“Adorable” Really Says It All
Can’t afford $23,500,000? Well, with a list price of only $255,000, this condo on 7th street is the least expensive home listed on the MLS. Now granted, it is only 298 square feet but it does have “new granite in the kitchen”. And dining room. And bedroom. And living room…
February 16, 2006
Rates Cheap. Houses Not Cheap.
According to the most recent DataQuick report, Bay Area home sales plunged last month while prices held steady. From the Chronicle:
Bay Area home sales tumbled to their lowest level in five years last month, and prices hovered well below record territory, further evidence that the region's seemingly unstoppable housing boom may have peaked with the blistering market of 2005.
What remains to be seen is whether the new figures amount to a hiccup or the beginning of prolonged slowdown.
Rising interest rates, and tighter lender standards, seem to be taking a lot of the blame. A quote from the director of the Center for the Continuing Study of the California Economy in Palo Alto: "People chose to bet on future appreciation by choosing loans where they knew payments would go up by a lot -- but they got in cheap…There are no cheap loans now."
The scariest thing? Current mortgage rates are still well below historical averages (second to last graph).
Posted by socketadmin at 11:07 PM
February 14, 2006
Hello, My Name Is Adam
Well, so much for our request to “keep your comments on-topic; resist the temptation to flame, troll, and spam; and avoid personal attacks.” From today’s comments on “Checking In On 300 Sea Cliff Ave”:
Adam, how is it that you decided to publish a blog about San Francisco when you're a licensed agent but not a member of the San Francisco Association of Realtors? Isn't your 'conditional' license held by a broker in Los Altos? Shouldn't you focus on those areas that you really 'know'? Or if you feel like SF is really your home, shouldn't you join your local association and perhaps a local company? At the very least, your readers should know who you are and what your qualifications are.
Imagine, if you were actually a Realtor and member of the local association, you could get legal access to the MLS! If you have the access now, you're doing so illegally...
Posted by: Anonymous
As we first commented: Great question. Poor form. But since you asked...
I first moved to San Francisco in 1994, and yes, I very much consider it home. As I first wrote a year ago, “Interested by, intrigued with, or invested in the Bay Area real estate market? So are we. Looking to make sense of all the stats, cut through all the rhetoric, and get the inside scoop? We’re on it.”
And (gasp!) it’s true. I am a licensed agent (along with 476,244 other Californians). And although I’m not actively practicing, my real estate license is being held by a fantastic broker in Los Altos just in case (and who is not affiliated with SocketSite) .
I earned my license to gain a first-hand understanding of the inner workings of the real estate “industry” (and to be able to selectively represent friends and family). But my understanding and observations of the “market” are based on data, facts, and trends.
A couple of other “qualifications” that “Anonymous” failed to mention: I hold a BS in Economics from Wharton, and an MBA from Dartmouth. In fact, some people might say I have a decent understanding of both economic theory (sorry folks, it’s really not as simple as just “supply and demand”) and the principles of investing (yes, you should be concerned about the trend in property “P/E” ratios).
So why don’t I bother to highlight any of my qualifications or experience on SocketSite? Because it's bigger than just me; and unlike numerous other real estate blogs, I’m not trying to sell or promote myself. But if you like our content, insight, and perspective I’d be happy to have you “Plug In”.
Editor in Chief
Checking In On 300 Sea Cliff Ave
At $23,500,000 (or $2,635/sqft) the home at 300 Sea Cliff Ave remains the most expensive single family residence for sale in San Francisco (and listed on the MLS). And after three years on the market...it has yet to advertise a single price reduction. So keep saving, and don't worry, we’ll keep you posted.
“Marin Home Sales and Prices Plunge”
Ron Parks of Vision Real Estate, and publisher of The Marin Report, definitely caught our attention with that headline. The first three paragraphs of his most recent monthly market trends report:
“What a way to start the year. Home sales in Marin County, while not at their lowest level ever, are certainly close to it. With only 114 homes sold in January, sales were off 28% from December and 24% from January 2005. This is the third lowest number of sales in any one month since we've been keeping records: January 1998.
The median price of single-family homes in Marin County also took a nose-dive in January, falling 8.6% from December to $877,500, and, gasp, down 5.7% from January 2005. This is the first year-over-year drop since June 2003. Also, it's the first time the median price has been below $900,000 since December 2004.
The question becomes, is this an aberration, or the start of a new trend? On one hand, the depth of the plunge in January is an aberration. On the other hand, the trend is towards a buyers' market. Looking at pending sales, we see an increase of 13% for homes and 29.6% for condos this month. This portends increasing sales in the month's ahead.”
Foreshadowing, or simple red herring for the San Francisco real estate market? The next CAR report is due out on 2/28/06, so be sure to stay tuned...
∙ The Marin Report [website]
February 13, 2006
QuickLinks: New Condos On The Market (Or In The Works)
∙ 170 off Third (coming this summer)
∙ 1635 California Street, 30 units
∙ San Francisco Perspective: Condominium Developments [SocketSite]
New Developments: 188 King Street
Five years ago the garment factory at 188 King Street sold for $3.6 million.
