San Francisco Real Estate Properties

Need I remind you to take your camera with you after sunset this week?

If you recall, last month in my article entitled “Did You Know San Francisco Celebrates the Moon?”, I said that Thursday, October 25, 2007 will once more be the perfect photo opportunity for us to take pictures of the Hunter Moon over San Francisco.

This is the last time this year that we will be able to take pictures at a decent hour from our every own San Francisco neighborhood street corners of the moon.

On Thursday evening, the moon will be rising at 5:51 P.M. while the sun will be setting 6:20 P.M. and dark at 7:17 P.M and a full Hunter Moon at 9:52 P.M.

Have fun. I’ll share if you share.

This is a continuation of “Part Two-Wait and See or Get In Now?”

In any real estate market and especially in San Francisco, the best properties sell first. In fact, the best location in the best condition at the best price sell the fastest and that is why the new mantra “Price, Condition, Location” is king today.   

I may be preaching to the choir when I say in San Francisco no one can ever under-estimate our real estate market, after all some properties don’t come on the market for generations.  This especially is true in the neighborhoods of Noe Valley, Eureka Valley, Presidio Heights, Pacific Heights, Russian Hill, Nob Hill, Cow Hollow, the Marina and North Beach/Telegraph Hill.  If you are a serious buyer in these neighborhoods, some of these properties come on the market and off the market in a matter of days or hours.  When this happens condition and price become secondary.   

With that aside, in this San Francisco market two things are emerging that Buyers that have been on the fence need to know now: (1) Our inventory for sale is increasing steadily. (2) We have just moved into a Buyers market for the first time all year. 

Both San Francisco’s Sngle Family Homes and Condo, Co-ops, and Lofts for sale inventory are mounting with the summer’s left over inventory and the seasonal new fall inventory are now outpacing the number of fall sales.   For the first time in years, Buyers are able to pick and choose what they want to buy and ultimately negotiate the best possible price with more and more motivated Sellers with properties not selling.

 

The above chart illustrates how the number of Single Family Homes listed for sale have been growing (Year-to-October 20, 2007) in San Francisco.

Now see how the Condos, Co-ops, Lofts, and TICs combined have been steadily inching up throughout the year, as well.

 

The above chart illustrates how the number of Condos. Co-ops, Lofts, and T.I.Cs on the market have been increasing (Year to October 20, 2007) to give Buyers more selection of properties to buy in San Francisco. 

Now, a quick look at one way to spot “the windows of opportunities” using the Market Action Index (MAI). 

The MAI charts illustrate the balance between supply and demand using a statistical function of the current rate of sales versus current inventory (similar to absorption rate).  A MAI value greater than 30 typically indicates a “Seller’s Market” (A.K.A. as a “hot market”) because demand is high enough to quickly gobble up available supply. A “hot market in San Francisco” will typically cause prices to rise and/or cause Buyers to anticipate multi-offer scenarios and they will write their offers over asking thus giving Sellers’ their highest possible price. MAI values below 30 indicate a “Buyer’s Market” (a.k.a “Cold Market”) where the inventory of already-listed homes is sufficient to last several months at the current rate of sales. A “cold market in

San Francisco” will typically cause prices to fall and/or cause Buyers to be able to negotiate with motivated Sellers to get their best possible price at or below theSeller’s asking price.

Each of the MAI charts (below) are shown by quartile to demonstrate how different price points react to the MAI.  Each quartile is 25% of the properties on the market.  Most expensive 25% of properties are in the first quartile, the upper- middle 25% of properties are in the second quartile, the lower-middle 25% of properties are in the third quartile and the least expensive 25% of properties are in the fourth quartile.

 

Both the San Francisco Single Family Home for sale inventory (see chart above) and the Condo, Co-ops, Lofts, and TICs for sale inventory (see chart below) have been trending down into a Buyer’s Market (below 30 on the chart above) in the last several weeks that puts Buyers in the driver’s seat for the first time all year.  

San Francisco Buyers are suddenly realizing that by sitting on the fence they will be missing out on this terrific “window of opportunity” to get into the San Francisco real estate market before the end of the year while interest rates remain at near-historic lows and finally, they can be choosy and maybe even a bit more commanding (?).

If the steady stream of visitors at my Open House on Sunday on Telegraph Hill in North Beach 

was any indication of how the real estate market is in San Francisco, maybe Buyers are finally realizing that it may be a really good time to get back in .

