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Win the Ugliest Dog Contest Up in Petaluma This Saturday

Hey you with the ugliest dog in San Francisco, and you know who you are. Your dog is toothless or hairless or has a shockingly scrunched up face that you love to death, or hanging skin and a corkscrew tail. Or all the above. Here’s your chance to shine. Now, SF does not have its own ugliest dog beauty contest, but there is the world famous World’s Ugliest Dog Contest just 20 minutes north in Petaluma. And it’s this Saturday, so get your pooch all spruced up, or not. Bring him or her as they are – the uglier the better.

The venue is the Sonoma/Marin County fair, and the Ugliest Dog contest will be held at 6pm on Saturday, June 23rd. If you watch this yearly, lovable contest you’ll know that there are some really ugly dogs that take the trophy home. Many winners are the hairless, shrimpy, crooked-teeth dog kind. But last year’s winner was Martha, a 125-pound Neopolitan Mastiff with shockingly droopy skin. Oh, so cute. The crowd loved her, and so did the judges. So, she won $1,500 and the trophy and worldwide fame as this contest is doggedly covered by all the major news media outlets.

Record Fast Time For Sales of Homes in San Francisco

Fast times are here in San Francisco – if you’re selling your house. In fact, across the entire Bay Area the sale of a home is so fast from listing to closing that our SF Bay Area holds the fastest list-to-sale times nationally. You can practically use a stop watch to time these sales.

Actually, in San Francisco, as of April, the median time for closings is 36 days, while nationally the median time is 64 days. This fast pace has been going down every year since 2010, with the time period for SF sales being reduced by 43 percent since 2010.

Miriam Westberg, a Redfin agent in San Francisco, says, “The last three deals I did all have been 14 days or less in terms of closing. One single-family home closed in seven days from the time the offer was accepted. It was a cash offer. Cash is king in terms of speed.”

One of the factors in the quick turnarounds is the low house inventory, which drives competition, higher prices and the rush to close. Another factor says housing economist Felipe Chacon is that the process of housing shopping itself is changing, with more people shopping initially online.

The Most Expensive Construction Projects in SF Now

San Francisco’s pretty skyline—even with fog moistly rolling in—is being remolded as we speak, so to speak. There are cranes all over the place, and a few big-ticket projects have come online, like the now tallest building in SF—the 61-story Salesforce Tower officially opening last month. There’s the new mega-hub, 5-story mass transit center, and the Park Tower on 250 Howard Street with its footprint of 750,000 square feet, and its price tag of $690 million.

Bizjournals.com has put together a nice little slide show on the most expensive construction projects being built in SF now. See link below.

Now, Park Tower is not nearly the most expensive. That honor belongs to the Oceanwide Center at 88 First St. It has a King Kong footprint of 1.35 million square feet of office space, residential units and a hotel. The price: a mere $1.6 billion.

Other notables are the new Terminal 1 Center at the San Francisco Airport, with a cost of $1.2 billion paying for 860,288 square feet.

Check out the slides and project descriptions here.

Pacific Heights Dream House Goes for $1.6 Million Over Asking

Now there’s a cosmic coincidence. A Pacific Heights home was asking $8 million, and just sold for $9.6 million, $1.6 million or 20 percent over asking. That number $1.6 million is also the average price for a home in San Francisco. So, the bidding war went to the trenches among six parties and the lucky winner got the prize by shelling out enough extra money to buy another really nice pied-a-terre condo in one of the city’s other desirable neighborhoods.

What makes this house worth $9.6 million? Well…the Pacific Heights address certainly counts, plus the five beds, six baths, a wine cellar and very commodious closets.

Patrick Carlisle, the chief marketing analyst at Paragon Real Estate, talked about the 20% over asking: “Actually in SF, the average house sells for 13 percent over asking.” According to Carlisle, over 80 percent of San Francisco houses and condos sell over the asking price. He thinks the reason there are so many over-the-top bids is that realtors purposely underprice their listings, with a bidding war in mind to drive up the final price to its max.

San Francisco’s Toilet Kiosks to Get Jetson-like Makeover

Say “ciao” to the old SF green JC Decaux public toilets. They’re going, well… “down the toilet.” Swooping in from a sort of Jetson’s futuristic techno and environmentally-friendly blend is the new toilet design from SmithGroupJJR which just won the toilet design contest held by SF’s Public Works department.  The new toilets are metallic sheen with soft aerodynamic curves, a living garden on its roof, and benches with planters embedded on one side. The mockup looks techno-savvy and comfy, roomy even.

