San Francisco Real Estate Properties

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 depends on several things, such as: price point, neighborhood, view and parking!

In San Francisco, the real estate market changes every day. One needs to continually investigate, analyze, understand and interpret the real estate market to make informed intelligent buy and sell decisions. A normal week’s marketing schedule in San Francisco is determined by several factors: which properties came on last Thursday and no later than last Friday at Noon to get on the Broker’s Tuesday Tour and still be able to advertise the first Open Houses before the San Francisco Chronicle’s Saturday and Sunday Open Home Guide deadline and which properties got offers this past week and/or closed. Checking on what’s new on the market in a particular neighborhood and if it is on the view side of the street, and how close a walk for a latte is a normal happening in the San Francisco real estate market.

Anticipation comes to mind.

For San Franciscans, Labor Day brings the anticipation of the beginning of our hot sunny San Francisco’s summer weather (and fewer foggy days).

For the San Francisco real estate market, it is the anticipation that the perplexing effect the media has had on potential buyers’ perceptions and fears will settle down soon, as buyers with a reasonable credit and a nice (20%) down payment are getting reasonable home loans when they have been working with a multi-source mortgage broker finding well-capitalized lenders.

Over the past several weeks, there have been a few San Francisco transactions that had loan setbacks which delayed and/or cancelled an escrow or two because the financial markets reaction to the tightening of credit in the mortgage industry.   Three real estate industry groups have reported slower sales in California and the nation due to the ongoing bad news of tighter mortgage underwriting and its adverse psychological impact, yet the reality here is that the credit tightening has only affected a very, very small percentage of buyers and sellers in San Francisco. 

This week before Labor Day, there are presently 551 homes and 444 unsold condos, co-ops, and lofts for sale that have been on the market unsold for an average of 56 days and 51 days respectively.  At the same time there have been 392 homes and 411 condos, co-ops and lofts that are either now in contract or have sold so far this month.

Now more than ever, I anticipate that your Realtor’s experience will count in you understanding today’s many opportunities that exist in buying and selling real estate in San Francisco! 

Charts presented by Ann Scherbert courtesy of San Francisco Association of Realtors MLS data (all information deemed to be reliable, but not guaranteed).

The Tourists are here for one last summer fling and so are our summer’s inventory stock (homes and condos, co-ops, and lofts) still for sale!

This is the week for writing an offer on a great neighborhood home or a super condo, co-op or loft somewhere in the city and getting it accepted (maybe even below asking) before our remaining summer inventory stock gets old and/or forgotten. San Franciscans getting back home from vacation will eagerly await the anticipated fall preview of new inventory and will get serious. Sellers will be attempting to get their property on the market and sold by the Holidays. Our Buyers will want to be entertaining in their new home before the end of the year.Tourists visit all year round and fall in love with San Francisco.

While they are here they start dreaming about coming back here as job transferees or buying a second home in the city…so Open Houses over a holiday weekend such as Labor Day are always a great way for them to see the inside of homes in our charismatic neighborhoods before heading home to start packing!

While most of California and the Bay Area’s real estate markets are seasonal/weather-related and centered around school schedules…San Francisco’s real estate market is centered more around when holidays and vacations begin and end.

Anticipating one of San Francisco’s high seasons about to begin just after Labor Day weekend, perhaps more San Franciscans will be thinking about staying in the city to enjoy this upcoming long holiday weekend with the tourists and take in an open house or two since the Bay Bridge will be closed from Friday, August 31st at 8 PM through Tuesday, September 4^th at 5 AM .

In the homes that are held open this coming weekend, September 1^st and 2^nd in San Francisco, you will find a motivated Seller and Seller’s agent …hoping their property to be sold before the end of summer.