Condos, condos, condos!
The construction boom that ended in 2008 forever changed our City’s housing market. Condos now outsell houses in San Francisco and former industrial wastelands in the South Beach-Yerba Buena zip codes are now thriving neighborhoods with SF’s highest median household income. Our skyline is altered with dramatic, new high rises like the Infinity Towers and Millennium. That boom died with the 2008 market crash. But now the city’s economy, employment, population and home prices make new home construction boom again, albeit in a different way.
The main difference during this new frenzy of construction is the size of the projects. You can see many of them marching up Market Street between the Civic Center and the Castro. More new housing (much of it high-end rentals like NEMA and Mosso) are going up in the mid-Market District.
You might read about plans for much larger projects near the future Transbay Terminal or out on Hunters Point– but these plans can take years to break ground. In the meantime, if predictions hold, demand will perpetually outstrip supply for at least the next decade.
As you review the accompanying chart, please take it with the usual grain of salt: supply/demand isn’t the only factor affecting the real estate market. Values can be affected by a gazillion other things, from weather to election cycles. Hence it is very difficult to make meaningful predictions, especially in the shorter term (despite how much “experts” love to make them).
Much of the city’s new construction is occurring on parcels that not so long ago might have been considered subprime for residential: 415 De Haro (Onyx) is nestled against a clutch of light industrial warehouses and 300 Cornwall is wedged between two busy streets. Regardless, new construction is generally selling for prices rarely seen before in their respective neighborhoods. They are also bringing lots of young, affluent buyers. However you feel about the “high tech worker” factor, these developments are altering the fabric of their respective neighborhoods.
The biggest common denominators of these properties are full service amenities (doormen and such), and spectacular views. Eight of these properties are post – 2000 construction. The oldest are also the smallest: 1170 Sacramento, built in 1963, has 73 condos. 1100 Sacramento, aka “Park Lane”, is a recent TIC conversion built in 1925. The building with the biggest drop and rebound in values since it was built is 88 King, perhaps because there was barely a “there” there when it was completed in 2000. This list excludes smaller buildings with only a sale or two per year.
Even though the newer South Beach-Yerba Buena district dominates the list of most expensive condo buildings, older-prestige neighborhoods such as Pacific Heights and Russian Hill still have more high-end condo sales. Most of them are in smaller two-flat Edwardian and Victorian buildings, although there are a variety of condo apartment buildings atop Nob and Russian Hills and along streets like Pacific, Vallejo and Broadway in Pacific Heights.
The first golden age of SF apartment buildings featured light gracious homes with elegant detail built between 1920-1940. – PacHeights, the Marina, Russian Hill and Lake Street are filled with these buildings. The second golden age really arrived with the latest burst of new-condo construction since 2000: These ultra-modern units in buildings like The Infinity and Millennium feature premium finishes and amenities. The newer construction commands a premium dollar per square foot. The older buildings also hold up well, with architecture that adds to our City streetscapes.
The districts South of Market now dominate condo sales simply because there are so many of them there. This trend will continue as some of the City’s largest residential projects break ground. The explosive growth in this area evolved from changes in zoning that allows large swaths of formerly industrial parcels to be developed residentially. There are also a healthy number of mid-rise construction projects along the Market Street and Van Ness corridors as well as in the Mission District, Hayes Valley, Dogpatch and Hunter’s Point.
Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email firstname.lastname@example.org. www.ceceblase.com