Earthquake Proofing: Almost 500 SF Buildings Miss Seismic Deadline

San Francisco, as everybody knows, is earthquake country, and the city’s efforts to be prepared for the next minor or major earthquake includes a rigorous earthquake safety code for SF buildings. The most recent (and minimum) earthquake resilience effort has been the seismic retrofit requirement.

There are 3,464 buildings in the city that are required to get permits for the necessary seismic retrofitting. Out of those, 484 have missed the first major deadline for seismic retrofitting by not applying for the permits—as reported by Bay City News.

Department of Building Inspection spokesperson Bill Strawn said the 484 building owners are now out of compliance with the city law that represents the minimum for earthquake safety improvements.

Many of these 484 are “soft story,” meaning they have open space like retail or a garage on the first floor. Next, the owners without permits will be served a violation notice and warning. If they don’t comply after this, they could be banned from leasing, selling or using the property as collateral.

Official: San Francisco Metro Area Richest in U.S.

It doesn’t get any more official than the U.S. Census and the Bureau of Economic Analysis , which shows San Francisco as the richest city area in America. Combining data sets drawn from 2016 and comparing the nation’s 25 top metropolitan areas, the BEA identified the SF area as the fastest growing incomes in the country. The median incoming pay went up $8,000 to $97,000 in SF in 2016, compared to $89,000 in 2015.

Based on those metrics, SF and area is the wealthiest U.S. locale, but the cost of living in the city erodes the relative value of that wealth—dropping it to $79,000. Basically, we make more but have to spend more to live here.

What are the top 3 most expensive metro areas to live in? San Francisco, Washington D.C. and New York in that order. New York metro area residents bring in about $25,000 less than in the SF metro area. But their median average cost of living is much less.

Luxury Condo Market Report for San Francisco

The autumn selling season is a big one for the San Francisco luxury homes market: There is usually a very significant spike in activity between Labor Day and the beginning of the mid-winter slowdown in mid-November. It will be a couple months before we begin to get definitive statistics on listing and sales activity in September and October, but in the meantime we can review the market conditions and trends as they have developed over recent years. This report will pay particular attention to the different neighborhood markets within SF.

We usually use $1,850,000 as the price threshold for the luxury condo, co-op and TIC market in San Francisco: That approximately defines the top 10% of the market. The ultra-luxury segment starts at $3 million, which constitutes the top 2.5% of sales. Of course, what one gets in the different neighborhoods for the same price can vary dramatically: The city has an enormous range in locations, architectural styles, views and amenities.

All our Paragon reports can be found here

Condo, Co-op & TIC Sales over $5m
2017 YTD SF MLS Sales

Overview: Listing & Sales Activity

As of mid-month, 49 new luxury condo, co-op and TIC listings have come on the SF market since the beginning of September, so it looks like it may be a record-breaking month for new listing activity.

If you wish, you may skip our summary and jump to additional graphed analyses further below.

MARKET SUMMARY

The luxury real estate market is impacted by a number of factors: positively, by improvement in general economic conditions and confidence, highly-paid employment and population growth, foreign buyers, and especially, by the creation of new wealth in large quantities. All these elements were dynamically present in the Bay Area from 2012 through mid-2015. Then significant economic and political volatility put a damper on the market: Chinese stock market turmoil, the crash in oil prices, Brexit, the U.S. presidential election, as well as an apparent cooling in our high-tech boom, all injected uncertainty into financial markets and our local luxury real estate market from late summer 2015 to late autumn 2016. Furthermore, Bay Area high-tech IPOs, which had created a stupendous amount of new wealth since 2011, basically dried up during this period – and newly rich or substantially enrichened buyers had played a big role in demand.

Generally speaking, most affected was the market for re-sale luxury condos, particularly in those neighborhoods where big, new-construction projects are concentrated and dramatically increasing supply. It is hard to get definitive data on new-project sales activity, but it is believed to have softened as well with the overall jump in listings, all competing for the same buyers.

