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What MLS Listed This Week in SF

New MLS Listings This Week in San Francisco.

Spring Listings are ramping up.

47 single family residences came on market in San Francisco this week. At the bottom of the price point of new SFR listings is 89 Naples in the Excelsior neighborhood District 10. More details.

At the top of the market for a single family homes 4352 26th Street is located in the Noe Valley neighborhood. More details.

82 Condo/Coop/TIC properties came on market in San Francisco this week. At the bottom of the price point of Condos, Coop and TIC listings 225 9th Street #B located in District 9 South of Market. More details.

At the top of the market for Condos, Coop and TIC listings 162 Lower Terrace located in the Corona Heights neighborhood is simply Amazing. More details.

About half of this weeks’ single family homes listed are priced under 2mm and the bulk of condominiums are priced 1mm – 2mm.

SF Cable Cars May Be Going Cashless

Our cable cars are certainly a significant expression of San Francisco’s charm and magic. Historical, fun, cool views, great mechanical feel on those tracks, the bell dinging in toe-tapping rhythms. SF visitors or residents could jump on and pay cash for a nostalgic ride. Seven bucks now for one way.

However, with the April 2017 arrest of two cable car operators over pocketing fare money from riders (officially, embezzlement) the SFMTA is seriously considering going totally to cashless fares on cable cars. Which means more hours at booths for prepaid fares, fare machines along the lines, and vendors to sell tickets are certain locations. Not as easy as paying cash.

The challenge with cashless is still providing an easy experience for SF visitors where now you can just jump on and pay the fare. Muni’s director of transit John Haley told the SF Chronicle that they’re doing the analysis not to find a balance between ease and protecting the cars from embezzlement. The SFMTA makes about $30 million a year from the cable cars.

Mapping Places to See in Spring in Glorious SF

Spring is blowing up beautifully all around us, and right now for every weekend or weekday we have off we’re contemplating what to see in San Francisco in this wonderfully everything-renewing season. Some of us go to favorite places. Some of us want something new, or that which we don’t even know exists yet. After all San Francisco is 49 (1849 gold rush coincidence?) square miles of exciting territory to explore.

To help us in our choices, Sfcurbed.com has produced a coolly wonderful city map that lays out all the streets and districts of SF (scrollable and zoomable) and then overlays teardrops that are clickable to pop up a very fine springtime place and thing to do (indoors and outdoors), with images and witty text. The map has 19 suggestions as culled by the map staff, and they’re really good choices.

For instance, there’s #14, the Castro Theatre, which is celebrating a hoary 94 years this year with great architecture, movies, and cult screenings.

Or, #9, the Lyon Street Steps—offering very delectable views of the bay. Great for wanderers.

Go to full story here.

Why Do All the New SF Condo/Mixed Use Buildings Look the Same?

If you’re keeping an eye out on new real estate developments around town you can’t help but notice that many of the lower story ones look very alike. Like twins, triplets and quadruplets. They all have shimmering windows set into strongly rectangular facades, with very geometric lines marching upward. To many critics (both private and speaking out in public) they’re “appallingly ugly,” “spectacularly uninspired,” and as well, “newly constructed monstrosities.” So reports hooline.com in a new article on real estate dullness in SF among these smaller buildings.

What is often the case, as the article points out, is that these new buildings are totally out of character with the neighborhood they’re set in. Often these neighborhoods are sprinkled with Victorian style home. The article points out that the charm and spaciousness of Victorians was lost on developers in the 1950’s through 1970s and many were torn down and carted away, making way for hotels and large residential projects. In 1971 that trend was curbed by the SF planners and conservation groups. Victorians are now beloved. But why are they not being built? The article explores how it’s too little space, too many people and there’s a housing crisis going on.

Go to the full story here.

Fun Interactive Photo Map on How SF Looked 1850-2000

Take an overhead street map of all of San Francisco’s districts that can be zoomed in and out of and scrolled around on. Then add in a layer of different sized black dots sprinkled all around the SF map that represent from one to multiple photos taken right at that spot. The more photos for that spot, the bigger the black dot. So you can tell if you’re going to see a lot of pictures or a few depending on the size of the black circle.

Click on the black dot and up pops on the right hand side a fairly big thumbnail of the photos, plus a caption. The image is clickable to a much larger version. The photos go as far back as 1850, pre Civil War, and as recent as year 2000.

