Marlow development.

Plus, details on the Fairmont’s giant gingerbread house! It’s all here in the latest edition of the Zephyr MarketTracker.

Buyers Land Holiday Deals in Luxury Market

The rule of thumb in San Francisco real estate is that if you’re sitting on the market for a very long period of time—and the holidays are approaching—-it’s highly likely you’ll eventually sell for significantly less than your original list price. Though most sales in our city are closing for above list price, I did find some recent sales that wrapped up after Thanksgiving.

In other words, the sellers came to grips with the reality of their home’s worth, and got it all done before the end of the year:

21 Laidley
Glen Park

Original List Price: $1,950,000
Sale Price: $1,410,000
Days on Market (DOM): 57 days
21laidley
Views certainly count for something in San Francisco, but so do the number of bedrooms, parking availability and location. 21 Laidley doesn’t have parking, and though it’s in a nice part of Glen Park, the two-bedroom limit and a tucked-away locale didn’t quite merit an almost $2M price tag. I think the buyer paid an appropriate price for 21 Laidley.

1081 Pine #401
Downtown

Original List Price: $3,125,000
Sale Price: $2,300,000
DOM: 136
1081pine_401
1081 Pine #401 is a two-level townhome with a nicely remodeled kitchen, private balcony, three bedrooms/baths, and two-car parking. It also carries a $900/month HOA fee and is situated on a busy street. So the $3M+ starting point did seem wildly ambitious. But hey, if you’re a seller who’s not in a hurry, you can list in the summer and wait around for a buyer to pay your price. That didn’t happen, but they sorted things out in early December, probably dreading making a go of it in 2014 with an overpriced downtown condo listing. And the buyer paying all cash undoubtedly greased the wheels.

1350 Jones
Nob Hill

Original List Price: $4,500,000
Sale Price: $2,900,000
DOM: 234 days
1350jones
Located on a prime Nob Hill street, 1350 Jones is a London townhouse-style single-family home with interesting architectural details. But it basically needs to be completely updated, so the more palatable $2.9M selling price will most likely allow the buyers to invest in some remodeling and create a very cool home.