However, in June 2017, the SF luxury condo market suddenly hit a new high in sales volume. This accompanied feverish spring real estate markets around the Bay Area, though the more affordable segments were most frenzied, and house markets somewhat hotter than condo markets. Consumer confidence climbed, interest rates remained low and the stock market soared to new heights.

The biggest shift in the luxury condo market has been the dramatic year-over-year drop in sales reported to MLS in the greater South Beach-SoMa district, even as listing inventory there has hit new highs. As illustrated below, by virtually every market indicator – months supply of inventory, average days on market, and others – it is the softest luxury condo market in the city. This is the area where many big, new projects continue to come on market, and, to some degree, they are probably cannibalizing MLS sales as they aggressively compete with the resale market. This is also the district where the unfortunate issues at the Millennium Tower (slight sinking and tilting; multiple lawsuits) are being extensively reported upon. On the other hand, the high-end condos that do sell in this district still often achieve the highest dollar per square foot values in the city.

The Pacific Heights-Marina district and the Noe, Eureka (Castro) & Cole Valleys district have much stronger supply and demand statistics in their high-end condo markets, with the greater Russian & Nob Hills district a bit cooler.

Overview Dollar per Square Foot Analyses

Most Expensive Luxury Condo, Co-op & TIC Buildings
in San Francisco, by Median Dollar per Square Foot

Each of these buildings had 7 to 23 sales during the period measured.

San Francisco Luxury CONDO, CO-OP & TIC Market
by Top Neighborhoods & Districts

Each Realtor district delineated on the map above and the charts below contains a number of neighborhoods. For example, Realtor District 9 contains South Beach, SoMa, Mission Bay, Yerba Buena, Potrero Hill and the Mission (as far as luxury condo sales go). Sometimes the chart legends will mention different neighborhoods within the district, but it is always referencing the same District 9.

Top Luxury Condo Districts: Average Dollar per Square Foot Values

The highest luxury dollar per square foot values are achieved in the greater South Beach-SoMa district – almost all high-rises built within the last 20 years or so – and in the swath of much older, high-prestige neighborhoods, such as Pacific Heights and Russian Hill, running across the northern side of the city.

Top Luxury Condo Districts: Listing & Sales Volumes

The South Beach-SoMa district has by far the highest number of active luxury condo listings, and that does not include most of the new-project listings, which are typically not entered into MLS. So supply, or over-supply, is a major issue there in the market dynamic.

This next chart illustrates the abrupt plunge in sales over the past 15 months in South Beach-SoMa (tying neatly into when the Millennium problems started getting press coverage). The Pacific Heights-Marina district is now the top district for sales, followed by the Russian & Nob Hills area. Sales in the two relative “upstarts” in the luxury condo market – the Noe, Eureka and Cole Valleys district and the Hayes Valley-NoPa-Alama Square district – have been significantly growing in recent years.

Top Luxury Condo Districts: Months Supply of Inventory

South Beach-SoMa now has a very high months supply of inventory, while Pacific Heights-Marina and Noe, Eureka and Cole Valleys have very low MSI figures. Russian and Nob Hills have somewhat higher but still relatively low MSI figures in recent months. The lower the MSI, the stronger the demand as compared to the supply of listings available to purchase.

High MSI in South Beach-SoMa does not imply that luxury condos are not selling there, but it does mean that listings generally have to stand out as good values, i.e. priced correctly as well as prepared and marketed properly, to seize the attention of buyers confronted with so many options.

Top Luxury Condo Districts: Average days on Market

The same dynamic seen in months supply of inventory is replicated in the statistic average-days-on-market. Indeed, the dynamic is consistently illustrated, to a greater or lesser degree, in all the following charts.

Top Luxury Condo Districts: % of Sales Accepting Offers within 30 Days
The higher the percentage, the stronger the market.

Top Luxury Condo Districts: % of Sales Selling over List Price
The higher the percentage, the stronger the market.