The old adage “Location, Location, Location” has now been replaced by “Price, Condition, Location”.  And the Buyers out on that warm sunny afternoon checking out the inventory knew the new mantra. 

 

Maybe these potential Buyers all came up the Hill to see me on Sunday at my Open House because of reading the Ben Stein article Gloom Sayers Should Look Up in the Sunday New York Times while slipping a café latte out in front of Caffé Greco  before strolling up to  Caffé Trieste  to chat with the die hard locals over an espresso.     Maybe it was then that these potential Buyers on that Sunday morning thought to themselves, “Let’s give it one more try.”  If they were really going to be a part of this neighborhood, they wanted to own apart of it too.   

So I imagined, out in front of Caffe Trieste, they got down to business circling the open houses in the Sunday Chronicle’s Open Home Guide.  Having done this drill before, these Buyers knew to look under both North

Beach and Telegraph Hill in the Guide before heading out by foot to find their dream home in paradise on another wonderful sunny afternoon. 

In the North Beach section of the Guide, there were 8 properties that were open for viewing that ranged in prices from $539,000 for a one bedroom condo to $1,799,000 for 2 units on  Washington Square.  

And in Telegraph Hill section of the Guide, there were 7 properties open that ranged from $419,000 for one bedroom Tenants-In-Common (also known as a TIC, I’ll explain this type of ownership in another article) to one of those “ essence of San Francisco” view homes that I was holding open for $3,695,000 (4+ bedrooms and 4.5 baths with a rare 2 car garage on Telegraph Hill) with fabulous views of Nob Hill, Russian Hill, and the Golden Gate Bridge (similar to the view I have in one of my sanfranciscorealestateproperties.com website’s rotating header pictures). 

Continue on to “Part Two- Wait & See or Get In Now?” to determine what is right for you. 

Here is a way to start a buzz in the neighborhood and to attract Buyers that are already looking for a home in your neighborhood. 

This “Coming Soon” rider on a For Sale sign was posted on October 9th.  Today, behind this sign, a 5 bedroom with 4.5 baths Marina home hit MLS for $7,950,000.

While you are preparing your property for sale, take advantage of all the commotion out on the street as my post “One Way to Buy Real Estate in San Francisco” also points out.

The San Francisco real estate market changes every day, as in any market, with each and every property coming on and off the market, along with each and every price reduction and pending sale.  Yet one of the quickest indicators of how our market is doing is through: how many buyers came through the open house last Sunday, how many offers are expected vs. how many were written, and lastly, how much over and under did the property sell for in the end. 

Perception is everything and reality takes a distant second when it comes to the uninformed. 

Time and again our local media plays on “factual” national, state, and/or regional economic news with big moan and groan headlines.  With a leading headline and the classic one long sentence first paragraph, these articles lead one to believe the bad news is happening on their block, on their street, or in their neighborhood or in our city.   

Case in point, based on sub-prime mortgages being reset to unaffordable rates for many in the Bay Area, a recent misleading headline entitled “Bay Area Foreclosures Skyrocket”  gives one a false impression that the sky is falling in San Francisco and prices must be dipping.

Many times these media stories are not reporting on the actual and accurate happenings in our San Francisco and yet they appear that they are.  As any market, a prudent consumer, potential buyer and/or potential seller should not buy into the media’s hype of “facts” at face value and first glance.   

For San Franciscans to get the pulse of the San Francisco Market, our local media will report median prices as news “facts”.  I find that a bit amusing that they look at our own market so generally.  Typically the media will lump the median home & condos sales prices together for the city.  What good is that? 

I saved a characteristic example of local media hype from the San Francisco Chronicle in the Business Section dated April 25, 2007 entitled “State Market Cools” . The article mentioned the Bay Area as cooling.  There are nine counties in the Bay Area (i.e. Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma).  While the article did mention several of the nine Bay Area counties were cooling, there was no mention of our San Francisco.   What is one to think …is the San Francisco Market cooling or not? 

But wait, I saved this article for another reason, read on…

 

Don’t get me wrong, I love to look at median prices.  At the very least, median prices need to be broken down into a chart showing each quartile (i.e. Most expensive 25% homes, upper-middle 25% of homes, lower-middle 25% of homes, and least expensive 25% of homes). 

Now, look at the same information from the chart above and see how median prices are now more meaningful and no longer “a bunch of hogwash”. 

You are able to see and understand the San Francisco Market in a whole new perspective.  The “facts” are actual and accurate; the consumer’s perception is, at a minimum, a truer reality.

