SF Market Shows Signs of Stabilizing

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The San Francisco real estate market is actually showing signs of stabilizing. That means we’re starting to see fewer offers on properties, fewer extreme overbidding situations, and buyers having offers accepted that—dare we say it?—have contingencies.

For those of us working in the field, networking with our colleagues and representing buyers and sellers in very recent transactions, it’s pretty obvious that things are calming down a bit. Our sales meetings in the first few months of the year were filled with reports on eight, ten or 15+ offer situations. Now it’s more like three or four. My clients are purchasing a condo in Bernal Heights, and their contract had the full appraisal, loan and inspection contingencies.

A look at single-family home and condo sales through June 25th reveals sales prices of only 7.5% above list price on average for condos, and 12% for houses. Of course, there are the usual hotspots (Mission and NoPa condos, Bernal and Noe Valley houses) where buyers are still recklessly throwing money around (see 334 Winfield, pictured above, listed for $1,295,000 and just closed for $1,765,000 in an all-cash transaction). But in the rest of the city, properties are not selling for way, way over the list price.

But let me be clear: Prices are not declining in San Francisco. Single-family homes sold for an average of $1,648,329 in June, and the average condo price was $1,175,558. If you’ve made a purchase or will do so in 2014, it means you’re at peace with what the market demands right now. And if you’re planning to buy between now and the end of the year, I believe that the summer will be the sweet spot due to less competition among vacationing buyers.

The Most Competitive House Markets in San Francisco Right Now

If you’re aiming to buy or sell a single-family home in San Francisco, it’s important to take note of the selling patterns in the city’s various neighborhoods. You’ve probably read my blog post from earlier this week on the hottest condo markets, but when it comes to overbidding on houses, the landscape looks slightly different.

The neighborhoods where buyers are overbidding most intensely are varied, and there are many. Here are the most competitive markets according to the average overbid percentage:
Inner Sunset 26.18%
The Mission 22.47%
Glen Park 21.95%
Inner Parkside 21.61%
Miraloma Park 20.48%
Noe Valley 20.14%
Bernal Heights 19.94%
Ingleside Heights 19.51%
Forest Hill 19.45%
Ingleside 18.96%
Crocker Amazon/Outer Mission 18.18%
Eureka Valley 17.77
Sunnyside 17.69%
Central Richmond 16.58%
Outer Richmond 15.38%
Potrero Hill 15.15%

The Runner-Ups
Central Sunset/Parkside 14.93%
Outer Sunset/Outer Parkside 14.80%
Excelsior 14.74%
Portola/Silver Terrace 13.93%
Mission Terrace 12.81%

The Most Competitive Condo Markets in San Francisco Right Now

One of the keys to success in the current San Francisco market is knowing which neighborhoods are the most competitive. Armed with that intel, you can more easily gauge how much to offer on a property, or what list price will work to your advantage.

As many of my regular readers know, I’ve been running a feature highlighting extreme overbidding for several months, regularly inducting new members into the SF Overbidders Club. The reality is that we have many neighborhoods in San Francisco that are showing double-digit overbid percentages, and it’s important to know what the selling patterns are when you’re determining values.

When it comes to the San Francisco market, these patterns can change pretty quickly. My sales data is based on reported MLS sales in the time period April 1 – May 12, 2014, so it’s the most current info available.

Here are the most competitive neighborhoods and their average overbids right now for condo sales:
1. Cow Hollow: 21.87%
2. Cole Valley/Buena Vista Terrace: 21%
3. The Haight: 19.85%
4. Eureka Valley: 18.69%
5. Noe Valley: 16.28%
6. NoPa: 15%
7. Pacific Heights: 13.88%

The Runner Ups
Bernal Heights: 11.37%
Mission/Mission Dolores: 10.49%
Potrero/Dogpatch: 10.49%
Corona Heights: 10.16%
Hayes Valley/Alamo Square: 9.6%
Presidio Heights: 8.52%
Lower Pacific Heights: 8%
The Marina: 7.61%
Mission Bay: 6.32%
SoMa: 6.61%

As for more specifics on how much you should offer or for what price you should list your home—well, that’s my job, and I’m happy to work for you. Give me a shout at 415.823.4656 / ebermingham@zephyrsf.com and we can talk about how I can help you. And yes, I’ll be hitting up the single-family home market later this week so you can see where the hottest markets are right now in the city.

Latest Sales, Value of Staging, Spotlight on Portola

The new Zephyr Market Tracker explores the southeast neighborhood of Portola, checks in on whether staging makes a difference in the current market and gives you the lowdown on the most recent citywide sales.

And of course, you’ll get the market overview for single-family homes, condos and two- to four-unit buildings.

It’s all here in the Zephyr Market Tracker!

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

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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.