Generally speaking, the higher the overbidding percentage, the more buyers are competing to win listings. However, it is also not unusual in recent years for lower priced areas to have higher overbidding percentages, and the Noe, Eureka and Cole Valleys district is distinctly less expensive than the other 3 districts illustrated on the chart below.

Top Luxury Condo Districts: Listings Taken Off Market without Selling
The higher the number, in relation to overall district
listing and sales numbers, the softer the market.

Ultra-Luxury Condo & Co-op Sales in San Francisco
The Top 2.5% of Sales, $3m+

As illustrated in the second chart below, sales at the highest end of the luxury condo and co-op market peaked in spring 2015, while the number of active MLS listings have continued to rapidly climb to peak this past June, so the supply and demand dynamics in this segment have changed considerably in the past 2+ years. This ties in with the financial market turmoil and plunge in local IPO activity that began in late summer 2015. At the same time, some of the recently built as well as upcoming condo projects are aggressively targeting this very expensive niche, adding further to supply.

This market segment targets a very small pool of very affluent buyers and it is not unusual that its statistics for months supply of inventory and average days on market to be appreciably above those in the general market. However, since spring 2015, both metrics have climbed much higher, to an average of 8.5 months of inventory and an average 55 days on market over the past year. This market has been clearly and significantly tilting to the advantage of buyers.

As seen earlier in the list of biggest sales and the chart showing the most expensive buildings, the ultra-luxury segment is totally dominated by neighborhoods such as Pacific Heights, Russian Hill, Nob Hill and South Beach-SoMa.

Please let us know if you have questions or we can be of assistance in any other way.

Our complete SF luxury real estate report (including luxury houses)
All Paragon Bay Area market reports

It is impossible to know how median and average value statistics apply to any particular home without a specific, tailored, comparative market analysis. In real estate, the devil is always in the details.

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

Get Out Your Biggest Credit Card For These SF Restaurants

An oft-heard topic of conversation or writing subject is: what are the most expensive restaurants in San Francisco? Not, where get you the best food for the bucks, but which ones have you put out the biggest bucks…period.

Well…bizjournals.com put out a list for SF that is an eye opener. The Japanese restaurant Hashiri offers a $500 a plate chef’s menu. Then there’s Saison, with a $398 chef’s menu. And for most expensive tiny bites in SF there’s the $198 tasting plate put together at Mosu.

San Francisco Chronicle food critic Michael Bauer observes, “The expensive fixed price menu is a defining element of our current dining scene. No other region in the country — not even New York, with 10 times the population — has such a deep bench of fine dining establishments.”

What gives…or what eats? The cost of doing dining business is going up in SF, and the median income for San Franciscans keep rising and people are eager to pay for a really expensive meal. So, a perfect storm of expensive fare.

Click here for a view of the uber expensive SF restaurants.

A Feast of Charts Capturing the San Francisco Real Estate Scene

Assembled here is a cornucopia of graphics (and their links) that tellingly chart the year-over-year general house and condo markets through the month of August 2017. The information is drawn from infosparks for MLS activity. Thanks to Patrick Carlisle of Paragon Real Estate Group for this work.

For some, there are also little notes put in before the links that give clues as to what to take note of.

Have fun.
 


 

San Francisco house market, year-over-year comparisons:

 
 

San Francisco condo market year-over-year comparisons. However, trends vary in the condo market quite a bit by subdistrict.

“Siberia of San Francisco” is the 2nd Hottest Neighborhood in SF

The “Siberia of San Francisco” (in case you didn’t know) is a literary nickname for the Excelsior area of SF, located in the city’s south east end. It’s north side is lined by Mission Street, but none of the Mission’s new development has spilled over into Excelsior. There isn’t even a Starbucks here. Because the locals fought it off. They like their Siberia just the way it is: charmingly old school. But some residents are looking for new shops and restaurants to invigorate the area.

