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State of the art renovations announced for Golden Gate Wholesale Produce Market

September 21, 2015

Golden Gate Wholesale Produce Market has released an exciting renovation plan to improve their facility. The renovation plan was developed through extensive research and collecting feedback from customers and businesses. The Golden Gate Wholesale Produce Market is just a short drive from any location in the San Francisco Bay area and offers the widest selection of fresh fruits, vegetables and organics in Northern California.

The renovation will benefit San Francisco residents by offering new jobs, green utility improvements, and enhance the customer’s shopping experience. The market plays an important role in San Francisco’s economy and the $8 million dollar proposal is exciting for all parties involved.

“The state-of-the-art enhancements to be made over the next year include new solar/energy efficiency upgrades, cold chain food storage management and worker safety systems, as well as smoother traffic flow within the facility, which is a mile from San Francisco International Airport on Highway 101,” said Peter Carcione, President of the Golden Gate Produce Market.

The market serves approximately 15 million residents. To best serve their growing community of diverse customers, they have an array of ethnic and specialty produce. The Market itself strives to promote healthy lifestyles and habits through their consistent commitment to food safety and fresh produce consumption.

Renovations planned include: Solar panel installations, additional parking, improved cold goods storage, and rehab of the buildings exterior and signage.

In the Market’s 53 years of operation, this is the largest renovation they have planned. This will be influential to the economy of Northern California, as it is currently the largest produce terminal within that area. The Golden Gate Produce Market employs 475 people and has twenty-three independent and family-owned businesses that also operate within the market. In order to create a better working environment for the employees, the renovation plan has multiple upgrades that will increase the workers safety with additions such as adding better lighting and developing loading dock safeguards.

Decreasing the Market’s carbon footprint is also a large part of the renovation plan by implementing new systems to help with decreasing energy consumption and waste. The Market is already “green” as they use recyclable materials and encourage others to recycle outside of the Market. The Market is now partnering with South San Francisco Scavenger to increase the efficiency and ease of recycling and composting. To make the Market even more “green” the main goal of these energy renovations is to drastically reduce the Market’s energy intake from the power grid by the end of 2016. This will be accomplished partly through the planned solar panel additions that are expected to generate more than 2,015,648 kilowatt-hours of electricity every year according to the U.S. Environmental Protection Agency.

For more information about the renovation visit their site Golden Gate Produce Terminal and stay tuned for these exciting changes!

Months Supply of Inventory, Seasonality, and its Relationship to Pricing

We’ve always known that seasonality plays a big role in real estate, but this Months Supply of Inventory (MSI) chart shows:

1) The lower-priced (under $2m) market has the most competitive supply and demand dynamic.

2) How much more seasonality affects the luxury home end of the market. Homes under $2m ebb and flow by season, but the fluctuations are much more dramatic in the luxury home segment.

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Home Matters® announces the three winners of its “Re-defining Home Challenge”

September 16, 2015

Affordable housing is a growing concern for the San Francisco area and the nation as a whole. Home Matters®, wants to make Home a reality for all, and today announced three winners of its Re-defining Home: A Design Challenge contest. This contest is the first US-wide competition that aims to address affordable and sustainable housing. The competition, supported by the Wells Fargo Housing Foundation, the Autodesk Foundation and in partnership with San Francisco Chapter of the American Institute of Architects (AIASF), challenged architects and designers to re-imagine the Home of the future and curb our nation’s housing crisis.

“The 1st Place winner did an exceptional job of designing a project called “HomeWork” which pairs home with work, providing both housing units and space for small businesses for individuals and families that need support to start or run their own business. This live work model is combined with shared amenity spaces to encourage community building, and that truly grabbed all the judges’ attention,” said Home Matters’ CEO Dave Brown.

The program’s core movement hopes to spark a powerful public dialogue about making better homes and communities for all. Research studies have shown that having an affordable, stable home and community can greatly affect one’s life – from better health and educational outcomes to improved public safety, economic indicators and personal success. The program hopes to inspire practical solutions that change the way that society thinks about shelter and community by introducing this bold new approach. The three winners were selected because their designs went beyond housing and animated the connections between housing and other important social factors of community life.