Two hundred submissions came in for the design challenge, most of which were kind of fuddy-duddy out of date. The Public Works Director Mohammed Nuru said of the design, “SmithGroupJJR’s design is forward-thinking, combining natural elements and environmental sustainability with modern technology and materials. This 21st-century street furniture reflects our San Francisco values, as we invest in a public realm designed with dignity, inclusivity, and beauty,”

However, once the final design is worked out between SmithGroupJJR and JCDecaux engineers, the design needs to be reviewed by the San Francisco Arts Commission and Historic Preservation Committee.

A Marriage Made in Heaven? – Work Plus Living In Same High Rise

Well, it’s probably the easiest home to work commute, outside of just working from inside your home. Just walk to work on the same floor you live on in a high rise—at least that’s the new idea from developer Realtex from some prime real estate in San Francisco.

So, if you can see yourself living at the corner of 4th and Bryant Streets, in a 13-story high rise (called 475 Bryant) that marries living space to work space, and your employer is there, then Realtex has the spot for you. Cody Fornari, of Realtex, says, “We envision this building as the first large-scale, fully integrated mixed-use building in San Francisco. We want to create a building where people not only have a unit to live in, but a space to work in.”

Realtex is confident that large tech employers will jump at the opportunity to have cheek-by-jowl living to work space—going with the thinking that it would be enticing to employees facing San Francisco’s stratospheric home prices. The building is about 200,000 square feet. No prices per unit have been published yet.

Upcoming Stern Grove Festival – Free and Fabulous

Summer concerts are zinging in on us in the SF Bay Area and our own San Francisco is putting on very special outdoor concert shows including the Stern Grove Festival: ten Sundays of absolutely free (donations welcome) concerts in Golden Gate Park. Starting Sunday, June 17, the Stern Grove Festival features performers blasting out great music (or dance as in the SF Ballet performing) at 2pm on every successive Sunday for ten weeks. From June 17 to August 19. Educational programs for kids and adults are also featured.

Stern Grove is one of the brightest spots at Golden Gate Park with its eucalyptus copses and wildlife, and for this concert series the grove is made over with a grand stage and punching sound system, and what really is a giant picnic area for the audience. Bring your picnic lunch.

The SGF has been a tradition since 1939, and this year’s eclectic line up includes: The Big Picnic with Jeffrey Osborne and Peabo Bryson, Ziggy Marley, M. Ward, Mexican Institute of Sound with Ginkgoa, Anoushka Shankar, San Francisco Symphony, Ronnie Spector, The Revolution and more.

Click here to check out the rest of the Stern Grove Festival scoop.

Bay Area Market Survey: From Billionaires in Mansions to Flippers & Fixer-Uppers

The county and city appreciation percentages in the chart above were calculated by averaging changes in both median sales prices and average dollar per square foot values. We also incorporated S&P Case-Shiller SF metro area calculations based upon its algorithm breaking the market into thirds by price segment. Each city and county includes within itself a wide variety of individual real estate markets of different price segments and varying dynamics, so these percentages are broad generalities. It is impossible to know how they apply to any particular home without a specific comparative market analysis.

IMPORTANT NOTE: As with stock market (or bitcoin) performance, comparative appreciation rates in housing markets vary wildly depending on the exact start and end dates of the analysis.

Bay Area Home Value Appreciation Rates
since 2011 (the post-crash bottom of the market)

Bay Area Median Home Price Trends
since 1990

Major Factors in Bay Area Appreciation

The appreciation rate and market dynamics of each individual Bay Area market since 2011 has each been affected by a mix of different factors – to greater or lesser degrees:

1) Being at the center of the high-tech boom (San Francisco, San Mateo, Santa Clara); 2) proximity to the central counties, but with significantly lower housing costs (Alameda County and especially Oakland are prime examples): 3) being affected to an outsized degree by subprime financing and the 2008-2011 distressed-property price crash (Oakland and many outlying, less expensive areas); 4) relative affordability: in recent years, as home prices soared, the highest pressure of buyer demand moved to less costly markets within and between counties; 5) substantially increased supply due to new construction (SF condo market); 6) increases in the average size of homes sold (+13% in SF); and 6) the general national economic recovery: U.S. home prices have appreciated by about 49% since hitting bottom in 2011.

