February 28, 2006
San Francisco Sales/Prices Trend Down
On a year-over-year basis, home prices are up 6.1% in the Bay Area (8.1% in San Francisco County) according to the California Association of Realtors. Yes, single-digit year-over-year appreciation for San Francisco County. Historically irrelevant, but it’s quite a change from the past couple of years of “guaranteed” double-digit appreciation.
And last month, both sales volume and median prices fell (-32.9% and -0.8% respectively) for homes in the San Francisco Bay Area (prices fell 1.2% in San Francisco County).
QuickLinks: Building Up
A tipster passes along the links to three new developments soon(?) to grace(?) the San Francisco skyline:
Note: Last we read One Rincon Hill was on hold (something about not wanting it to fall over). And the tipster also included the following: “I thought it might be funny to do a thread on the site about stupid building names”. We'll...we’re here to please, so feel free to have at it folks.
Evidence Of Another Marketing Problem
An article in Friday’s San Francisco Business Times focuses on how lenders are “falling all over themselves to throw money at [SF condo developers]”, and characterizes Bay Area condo construction as the “darling of lenders”.
Unlike Miami, where an estimated 60,000 units are in the development pipeline, San Francisco is constrained geographically. Less than 8,000 units are slated for completion within the next few years, and additional development sites are limited. The Palms, the Watermark and the Beacon, the only three projects where new condos are for sale [emphasis added], all report record activity in January and February, traditionally the slowest time for homebuyers. Since Jan. 1, the Beacon has averaged nearly one condo sale a day.
The “only three projects where new condos are for sale”? Did we miss something? (Or did the author?) And averaging "nearly one condo sale a day"? Aren't there 595 units at the Beacon? And "record activity" compared to what?
∙ Costs soar, market cools -- but lenders are still hot… [BizJournal]
∙ 1635 California Street [SocketSite]
∙ Update: 1725 Washington Street [SocketSite]
∙ SocketSite New Developments Archive [SocketSite]
February 27, 2006
1635 California Street
Vanguard’s marketing materials describe 1635 California Street as having a “stylish entrance lobby and elevator much like a boutique hotel”. And after making it to yesterday’s open house, we’d say “boutique hotel” fairly characterizes the “36 modern luxury residences” as well. Much like 1725 Washington, these “residences” suffer from a lack of space.
1635 California opened its doors over three months ago and at least 7 of the units are still on the market (with more yet to be “released”). And although we were not able to secure a full pricing sheet (the agents staffing the open house seemed downright defensive when asked), nor any property statements (none were made available), we’ve still got some numbers for our readers:
∙ 1635 California Street #31 - $715,000 [MLS]
∙ 1635 California Street #43 - $789,000 [MLS]
∙ 1635 California Street #44 - $719,000
∙ 1635 California Street #52 - $725,000
∙ 1635 California Street #55 - $739,000 [MLS]
∙ 1635 California Street #62 - $739,000 [MLS]
∙ 1635 California Street #63 - $835,000 [MLS]
San Francisco Population 400,000?
Results of the Bay Area Council’s annual poll have been released.
Although 35 percent of respondents ranked transportation as their highest concern, 19 percent said housing was the biggest problem. Forty percent said they have considered moving out of the region, and 70 percent of those cited high housing costs as a major factor.
In 1996, as the real estate market began to recover from the early 1990s recession, only 1 percent of respondents cited housing as a big concern.
The high cost of housing is a concern? That’s no surprise. Forty percent of the population is actually considering moving out of the region? Surprise.
∙ Cost of housing among area's top woes [SFGate]
February 24, 2006
Permaconstruction At Post And
A year ago construction began on a multi-unit building at the corner of Post and
Masonic Presidio. After nine months workers stopped showing up. And today, the building sits unfinished and off the market (as far as we know).
So our question of the day, does anybody know what the hell is going on? Cash flow problems? Permit problems? Contractor problems? It’s a shame to see (potential) inventory just sitting there like that...
Posted by socketadmin at 3:05 PM
Speculators in San Francisco?