This is really fun. For instance at the south central side of the Presidio there’s a pretty big black dot that when clicked opens up to a set of images that start with an 1890 shot of Mountain Lake Park and then proceeds chronologically to 1941, then to 1956, 1958 Mountain Lake Park shots and so on. So, all the images are in chronological order.

Go here to see the map.

Be The Lord Of Your Own Alley in San Francisco for $35,000

Here’s something curiously unique and a very once-in-a-lifetime opportunity. Haven’t you ever thought about owning your own alley in SF? Sure. Lots of people have. And it’s only $35,000. Pretty cheap. Last week, the alley was listed on the market—it’s location in the Richmond District, between 22nd and 24th avenues.

Of course, there’s no real estate on (or in) the alley. It’s a strip of concrete paved shared driveway running behind a row of homes, that is an official easement. But, it’s block from the Presidio. As the sfgate.com article correctly states there’s not much you can do with this alley, except walk on it or stand on it, and know it’s yours, and brag about it. You can’t build on it. Park a vehicle on it. Or pitch a tent. Maybe give it an unofficial name.

As the owner you pay taxes, insurance and keep it ship shape. The current owner, an East Coaster, bought the alley sight unseen at a city tax auction. The corporation that used to own it (along with the entire block) disappeared, thus property going on the auction block.

A Roundup of the Best, Largest Wineries in the larger Bay Area

Here in San Francisco, we’re great and discerning wine drinkers. And we’ve got some really good vintners in the immediate Bay Area, of whom the top 25 in toto have produced 444 million bottles.

For wine lovers in the city, the question is: what are considered the best wineries and wines according to knowing reviews. Drawing upon Wine Enthusiast magazine’s database of 216,000 wine reviews, bizjournals.com assembled a slide show of the best wines from the 10 largest wineries near us. The greater Bay Area is defined as Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano and Sonoma counties.

Of course, bigger is not necessarily better. But these are some very delectable wines.

At the top of the list is the grand Trinchero Family Estates that bottles wine under 20 brands and last year produced 21 million cases of wine. Reviewers called their 2007 Cloud’s Nest Vineyard Cabernet Sauvignon the best with a 95 point rating for “complex blackberry, cherry, mineral, tobacco and cedar flavors that impress for their sheer power.”

Go to the top ten best, largest wineries and wines here.

Supply, Demand, Money & Demographics: 10 Factors Behind San Francisco’s Real Estate Market

A consideration of the main factors at play behind the current San Francisco real estate market, some of which reflect general macro-economic trends and some of which are specific to the city itself. As we’ve seen in 1989, 2001 and 2008, many of these factors can stall or go into reverse very quickly in the event of a large, negative, economic, political or even ecological event.

In 2016, the market in San Francisco started to cool off somewhat after 4 years of a ferociously high-demand/low-supply dynamic. By any national standard, it is still a strong market, especially in the more affordable price segments, but it has distinctly changed with listing inventory increasing and buyer demand softening. The influx of newly constructed condos have affected the condo market most of all, especially the luxury condo market.

  • Population growth vs. New Construction: San Francisco has recently been adding approximately 10,000 – 12,000 new residents per year. New construction is booming again in the city, and tens of thousands of new housing units are now somewhere in the planning and construction pipeline. Thousands of new condos and apartments (mostly at the high end of prices) hitting the market have been affecting the supply and demand dynamic, with both condo prices and apartment rents ticking down from 2015 highs – especially in those districts where new construction is concentrated. It will be interesting to see how influx continues to affect the market as more inventory arrives. There is no question that the city continues to suffer from a grievous lack of more affordable housing.

  • Employment growth: San Francisco has recently hit new highs in the number of employed residents and its unemployment rate is as low as it has ever been. Many of these new jobs – in high tech, bio tech and professional occupations – are very well paid. Approximately 14,000 units of housing have been built in San Francisco since 2010. Over the same 6 years, the number of employed residents has increased by about 100,000. In light of the mismatch between supply and demand, the pressure on housing prices is not surprising. Employment actually dropped in the first 6 months of 2016 and then surged again in mid-summer to its highest point ever.

  • Stock market upswing: Though there was some major volatility in the period from autumn 2015 through autumn 2016, adding in the recent surge after the election, the S&P 500 is way, way up from 2011. The affluent have benefited most from this large increase in the value of financial assets, and San Francisco has one of the most affluent populations in the country. When people feel wealthier, they spend more on homes, second homes and real estate investment properties. However, we believe much of the local affluent population has become somewhat more cautious with all the extreme volatility – China stock market, oil price crash, Brexit, the 2016 election – that has occurred in the stock market over the past 20 months.

