Notable Network Names

Tuesday tour this week had me all over the city, as usual, from Russian Hill to South Beach via Ocean Beach, Noe Valley, and Bernal Heights to name drop just a few of the neighborhoods I visited. And while broker’s tour is always notable for some of the interesting things I see, this week I thought I’d share just a few of the interesting wireless network names that pop up on my phone.

 

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For example, we have the either ominous or helpful “LiceAuthority” network. While I don’t really want to know, if I was chatting away with you at a cocktail party I’d have to ask if you were an authority with lice because you frequently suffer from them, or for other reasons?

wireless_socialclimber.jpg

If you happen to be a social climber, you’ll appreciate the network name of “PacHeightsorBust” which was not taken in Pacific Heights, but from an adjacent neighborhood…

wireless_att.jpg

Plenty of people, apparently, never bother to change the default network name (which probably means that they don’t change the default password either), I saw plenty of ATT*** and Linksys***** networks all over town. San Francisco is supposed to be a city full of creative souls – don’t fail us now!

wireless_breasts.jpg

See, there’s some creative thinking from a guy that probably doesn’t have a girlfriend. Just a hunch on that one folks. And who knew you could use so much punctuation in a network name?

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He ain’t never gunna…? Don’t leave me hanging like this! I’d like some closure and finality, please.

wireless_surveillance.jpg

You aren’t paranoid, they really are watching your every move.

wireless_illegal.jpg

I’m glad you remembered to lock down your network, and congratulations on the correct spelling of illegal. But you should know, Surveillance Van #8 is out there. And coming for you.

wireless_goats.jpg

In what way does Seth know goats?

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And finally, for all you passive aggressive communicators, I present to you “Click here to get a virus” – because while I don’t really want you to join my network, I just can’t bring myself to say it out loud.

What awesome network names have you stumbled across while in the city or elsewhere?

 

That Awkward Moment When The Cops Show Up To…

Yesterday’s SFgate had an article about a cold-case search for a boy that disappeared from the Haight Ashbury neighborhood in 1984. The story itself, about the disappearance of Kevin Collins, a 10 year old boy, is heartbreaking to read, particularly from the perspective of a parent. I don’t want to minimize that aspect of it in anyway…

Kevin Collin, undated photo. Source: SFGate
Kevin Collin, undated photo. Source: SFGate

I bring the story up, though, because yesterday police jack-hammered the concrete garage floor in a home at 1106 – 1108 Masonic Ave. in a search for his remains. Apparently there was once an individual who lived at that address that was a person of interest in his disappearance. That person was never charged with a crime and is long since gone. The current building occupants are in no way associated with the case or suspected of involvement.

California law requires sellers to disclose any material fact about a home to potential buyers, and when it comes to deaths or murders, any crime that was “notorious” is pretty much a permanent property disclosure. But this particular property doesn’t fall neatly into that category. The building was never identified as the site of a crime scene, and until this week no one had taken the house apart in a search for remains.

How would it feel to wake up one morning and have the police knocking at your door with a search warrant to jack-hammer out your garage floor to search for the remains of a 10 year old boy that has been missing since 1984? I have to say I think it would feel absolutely bizarre, but I also don’t see how you can blame anyone for not telling you that along time ago a strange person lived in the building… If “a long time ago an odd individual lived here” was to become a disclosure item, there probably isn’t a house in SF that wouldn’t have that box checked “Yes!”

All of that said, it is a heartbreaking story and while I have sympathy for the current building owners and building occupants, my heart truly goes out to the family of Kevin.

Are Entry Level Homes available in SF for under $500k?

According to CAR, the price of an entry-level home in San Francisco (well, the SF Bay Area) is $482,830, by far the most expensive area of the state. As you can see in the infographic below, according to the number crunchers at CAR, the entry level price for a home in California is $288,880, with the LA metro area and the Inland Empire both coming in below the average state price.

CAR-onecoolthingNot to be a debbie downer, but the reality is that $483,000 doesn’t get you much in San Francisco, especially in the single family home category.

