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Rents Falling in 2017 in SF While Rising in Some Bay Area Cities

San Francisco is the most way, way expensive city to rent in globally, as we blogged about on February 28th. That’s what a worldwide survey conducted by Nested concluded. We are the champs of high rents. Yet, rents are falling in the city and around the Bay Area over the past few months.

According to a just-released report from Zumper SF’s rents dropped 9 percent since the last report it released in 2016. The median rent is now $3,270 for a one-bedroom apartment, which on the face is still very expensive. Yet, it’s a drop. Meanwhile over in Redwood City and San Jose (of the Silicon Valley tech region) rents are climbing—with $2,730 and $2,890 respectively. But overall, across the Bay Area rent prices are declining.

Further the overall rent picture is one of dropping (including the Silicon Valley region). SFcurbed.com reports that, “It turns out this was a region-wide trend: Median rents on Zumper are down 15 percent in Redwood City, Burlingame, and Emeryville, 13 percent in Santa Clara, 12 percent in South San Francisco, 10 percent in Fremont, and nine percent in Mountain View.”

160 Folsom St Pretzel-Twist Tower Set to Go to Next Phase

A condo tower called “Bay Tower” that twists horizontally in two directions as it rises up 400 feet will soon be an SF architectural conversation piece at the northwest corner of Folsom and Spear in the Transbay District. Architect Jeanne Gang’s vision for this stunningly exotic building has cleared building permits with the site-clearing permits (which includes excavation, shoring and pile driving) are on hold but are expected to be approved soon.

The site clearing work is expected to begin within a month and first occupancy is slated for the first quarter of 2020. The tower will house 391 condos with 156 designated as BMR (below market rate). A grand total of 10,200 square feet of retail space will be built into the tower. Underground parking servicing 340 cars will be part of the construction.

The height limit of the Bay Tower was successfully raised from 300 feet to 400 feet awhile ago through the planning department.

Bidding Battles Still Raging in SF, San Jose & Oakland

A new national report from the real estate Redfin observed that in the home buying market in the SF Bay Area bidding battles are the usual for each home, rather than the unusual. And for once San Francisco is not leading the national list.

San Jose is at the top of the national over asking list with 63% of homes sold going above the asking price in February 2017. San Francisco was second with 62% and Oakland coming at number 3 with 59.1% being involved in bidding wars.

In San Francisco in February the median price went up to $1.18 million. That is a 14.6% increase from January. San Jose’s median home prices went up 7.4% to $881,000. And Oakland’s median price for homes climbed to $600,000 with a 3.4% uptick from January.

The Redfin report stated that in San Francisco homes stayed on the market an average 28 days, while those in San Jose were on the market for a 21-day average. Oakland’s average was very fast with sales occurring by 15 days of being on the market.

Local Charming Small Towns for Spring is Here Visits

Spring is in the air now that all the atmospheric river storms have come and gone—well, at least for now. And last week we even had snow dusting on our local mountain tops and high passes. The greater Bay Area is flush with water and great soil, and now sunshine, and the blooming season is blooming away.

SFcurbed.com just came out with a great list of 20 small towns that are nearby for a pleasant car ride to and experience the uplifting range of towns, environments and history we possess.

#1 Davenport: just north of Santa Cruz on the coast with gorgeous views and a jail that has only been used twice from1914 – 1936 (now a museum).

#2 Yountville: one of the real charmers in the Wine Country and home to The French Laundry restaurant and other cultural icons.

#4 Port Costa: Over near Concord this town is a living piece of history, was once an important small port for the Southern Pacific Railroad. Boasts the Warehouse Bar, founded in 1883, and is pretty much the same as 134 years ago.

Click here for the full story.

The 20 Best Happy Hour Watering Holes in San Francisco

Happy hours are a cultural fixture (and time) in SF after-work life, and who knows how many really good literary or artistic or business ideas have gestated in the wombs of happy hour establishments. Plenty, undoubtedly.

But, the pressing question is: where are the best happy hours in our city?

Sfweekly.com has come up with a list of the 20 top spots based on good times, quality of drinks and food, price, ambiance and other psychometrics.

At the top of the list is Pi Bar in the Mission. Their happy hour fete starts at 3:14pm and runs for 3 hours and 14 minutes. How’s that for symmetry?

Next is Jersey on Second Street. Despite the east coast name, this is a west coast SoMa Italian eateries treasure. HH starts at 2:30, and the prices are very good and great pizza or burgers to go with the drinks.