An excerpt from this week’s Surreal Estate:
Recently, San Francisco has added protections to make Ellis Acting less desirable. Just this week, the California Court of Appeals upheld a new law that would compel landlords to give each legal tenant 120 days' notice and $4,500 (up to three tenants) to help with new housing costs after an Ellis Act eviction. Protected tenants are also offered an additional $3,000 and one year to move.
There is also pending legislation that would penalize any property that has been the site of a "dirty eviction" of an elderly or disabled tenant, making it impossible for that building to be converted to condominiums.
Indeed, according to landlord attorney Jeffrey Woo, the extra laws created to discourage owner move-in evictions have largely backfired by making Ellis Act evictions increasingly common.
"People are clearing out more units than ever before," Woo says. "It has also brought in the speculators. They realized, 'I don't even have to live there. All we have to do is Ellis Act it and we can sell the TICs.'"
Speculators in San Francisco? All together now…Inconceivable!
Friday Fun: Name This House
Welcome to the inaugural installment of SocketSite’s Name This House™ (just sounds better than “identify this house”). First up, an ex-bachelor pad with a modern façade that belies quite possibly the best bay views in San Francisco.
Unfortunately we’ve only seen pictures of the views, so bonus points to anyone that can name the magazine, and edition, in which the interior shots appeared (because we can’t remember), and double bonus points if you actually send us a copy.
And only since someone is bound to ask, the current Zestimate™ is $9,139,834.
Economic Impact Of Industry Slowdown
A couple of interesting paragraphs from Inman News yesterday:
“As real estate industry layoffs continue and the toll mounts, some industry experts predict a toll of as much as 40 percent of existing jobs lost by the end of the year, while others insist that the WaMu layoffs [2,500 jobs] are just an anomaly.”
"The real estate occupations tend to be more flexible and move with the economy because everyone knows they are cyclical," said Dr. Delores Conway, director of the Casden Real Estate Economics Forecasting Project at the University of Southern California Lusk Center for Real Estate.”
“It might seem that one way to chart a drop-off in the real estate profession would be to tally the number of real estate licenses being granted. But, according to Vince Malta, the president of the California Association of Realtors, historically there is a two-year lag between a change in the housing market and any change in membership.”
“The California Association of Realtors has 180,000 members at present and Malta predicts there will be 210,000 members by the end of 2006. California's Department of Real Estate currently has 475,000 current real estate licensees. Malta said the Real Estate Commissioner predicts there will be 500,000 licensees by June. "Generally there is a lag," Malta said.”
“As far as the state of California's real estate market, Malta said, "We are still projecting the state to have about 620,000 single-family (sale) transactions this year. The record is 625,000 last year and 624,000 in 2004, so we're going to still have a good year in terms of transactions. We are going to have a more balanced market.”
A couple of key words: “cyclical”, “lag”, and “balanced”.
∙ Real estate slowdown leaves casualties [Inman - $]
February 23, 2006
Golden Gate City?
Okay, we're big fans of apartment therapy. And we’re looking forward to their full-blown San Francisco edition. But somebody really needs to tell them to stop referring to San Francisco as “Golden Gate City”. You're killing us over here people.
That being said, and if you have a long Victorian hallway that you’ve been struggling to cover, be sure to check out their "long-distance runner" tips.
∙ The Loneliness of the Long- Distance Runner [apartment therapy]
February 22, 2006
Ellis Act Relocation Assistance Upheld
A challenge of San Francisco's relocation assistance law for Ellis Act evictions has failed. From the Chronicle:
A state appeals court on Tuesday upheld a San Francisco law requiring landlords who plan to get out of the rental business to pay relocation assistance to the tenants they evict.
The measure requires all San Francisco tenants evicted under the Ellis Act -- regardless of their income -- to receive $4,500 in relocation assistance, with a cap of $13,500 per household.
A previous city law required landlords to pay that amount only to evicted low-income tenants and $3,000 to disabled tenants or those 62 and older.