There used to be a thriving garment factory at this site. When the previous owner retired, he closed the factory and sold the property to real estate speculators, who swiftly demolished the warehouse that housed the factory to make way for a live-work development. In a letter to the Planning Commission, Alice Barkley (who did not return phone calls seeking comment), the lawyer representing the developers, argued that the demolition of the warehouse was justified on the grounds that it represented an "under-utilization of the site." In late 2000 the Planning Commission approved the construction of an eight-story building containing 46 live-work units.
Today, “Open Floorplan [sic] Residences” are on the way.
Scary Gary Speaks
We can’t help but take a little journey down South this morning where Realtor Gary Watts (a.k.a. Scary Gary) appears to be the groundhog for the Orange County real estate market. And apparently he hasn’t seen his shadow. From FORTUNE:
If you want to know where real estate prices are headed in California's Orange County, the man to talk to is Gary Watts. The Mission Viejo broker has 35 years of experience and doubles as a spokesman for the O.C.'s Association of Realtors.
But it's his track record more than his resume that has won him serious credibility with his peers. In 1989 he earned the nickname "Scary Gary" by correctly predicting that the housing market in Southern California was headed for a tumble. Then, in 1996, he was one of the first to call the area's rebound. Since 1997, Orange County home prices have seen a 195 percent rise. Will the good times last another year? Gary doesn't hesitate. "Fifteen percent is pretty much in the bag for Orange County in 2006," he says. "It's impossible for prices to go down this year."
Half a decade into the biggest real estate boom in our nation's history -- and a full two years after pundits began sounding alarms about its coming to a close -- the endgame is still unclear. Pick your cliche: Are we in a bubble that's ready to burst, or are we, as National Association of Realtors chief economist David Lereah recently asserted, headed for a "soft landing"? The almost daily drumbeat of national statistics doesn't help sort things out. Is it more significant that we just had a fifth straight year of record home sales, or a third straight month of decreasing prices?
"No one really understands how these things behave," says Robert Shiller, the Yale economist and author of "Irrational Exuberance," who presaged the dot-com crash and has lately been spending much of his time studying real estate. "Looking for indicators is a little bit futile because we've never seen this kind of growth in housing before."
In fact, the best way to get a handle on where the broader housing market is headed is probably to ignore the national numbers and heed the example of Scary Gary: Stay local, and always follow the inventory.
Always follow the inventory? We couldn’t agree more. And we’re on it.
∙ A tale of two markets [CNN/Money]
February 11, 2006
SocketSite Update: You Asked For It
You probably spent this beautiful day outside (as you should have). We spent it inside updating software, tweaking the site (hopefully we didn’t screw things up too badly), and yes, finally adding the ability for our readers to directly share their comments on all future (and some past) posts.
Add your comments to enhance, debate, or praise (we can dream, can’t we?) any of our posts. It’s completely up to you. All we ask is that you keep your comments on-topic; resist the temptation to flame, troll, and spam; and avoid personal attacks (opinions are fair game). In a nutshell, add value.
Oh, and please keep sending all your tips, questions, and ideas directly to SocketSite by emailing: email@example.com. Either way, we’re looking forward to hearing from you.
February 10, 2006
Learning From Past Mistakes
A tipster passed along some interesting Friday afternoon reading. A couple of excerpts from a New York Times story published in 1984:
“My pal Jerry P. just bought a condominium in Century City, in Beverly Hills, for 60 percent of what it sold for in 1980. Down the street from me here in the Hollywood hills, four houses have been on the market since 1981. The asking prices now are about one-third less than they were three years ago. Up and down Sunset Boulevard in West Hollywood, apartment houses that were converted to condos lie empty, boarded up, not one unit sold, in bankruptcy, with banks holding title.”
“The Southern California residential real estate boom began in about 1974. It was not just a boom. It was a superboom, with miserable bungalows in Santa Monica running up from $40,000 in 1974 to $400,000 by 1980. Two-story colonials in Beverly Hills went from $200,000 to $800,000 and then over a million. One-bedroom condos in Hollywood were built and sold for $100,000 - what a house in Beverly Hills had been five years before. Every day, home buyers would look at the prices and say, ''It can't go on.'' But every day, for five years, it did go on. Middle-class families were priced out of the market, and the brokers said, ''But the rich will always be able to buy.'' Ordinary rich people were squeezed out of the market in some areas, but the brokers said, ''Never mind, the music business people will buy anything.'' The music business fell into a depression in 1979, and the brokers said, ''The foreigners are buying. Compared with Paris or Teheran, real estate in Holmby Hills is a bargain.''
Everyone wanted to get in to the game, get the down payment on a house, somehow struggle with the payments for a year, then sell out and get rich quick. Inflation pushed housing prices into the stratosphere. But even when inflation stopped, brokers said, ''The prices have nothing to do with inflation. Everyone on earth wants to live in L.A. The price will go up forever here, no matter what else happens in the rest of the country.''
Then the music stopped, some afternoon in 1980. As if a spell had fallen over the city, suddenly things began to stay on the market for three months, six months, a year, two years. Buyers disappeared. Asking prices stayed high, but nothing sold.
