SF TIC Market: Small But Mighty

SF TIC Market: Small But Mighty

Tenancy-in-common (TIC) interests accounted for a small portion of San Francisco sales in 2019. But the average price was almost $1,300,000, and there were a fair number of luxury sales in the $2,000,000+ range.

Only 262 TICs sold in 2019—a comparably small quantity compared to the 2,530 condos sold. But the fact that there is a still a solid market for a property type that involves sharing title with other building owners speaks to the risks buyers are willing to assume in their quest to become San Francisco homeowners.

The reality is that TICs still afford more space in better locations than their condo counterparts. TIC sales in 2019 were largely concentrated in fewer than 20 neighborhoods across the city—Inner Richmond, Inner Sunset, Noe Valley, Cole Valley, Eureka Valley, Mission Dolores, Hayes Valley, NoPa, Marina, Pac Heights, Nob Hill, Russian Hill, Telegraph Hill, Bernal Heights, Inner Mission, and SoMa.

Unlike the selling pattern for single-family homes and some condos in the city, TICs sold at or under their list prices. There were a dozen or so overbids in the 20%+ range, particularly for units in two-unit buildings.

Top dollar continues to go to TICs in duplexes, as those are the only type that offer condo conversion possibilities. However, there were quite a few overbids for TICs in buildings with three or more units.

The high-end TIC segment made a good showing last year, with 11% of all sold TIC interests changing hands for $2,000,000 or more. The most expensive unit sold was at Nob Hill’s 33-unit Park Lane building at 1100 Sacramento. #708 was a three-bedroom, three bath unit with 2700 square feet and parking that sold for $5,995,000.

TIC loans are done through fractional financing with adjustable-rate loans, and interest rates are pretty reasonable right now. But it’s important to note that fractional loans have some different requirements, such as:
– Origination fee (based on loan amount, typically around 1%)
– 80% financing allowed with minimum 740 credit score; 75% financing allowed with minimum 700 credit score
– minimum down payment required is 20% to $1,000,000, 25% to $1,500,000
– six months of the total housing payment (monthly mortgage, taxes, and HOA dues) must remain in liquid or retirement accounts after close of escrow
– maximum loan amount $1,500,000.

Don’t hesitate to contact me if you’re planning to buy or sell a TIC this year. I’d be happy to chat with you about the details (415.823.4656 | ebermingham@zephyrsf.com).

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Get in touch:

Eileen Bermingham

Corcoran Global Living

415.823.4656

eileen@insidesfre.com

DRE# 01352627

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