Case-Shiller Home Price Index Update

The Case-Shiller Index report for May 2014 for the 5-county San Francisco Metro Statistical Area was released yesterday, showing another small bump in home prices from April to May. The aggregate or total index is now up approximately 55% since the market recovery began in early 2012. The 5 counties covered by the index are San Francisco, Marin, San Mateo, Alameda and Contra Costa.

Our full report can be found here: http://www.paragon-re.com/Case_Shiller_Reflects_Accelerating_Home_Prices.

However, Case-Shiller also breaks out home price changes by price tier – low, middle and high – and each tier has experienced dramatically different trend lines since 2000. The low price tier – homes found mostly in Alameda and Contra Costa counties (though also other Bay Area counties not in the SF MSA, such as Solano, Sonoma and Napa) experienced a crazy bubble much larger than the other price tiers and subsequently experienced a much bigger crash due to foreclosures and short sales. The middle and high price tiers, which predominate in San Francisco, Marin and San Mateo, experienced much smaller bubbles and crashes. This is dramatically illustrated in the first graph below.

In all the Case-Shiller Indices the numbers refer to a January 2000 home value of 100. Thus a reading of 195 signifies a value 95% above that of January 2000.

All tiers have seen big recoveries since 2012 began, but only the high-price tier has now exceeded previous peak values attained in 2006-2007. Because of the absurd size of the low-price tier bubble, its home prices are still far below previous peak values and it’s probably unreasonable to expect them to be surpassed anytime soon.

However, all the price tiers show very similar overall appreciation rates since 2000, running from 93% to 97% over the 14 ½ years, which suggest an equilibrium is being achieved across the general market.

This chart below tracks home price appreciation for higher-priced homes since 2012. As with all statistics, monthly statistics are much less meaningful than longer term trends.

San Francisco itself, whose median house price is now over $1.1 million, has performed significantly better than even the general high-price tier, as can be seen in the median price chart for the Noe & Eureka Valleys neighborhoods of the city.

This chart is just a sample of how some San Francisco neighborhoods – especially its most expensive ones – have far exceeded general Bay Area appreciation trends, as far a previous peak values are concerned. Many of San Mateo’s cities have experienced a similar dynamic, as they both share the dominant effect of the high-tech wealth effect on home prices.

Tomorrow: SFAR legislative education session

Do you want to be a housing hero to your clients? If so, read on. Tomorrow, July 31, the San Francisco Association of Relators’ governmental affairs director Mary Jung and deputy governmental affairs director Jay Cheng will offer an educational legislative session from 3:30 p.m. to 5:30 p.m.

This legislative affairs update will include a discussion of the ever-shifting political landscape in San Francisco as well as California as a whole. It will also provide an overview of the latest legislation under discussion as well as how it affects you and your business. You’ll also learn ho to get involved in supporting or opposing campaigns to protect the interests of you and your clients.

Why is staying savvy and up-to-date important? Well, in case you haven’t noticed, there’s a lot of competition out there. In order to distance yourself from those competitors, you need to be on the ball in order to provide excellent client advocacy as well as to attract new business. Continuing your education is a commitment you make when you get your license, since so many things can change so quickly.

A little about the San Francisco Association of Realtors: the SFAR comprises a part of a network of local and state associations of Realtors, all of which are affiliated with and chartered by the National Association of Realtors. The San Francisco Association of Realtors provides services to Realtors doing business in San Francisco and the Northern Peninsula, and the Association operates the SFAR multiple listing service, known as SFARMLS, in addition to providing member services including publications, legislative representation and education programs such as tomorrow’s event.

You can learn more at my.sfrealtors.com.

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email cblase@paragon-re.com. www.ceceblase.com

What are the city’s most expensive condos?

Paragon hit the San Francisco Chronicle once again this week, this time with our recent report titled “New Condo Construction in San Francisco: New Construction is Transforming San Francisco”. As the report declares in its opening salvo:

“The construction boom that ended in 2008 changed the city and its housing market. Condos now outsell houses in San Francisco. The South Beach-Yerba Buena zip code, previously a commercial area filled with parking lots, now has SF’s highest median household income. Mission Bay was born. And our skyline has been altered with dramatic, new high-rises like the Infinity Towers and Millennium.

“That boom died with the 2008 market crash. But now with the city’s economy, employment, population, rents and home prices all surging to new heights, new home construction is booming again.”