Over in Mid-Market is the Corridor offering a finely nuanced menu of libations and brews from 3-6pm. All drinks are 5 bucks, and there’s good sides too.

Click here for the full story.

Steep Drops in $500,000 or < Home Market in SF & Bay Area

Home sales across the board in the greater Bay Area dropped 9.4 percent in 2016—a decline of 6,466 successful sales. In SF the decline was 11.5 percent. This according to a recent report from Property Radar. Separating out the $500,000 and under market the drop is over-a-cliff: 24.6 percent down. In 2015 the lower priced homes sold totaled 18,945. In 2016 the total of lower priced units sold was 14,276. Across the Bay Area 62,000 homes sold.

On the other hand, sales of pricey homes (more than a million dollars) slightly climbed in 2016 by 1.5 percent with 19,277 homes or condos selling. Sales for anything less than a million bucks have declined year over year over the past few years.

In San Francisco, in January 2017, one title company recorded 110 home sales in SF. Of those, 10 cost $500,000 or less and 8 sold from between $500,000 – $700,000. Observers point out that one of the reasons that lesser priced homes are not being sold as much as in the past is because fewer homes are priced in that low range. Median prices have gone up over the year—including in SF where a single family home is now $1.17 million, up from $1.15 million in 2016.

What Costs How Much Where in San Francisco

Below are 3 charts from our updated 9-chart report that breaks down which neighborhoods one is most likely to find a home within a specific price range, whether house or condo. The report covers homes from under $1 million to over $5 million.

If you want to buy a house under a million dollars, one is now mostly limited to the neighborhoods that run across the southern border of San Francisco.

The full report is here: San Francisco Neighborhood Affordability

What Can I Buy for $1,200,000 or $2,000,000?
Below are illustrations of the wide range of homes (and, to some degree, lifestyles) one might buy at two different price points in the city. The higher a home is located on the vertical axis of the charts, the greater its square footage. (Note that the bathroom specifications can be a little screwy, for example 1.3 or 1.7 baths, because these are averages of homes sold at these approximate price points.)

$1,200,000 is approximately the median home price in San Francisco if one combines both houses and condos. For that price, one could buy a 4-bedroom, 2135 square foot house in Ingleside or Oceanview, or a 3-bedroom, 1566 square foot house in Outer Parkside, or a 2-bedroom, 1070 square foot condo in Pacific Heights.

For $2 million, one could purchase a gracious 4-bedroom, 2650 square foot, detached house on a large lot in Forest Hill, or a classic 2-level, 3-bedroom, 1900 square foot condo with a garden in the Marina, or a 2-bedroom, 1350 square foot, luxury high-rise condo with spectacular views in South Beach.

Quick Market Update
December through February constitute the slowest sales months of the year and are subject to significant seasonal issues, so coming to definitive conclusions about where the market is heading based on their data is difficult. However, for what it is worth, comparing the 3-month period to the same period a year ago, the median house sales price at $1,290,000 is up 4.5% and the median condo sales price at $1,050,000 is down 4.1%. As mentioned in earlier reports, the big dynamic affecting the condo market has been the surge of new-construction inventory hitting the market in the past year, just as demand started to soften. The inventory of new condos for sale is now at its highest level in 7 years, and, not surprisingly, this is impacting the supply and demand dynamic for condos, especially in those districts where new construction is concentrated. On the other hand, the inventory of house listings continues to remain at record lows, keeping that market, especially its more affordable segments, quite competitive.

This chart below reflects the latest Case-Shiller Home Price Index for the 5-county metro area house market, going through the end of 2016. It illustrates how in 2016, more affordably-priced houses continued to appreciate significantly, while the most expensive segment basically plateaued. Generally speaking, this is a common dynamic around the Bay Area.

San Francisco Median Home Price Trends since 1994
For a longer-term perspective

New Listings Begin Pouring onto the Market Again

The period of March through May is usually the most active selling season of the year, and we will soon have more conclusive indications of where the 2017 market is headed. This next chart illustrates the typical, dramatic surge of new inventory that fuels sales during this season.

San Francisco Home Sales with Views
SF is a city known for its wide variety of gorgeous views, which can add substantially to the value of a home so graced. Of all the house sales in 2016, only 88 reported having a Golden Gate Bridge view, and some of those were peek-a-boo views (i.e. if you lean out the bathroom window on the top floor) or roof deck views. A full-on, panoramic view of the GG Bridge from Pacific Heights adds over $1 million to the median house price there. Unsurprisingly, condos have the most, and most spectacular, views due to high-rise condo projects.