 

  • Brand new wealth: Thousands of newly affluent residents, including significant numbers of millionaires and even billionaires, have been created in the Bay Area in recent years from stock options, IPOs and company sales. This super-charged the “wealth effect” on the real estate market from 2011 through mid-2015. According to Wealth-X, San Francisco ranks 3rd in the nation for number of “ultra-high-net-worth” residents. However, since mid-2015, there have been very few new IPOs, so the dynamic creation of huge amounts of brand new wealth has slowed. On the other hand, the Bay Area is still full of large start-ups like Uber, Airbnb and Palantir, which certainly have the potential to go public in the not too distant future, and start minting, once again, new millionaires by the dozens or even hundreds. It’s also interesting to note that: “San Francisco ranks first among U.S. cities in income mobility, i.e. the opportunity to rise upward on the income scale thanks to its schools, its growing economy and its compact physical size that doesn’t produce walled-off divisions.” (San Francisco: a city pushed to new limits and opportunities)
  • High rents: Purchasing a home in San Francisco, with the attendant multiple tax benefits, being able to take advantage of low interest rates, and equity accrual (as well as the possibility of future appreciation), often makes compelling financial sense if the alternative is to pay an extraordinarily high rent (with none of those benefits). SF rents started to plateau in mid-2015 and have dropped a little in 2016 and early 2017, but they are still the highest in the country.

  • Low interest rates: from 1996 to 2006, the average interest rate on a 30-year fixed rate loan was approximately 6.3%. By late July 2016, it was running under 3.5%, and as of late-March 2017, it was running about 4.2%. Even after the relatively big post-election jump, the large reduction, 2007 to present, in the cost of financing has made an enormous difference in affordability and the ongoing cost of housing. To a significant degree, declines in interest rates to these near-historic lows have subsidized increases in home prices. It is extremely difficult to predict interest rate movements, but if rates continue to rise appreciably, it will certainly affect housing affordability.

  • Renting instead of selling: Very high rents and very low interest rates have convinced some owners who would have sold their homes to rent them out instead, and the Airbnb rent-to-tourists option is probably adding to this (even if in many instances, it violates city statutes.) As an adjunct to the financial calculation for renting instead of selling, we are also hearing from some owners that they are afraid that if they sell now, they or their children will never be able to afford to move back. All this further depresses the supply of new listings coming on market, exacerbating the inventory shortage. This is particularly true of houses in San Francisco, of which virtually no new ones are being built. (Condo construction is booming, and condo owners have a tendency to move much more often.) Not selling as frequently: According to a November 2016 report by ATTOM Data Solutions, “homeowners who sold in the third quarter [of 2016] had owned their home an average of 7.94 years, a new high in our data and substantially higher than the average homeownership tenure of 4.26 years pre-recession.” This big decline in turnover goes a long way to explaining the extremely low inventory levels of homes on the market: Owners are selling much less often.
  • Work there, live here: A relatively recent development, many of the people working or taking new jobs in Silicon Valley high-tech and bio-tech now insist on living in the city, creating what might be called a “reverse commute” from past patterns. The Google bus phenomenon (picking up employees in the city and ferrying them to offices in Mountain View) is just one illustration of a trend which puts considerable additional pressure on our housing market.
  • Magnet effect: Economic, social, cultural: San Francisco, a small city of 7 by 7 miles, is now the capital of perhaps the strongest, fastest growing, most lucrative, highest-prestige business segment in country: The Bay Area economy is the envy of the world. San Francisco is also in one of the most beautiful, best educated, most tolerant and culturally rich metropolitan areas in the world. That makes the city a magnet for smart, creative, ambitious people from all over the planet and they are willing to pay a premium to live here. (Of course, at certain levels of housing costs, people and companies start to look for alternatives, even if they’d much prefer to be located in SF. And that doesn’t begin to address the issue of teachers, police officers and so many other employment profiles, who can’t begin to think about affording to buy a home here.) There has clearly been a general demographic trend for post-college adults, aged 24 – 39, to move back into urban core areas – and that certainly is dramatically occurring in San Francisco. (See the books, “The Great Inversion & the Future of the American City” and “Who’s Your City? How the Creative Economy Is Making Where to Live the Most Important Decision of Your Life.”)
  • Limited supply: Almost two thirds of the city’s housing is in rental units, much of it under rent control. The number of homes suitable for owner-occupancy and available to purchase each year is relatively small, usually 6,000 to 8,000 units. The SF homes market is less than half the size of the markets in either Alameda or Contra Costa counties.Furthermore, new housing construction simply has not been adequate to the city’s needs over the past 35 years. 49% of San Francisco’s housing stock was built prior to 1940. As seen in the chart below, the surge in population during WW II led to a burst of building, which then steadily declined to clearly insufficient levels until the big increase in condo construction at the end of the 1990’s. The 2008 market crash ended that cycle, and the current feverish boom in home construction has been quickly gathering steam only in the past few years – however, as increasing volumes of new-construction housing units come on market, it has been significantly altering the supply and demand dynamic that has prevailed 2012 – 2015. Worth noting is that ever since the mid-1990’s the units being built are typically 1 or 2-bedroom condos or apartments, instead of 2 and 3-bedroom houses, i.e. the new housing units being added accommodate fewer people per unit. Our report on new housing construction in San Francisco is here: SF Housing Inventory & Construction Report