According to our report, the Four Seasons is at the top of the list of the city’s most expensive condo buildings, with units selling for a median price of $1,760 per square foot – or about $3.2 million – in the calendar year ending May 30, 2014. Next on the list is 999 Green in Russian Hill, boasting a median price of $1,653 per square foot, or about $2.2 million. Third is the St. Regis in Yerba Buena, at $1,453 per square foot, or about $2.5 million per unit.

Most buildings carrying median prices over $1 million were in – surprise, surprise – the South of Market area, as well as South Beach and Yerba Buena. Here’s where we also saw 834 loft, condo, co-op and TIC sales in the previous year. That’s far more than any other neighborhood in the city.

We’ve found that common denominators include full-service amenities, dramatic architecture and the prevalence of spectacular views from many of the units. Eight of the most expensive properties didn’t even exist before 2000! It just goes to show how quickly the city can change.

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email cblase@paragon-re.com. www.ceceblase.com

More hot links!

Greetings, my internet-savvy favorite people! I have compiled a list of hot links for you so that you can stay up-to-date on the state of the market. Remember, knowledge is power! Of course, if you want to talk specifics or you just happen to be looking for advice on what to do with your own piece of paradise, feel free to give me a call.

And now, here are the links:

Paragon’s San Francisco Demographics Study. This demographics according to zip code study can tell you which mailing addresses earn the most money, which ones have the highest rate of ownership, which ones have the most families and a bunch of other stuff. We got lots of props for this study, which was featured in many local media outlets.

Paragon’s New-Construction Developments Map. If you have a taste for new construction, I don’t know where you will find a more current map of what’s new and what’s coming up in San Francisco’s new housing market. Make sure that you scroll all the way down to find links to the different projects.

2014 Neighborhood Home Values Map. This is another fun, interactive map that was recently updated. Surf over to here to check out average and median selling prices of houses and condos, all organized by neighborhood.

Paragon’s New SF Housing Construction Report. This newsletter has focused exclusively on the condo market. If you want to dig deeper and learn about all new housing in San Francisco (including rentals, affordable housing and social housing projects), you should check out this report.

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email cblase@paragon-re.com. www.ceceblase.com

Condos, condos, condos!

The construction boom that ended in 2008 forever changed our City’s housing market. Condos now outsell houses in San Francisco and former industrial wastelands in the South Beach-Yerba Buena zip codes are now thriving neighborhoods with SF’s highest median household income. Our skyline is altered with dramatic, new high rises like the Infinity Towers and Millennium. That boom died with the 2008 market crash. But now the city’s economy, employment, population and home prices make new home construction boom again, albeit in a different way.

The main difference during this new frenzy of construction is the size of the projects. You can see many of them marching up Market Street between the Civic Center and the Castro. More new housing (much of it high-end rentals like NEMA and Mosso) are going up in the mid-Market District.

You might read about plans for much larger projects near the future Transbay Terminal or out on Hunters Point– but these plans can take years to break ground. In the meantime, if predictions hold, demand will perpetually outstrip supply for at least the next decade.

As you review the accompanying chart, please take it with the usual grain of salt: supply/demand isn’t the only factor affecting the real estate market. Values can be affected by a gazillion other things, from weather to election cycles. Hence it is very difficult to make meaningful predictions, especially in the shorter term (despite how much “experts” love to make them).

Much of the city’s new construction is occurring on parcels that not so long ago might have been considered subprime for residential: 415 De Haro (Onyx) is nestled against a clutch of light industrial warehouses and 300 Cornwall is wedged between two busy streets. Regardless, new construction is generally selling for prices rarely seen before in their respective neighborhoods. They are also bringing lots of young, affluent buyers. However you feel about the “high tech worker” factor, these developments are altering the fabric of their respective neighborhoods.

The biggest common denominators of these properties are full service amenities (doormen and such), and spectacular views. Eight of these properties are post – 2000 construction. The oldest are also the smallest: 1170 Sacramento, built in 1963, has 73 condos. 1100 Sacramento, aka “Park Lane”, is a recent TIC conversion built in 1925. The building with the biggest drop and rebound in values since it was built is 88 King, perhaps because there was barely a “there” there when it was completed in 2000. This list excludes smaller buildings with only a sale or two per year.

Even though the newer South Beach-Yerba Buena district dominates the list of most expensive condo buildings, older-prestige neighborhoods such as Pacific Heights and Russian Hill still have more high-end condo sales. Most of them are in smaller two-flat Edwardian and Victorian buildings, although there are a variety of condo apartment buildings atop Nob and Russian Hills and along streets like Pacific, Vallejo and Broadway in Pacific Heights.