San Francisco Home Sales by Bedroom Count

Renting vs. Buying in San Francisco

Comparing the purchase, with 20% down, of a 2-bedroom/2-bath condo with the rental of a comparable apartment in San Francisco.

Every year or so, we like to update this analysis using current median sales prices and average rents for comparable 2-bedroom condos and apartments. Rent vs. buy calculations can be performed a wide variety of ways, and results will depend on your own financial circumstances and economic projections, which you should review with your accountant. There is a versatile calculator published by The New York Times, where one can play with all the financial factors involved: NYT Rent vs. Buy Calculator. Our analysis represents simply one scenario, which is meant to be more of an invitation to perform your own calculations than a definitive conclusion on the subject.

Depending on your circumstances, plans and predictions for the future, renting may well be the best choice for you. However, low interest rates, high rents, loan principal pay-down over time, inflation and appreciation rates, and the large tax benefits that accrue to homeownership typically give a large long-term financial advantage to buying, if you have the funds for the cash down-payment. (Of course, as with any investment, financial results will ultimately depend on your purchase and sale dates.) This next chart compares net monthly housing costs between renting and buying after tax deductions and principal repayment are accounted for. Our full report goes into much greater detail, such as the accumulation of wealth, in the form of home equity, over time. Please contact me if you would like a copy.

Other recent Paragon reports you might find interesting:

A Comprehensive Survey of the 2016 Market in San Francisco
San Francisco Luxury Homes Market Report
A Survey of Real Estate Markets around the Bay Area
Bay Area & San Francisco Home Price Maps

It is impossible to know how median and average value statistics apply to any particular home without a specific comparative market analysis, which we are happy to provide upon request.

These analyses were made in good faith with data from sources deemed reliable, but may contain errors and are subject to revision. It is not our intent to convince you of a particular position, but to attempt to provide straightforward data and analysis, so you can make your own informed decisions. Median and average statistics are enormous generalities: There are hundreds of different markets in San Francisco and the Bay Area, each with its own unique dynamics. Median prices and average dollar per square foot values can be and often are affected by other factors besides changes in fair market value. Longer term trends are much more meaningful than short-term.

© 2017 Paragon Real Estate Group

In March Snow Dusted Our Surrounding Bay Area Mountain Tops

The Winter Wonderland look just visited us again in the normally no-snow-zone Bay Area. Maybe a lot of us in SF missed out on seeing the snowfall on our nearby mountain tops, or didn’t even know about it. After all, we were on the ground level of more of this “atmospheric river” type of rain filling our streets.

But the cold snap we just went through over the past few days has dropped snow on four of our local mountains and high elevation areas. Yesterday, March 6th, a pretty good snow dusting came down on Highway 9 and Skyline Boulevard near Saratoga (elevation at around 2,000 feet)—as reported by SFGate. As well snow came down on Mount Diablo in Contra Costa County, Mount Tamalpais in Marin County, and Mount Hamilton near San Jose.

The last time it actually snowed in San Francisco was an inch of snow dropped on February 5, 1976.

Uber Falsely Blames Human Error for Self-Driving Cars Running 6 Red Lights

Uber likes to keep a lot of things secret—as everybody knows who follows Uber in the news. And Uber is certainly a presence that is loved and not-so-loved in the city, and even boycotted recently. When it comes to the public trials of self-driving Uber cars driving around on our SF streets stuff like the real reasons for accidents and running red lights is also secret. Uber’s self driving tests were stopped two months ago, and its just been reported by the NY Times that the suspension came because of the self-driving cars running six red lights in San Francisco (with human alternative drivers on board). Uber had stated to authorities that the red light was human error, and that the cars were manually driven during the incidents. The NY Times article states those Uber statements were false.

The article states, “”Even though Uber said it had suspended an employee riding in the Volvo, the self-driving car was, in fact, driving itself when it barreled through the red light, according to two Uber employees, who spoke on the condition of anonymity because they signed nondisclosure agreements with the company, and internal Uber documents viewed by The New York Times.”

The California DMV put pressure on Uber within just hours of the trials with Uber’s self driving cars (began testing in SF in mid-December) when at least two incidents of red light running occurred. Then four more occurred. The Uber program was shut down and though Uber battled the DMV to continue in SF into January for its testing, it ended up moving its self-driving program to Arizona.