In all of San Francisco, there are currently 17 single family homes listed for sale that are listed for $483,000 or less. 14 of those homes are located in District 10, which covers the south end of San Francisco from Hunter’s Point to the Excelsior.  In other words, if you want a single family home and don’t want to be on the far southern end of the city, you’ve got about 3 options, and none of those options are going to be your dream home.

If you are open to a condo, the pickings aren’t much better, with only 14 condos currently on the market in the city for under $488,000 (this excludes BMR units and senior housing, both of which have particular eligibility requirements). If you are a first time buyer and qualify for the city’s BMR program, you’ll have a few more options, but not a ton.

Willing to expand your search criteria further? If we add tenancies-in-common into the mix, we only have 13 additional homes to choose from.

All of which is a long way of saying that entry-level in San Francisco is realistically going to require spending more than $483,000, and most likely more than $500,000 to find a home that you will actually want to share with your friends on Facebook as being your new home.

 

TIC Lottery Bypass Legislation is a Win/Win for SF

I’ve written about the proposed condo bypass legislation before, but Randy Shaw at beyondchron is at it again, flogging his specious falsehood that approval of the condo bypass legislation would KILL JOBS!

Let’s get something out of the way up-front: I don’t believe that people who can’t afford to own a home are lazy, bad people who deserve to be evicted and forced to live in the backseat of their cars or underneath the bushes of our public parks. When I moved to SF, I was a renter. I can tell you some crazy stories about my landlord and rental experiences. I’ll also be honest: I’m fortunate enough that thanks to a variety of circumstances I was able to afford a home in San Francisco. Again, though, here’s the important thing: tenants are not bad people, and I’m not going to spend time calling them names or describing them in an offensive manner that does nothing to help the public dialog about SF housing. I wish Randy Shaw and his editors at beyondchron felt the same, but since he can’t find honest facts to support his hysteria, he instead relies on the time-worn tradition of name calling.

In just the first three paragraphs, homeowners are vilified as “real estate speculators,” a “small segment of the real estate community” and  a “small constituency with money” – if his divisive language doesn’t turn you off, you can read on to find out that homeowners can’t be progressives but are instead the “Ayn Rand crowd” and “the city’s most Paul Ryan-like constituency.” Seriously?

Name calling aside, the gist of his argument seems to be:

  1. Mayor Lee is the consensus Mayor, who would never ever offer legislation like this, and…
  2. We have brand new supervisors who haven’t had a chance to form opinions or talk to voters about housing policy in the city, but really…
  3. Condo conversions would kill jobs because….
  4. San Francisco would suddenly have too much housing supply to make other development financially attractive…

These arguments are so factually weak that you can almost understand why he resorts to name-calling instead of constructive dialog. Let’s look at them:

1) Domestic Abuser Mirkarimi is just one example of a situation in which Mayor Lee was willing to lead, even when it wasn’t politically popular. While his tenure as Mayor may show him to be more consensus oriented, he’s been willing to take principled stands for what is right when the situation called for it.

2) Housing policy isn’t something new to the political debate in San Francisco. It’s been debated and discussed almost ad nauseum for decades in San Francisco. I have a hard time believing that a recently elected politician hasn’t already been in dialogue with his or her constituents about housing policy. Furthermore, the condo bypass legislation was available in draft form for months before the election, so it’s not like some crazy-policy-from-outer-space just landed in San Francisco. More time is not needed for everyone to get familiar with the proposed condo bypass legislation.

And finally, items three and four: condo bypass legislation will kill jobs and destroy the market for new homes in San Francisco! This argument is so specious that I’m almost embarrassed for Mr. Shaw. It is predicated on false assumptions and ignores the facts behind San Francisco housing demand and supply.

Tenancy-in-Common owners are homeowners, not speculators
A large portion of the people living in TICs will remain in them as condos.  Mr. Shaw’s argument rests on his presumption that immediately upon completion of condo conversion, the owner of every single newly converted condo would immediately sell their home. Common sense (and any level of personal knowledge of tenancy-in-common owners as part of the San Francisco community instead of a divisive stereotype relegating them all to Ayn-Rand-Paul-Ryan-Loving-Really-Rich-Speculators) says that the owner occupants of TICs that become condos are not all going to immediately sell. However, if we want to rely on something more common sense, we can look at the stats.