The first golden age of SF apartment buildings featured light gracious homes with elegant detail built between 1920-1940. – PacHeights, the Marina, Russian Hill and Lake Street are filled with these buildings. The second golden age really arrived with the latest burst of new-condo construction since 2000: These ultra-modern units in buildings like The Infinity and Millennium feature premium finishes and amenities. The newer construction commands a premium dollar per square foot. The older buildings also hold up well, with architecture that adds to our City streetscapes.

The districts South of Market now dominate condo sales simply because there are so many of them there. This trend will continue as some of the City’s largest residential projects break ground. The explosive growth in this area evolved from changes in zoning that allows large swaths of formerly industrial parcels to be developed residentially. There are also a healthy number of mid-rise construction projects along the Market Street and Van Ness corridors as well as in the Mission District, Hayes Valley, Dogpatch and Hunter’s Point.

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email cblase@paragon-re.com. www.ceceblase.com

This Weekend: The 30th Anniversary of Purple Rain

Has it really been 30 years? Apparently so! On Saturday, July 26 at 8 p.m., Slim’s (333 11th Street) presents The 30th Anniversary of Purple Rain. It’s been 30 years since the release of Prince’s iconic film and album, and you’re invited to help celebrate the milestone along with The Purple Ones: A 10 Piece Tribute to Prince, which will be playing the Purple Rain album in its entirety, including the hits, B-sides and deep cuts.

Come and party like it’s 1999 (sorry, had to) as band members play classics including I Feel for You, I Would Die 4 U, When Doves Cry, Let’s Go Crazy, and of course … Purple Rain. Also on tap are the Prince/Sheila E hits The Glamorous Life and A Love Bizarre as well as Prince/Sheena Easton’s U Got the Look.

The 10 Piece Tribute to Prince features current and former members of bands such as 4 Non Blondes, The New Morty Show, Foreverland, Casino Royale, Joshua Cook and the Key of Now and the 2014 Grammy-winning Pacific Mambo Orchestra. Also on the bill are the Goldenhearts, featuring Roger Rocha of 4 Non Blondes as support slot. The opening band is the Phone Sex Operators and DJ Rockin’ Raul Castro. Tickets are $16 advance and $20 at the door, and the show is all ages, six years old and up.

Doors open at 8 p.m. The Phone Sex Operators will perform from 9 p.m. to 9:30 p.m., followed by The Goldenhearts from 9:45 p.m. to 10:30 p.m. The Purple Ones will take the stage at 11 p.m. DJ Rockin’ will spin the funk from 8 p.m. to 9 p.m. as well as between sets. Enjoy!

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email cblase@paragon-re.com. www.ceceblase.com

Bernal Heights: Part 2

As hard as it might be to believe, in the 1980s you could buy property in Bernal Heights for next to nothing. A long period of decline and neglect had left the proud, working-class neighborhood in such a state that businesses and homeowners alike had fled, leaving boarded-up storefronts and empty Victorians in their wake. Even the Bank of America, which had kept a presence on Bernal’s Cortland Avenue for decades, considered moving out.

Today, such an exodus seems absurd, especially in a neighborhood recently called the country’s “hottest” by Redfin. Buyers now target Bernal Heights so often that neighborhood homes routinely sell for well over their asking price, sometimes after fierce bidding wars. Bernal Heights is well past its “low” point.

Despite the furor, part of Bernal’s allure remains its relatively affordable market. In a city whose median single-family home price recently soared past $1 million, Bernal is still a middle-class neighborhood offering plenty of options above and below that mark. A recent check of Bernal homes on the Multiple Listing Service (MLS) showed single-family homes available for as little as $525,000 ranging all the way to $2 million, with a median asking price of $995,000.

Buyers are drawn to Bernal for a number of reasons, and not all of them are economic. For example, there are few San Francisco districts offering so many historic homes, thanks to a pair of factors. Because of Bernal’s history of neighborhood activism, it’s been free of large-scale redevelopment. The first settlers came to Bernal Heights 150 years ago; many of the existing homes in the neighborhood are almost that old. The second reason is somewhat ironic: Bernal’s long period of decline meant many of its oldest homes escaped being snapped up by ambitious remodelers or flippers during San Francisco’s early renaissance periods, leaving them authentic and intact for 21st-century buyers.

They’re the type of historic homes – Victorians – that traditionally capture the imaginations of San Francisco buyers. In Bernal Heights, you can purchase a 19th-century farmhouse with a view, a garden and all of the period details you can handle, and you can do this in the middle of the second-most densely populated city in America. Some buyers find this opportunity – to restore a classic Victorian or Edwardian home to its former grandeur – irresistible.

