Q1: Market On Fire (with Apologies to Alicia Keys)

It’s Tax Day! Which means that if you haven’t filed your taxes, you need to file your extension. Once you do that, come on back and we can talk San Francisco real estate for hours and hours.

Q1 Residential Sales in San Francisco
Q1 Residential Sales in San Francisco

As you can see from the chart above, the first quarter of the year was a very strong quarter for residential real estate in San Francisco. Sales held steady, down just slightly from last years sales in the same three month period. So inventory remains unchanged but demand is up, which is why being a seller in the current market is so much fun and being a buyer is, well, not so much fun.

Year over year, the list price is up by about 18%, and in Q1 of 2012 homes – on average – sold for asking. This year, homes have been going an average of about 4% over asking.

Days on Market (DOM) is down substantially, decreasing 38% quarter over quarter. And as I mentioned, supply remains roughly the same as in 2012 so the decrease in DOM is not a result of fewer homes being for sale, but a result of A LOT more buyers being in the market. Yes, everyone wants to take advantage of low interest rates, but the bigger story (in my experience) is that buyer confidence in the economy and housing market has improved substantially.

What trends have you noticed in the first three months of the year in San Francisco real estate?

PS – This is why I’m apologizing to Alicia Keys.

Disclaimer: All data is from the San Franicsco Multiple Listing Service (MLS). Data is believed to be reliable but is not warranted or guaranteed. The data does not include all off-MLS sales, which would include sales of new construction directly from the developer (unless it was listed in the MLS, which is rarely the case). Your mileage may vary. If you’ve got a specific question about our data or methodology, don’t hesitate to leave a comment or get in touch. 

$3,800,000 – will it sell in Glen Park?

2 Everson is a rather stunning property that recently came to market. It is an amazing single family home located next to a strip of city open space that was built by Nova Designs + Builds. The property is listed by Helena Zaludova of Paragon Real Estate. While I could go on and on about the property and the views, instead I’m just going to encourage you to take a look at the agent’s property website, as it’s very well done and has a very comprehensive set of photos.

2 Everson was listed by Helena Zaludova of Paragon Real Estate

The property is currently listed for an asking price of $3,800,000 – which is $980,000 more expensive than the most expensive house that has ever sold in Glen Park.

According to the records I’ve reviewed, the most expensive home to sell in Glen Park is 147 Laidley St., which sold in May of 2010 for $2,820,000, which was under the asking price of $2,950,000 (originally listed in 2009 for $3,350,000). 147 Laidley St. was a 2009 AIASF Award Recipient, and had approximately 3,200 square feet – which comes out to be about $866/square foot (if you believe in the validity of that metric).

2 Everson is a significantly larger home – approximately 5,000 square feet – on a much larger lot – approximately 10,000 square feet, so on a price per square foot basis it actually comes in under 147 Laidley. That said, at the end of the day if you want the keys to the mansion  you’ll still be handing over almost $1,000,000 more than the next most expensive home in the neighborhood (should you purchase it at the current list price).

And as for the story of how 2 Everson came to be in its current state, those of you that have been paying close attention will remember that it was a short sale that closed last summer for $1,350,000. Someone clearly had a rather busy winter, and it remains to be seen exactly how profitable this past winter will be for the developer. And if you love the neighborhood, but can’t quite swing the mortgage payment, take a look at these other Glen Park homes for sale.

Update: This property has sold and is no longer available. If you’d like information about the sales price, get in touch.

The Impact of a Tenant

Clients often ask about where they can find a “deal” in San Francisco real estate. Some people believe that REOs are an excellent value, others focus on probate sales. My experience is that the number one detractor from the value of a property in San Francisco is a property being sold with tenants who will be in occupancy at the close of escrow. Whether or not that decrease in value makes for a “deal” is an open question. That introduction probably makes me sound like a horrible person, so I’d like to preface this by saying that I was once a tenant in San Francisco, and that home ownership in San Francisco is an elusive goal for many individuals, even those with financial means that would be considered enviable in the rest of America.

I also want to be clear that I’m not advocating eviction, particularly when it comes to people that are elderly, disabled or otherwise in a precarious and challenging personal situation.

I did some research over the weekend looking at the sales price of single family homes in San Francisco that are tenant occupied vs. those that are vacant at the close of escrow. The numbers were pretty eye opening, even though I went in expecting their to be significant difference in the value of a tenant occupied property.

How dramatic is the difference? For homes that have sold in the past 15 months (since January 1, 2010), the median sales price of a tenant occupied home was $554,000 while the median sales price of a home that can be immediately owner occupied was $740,000. If you calculate out the median price per square foot, the tenant occupied home has a median price per square foot of $402 while other homes have a median price per square foot of $548.

San Francisco has extensive — some would say byzantine — laws and regulations regarding tenant rights. These laws vary by property type, among other things, and single family homes are perhaps the easiest to recover possession from a tenant. I would expect these values to vary by property type, and also by neighborhood. Finally, should you be considering purchasing a tenant occupied property, be sure to consult with a qualified San Francisco attorney who has a specialty in this particular area of practice.

Bernal Heights Fixer – Single Family

This property has closed escrow. Please get in touch if you’d like additional information.

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