Tenancy-in-Common owners invested in San Francisco because they didn’t want to leave
A search of the MLS reveals that in 2012, there were about 22 sales of condos that were newly converted from tenancies-in-common. Given that 200 units are allowed to convert per year (not including fully owner occupied 2 unit buildings with a clean eviction history that can bypass the lottery), this suggests that only 10% of newly converted homes would be sold. TIC groups started forming when “entry-level” buyers in SF got priced out of the single family and condo market. It was a (relatively) affordable way for someone to take advantage of the benefits of home ownership (tax deductions, build equity) without having to leave the city. Does it make sense that people who chose the most challenging form of home ownership are suddenly going to flee the city, when they chose to buy a TIC because it was the only realistic way for them to remain in San Francisco?

Condo Conversion Would Lower Mortgage Payments for Many
The benefits to homeowners who convert from TIC to condo financing (which can only happen when the property converts from a TIC to a condo) are that they are no longer jointly liable for a shared mortgage (old-school TIC financing) or for a shared property tax bill (which still exists even with fractional financing). Furthermore, they are all immediate beneficiaries of the incredibly low interest rates that are available to condo owners but aren’t available to tenancy-in-common owners on a group loan (jumbo financing, few lenders, thus higher rates) or fractional financing (boutique financing offered by a few local lenders with higher rates and more restrictive terms).  The homes that remain owner-occupied will be occupied by people who have more disposable income and more security in their homes.  Would the SF economy benefit from a few thousand homeowners who were able to refinance into a mortgage that gave them more disposable income every month? I’d say Yes! Would that kill jobs? I’d say absolutely not! 

San Francisco has Far More Demand for Housing than Supply
San Francisco has a general plan, one part of which is the Housing Element. One part of the document is the Housing Element: Data Needs and Analysis (pdf file) that lays out background data about housing availability, supply, and anticipated demand. It’s a meaty document that was published in 2009, and while the entire document is worth a read, for our discussion I want to highlight a few numbers to show how demand for San Francisco housing far outstrips supply. Case in point:

Accounting for new production, demolitions, and alterations, the City has seen a net increase of over 18,960 housing units – an annual average of almost 2,010 units – in the last nine years [2000 - 2008]. In comparison, a net total of 9,640 housing  units were added between 1990 and 1999 or an annual rate of about 964 units per year. (Page 1.26, Housing Element: Data Needs and Analysis)

From 2000 – 2008, the city added about 2,010 homes per year. It wasn’t enough, even though it was almost double housing creation in the 1990s, which averaged just 964 homes per year!

SF Housing Supply vs Demand

So we’ve got a twenty year track record of producing – at most – 2,010 homes per year. How does that compare to what we should be building to meet demand?

The Association of Bay Area Governments (ABAG), in coordination with the California State  Department of Housing and Community Development (HCD), determine the Bay Area’s regional housing need based on regional trends, projected job growth and existing needs. San  Francisco’s fair share of the regional housing need for January 2007 through June 2014 was calculated as 31,190 units, or about 4,160 units per year. (Page 1.41, Housing Element: Data Needs and Analysis)

Yes, you got that right – according to the SF Planning Department, based on factual research, SF would need to build 4,160 homes per year to meet anticipated demand from 2007 – 2014.

The Condo Conversion Process Creates Jobs & Revenue
The process of condo conversion itself creates jobs for surveyors, construction tradespeople, and attorneys (well, maybe I shouldn’t mention this one) to name just a few. Having personally been through a condo conversion, I can tell you that it is a lot more than just submitting some forms to the planning and building departments. Condo conversions require a professional survey and the appraisal of all the homes in the building that want to refinance into a new mortgage. Condo conversion also requires that the owners correct any items noted by the city during one of three inspections required by condo conversion: a general building inspection, a plumbing inspection, and an electrical inspection. As you can see condo conversion itself creates jobs for plenty of local small businesses.