It takes a seasoned real estate agent to distinguish between “facts” and actual and to be able to analyze the (sometimes hidden) market trends and spot windows of opportunity in order to be able to interpret these findings to one’s clients so that these clients are able to make informed, intelligent decisions when it comes to their buying and selling in San Francisco…in any market.   

Do you have such an agent?

 

Drive down the street in one of your favorite neighborhoods and look for curb appeal of a different sort.

Look for double parked trucks and moving vans, they are easy to spot. Or look for any construction activity in front of a property that is worth pursuing. Write down the address and call your Realtor to check it out.

That’s what happened in Pacific Heights recently. Potential Buyers drove by and recognized a stager moving furniture into an attractive house on one of prettiest blocks in the city. They stopped the car and inquired within.

They found that the property was listed, although the Seller was waiting for these final preparations to be completed before the Seller’s agent would place the property on the MLS. The next morning an offer was on the Seller’s agent’s desk that (by law) had to be immediately presented to the Seller. In turn, the Seller accepted the pre-emptive offer that exceeded the Seller’s expectations from a very observant tenacious Buyer.

The property did hit MLS as “Active” and then immediately changed status to “Active Continue to Show” with an asking price of $6,895,000 with numerous pictures of a 6 bedroom - 4.5 bathroom fully staged pristine home with a partial view.

The bad news is that with the 2007 pent up demand in the high-end market in San Francisco, before my Buyer could even view the property, my buyer through an MLS automatic responder emails me, “Does this mean the house was sold and ….they just have it on for comp [comparable sales] purposes? Sounds like Clay St.” Sad to say, my answer was “yes”.

Now that was twelve days ago. To check the MLS today to see if the “Active Continue to Show” status has changed to either “Pending” or “Sold”, the search results show “0 listing(s) found”. That’s a new one on me. Was the Seller’s agent really able to have the MLS erase the property from the MLS(?)

In the San Francisco high-end market, it is not uncommon for property in move-in condition to get multiple offers within one or two weeks of marketing, have an accepted offer, and close escrow very quickly. And it is also not uncommon that the Seller and Buyer authorizes that the sales price be undisclosed in MLS at the close of escrow. This is done in the MLS by having an asterisk placed next to the sales price showing the original asking price.

Also the sales price and/or the transfer taxes may be hidden from the public records at the San Francisco County Recorder’s Office. Years later, one may be able to decipher the original assessed value in the public records, yet by that time it is history.

In the end, using high-end comparable sales (or word of mouth) to determine what other buyers paid for a property in writing an offer is sometimes fruitless. A better approach is to ask yourself, what are you willing to spend to get your San Francisco trophy home in either a pre-emptive offer or a multiple offer and exceed the Seller’s expectations?

It is because…

1. The terrain, the steep hills, the wide valleys, the Pacific Ocean, the Bay dotted with islands, the green belts and the many parks.
2. The period architecture, the tall buildings, and the bridges. 
3. The ever-changing maritime activity of sailboats, tall ships, tankers, ferry boats, yachts, and the wind surfers scooting across the Bay.
4. The sun rising over the Bay Bridge and the sun setting over the Golden Gate.
5. The changing skies and the predictable weather of early morning fog, sunny skies by mid-day, summer in late September and early October, rain from December to early April, and the fog rolling.

It can be a …  

• partial view
• peek-a-boo view
• across the street view and through the buildings view
• turn your head against the window view
• in your face view
• back service porch view
• tree in your way view
• top of a bridge view
• high-rise sit-down sky only view
• and/or across the roof top view

No matter, it is a San Francisco view of… 

• the Bay Bridge or the Golden Gate Bridge
• the Bay or a sail boat or two
• the Marina, the top of Palace of Fine Arts and Crissy Field
• city lights from hills or the valleys
• downtown skyscrapers
• East Bay or Marin
• Alcatraz, Belevedere, Treasure and/or Angel Islands
• Marin Headlands or the Pacific Ocean
• South Bay or the North Bay
• Pacific Heights, Presidio Heights, Asbury Heights, Bernal Heights, Golden Gate Heights,  or Diamond Heights
• Russian Hill, Nob Hill, Potrero Hill, Forest Hill, Liberty Hill, or Telegraph Hill
• Noe Valley, Eureka Valley, or Hayes Valley
• South Beach or North Beach

And because we live every day amongst these views, these views add value to our quality of life in San Francisco and our real estate!