Now, Excelsior is the second hottest real estate zone in the city, according to Redfin real estate site. Put a house on the market and within 19 days it has sold at 111% of the asking price. The median price for a home is $890,000, making it one of the most affordable neighborhoods in the city. Projections put the area into a million dollars per home soon. The area’s retail stores and commercial frontage are pretty quiet, and there are lots of pretty good murals, but the real finds here are the residential homes which make up most of Excelsior.

Props and Shout-Outs:

I’m long overdue in thanking my real estate peeps who continue to think of me when referring their San Francisco buyers and sellers. A hearty thanks to Katharine Gibson of Windermere Properties in Seattle – I just helped her family member buy a splendid little building with his wife, and sell the TIC they used to live in. Thanks, too, to Andrew and David from Alain Pinel in Montclair – their lovely seller sold in Alameda and quickly bought a terrific Victorian house on a great block of Bernal Heights. Tracy Sichterman of Berkeley Hills Realtyalso deserves my deep appreciation for referring a lovely family seeking a solid San Francisco rental property– we quickly secured a superb 2BR condo for them that is presently under construction in Hayes Valley. I also had a great talk with Joanna Hirsch of the Grubb Company this week about some future sellers who plan to put their Mission District condo to market later this year.
Questions? Comments? Feedback? I always love to hear from you. I also have loads of statistics at my fingertips. If these charts don’t satisfy your particular itch for market data, please reach out and tell me what you really want!

Top Dog Breeds in the City of Dogs: San Francisco

There are 120,000 dogs in San Francisco and 108,000 to 113,000 children—according to official government tallies. So, obviously there are more dogs than kids in our fair and dog-loving city. And if you are looking at breeds, well, there’s probably a dog rep of every breed in the world.

What are the top ten breeds in SF? According to packdog.com, here’s the pooches we love most:

1. Mystery Mutt: the great mixed breed from rescue shelters is #1.
2. French Bulldog, the bug-eyed, Yoda-eared guys and gals we see all the time.
3. Boston Terrier—might as well call it the San Francisco Terrier
4. Okay, naturally, the great big Chihuahua for the SF tiny apartments.
5. Golden oldie, the Golden Retriever is a big fav prancing around the city.
6. Goldendoodle: spot them all the time with their curly, goofy cuteness.
7. Oh yeah, of course, the Labrador Retriever in all color flavors.
8. Cool: the Pug, and we all love a very handsomely ugly face.
9. Cattle Dog: they love herding us, the people.
10. The smart guys: Border Collie, and they know SF like the back of their paw.

Enjoy our city’s dog citizens. They make everything better.

A Hot Autumn Market in San Francisco?

Generally speaking, late summer market dynamics (or, for that matter, during the mid-winter doldrums) are not of great significance and do not tell us much about where the market is heading. September, however, is usually the single month with the greatest number of new listings hitting the market in San Francisco, and that surge fuels sales through mid-November, when activity begins to plunge. The coming two months will be the next major indicator: Will the SF market continue to maintain the intense high-demand, low-supply heat of this past spring, or will it cool? While the entire market is affected by seasonality, the luxury home segment is fiercely so, and the next couple months will be the peak selling period for high-end homes until spring 2018 rolls around.

City-Wide Home Appreciation Trends since 2005
Median Sales Prices & Average Dollar per Square Foot Values

As of September 1, the 3-month-rolling median sales price was $1,418,000 for SF houses, and $1,160,000 for condos. The average dollar per square foot value was $907 for houses and $1056 for condos.

San Francisco Median Home Sales Price Trends

San Francisco Average Dollar per Square Foot Trends

San Francisco Neighborhood Appreciation Rates
2011 to 2017 YTD, Median Sales Price Change

Median sales prices are not perfect indicators of changes in values for specific homes: They can be and often are affected by factors other than changes in fair market value, and shorter-term anomalies are not uncommon. What is certainly true is that every part of the city has seen tremendous appreciation since the recovery began in 2012, however the percentages on the charts below should be considered very approximate indications of the scale of change.