An entire community of partners across the country made this contest a reality including: AIASF to AIA Atlanta, AIA Austin, AIA California Council, AIA Chicago, AIA Denver, AIA Dallas, AIA Los Angeles, AIA New Orleans, AIA Northern Virginia, American Architecture Foundation, Autodesk Foundation, Boston Society of Architects/AIA, Enterprise Community Partners, Public Architecture, SPUR and the Urban Land Institute.

Winners:

1st Place Winner: Geoff DeOld & Emily Andersen of DeOld Andersen Architecture, LLC with their project entitled “HomeWork”. They received $10,000 in prize money. “HomeWork” brought out fundamental ideas of the Home Matters message: that wherever you call Home in this country, it should be a safe and nurturing place to live – Geoff and his team really captured that with their design.”

2nd Place Winner: Jerry Kler, A.I.A of Jerry Kler Architects with their project entitled, “Cross Pollination”. He received $5,000 in prize money.

3rd Place Winner: Ben Tillman, an Architectural Designer with his project entitled “New Leaf”. He received $3,000 in prize money.

Emily Andersen of DeOld Andersen Architecture, LLC, on receiving the 1st place award, commented, “We entered this competition because we care about urbanism, and good housing is a key component of a good city, and affordable housing is a huge issue in many cities. Creating good urbanism means creating a mixture of uses that can eventually reinforce communities. We used this competition to test these ideas.”

The Home Matters® movement was launched in 2013 by a group of visionary housing professionals and leaders that identified a gap in public discourse. Fundamental social challenges in our nation – from health to education, to public safety, the economy and individual success – all have a common denominator: their connection to Home. With a high-level, holistic approach to housing, Home Matters underlines the link between Home and these core societal issues such as health, education, safety, individual success and the economy.

San Francisco bay area selected for Google’s Project Sunroof program launch

September 10, 2015

Google's Project Sunroof launched in San Francisco Area

Photo Courtesy of Pixabay.com

Ready to make the jump to solar power, but not sure how to get started? Google launched Project Sunroof in August and San Francisco bay area homeowners are now just a few clicks away from discovering if solar energy is a practical option for their home.

The program will tell the homeowner how much sunlight hits their rooftop throughout the year while factoring in roof orientation, shade from trees and nearby buildings, and local weather patterns. Google has created a simple formula to take the guesswork out of solar panel installation. Google has partnered with Vivint Solar, a leading distributor in solar energy systems to offer affordable solutions for interested homeowners.

“It’s simple. It’s affordable. And together with Google, we’re able to let customers all over the country know that solar power is a lot simpler and more affordable than they might have thought.” Dwain Kinghorn, Chief Strategy and Innovations Officer at Vivint Solar

San Francisco homeowners can visit Project Sunroof and simply enter their address for an initial estimate. A homeowner can also enter their typical electric bill cost for more customized results. The tool will combine the information to estimate the amount a homeowner could potentially save with solar panels, and it can help connect them with local solar providers, like Vivint Solar.

“Vivint Solar teaming up with Google is giving homeowners across the country immediate insight, information and access to rooftop solar power—that’s good for everyone,” said Greg Butterfield, CEO of Vivint Solar.

The new online tool is being tested in San Francisco Bay Area, Fresno, and greater Boston. Roof condition and sun exposure are important factors to consider when exploring solar energy options. For further details check out the FAQ section on the site.

Sources:

Project Sunroof

Vivint Solar

PR Newswire

Autumn SF Home Selling Season Begins Against Backdrop of Market Volatility

Real estate markets are essentially determined by the balance – or imbalance, as is often the case – between buyer demand and seller supply of homes to purchase. Underlying that dynamic are economic, political and demographic factors – some local, some not – such as population growth, employment, new home construction, high-tech booms, consumer confidence, interest rates, affordability, IPOs, stock market movements, shenanigans in Congress, and SF ballot proposals, to name a few. Even environmental factors, such as droughts and earthquakes, can jump in and affect the market. These factors are all jostling for effect, ebbing and flowing, sometimes appearing out of nowhere to shake things up, or suddenly shrinking and quickly forgotten.