This chart illustrates the dynamics of the enormous appreciation rate in Oakland since 2011, following its drastic crash in prices during the market recession: Chart: Oakland median price changes. And this chart based on Case-Shiller data illuminates the vast differences in the magnitude of bubbles, crashes and recoveries of different home price tiers: Chart: Appreciation Trends by Price Segment.

Generally speaking, the most affluent neighborhoods, with the most expensive homes, have appreciated less on a percentage basis (but more on a dollar-increase basis) than more affordable neighborhoods – especially over the past 2-3 years. This dynamic also occurred in the latter period of the last housing boom.

There were sometimes specific local factors, such as the terrible fires in Sonoma, or the opening of the new Apple spaceship headquarters, which played roles in boosting home prices in their locales.

Bay Area Average Price per Square Foot Values

San Francisco County Median Price Trends
since 1993

Within SF, appreciation rates have diverged between houses
and condos due to classic supply and demand factors.

Many more analyses specific to San Francisco County and its neighborhood markets can be found here: San Francisco Market Report

Bay Area Median Condo Prices by County
Year-over-year changes

Condos are the distinctly more affordable home purchase option, though that is less true in San Francisco than in other counties. Indeed, overall in the city, condos sell at higher price per square foot values than houses, but, of course, average condo size is much less.

The high-tech boom has led to a considerable divergence between Bay Area and national home price appreciation rates, as illustrated in this graph based on Case-Shiller data: Long-Term Home Price Appreciation Trends

Fixer-Uppers: Median Sales Prices

Bay Area Luxury Home Markets

There are very expensive neighborhoods and enclaves throughout the Bay Area, but the fabulous creation new wealth has supercharged Silicon Valley high-end real estate sales above all others.

How much luxury home one gets for the money varies considerably between counties. On a dollar per square foot basis, the highest values are found in San Francisco luxury condos, often high-rise units with utterly spectacular views.

Bay Area Real Estate Market Dynamics

Sales by Price Segment

These next 2 charts break out house and condo sales in the 9-county Bay Area by price segment. (We roughly estimate another 10 to 12% of such home sales were not reported to MLS, and not included below.)

Respective Market Sizes

By unit sales volume, the Bay Area is utterly dominated
by Santa Clara, Alameda & Contra Costa Counties.

San Francisco & San Mateo close the gap in dollar
volume sales due to their high home prices.

The above chart tracks dollar volume sales for houses, duets, condos, co-ops, TICs and 2-4 unit residential buildings. If the sales of larger multi-unit residential buildings and commercial buildings were included, sales volumes would soar for some counties. For example, in San Francisco, 74% of all transfer taxes collected in 2017 related to property sales of $10m+, the vast majority of which were larger apartment buildings and commercial properties.

Home and Lot Sizes

As the economy recovered from the recession, people began to buy larger houses, which is one factor in increasing median home sales prices. The average size of houses sold in San Francisco increased 13% over the period, but is still far below those in Marin, and in Diablo Valley & Lamorinda in Central Contra Costa County.

Marin & Diablo Valley also have the largest median lot sizes.

Homeownership & Tenant-Occupancy Percentages

Of the 9 Bay Area counties, only San Francisco has a higher percentage of renters than of homeowners (though certain cities of other counties do as well).

On the issue of rent and eviction controls, people have a tendency to vote their own financial interests (and not according to their opinions on macro-economic housing-supply theory): Tenants for controls, and landlords and homeowners (potential landlords) generally against them. This is why strong rent control measures are typically found only in CA cities with majority tenant populations, such as SF, Oakland, Berkeley and Santa Monica. Upwardly spiraling rents, as illustrated in the below chart, has made this one of the most intense political issues of the day, to be voted on at the ballot in November.

Bay Area Rent Trends

The Bay Area has the highest rents of any metro area in the nation.

Supply, Demand & Market Seasonality

Most Bay Area markets will now start to transition from the more heated spring sales season to the less active summer season. Part of this dynamic is a marked increase in price reductions. Seasonal trends do vary by county: Sonoma, for example, has a strong second-home market which can peak in mid-summer. San Francisco and Marin typically see dramatic spikes in sales during the short autumn selling season. All markets head into big slowdowns for the mid-winter holidays, before waking up and beginning the cycle again in the new year.

Price Reductions

As the spring market ends, the major period
for listings reducing their asking prices begins.