These charts delineate 2011 and 2017 YTD median sales prices by neighborhood, as well as the percentage change between the two. The 2 charts on house appreciation are followed by 2 on condo appreciation. If you wish information on a neighborhood not included in the charts below, please let us know.

SF HOUSE Median Sales Price Appreciation Rates

SF Neighborhood House Price Appreciation

NOTE: A perfect example of how median price changes can misrepresent changes in fair market value can be seen above: Typically, Noe Valley and Eureka Valley (Castro) have very similar median house prices, but in 2017 YTD, the Eureka Valley median price unexpectedly jumped by an astonishing $500,000 (23%), putting it far above Noe, and giving it a much higher overall appreciation rate. However, the average size of houses sold in Eureka Valley so far in 2017 suddenly jumped by 22% from 2016: That is, its houses did not just suddenly and inexplicably have a tremendous jump in value: the average size of homes sold changed, probably temporarily. Monthly median price changes in particular, trumpeted everywhere in the media as vitally important, are often unreliable due to seasonality and the small size of the data set.

SF Neighborhood Home Price Appreciation

SF CONDO Median Sales Price Appreciation Rates

Thousands of newly constructed condos, which typically sell for higher prices than resale condos, have hit the market in recent years, which means year-over-year comparisons are not always apples to apples. Generally speaking, comparable-condo appreciation rates have been well below house appreciation rates since 2015, because of the difference in the supply available to purchase.

San Francisco Neighborhood Condo Price Appreciation

SF Neighborhood Condo Price Appreciation

The September Rush of New Listings
General Market

San Francisco New Listings

Luxury Home Market

For some reason, September 2016 saw a stupendous rush of luxury home listings coming on market, which among other effects led to the highest monthly number of luxury house sales ever in October 2016. (As an aside, luxury condo and co-op sales hit their highest sales volume this past June.)

San Francisco New Luxury Home Listings

Where to Look in Your Price Range

In August, we updated our complete series of charts delineating where one is most likely to find a home in a specific price range. Below are 2 of the charts, and the entire series can be found here: SF Neighborhood Affordability.

San Francisco Condo Prices by Neighborhood

San Francisco House Prices by Neighborhood

National Housing Affordability

This next chart illustrates home affordability for selected metro areas across the country as calculated by the National Association of Realtors. The 7 Bay Area counties, in our 2 metro areas, are the least affordable in the nation – not the happiest of distinctions, except for those planning to sell and move out of the area.

U.S. Metro Area Housing Affordability

San Francisco, California & the United States

The appreciation of home prices in San Francisco since 2011 has out-performed overall state and national markets by a substantial margin.

San Francisco, California and US Home Price Trends

County House Markets

Since San Francisco is considered the big city in the Bay Area (though San Jose is actually larger), it seems counter-intuitive that its house market is one of the smallest, but this is a major part of its ruling dynamic: Very little supply compared to intense demand. Owners in the city (and the nation) are getting older, and selling their houses ever more infrequently. And virtually no new houses are being built within SF itself.

SF Bay Area House Markets

Condo sales significantly outnumber house sales in SF, and the supply of condos available to purchase has surged with new project construction. This has made that market segment somewhat less heated; condo owners also tend to sell more frequently than house owners. However, the condo market in the city is much more expensive than in other counties.

Ultra-Luxury House Sales in San Francisco
Houses Selling for $5 Million & Above

A quick look at the very highest end of the SF market. Though other districts, such as the greater Noe-Eureka-Cole Valleys district, have increasingly surged into the luxury home segment, when it comes to the realm of the really big, most expensive houses, the district comprised of Pacific & Presidio Heights, Cow Hollow and Marina dominates with 75% of sales. House sales there can exceed $30m, though that is still very rare.

