What’s been selling?
Paragon published a hefty survey on what kinds of homes sold in 2014 at the end of December. It has all kinds of juicy tidbits about the oldest home sale, the most expensive home sale and how many homes sold with swimming pools. If unpacking such arcana amuses you, the entire report is available here. If you prefer the Cliff Notes version, what follows are some highlights from the report, along with my personal observations. If you get confused by various references to different neighborhoods, a colorful map at the bottom of this email has all the different districts labeled.
I’ve been saying for a while that $1M for a single family home in San Francisco is the “new normal” and this chart proves it. That jump in sales prices from 2013-2014 can probably be ascribed to the influx of hi-tech money and buyers, combined with low interest rates that make owning cheaper than buying (provided you can come up with the down payment.)
Special circumstance sales are a real estate market’s “problem children.” All come with challenges to overcome. Probate sales are often subject to court confirmation and overbidding. Bank sales frequently require lender approval. And tenant-occupied properties can sometimes be difficult to move into because of San Francisco’s rent control restrictions. All “special circumstance” properties generally sell at some kind of discount. Generally speaking, the largest discounts come on properties that are tenant-occupied at below market rents.
The slice of pie in this chart going to condos is only going to get bigger each year with new construction rising in neighborhoods like Mission Bay and South Beach. It also makes single family homes a rarer, more valuable commodity.
Want a list of the homes that came with pools or bidets? Want to know which six sold for over $10M? Just email me. The “only in San Francisco” bar that jumps out in this chart is the limited number of houses that were “fully detached.” I’ve often had buyers new to the area puzzle over how most of our houses and buildings snuggle right up against each other.
I was surprised at the number of condos that sold with earthquake insurance so I looked up what buildings have it– Diamond Heights, Opera Plaza and The Beacon all have earthquake insurance. Luxury hotel-style condos like the Ritz Carlton, Four Seasons and the Saint Regis also have it, along with a few buildings in Pacific Heights, North Waterfront and the Outer Sunset. Email me if you want to know more.
I suspect the SOMA price-point is combining SOMA with the Yerba Buena District– a newer “micro-neighborhood” that is fast becoming one of the City’s most walkable districts. To get an idea of how the market appreciated in 2014: the median for Diamond Heights in 2013 is was only $629,000. In the Van Ness Corridor it was $850,000.
A third bedroom in San Francisco is a rare, sought-after commodity. Many of our older floor plans have just two bedrooms on the main level, with a third bedroom added later downstairs. Four bedrooms are even more unusual; when someone asks me for a home that large, I often start out by asking them how they like the fog, since many of our more affordable larger houses are West of Twin Peaks in neighborhoods like St. Francis Wood or Forest Hill. The Richmond District is another good place to shop for an older, bigger gracious period home.
One of the first things I ask any buyer is how important parking is. If it isn’t, I shout a “hallelujiah” because bidding on homes without parking is far less competitive. At the other end of the spectrum are my buyers who need two-car parking, which is a rare amenity in San Francisco.
That cute little Victorian house people dream of owning in San Francisco is extra-expensive because it is extra-rare. The districts with the most single family home sales boast a housing stock that runs more towards the post-WWII era. Not that these homes don’t often have their own charm, especially with newer design trends that favor mid-century architecture.
When I first started selling real estate in the mid-80s, I specialized in residential income property in and around the Haight Ashbury. Owning a little building back then was easy and profitable because you weren’t subject to rent control if you lived in the property. Today, owning residential income property requires a strong stomach and the financial resources necessary to take on the risks associated with some of the strongest rent restrictions in the country.
I have the memory of an elephant when it comes to the people I meet and greet and talk about real estate with. So please don’t hesitate to reach out if you have questions or just want to chat about what the New Year holds. You’ll probably find that I more than likely remember you and delighted to hear from you.
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