June 30, 2005
San Francisco Population Drops 4.2%
According to a report just released by the Census Bureau, the population of San Francisco declined 4.2% (or 32,000 people) from April 2000 to July 2004.
According to CNN, “Hurt by skyrocketing housing prices, people are leaving San Francisco, Boston and other large cities in droves.” "Droves" might be a bit of an overstatement, but once again, directionally interesting.
Posted by socketadmin at 8:51 AM
Only in San Francisco
All of a sudden our so called housing “shortage” is starting to make sense...
Joshua Brody and his wife, Juliana Grenzeback, have been married for seven years, but they have never lived together. Grenzeback lives in a neat, pleasant house in San Francisco. Brody lives across the street in a rented flat.
· One for the price of two [Chronicle]
Posted by socketadmin at 8:00 AM
June 29, 2005
Price Drop In San Francisco Bay Area
According to the California Association of Realtors, the Media sales price of a single-family detached home in the San Francisco Bay Area dropped .2% (from $723,070 to $721,730) in May of this year. Granted, not a huge decline, but directionally interesting. Also of note, sales activity has declined 8.3% from a year ago.
· Median price of a home in California [C.A.R.]
Posted by socketadmin at 4:13 PM
Understatement Of The Week
Sounds all too familiar:
"Lots of people are putting impressive amounts of money into their houses," said Mark Scott of Mark IV Builders in Bethesda at a recent remodeling seminar..."They don't have any money in the bank," he said, but they're not worried because they're counting on future appreciation. "They have a tremendous tolerance for risk."
· The Wait to Renovate [washingtonpost.com]
Posted by socketadmin at 10:30 AM
Overstatement Of The Week
From SF Gate: “Who would have guessed the best-looking new housing complex in SF is across from the Cow Palace?”
Answer: Not us. And we wouldn’t have been wrong.
Kudos to the Mercy Housing California, Carter Terrace is a great addition to the neighborhood. And we applaud all the design and usability considerations that usually get swept aside in affordable housing developments. But “best-looking”? Not a chance.
· Urban design that's smart, practical [Chronicle]
Posted by socketadmin at 8:23 AM
June 28, 2005
The New New Pricing Thing?
10% of the listings featured in HILL & CO’s full page Sunday Real Estate ad screamed “PRICE REDUCED!" Perhaps under pricing listings to generate bidding wars is so last year, and the new new pricing thing is to over price in order to make buyers feel like they’re getting a bargain when it’s reduced?
All relatively high-end properties, but that’s usually a leading indicator (of you know what). The three properties:
Posted by socketadmin at 9:15 AM
Housing Prices Always Come Back
Should the housing market “pop”, it will return. It’s just a matter of time. But how long will it take? Let’s take a look at three historical housing market declines for some insight.
First up, Houston. The Houston housing market declined 22.7% from 1983 to 1988; it recovered nine years after its peak. Granted, not a great comparison to San Francisco, but the point is that homes can lose significant value for an extended period of time.
Next up, Los Angeles. The Los Angeles housing marketing declined 19.5% from 1989 to 1996; it recovered eleven years after its peak. Still not the best comparison, but it is much closer to home and constitutes prime coastal real estate.
And finally, New York. The New York housing market declined 7.7% from 1988 to 1995; it recovered ten years after its peak. And no, Manhattan, that geographically constrained, “fully developed”, and highly desirable piece of real estate to our East was not immune.
Considering we Americans tend to move every 7 years, a decade could be an awfully long time to wait for a market to return.
Posted by socketadmin at 9:00 AM
June 27, 2005
The Supreme Court’s In The House
Last Monday the Supreme Court squashed a long running challenge by the owners of the Hotel San Remo in North Beach concerning a $567,000 fee they were required to pay to the city in order to convert their property from rental units to hotel rooms. Having already lost legal challenges in both the State Supreme and Federal courts, that fee is probably looking like chump-change compared to their legal bills.
Then, just three days later, the Supreme Court ruled against homeowners in New London, Connecticut who challenged the local governments right to seize their property for private economic development.
Tough week for property rights advocates from coast to coast.
· Hotel San Remo Property Rights Case Chronology [San Remo Hotel]
· Supreme Court Upholds Local Regulations on Private Property [LA Times]
· Supreme Court Rules Cities May Seize Homes [Chronicle]
· Eminent domain: A big-box bonanza? [Money]
Posted by socketadmin at 11:44 AM
Sale Watch: Home Furnishings
You might have already seen, but a couple of sales we're watching:
Posted by socketadmin at 11:30 AM
June 24, 2005
True Curb Appeal
The TRASHed campaign is a year long trash education program developed by Fashion Peace that redefines the way people and businesses view recycling and trash collection. TRASHed develops programs that fit seamlessly within the surrounding environment and provide creative options in the way people approach waste management.
One such program was a challenge to design the coolest Recycling Bin in the land. Probably not street legal, but these bins would definitely make the curbs of San Francisco that much more appealing.
Posted by socketadmin at 7:30 AM
June 23, 2005
Mid-Market Development “Breaking” News
A city plan to redevelop Market Street between Fifth and 11th is in front of the Planning Commission for approval this evening (6pm). Apparently it’s been in the works for the past 11 years and yet we just heard about it. Nice.