Reader’s Tip: MLS DOM
A reader “tips” us off to a trick for finding a listing's DOM on the MLS:
"If you want to see the date a home goes on the market. Do a search for open houses, it will give the "DOM" days on market. That does not help if they take it off and then put it back on though. I was looking the other day and there is one on there for over 220 days."
Obviously not perfect, but a nice little trick. For example, condo #504 in the Marquee (a building we love) is having an open house on this weekend, has been on the market for 56 days, and is touting “1/2 yr of FREE HOA DUES!”.
∙ Listing: 151 Alice B. Toklas Pl #504 - $669,000 [SF MLS]
706 Mission Sold And Mission Bay Booming
Add the 10-story office building at 706 Mission St. to the list of “older, smaller office structures snapped up by luxury housing developers” over the past couple of years (others include “the former Chronicle building at 690 Market St.; 333 Grant Ave.; 74 New Montgomery St.; and 201 Sansome St.”). And although it hasn’t been confirmed, “sources with knowledge of the deal said the developer wants to build a mixed-use housing and retail development”.
According to the San Francisco Business Times, while 16 developers made offers on the property, “about half the bidders were interested in converting the building to housing, but perhaps more surprisingly, about half saw its promise as a revamped Class B office building.” And while “the conventional wisdom in real estate circles has been that the conversion market is slowing down” architect Dan Huntsman offers the following: “We are still getting contacted literally every week by people who want to do these projects".
And a little to the South, the Mission Bay area continues to boom with “more than 1,000 residential units completed and 6,000 more slated for completion within the next 36 months”.
February 21, 2006
Mansion Impossible (The
∙ Mansion Impossible [FWG.com]
Proof Of Listing Dates? Inconceivable!
Folks, if you’re planning on either discrediting or slandering us in the future, do us a favor and at least have the decency to know what the hell you’re talking about. It’s just plain embarrassing when you don’t.
As you might recall, a certain ‘MLS Cop’ recently justified his attack on our Editor as a policing of “unauthorized” MLS access, and posted the following comment: “And just for the record (which caused me to do this research in the first place), there has NEVER been access to the dates that properties are listed in the publicly available MLS data. You only ever saw those dates if you were accessing the full data.”
Well…while a couple of calls to the San Francisco Multiple Listing Service didn’t do the trick, a search of our files did. As recently as 7/18/05, a listing's status ('Active', or 'Act. Con.') was followed by a date (the elusive 'listing date' for Active listings) on the Search Results page. (A highlighted example is shown above, and a complete printout from our files on 199 New Montgomery is available for your review: page 1, page 2.)
And yes, these dates have since been removed from the Search Results page.
∙ SF MLS Quietly Removes Listing Dates [SocketSite]
February 19, 2006
Hot Housing Design Trends
Fixing to flip or ready to renovate? Eight trends in home design you need to know (according to CNNMoney.com):
1. The bathtub: Yesterday - whirlpool; Today - soaking tub; Tomorrow - infinity tub?
2. Paint colors: Yesterday - neutrals; Today - bold; Tomorrow - chameleons?
3. Kitchen: Yesterday - uniform design; Today - mix and match; Tomorrow - anything goes?
4. Kitchen cabinet woods: Yesterday - cherry; Today - anegre; Tomorrow - teak?
5. Counters: Yesterday - solid surfacing; Today - granite; Tomorrow - still granite?
6. Wood floors: Yesterday - red oak; Today - white oak; Tomorrow - bamboo?
7. Appliance colors: Yesterday - black; Today - stainless steel; Tomorrow - full overlay?
8. Appliances: Yesterday - trash compacter; Today - wine cooler; Tomorrow - cheese cooler?
Anegre? Who knew.
∙ What's hot in home design [CNNMoney]
Fiserv Says San Francisco Home Prices To Drop 1.9%
Fiserv Lending Solutions (a provider of mortgage and consumer lending services) is forecasting a 1.9% drop in home prices for the San Francisco MSA in 2006.