The condo lottery bypass legislation itself is filled with revenue generating fees that are estimated to create almost $30 million dollars in revenue:

  • $20 million in bypass fees would go to affordable housing
  • $6 million in processing fees for the city’s planning department
  • $2 million in mandated repairs and upgrades for TICs to comply with condo conversion requirements

And for those roughly 10% of newly converted condos that would sell soon after conversion, the city would get additional income from the real estate transfer taxes collected, not to mention that the newly sold homes would be re-assessed at current market value, adding to the city’s annual income from property taxes for years to come.

An Average San Francisco Year?

What’s an average year in San Francisco real estate? If you’ve been following along, you know that we’ve been pumping out statistics during the month of January. 2012 was definitely the year that buyers returned to the San Francisco housing market, and as I’ve been chugging through spreadsheet after spreadsheet, I realized that I don’t really have a baseline number to work from. So, as you can see below, I’ve gone back and graphed out the total number of sales in San Francisco that have been reported in the SFAR MLS since 1994.

Total residential sales reported in SFAR MLS, 1994 - 2012
Total residential sales reported in SFAR MLS, 1994 – 2012 (click for bigger version)

The light blue bars in the background show the total number of residential sales by year, with the low point being 4,663 sales reported in 1995. The busiest year was 2004, when 10,057 sales were reported, with 2005 and 2003 coming in the second and third position, making 2003 – 2005 by far the busiest three years in recent San Francisco real estate history. The colored lines represent property types, with the red line plotting the number of single family home sales over the same period, the orange line represents the total number of condominium/co-operative/loft/tenancy-in-common sales, and the green line represents residential unit buildings (2-4 units, including mixed use).

Look for a future post in which I call out some interesting details about unit building sales that you can’t see in this graph because of the scale. But let’s just say that while the green line seems fairly steady, there is a very interesting pattern in the sales of unit buildings.

All of which still doesn’t answer my question about what an average year in San Francisco real estate would look like, at least from a volume/transaction point of view. But luckily for you (or not – depending on how you feel about charts and statistics), I kept doing the math until I could answer my own question. In an average year there are 7,284 sales in San Francisco that are reported in the MLS. Of those 7,284 sales, in an average year 3,800 of them would be for single family homes, 2,735 would be condos/tics/lofts/co-ops, and 749 would be unit buildings.

Given a benchmark to measure against, I can finally judge the past 19 years of real estate in San Francisco, and my judgement is:

Above Average Years: 2012, 2006, 2005, 2004, 2003, 1999, 1998

About Average Years: 2007, 2002, 1997

Below Average Years: 2011, 2010, 2009, 2008, 2001, 2000, 1996, 1995, 1994

What are your thoughts?

What you need to know about District 2: Single Family Home Sales 2012

District 2 on a San Francisco real estate map encompasses the central-west side of the city, and includes the following neighborhoods:

Most of district 2 housing stock is made up of single family homes, although their size, age of construction, and style do vary between the neighborhoods. A few unit buildings, condos, and TICs are sprinkled here and there in the various neighborhoods, but the number of these is pretty much dwarfed in comparison to single family homes.

Looking at the stats, what can we say about real estate in District 2? On a median price basis, Godlen Gate Heights had the best showing of all the neighborhoods in 2012, coming in at a median sales price just shy of $960,000. On a price per square foot basis, though, they came in behind the Outer Sunset, which came in with the highest median price per square foot of $564. Which make sense when you know that homes in Golden Gate Heights tend to be newer and larger than Outer Sunset homes, and also that many homes in District 2 have “non-conforming” in-law units that are not reported in the square footage, thus making the $/Sq.Ft. metric a not very useful stat for this neighborhood, since there is a fairly high chance that the usable space being purchased is larger than reported. District 2 2012 market stats

District 2 2012 market stats

Days on Market was down across the neighborhoods, but the number of sales wasn’t necessarily up year over year, with Golden Gate Heights, Outer Parkisde, Outer Sunset, Parkside, and Inner Parkside reporting fewer sales in 2012 than in 2011. District 2 2012 market stats District 2 2012 market stats
What are your thoughts about real estate in District 2 over the past several years? I’d love to hear your thoughts in the comments below. As always, no spam and play nice!