We are neither blithe optimists, for whom boom times will never end, nor inveterate pessimists, who see bubbles and crashes behind every shrub. For what it’s worth, based on our survey of current economic fundamentals, we don’t expect an imminent crash in the U.S. stock market or in Bay Area real estate values. (This short New Yorker article is excellent on recent market volatility: Drop in the Bucket) However, economies and markets naturally experience fluctuations – short-term ups and downs, times of slowing and flattening – and it’s certainly possible that the balance between buyers and sellers might shift, that the frenzy in our market may subside, and that home prices may plateau or even tick down to some degree. On the other hand, due to the scale of our high-tech boom (another area of exuberantly conflicting predictions) and our deeply inadequate supply of housing, demand may continue to exceed supply, and the pressures of recent years may continue until new-home construction makes a more significant contribution to inventory.

New Listings Coming on Market

Seasonality_New-Listings

September is usually the single month with the greatest number of new listings, and those that hit the market in the 4 to 5 weeks after Labor Day feed the vast majority of autumn sales activity until the market goes into hibernation mode in mid-late November. Preliminary indications are that this may be a very big new-listing month, even for a September. If this is true, and especially if it marks the beginning of a trend of more listings coming on market, that could cool the ferociously competitive, low-inventory, “seller’s market” of recent years. If buyers are more hesitant due to recent financial-market volatility, that would also cool the market. But, in our opinion, neither factor is likely to flip us into a crashing or recessionary market.

Percentage of Listings Accepting Offers

Percent_UC_SFD-Condo_by_Quarter

This chart illustrates the surge in buyer demand from the end of the last recession through the 2012 – 2015 recovery. Having the percentage of listings accepting offers over 50% and sometimes well over 60% in a given quarter – extremely high percentages historically – has applied consistent upward pressure on home prices. Demand usually peaks during the spring and autumn selling seasons, i.e. in the 2nd and 4th quarters.

Additional market indicator analyses can be found here: SF Market Overview Analytics

S&P Case-Shiller Home Price Index

Case-Shiller_from_1990

An updated Case-Shiller Index chart for the 5-county San Francisco Metro Area, outlining the real estate market cycles going back to the 1980’s. (The June Index was released on August 25th.) It is noteworthy that over the past several decades, we’ve never seen a crash or significant “correction” in our real estate market that was not in conjunction with a major, sustained, national economic event. This chart also suggests that SF buyers who purchase homes 1) they can afford in the first place, 2) using fixed-rate mortgages, and 3) for longer-term ownership, usually come out all right, and often fabulously well, despite periodic market declines.

“Renting can make sense as a lifestyle choice or because of income constraints. As a means to building wealth, however, there is no practical substitute for homeownership.”
Homeownership & Wealth Creation, 11/30/14, NYT op-ed article

The Case-Shiller chart above reflects sales in the upper third of Bay Area home sales (i.e. “high-price-tier”) – which applies best to SF homes. Even in the high tier, the city has generally outperformed the Bay Area in home price appreciation. The numbers on the graph refer to a January 2000 price of 100; thus, the number 217 signifies a price 117% above then. It is interesting to note, that as of the June Index report, all three Bay Area home-price tiers – low, mid and high – have readings of 117% appreciation since 2000, which may be a sign of an equilibrium being reached in the market. Our full report: Case-Shiller for SF Bay Area

Bay Area Housing Affordability

Housing-Affordability-Index

The California Association of Realtors recently released its Housing Affordability Index (HAI) for the 2nd quarter of 2015. All Bay Area counties saw declines in their affordability index reading – which measures the percentage of households that can afford to buy the median priced single family dwelling (house) – and San Francisco is now only 2 percentage points above its all-time low of 8%, last reached in Q3 2007.