This is not to say that there is only one kind of house for sale in Bernal Heights or even one kind of historic home in one type of condition; far from it. This is a large neighborhood with multiple personalities and multiple types of living. North slope homes feature a breathtaking downtown view; south slope domiciles boast walking access to Cortland Avenue. Homes on the east slope are often more rural than their neighbors to the west (and often have views of San Francisco Bay) and property in St. Mary’s Park, at Bernal’s southern border, are of the same vintage and style as the fully-detached pre-war “streetcar suburbia” homes you’d find in neighborhoods like West Portal.

Bernal homes can run from the challenging to the spectacular. Some of the city’s most impressive contemporary construction is on Bernal’s north slope (as well as some of its most creative; a few north slope lots are extremely steep and narrow), and don’t forget that Bernal has San Francisco’s largest collection of existing earthquake refugee shacks from 1906, adapted into permanent dwellings. Some stand alone or are connected in twos and are easily identified; others have been integrated into other construction and are harder to spot.

The district has classic “full five” and “junior five” homes from the 1930s, 40s and 50s and new condominium complexes (small ones; Bernal’s homegrown activists have successfully blocked major development from encroaching on their neighborhood). It’s large enough to offer very different micro-neighborhood experiences within its borders; life near Precita Park is very different from life near Holly Park, for example.

All of this is what makes Bernal so attractive and what is driving its present-day popularity. It is, in many ways, unlike any other San Francisco neighborhood. No other offers such housing diversity, so many options at so many price points and the opportunity to “live in the country” while living in the city.

Source : Parascopesf.com

San Francisco expected to miss affordable housing allocation

SocketSite is reporting that San Francisco’s goal of building a little more than 31,000 housing units between 2007 and 2014 is not going to be achieved. The goal was determined by the California Department of Housing and Community Development in conjunction with the regional Association of Bay Area Governments.

According to SocketSite, there have been nearly 12,000 market-rate units built between 2007 and the first quarter of 2014. That places housing production for those with household incomes exceeding 120 percent of the area median at nearly the full Regional Housing Needs Allocation (specifically, 97 percent). That goal was 12, 315 units. But as the site notes, the market-rate component only comprises 40 percent of the city’s overall housing needs allocation.

Instead, as of the first quarter of 2014, a total of 6,085 affordable housing units have been built in the city since 2007. That’s slightly less than 32 percent of the goal, with slightly less than 13,000 units left to be built in the ensuing nine months. The goal had been to build at least 18,878 affordable units by year-end 2014 for those with household incomes up to 120 percent of the area’s median.

In today’s Planning Director report to the Planning Commission, there is a table representing completed units and development projects in the current residential pipeline as of the first quarter of 2014. That table shows that given the total units built, the city is 111.6 percent in excess of its goal – but other figures, as we’ve discussed, show that affordable housing is taking the hit in favor of “above moderate income” housing, which is 211.7 percent in excess of the goal.

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email cblase@paragon-re.com. www.ceceblase.com

Another look at Paragon’s mid-year report

Recently Curbed SF picked up our mid-year report, “Prices, Cycles and Trends in SF Real Estate: Of Seasons, Factors, Prices, Cycles & Trends in San Francisco Real Estate.” As Curbed noted, it seems to be confirmed that prices are continuing to rise, just about everything is selling at asking price or over, and most properties are on the market for less than a month before an offer is accepted.

Our research found that, in the second quarter, the city’s median house prices raised the roof. They tore up from $975,000 in the first quarter to $1.12 million in the second quarter. As Curbed notes, “Huge over-asking sales happened so often this spring that they became almost banal.” That said, some eye-catching figures include the Sea Cliff house that went for $1.4 million over asking as well as the Pacific Heights home that was sold for 70 percent over asking. A whopping 90 percent of homes sold without price reductions in the second quarter, with an average of sales for 111 percent of original asking price. We saw properties in Bernal Heights going for 24 percent – on average – over asking, and in the Sunset/Parkside, that figure was 18 percent.

Spring continues to be by far the biggest sales season. The accompanying chart illustrates leaps over the years, ranging from the first quarter of 2011 to Spring 2014. During this last spring, we saw the largest volume of San Francisco luxury home sales in history. Check out our Luxury Home Report here to learn more. During Spring 2014, the market was still singing the low-inventory blues – well less than two months’ worth of supply. This in addition to other factors led to the extremely quick sales we were discussing above.

Need some help navigating the market? Give me a call!

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email cblase@paragon-re.com. www.ceceblase.com