Tax benefits: We won’t count this as one of the 10 factors behind the current market, because the enormous tax benefits of homeownership in the U.S. are always present, boom or bust (until Congress legislates large, unexpected changes to U.S. tax law), but still they are a big factor underlying the housing market. Being able to deduct interest costs and property taxes allows homes to cost (much) more and yet remain affordable to buyers. And there is also the $250,000/ $500,000 exclusion of gains realized upon sale of a primary residence from capital gains taxes: There is not another financial investment we can think of that allows one to reap profits of this magnitude without any tax liability. It’s interesting to note that the tax benefits of homeownership in this country are rarely found anyplace else in the world.

This chart below is a simplified, smoothed-out and approximate look at the last few real estate cycles in the San Francisco Bay Area, illustrating estimated percentage changes in home prices from successive peaks and bottoms of the market. The years between these high/low points are simply depicted here as straight lines (which does not reflect reality). Different market segments – areas, property types, price segments – have experienced varying appreciation and depreciation rates over the years and how this chart applies to any specific property is unknown without a tailored analysis.

We want to reiterate that none of this implies justification for an ever-appreciating real estate market: Almost all these factors can stall or even go into reverse, and as mentioned earlier, in 2016, conditions began to cool. Real estate and financial markets are prone to a wide variety of extremely complex and hard-to-predict economic and political factors, and they typically go in cycles: up, down, flat, up again (repeat). And economic and market fluctuations are not uncommon within cycle phases. Still, the above factors are, we believe, the fundamental realities underpinning the city’s homes market in recent years.

San Francisco’s real estate market is now heading into the beginning of its 6th year of its current market recovery since the crash and recession that ran 2008 – 2011.

Our full report on real estate cycles is here: 30+ Years of San Francisco Real Estate Cycles

Paragon’s Fascinating Round Up of First Quarter 2017

San Francisco’s Paragon Real Estate Group has been rethinking and redesigning its online Market Updates resources for the Bay Area, and its quite a useful, aesthetic presentation for everybody interested in SF (and all Bay Area) real estate as displayed in analysis and graph charts.

The site page’s focus now is on the first quarter of 2017 and includes market trend stats of median sales prices, year-over-year comparisons, luxury homes market analysis, and an array of graphed perspectives on supply and demand.

A few tempting tidbits:

  • Long-term annual trends in San Francisco Real Estate
  • Marin County Real Estate Market Report
  • San Francisco Neighborhood Affordability
  • San Francisco Bay Area Apartment Market Report

And much more.

Go to Paragon’s current Market Updates by clicking here.

2017 Design Trends and Features for Luxury Homes

What’s in for 2017 in the creative world of designing or renovating luxury homes—a vital interest for both sellers and buyers? The inman.com site had a talk with the twin brothers of HGTV’s Property Brothers about this and came up with 30 trends and features.

The first point the article makes is that high-end buyers this year are seeking the antithesis of standard, cookie-cutter looks and functionality. They want convenience, style and recreation built into their house.

HGTV personalities Jonathan and Drew Scott in the article talked about their ranch style house they built in Las Vegas, which has a designer kitchen, blended living space and mixed metal adornments, along with very smart home technology, and plenty of recreational year-round space built in.

Some of the items they point out for 2017 luxury homes are: single story outselling multistory homes; 5800 to 7000 square feet; 6-plus car garage; in the kitchen a full raft of the ultimate in commercial appliances; full on smart house automation including LED wall pads for adjusting lighting and temperature or voice activation; spacious walk-in closets; collapsible window walls; and much more.

Go to the 30 luxury home design trends for 2017.