Very low affordability at a time of very low interest rates is certainly a concern, but housing affordability is a complex subject and there are other factors at play in San Francisco. Our full report, which also charts median home prices, rents, interest rates, inflation-adjusted housing costs and household income by county is here: Bay Area Housing Affordability

Where to Buy at What Price Point

8-15-House-Sales_1m-1499k-by-Neighborhood

We’ve recently updated our report on where one is most likely to find a house or condo in one’s price range. The chart above is 1 of 7 delineating San Francisco neighborhoods with homes from under $1 million to over $5 million: San Francisco Neighborhood Affordability

Median Home Prices and Economic Indicators

A glance at recent movements in San Francisco’s median home sales price, as well as at a few longer-term local and national economic indicators.

Monthly fluctuations – often seasonally related – have been common since
2012, but home prices have consistently climbed higher over the longer term.

Median-Prices_Short-Term

National and San Francisco unemployment trends: Very positive.

Unemployment-Rates_US-SF_since-1990

Over 100,000 new SF jobs – many of them very well paid – have been created since 2009. (The housing supply has increased by less than 15,000 units.)

Employment_SF-by-year

Household debt to GDP and mortgage debt service ratios – huge issues
in the 2007-2008 crash – have significantly declined since then.

Household-Debt-to-GDP-Ratio_US-since-1990

Mortgage-Debt-Ratios_US_since-1990

Sustained movements in the S&P 500 Index largely correlate to SF home-
price trends. Short-term financial-market fluctuations typically have no effect.

8-26-15_SP-Stock-Market

Price to Earnings (PE) Ratios of the S&P 500 Index climbed a bit high
in mid-2015, but not egregiously so compared to historical averages.

SP500_PE-Ratio_since-1986

Our goal is not to convince you of a certain position, but to provide you with what we believe to be reliable data, so that you can make your own informed decisions.

These analyses were made in good faith with data from sources deemed reliable, but they may contain errors and are subject to revision. Statistics are generalities and all numbers should be considered approximate. Sales statistics of one month generally reflect offers negotiated 4 – 6 weeks earlier.

© 2015 Paragon Real Estate Group

Where is multi-family real estate headed ? Experts will weigh in at summit

September 4th, 2015

Is the current real estate investment market a race to the finish line? Experts will weigh in at the second annual Northern California Apartment Summit. This summit will bring together 450+ senior-level commercial real estate executives who seek new opportunities and new business relationships in San Francisco, Silicon Valley and East Bay multifamily areas.

The summit will exceptionally important this year to those involved in the real estate investment and development industries considering current market conditions.Smart minds sharing opinions on the same subject can be like tapping a brain trust. Among topics of discussion at panels and breakout sessions will be whether the Northern California multifamily housing market has peaked or cycling out; how important is a sexy commercial component in urban home developments (like the Whole Foods in Avalon Bay’s project on Ocean Avenue), and the role of “going green” in our current multi-family housing market.

The summit will feature 50 speakers in 12 panel discussions. Recent speaker additions represent Benedict Canyon Equities, Emerald Fund, City National Bank & more.Panel sessions will focus on the state of the market, developer challenges, emerging submarket opportunities, innovative new design, tenant trends, investment, financing.

Speakers Relevant to the San Francisco Market

Yat-Pang Au of Veritas Investments. Veritas has turned into a significant player in the furnished rental market in San Francisco. Veritas is also the developer selling the current loft project at 6 Mint Plaza.

Joe Kirchofer, Senior Development Director of AvalonBay Communities Inc. AvalonBay is a major player in the new apartment communities in San Francisco. Their buildings include the AVA apartments near the Twitter Headquarters, Avalon at Mission Bay near AT&T Ball Park, and Avalon Hayes Valley in the heart of (you guessed it) Hayes Valley.

Erin Kennelly and Alan Mark of the Mark Company, one of the City’s top new homes marketing companies. They also have an ace analyst squad who slices, dices and sifts numbers every way conceivable when it comes to predicting market demand and demographics for the new homes market.

Highlights of the conferenceAnalysis of land, labor and building material costs. There will also be discussion of the benefits of working with union and non-union workers. The politics of development and community opposition will be examined, as well as the challenges in dealing with the municipality in entitlements and permitting.

Register for this event here. The event takes place September 23- 24, 2015 at the Mission Bay Conference Center. For more information and a full list of speakers and the jam-packed agenda visit: http://cre-events.com/norcalmf2015/speakers-advisors/