Bay Area Population & Housing Statistics

Our report on local demographics is here: San Francisco & Bay Area Demographics. We guarantee you will learn surprising and interesting things you never knew before.

Bay Area Housing Statistics

In recent years, some counties have embraced growth in housing supply, and others have resisted it. For better or worse, no county has resisted growth more than Marin. Any way you slice it, housing supply has not come close to keeping pace with the surge in population, a major factor in our real estate markets.

According to a recent report by Turner & Townsend, San Francisco has the second highest construction costs in the world, behind only New York, and these costs continue to accelerate due to a number of factors: land and labor costs; the long planning, approval & permitting process; political opposition to growth; and affordable housing requirements.

Income, Poverty & Housing Affordability

According to the above calculations by the CA Association of Realtors, Bay Area median household income has increased by 23% since 2015, as compared to a 7% national increase (as calculated by Seeking Alpha). Among other factors, it has been reported that people moving into the Bay Area earn considerably more than those moving out.

The Bay Area high-tech boom has been one of the greatest new-wealth-creation machines in history, but many residents have not shared in its benefits, or, indeed, been negatively affected by its impact on housing costs. The Bay Area ranks third for its number of billionaires (after NYC and Hong Kong, according to Wealth-X), but, on the other hand, over a million local residents live in poverty (according to the Public Policy Institute of California). We have one of the great luxury home markets in the country, and one of the worst problems with homelessness.

Q1 2018 Housing Affordability Statistics
per the California Association of Realtors (CAR)

According to CAR, despite very significant increases in median home prices and interest rates, affordability rates ticked up a little year-over-year in most Bay Area counties due to increases in household incomes. This surprises us, but we have not been able to review all the underlying data employed in the CAR Index. CAR has not yet been able to incorporate the recent federal tax law changes into their calculations, which would presumably lower affordability rates due to new limits on the deductibility of state and local taxes (such as property taxes) and mortgage interest costs. Depending on specific financial circumstances, our, admittedly unqualified, back-of-the-envelope estimate is that this will probably mean the loss of tens of thousands of dollars in federal income tax deductions for someone, say, owning a San Francisco house at the current median sales price. (Get more qualified counsel from your accountant.)

According to National Association of Realtors calculations, the San Jose and San Francisco metro areas are the least affordable in the country, just a bit below Honolulu.

Mortgage Interest Rate Trends

Interest rates play a large role in ongoing housing costs (for those who do not pay all cash). They have risen appreciably in 2018, but so far that only seems to be motivating buyers to act more quickly before rates go higher. Still, at some point, if rates continue to rise, presumably there would be some negative impact on the market. Though considerably above the historic lows of recent years, rates are still very low by long-term standards.

Bay Area Employment Trends

One of the foundation stones of the current Bay Area economy and housing market has been the spectacular increase in employment over the last 7 years, often in extremely compensated jobs: It recently came out that the median salary at Facebook was $240,000. (On the other hand, Mark Zuckerberg made a salary of just one dollar in 2017: Hopefully, he has other sources of income.)

As with all economic trends, employment numbers can also decline suddenly and precipitately, as occurred after the dotcom bubble burst. Note: We are not making comparisons between the two high-tech booms.

Additional reading for those interested:

Report: Positive & Negative Factors in Bay Area Markets
Will the Last Person Leaving Please Turn Out the Lights
30+ Years of Bay Area Real Estate Cycles

All our reports and articles can be found here: Market Analysis & Trends

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 the Bay Area, each with its own unique dynamics. Median prices can be and often are affected by other factors besides changes in fair market value, and longer term trends are much more meaningful than short-term. It is impossible to know how median prices or general appreciation rates apply to any particular home without a specific comparative market analysis. All numbers in this report are to be considered approximate.

© 2018 Paragon Real Estate Group

Women Are Better Tippers Than Men, Even With Subpar Service

We in San Francisco are good tippers, even very good tippers at our ginormous array of restaurants. We often plunk down 20% or near that. We appreciate good, attentive service and the hard work of servers. Discover, the credit card company, recently did a study on tipping and discovered that women are slightly more generous than men in tipping in restaurants, even when the service is off or even awful. The exceptions are when the server flirted with the diner or were physically attracted to the server, then men tip more. Go figure that one.    

But in all other cases of say, receiving perfect service or some kind of mishap occurred or a recommendation went south, or rudeness came with the meal, then women give more than men.

On average across the country, Americans give 20% for perfect service, and for very flawed service the tip can go as far down as 6%.