Most expensive houses in San Francisco

Bay Area Home Price Appreciation
per the S&P CoreLogic Case-Shiller Index

Earlier in this report, it was mentioned that median price changes can sometimes be unreliable as indicators of actual appreciation. However, the S&P Case-Shiller Home Price Index measures appreciation using its own special algorithm tracking resales of the same home, and it does not use median sales prices. This first chart below, based on Case-Shiller, is a simplified, smoothed-out look at the up and down cycles over the past 33 years in the higher end of the Bay Area real estate market, which predominates in most of the city, Marin, San Mateo and areas like Piedmont, Diablo Valley and Lamorinda. Because it covers 5 counties, it merges the differences between their separate markets into a single trend line.

San Francisco Bay Area Home Price Cycles

This second Case-Shiller chart illustrates how homes in different price segments around the Bay Area have recently been appreciating at considerably different rates. C-S divides all the Bay Area house sales into thirds by number of sales: low-, mid- and high-price. As illustrated in the lower green line, the higher-priced segment went flat in appreciation in 2016, but then jumped back to life in 2017. The most affordable price segment (top blue line) has been experiencing the highest pressure of buyer demand and competitive bidding, and since April 2016, has out-appreciated the most expensive segment, 12.4% to 4.3%, i.e. almost triple the rate of increase. The middle price segment (gold line) has been in between, appreciating by 7.8%.

These dynamics are generally true within each county, as buyers, somewhat desperately, search for homes they can still afford, in the area they wish to live.

The numbers on this chart all refer to a January 2000 home price of 100. Thus 262 signifies a price 162% higher than in 2000.

Case-Shiller SF Home Price Trends by Price Tier

Months Supply of Inventory (MSI)

The lower the months supply of inventory, the higher the demand as compared to the supply of homes available to purchase, i.e. lower MSI equals a hotter market. The entire Bay Area has been experiencing very, very low MSI figures recently, with San Mateo at rock bottom. (Its median house sales price has just recently been exceeding the median price in the city.) Alameda and Contra Costa Counties, generally offering considerably more affordable home prices than Silicon Valley, San Francisco and Marin are also at extreme lows.

Within SF itself, the MSI for houses alone, and especially in the more affordable neighborhoods, is substantially lower than the MSI for condos, though both have been very low since spring began.

SF Bay Area Months Supply of Inventory

Mortgage Interest Rates

Since the election, interest rates have seen a wild ride, first up and then down. As of the end of August, rates hit their lowest point so far in 2017, a significant financial advantage for buyers.

Mortgage Interest Rate Trends

Please let us know if you have questions or we can be of assistance in any other way. Information on neighborhoods not included in this report is readily available.

All our many Bay Area real estate analyses can be found here: Paragon Market Reports

Over the past 12 months, Paragon sold more San Francisco residential and multi-unit residential real estate than any other brokerage.

It is impossible to know how median and average value statistics apply to any particular home without a specific, tailored, comparative market analysis. In real estate, the devil is always in the details.

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

Checking Out Most Expensive SF Homes to Most Affordable

The final week of August saw sfcurbed.com’s High and Low take on the most pricey and least pricey homes sold in San Francisco go to Presidio Heights and Bayview.

Ah, Presidio Heights. Leafy and chic-cool and right out of a novel, and houses there go for millions. Take the most expensive house sold last week in San Francisco at 3317 Washington Street. It’s a grand adobe-colored stuccoed house with 4 beds, 3.5 baths, 3,300 square feet of Presidio Heights luxury. It listed in May for $4.99 million, a quantum leap in value of $1.99 M from its 2010 price of $3 M and change. And, it just sold for the May asking price, so quite a tidy profit for the owners. The home was spared the renovation buzz saw so it has it has kept much of its original charm.

Over in Bayview, a nice little cottage type house with potential at 1485 Van Dyke Avenue came in under what sfcurbed calls its Under $700K Club with a sold price of $620,000 on a listing of $679,000 in June. Among its assets are 3 beds and 1 bath, was erected in 1906, the year of the Great Earthquake and Fire, and will be a fun, perhaps exasperating fixer upper.