Unfortunately we’ve never heard of Fiserv Lending Solutions, have no insight into their methodology, and have no idea how accurate any of their forecasts have been in the past (or if they even have a “past”). It’s just another data point (but from within the industry).
∙ Price forecasts for 379 metro areas for 2006 [CNN/Money]
And We Definitely Agree With Sir Issac Newton
An evenly balanced follow-up from the Chronicle with regard to the their coverage of the most recent DataQuick report:
This spring, Bay Area homeowners are likely to know whether the housing market has merely paused before resuming its upward climb or has truly downshifted to the slow lane and, if so, how dramatically.
Last month, the number of homes sold declined for the 10th month in a row and hit its lowest level since 2001, and price gains slowed markedly as well.
Now, the question is, will the market simply cool or will it dive into negative territory?
Each housing cycle in the past has had its own set of twists and turns in which a multitude of factors comes in to play.
As the current housing frenzy exhausts itself, variables ranging from interest rates and employment growth to affordability, new home supply and sellers' willingness to part with their No. 1 asset will help determine the swiftness and magnitude of any downshift.
"Making this cycle more unique ... is that there's been a big increase in homeownership since the early 1990s," said Celia Chen, director of housing economics at Moody's Economy.com. "We've brought a lot more people into the market, and it's uncertain how these people will react in a down cycle."
Here’s where we definitely agree with Sir Issac: “I can calculate the motions of heavenly bodies, but not the madness of people.” (Sir Issac Newton having lost his shirt in the South Sea bubble, 1721)
February 17, 2006
We Agree With David (Sort Of)
For the past eight months we’ve been yammering on about “risky mortgages”. Why? We’ll let David Lereah (chief economist for the National Association of Realtors) explain:
“Home price appreciation, after reaching an astonishing estimated 12.7 percent national annual rate, will decelerate back into single-digit territory, registering 6.1 percent and 7.3 percent for existing and new home prices, respectively.
This cooling is exactly what markets need today, because it helps check the rise in speculative buying and the growth in risky mortgages, such as the interest-only loans we started seeing at the height of the boom.
That risk-taking changed the residential real estate landscape in significant ways by encouraging some investors to flip properties and home buyers to spend beyond their means.
There will be some adjustment, of course, as many of the hottest areas transition from a seller’s to a buyer’s market.
We’re already seeing inventories rise and days-on-market increase as buyers and sellers search for equilibrium in pricing, with buyers saying no to double-digit price hikes and sellers dragging their feet before agreeing to adjust their price downward.”
We’re just surprised nobody saw that coming. Oh, wait a minute…
Condo’s Going Up. Prices Coming Down?
No mention of San Francisco in today’s New York Time’s article about the impact of speculators exiting the condo market ("Farewell, Condo Cash-Outs"), but it’s still relevant. And worth a quick read.
While investors made up only 9.5 percent of residential mortgages nationally in the 10 months through October, according to First American Corporation's LoanPerformance, a San Francisco mortgage data firm, the numbers are much higher in places like San Diego, where investors represented 13.5 percent of residential mortgages, and Miami, where they were 16 percent.
Hans Nordby, research strategist at Property and Portfolio Research in Boston, said those numbers underreport the real level of speculation in those markets because many buyers disguise their intentions when they get their mortgages. As those speculators flood the market, he said, they will put pressure on other sellers to cut prices, too. "A rising or sinking tide affects all boats," Mr. Nordby said.
Still, a sell-off in speculative condos is unlikely to start a widespread housing crash, because condos were more overbuilt than single-family homes during the recent boom, said Joseph Gyourko, professor of real estate and finance at the Wharton School of the University of Pennsylvania. But weakness in the condo market, he said, "is a consistent indicator that the great boom has really ended."
Perhaps now would be a good time to familiarize yourself with SocketSite’s growing New Developments archive.
∙ Farewell, Condo Cash-Outs [NYT]
∙ San Francisco Perspective: Condominium Developments [SocketSite]
∙ QuickLinks: New Condos On The Market (Or In The Works) [SocketSite]