The plan would attempt to create a “self-contained, self-sustained neighborhood...with a feel similar to North Beach” in an area currently “plagued with crime and neglect”. Flip side: according to activist Richard Marquez, this is “the final nail in the coffin in terms of pushing low-income people out of this portion of San Francisco.”
We can’t make it for the fireworks, but please drop us a line if you attend.
· Mid-Market plan: Gentrification or revitalization? [Examiner]
Posted by socketadmin at 12:51 PM
An ARM (And Quite Possibly A Leg)
As you already know from diligently reading SocketSite, adjustable-rate mortgages (ARMs) are all the rage in our fair city and account for the vast majority new mortgages. What you might not know, and few brokers or agents like to emphasize, is that most ARMs expose barrowers to significantly more risk than traditional fixed-rate mortgages.
Now don’t get us wrong, ARMs definitely have their time and place if effectively employed and managed. All we’re suggesting, is that if you’re considering using an ARM, please take the time to fully understand, and mitigate, the potential risks associated with these loans. A couple of articles to get you started:
Posted by socketadmin at 10:00 AM
June 22, 2005
Unclear On The Concept
Making money through arbitrage (e.g. flipping) is dependent on an inefficient market. Condo Flip™ is attempting to create a marketplace for builders, buyers, and sellers, in order to make transactions more efficient for the flippers. Wait a second...
Posted by socketadmin at 11:00 AM
Yes! Yes! No.
The title naturally caught our eye (Why You Can’t Afford a House in San Francisco), and we think the author’s analysis gets off to a strong start. But then he sputters. And falls flat.
The entire premise of this article is that housing prices should be directly correlated with purchasing power (a combination of interest rates and income). The author’s model seems to work quite well on a national level where, based on his assumptions, the median household income of $60k provides enough purchasing power for a $215k home (versus an actual median home price of $187k). But then he goes and gets a bit cocky,
Now that we understand what drives home prices—loan size dictated by rates and income—most everything else about the real estate market, even at the local level, falls neatly into place.
The punch line? Prices are high because we San Franciscans make a lot of money, and you can’t afford a house in San Francisco because you don’t earn enough. Genius!
(Of course the mean San Francisco household income is around $75k, which, based on the author’s model, would predict a median house price of $270k. Just slightly below our current median price of $723k...)
· Why You Can’t Afford a House in San Francisco [Efficient Frontier]
Posted by socketadmin at 9:25 AM
June 21, 2005
Trade School Versus Academia
Yes, once again it’s the academics squaring off against the Realtors®. Not too surprisingly, they offer two wildly different views. Play along and see if you can match the forecast to the group:
1. [M]edian home prices across the state will rise 15 percent year-over-year in 2005, down from 21 percent last year. In 2006, prices will probably increase less than 15 percent, but well above zero.
2. Prices are not associated with reality...[they] are gambling on massive amounts of appreciation, and it's not worth the price compared to the rental value. It's a house of cards.
That’s right, the first is credited to Leslie Appleton-Young, economist at the California Association of Realtors. And number two? A pesky academic economist at UCLA named Christopher Thornberg.
· Housing market tumble forecast [Chronicle]
Posted by socketadmin at 9:42 AM
Seller’s Squirrel’s Market
Within a month of putting her two-bedroom house in San Francisco on the market recently, homeowner Linda Gao had five offers, each one above her asking price of $699,000. So before accepting the most-attractive bid, she threw in an extra condition: If you want to buy my house, you have to feed the squirrels.
· In a Booming Market, Sellers Can Be Choosers [RealEstateJournal]
Posted by socketadmin at 8:33 AM
June 20, 2005
Freakonomics Freaks NAR
Freakonomics just moved to the top of our summertime reading list. Pointing to data that suggests that “full-service” "realtors get 3-4% more for their own houses and leave their own houses on the market 10% longer” than their clients' properties, and suggesting that “discount” brokerages might be the way to go, seems to have irked the National Association of Realtors (NAR).
· Freakonomics [Amazon]
· NAR Responds to Erroneous Statements Made on Today Show [Realtor]
· Professors Dubner and Levitt Made Erroneous Statements on Today Show!! [Freakonomics]
Posted by socketadmin at 10:51 AM
June 17, 2005
QuickLinks: Let's Be Careful Out There
"Usually (housing) cycles last for seven or eight years...Now we're in year nine or 10." (DataQuick analyst John Karevoll)
· Pace of appreciation slows, signaling possible cooling in market [Chronicle]
· The other real estate boom: Scams [Money]
· 10 Things to Know About Mortgages [Fool]
Posted by socketadmin at 10:24 AM
A Good Handyman Is Hard To Find
Trying to find a good handyman? Give No Job Too Puny a read.
Yes, it was written about New York but get over it, it’s still relevant, informative, and contains some good tips. And if you’re really struggling, just print it out and write “San Francisco” across every mention of New York, like so, “Few tasks provoke Paxil-bingeing like finding a good handyman in
New York San Francisco.”
· No Job Too Puny [NewYorkMetro]
Posted by socketadmin at 8:00 AM
June 16, 2005
Remodeling For Profit
First, you should not increase the value of your house to a point where it is the most expensive home in your neighborhood…Second, you should strive to keep your new mortgage debt below 80% of your home's new appraised value.
Well, one out of two isn’t bad.
Posted by socketadmin at 9:15 AM