The great Southern California real estate boom was over. Prices had gotten so high that they could no longer be justified by inflationary expectations, or the influx of foreigners, or the climate, or for any other reason.
Now, four years later, those brokers who are still in the game tell sellers to expect that their houses will be on the market for two years. Other brokers have sold their BMW's and are now working as ''financial planners'' or public-relations people, dreaming of the days when they worked for 6 percent of infinity.”
At least we learn from our mistakes (right?). Now get outside and take full advantage of a beautiful afternoon/evening in this amazing city. It is days like today that justify paying through the nose to live here.
Bueller? Bueller? Bueller?
Come on readers, we're still trying to answer our last reader request, and now we have another:
“Do you know anything about a small new development in South Beach called The Shoreline? It's on Federal. I can't find a website or who the developer is or anything!”
Anyone have the inside scoop on The Shoreline and care to share? (firstname.lastname@example.org)
And speaking of new developments:
∙ Maguire gets nod to market Esprit condos [bizjournals]
February 9, 2006
2401 Vallejo Is Back (And Better Than Ever)
Neighbor's listing making yours look bad? Wait until it sells, update (and stage) your interior, and then put your house back on the market with another agent (oh, and jack the price back up).
2401 Vallejo is back on the market and looking better than ever. No seriously, we want it. But about that ridiculous "bonus room"...
Are Ikkyu’s Days Numbered?
Rumor on the street is that the Japan Center (a “five-acre complex of hotels, shops, theaters, sushi bars and restaurants at Post and Buchanan Streets”) is up for sale. Yes, the entire thing. Can anybody confirm, elucidate, or debunk?
UPDATE: Uhh, guess this kind of confirms it (that's not too embarrassing...).
Posted by socketadmin at 10:11 AM
February 8, 2006
Did Somebody Just Get Zillowed?
What's interesting is that 2257 Green failed to sell when it was listed at $3,495,000, and was recently reduced to $2,595,000 (now in contract). Sombody's got some explaining to do.
And this might be premature, but it's possible somebody just got Zillowed!
UPDATE: 2257 Green Street sold for $2,900,000 on 2/22/06.
∙ Third Time (And 50% Off) Is Definitely A Charm [SocketSite]
QuickLinks: Power To The People
Posted by socketadmin at 1:28 PM
Renovation Sighting: 3536 Sacramento
Numerous hopeful NIMBYs have asked us if we could provide any insight into the renovation of the beautiful old building located at 3536 Sacramento which used to the home of an “unsightly garage and body shop”. That we can.
The new tenant will be...the same old garage and body shop. We can hear the collective sighs from here. And know where we’re going the next time we need an oil change...
February 7, 2006
Update: 1725 Washington Street
Some brokers' tour comments for Washington Square West (1725 Washington): “great light, area, and reasonable HOA,” but “little storage space with small rooms and living space”.
And despite being advertised as “SOLD” on the pricing sheet, units #2 and #6 have simply been reserved for below market rate ("BMR") sales (here we go again), which leaves a full fourteen units up for grabs at "full" market rates:
∙ 1725 Washington Street #1 - $799,000 [MLS]
∙ 1725 Washington Street #3 - $879,000
∙ 1725 Washington Street #4 - $875,000
∙ 1725 Washington Street #5 - $829,000
∙ 1725 Washington Street #7 - $849,000
∙ 1725 Washington Street #8 - $845,000 [MLS]
∙ 1725 Washington Street #9 - $859,000
∙ 1725 Washington Street #10 - $865,000 [MLS]
∙ 1725 Washington Street #11 - $875,000
∙ 1725 Washington Street #12 - $879,000
∙ 1725 Washington Street #13 - $879,000
∙ 1725 Washington Street #14 - $885,000
∙ 1725 Washington Street #15 - $899,000 [MLS]
∙ 1725 Washington Street #16 - $895,000
From Flip To Flames?
Three weeks ago 2626 Sutter was just another “renovated” property with fresh paint, sloping floors, and a price tag destined to land it in the RealRecentReductions archive. Today it’s a burned out shell.
Our first thought? We hope nobody got hurt. Our second thought? Well, let's just say it was probably the same as yours. And we hope it's not a trend.
The New Yorkers Are Coming! The New Yorkers Are Coming!
Perhaps we shouldn’t have gone and pointed out that what Curbed deemed to be “quite possibly the coolest feature ever to be included on a real estate website” just a couple of days ago has actually been around for quite some time on another website...
almost an early welcome to the block. Both of you.
UPDATE: Calm down people, besides being rushed and poorly phrased that last sentence was also sincere! (see new phrasing above)
Posted by socketadmin at 8:50 AM
February 6, 2006
Turning Japanese (In Atherton)
Japanese-style strolling gardens and a tea house; 7 bedrooms and 8,090 sq. ft. of living space on 2.81 acres in Atherton; and a twenty-five million dollar price tag? It must be Ellison's original Atherton estate. (Thanks to The Walk-Through for the link)
Posted by socketadmin at 9:22 PM