September 30, 2008
July S&P/Case-Shiller: Pace Of San Francisco MSA Decline Continues
According to the July 2008 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA fell 1.8% from June ’08 to July ’08 and are down 24.8% year-over-year (once again, a new record low).
For the broader 10-City composite (CSXR), year-over-year price growth is down 17.5% (having fallen 1.1% from June).
Prices fell across both the bottom and top price tiers for the San Francisco MSA while the middle tier was unchanged. The bottom third (under $432,119 at the time of acquisition) fell 4.1% from June to July (down 41.3% YOY); the middle third remained unchanged from June to July (down 25.2% YOY); and the top third (over $696,153 at the time of acquisition) fell 0.6% from June to July (down 11.1% YOY).
And according to the Index, home values for the bottom third of the market in the San Francisco MSA have returned to May 2002 levels, the middle third remains at December 2003 levels, and the top third is approaching February 2005 levels.
The standard SocketSite S&P/Case-Shiller footnote: The HPI only tracks single-family homes (not condominiums which represent half the transactions in San Francisco), is imperfect in factoring out changes in property values due to improvements versus actual market appreciation (although they try their best), and includes San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., the greater MSA).
∙ Continued Record Home Price Declines [S&P]
∙ June S&P/Case-Shiller: San Francisco MSA Continues Decline [SocketSite]
What To Do When Incentives Don’t Work? (Lower Prices Perhaps?)
“The [homebuilder] industry will ask lawmakers to pass a $15,000 tax credit for all homebuyers, replacing a smaller incentive enacted earlier this year that they contend failed to stimulate demand.”
From the chief executive officer of the National Association of Home Builders:
“Our members are really hurting…The [$7,500] tax credit passed in July seems to have failed to have sparked interest. We are hearing from high volume and small volume builders that it has had no impact.”
And from the co-director of the Center for Economic and Policy Research in Washington:
“Let the house prices settle, then worry about stimulating the market…I have very little sympathy for these builders. If they weren't able to figure out what was going on during the bubble, don't go crying to the government.”
∙ `Hurting' Builders Seek New Tax Credit to Help Market [Bloomberg]
A Listed Infinity Resale (301 Main #4B) And Reader’s Report On Sales
As a number of readers and tipsters have noted alike, 301 Main Street #4B (a lower floor two-bedroom resale in The Infinity) has hit the MLS and open house parade.
According to one tipster the asking price of $1,499,000 ($826/sqft) is “more than the current owner paid,” but unfortunately that’s a claim that we can’t confirm (readers?).
We can confirm, however, that $20,000 in Design Center credit was being offered “on most unsold homes in Phase 1” to all those attending an Infinity sales event last week (“must be in contract by 10/15/08”).
And from a plugged-in reader who attended said event: “They were still quoting 85-90% of units in contract or sold, which doesn't seem to have changed much in the last 10 months or so.” (Actually, 20% ten months ago.)
UPDATE: From a plugged-in tipster (and not the sales office): "[A]sking price for 4B was $1.25m when we were initially looking at it."
∙ Listing: 301 Main Street #4B (2+/2.5) - $1,499,000 [MLS]
∙ Infinity Update: Construction, Tower Two, And Possibly Even Sales [SocketSite]
September 29, 2008
A Quick Cut (And Case Of Cash Back?) For 310 Townsend #308
Priced by the developer at $611,000 when the building first opened in February of 2007, 310 Townsend #308 closed escrow in June of 2007 with a reported contract price of $617,500 (no word on whether we're talking upgrades or another case of “cash back”).
Back on the market two weeks ago with an asking price of $629,000 (a sale at which would have represented average annual appreciation of roughly 1.4% over the past sixteen months), the list price has since been cut to $599,000.
∙ Listing: 310 Townsend #308 (1/1) - $599,000 [MLS]
∙ 310 Townsend: Available And Selling [SocketSite]
∙ Can Bank Owned Comps Kill (Values)? 246 2nd Street #502 Returns [SocketSite]
$700 Billion Bailout Breaking News: Round One Rejected By The House
"The fate of a controversial $700 billion financial bailout plan was in doubt Monday as a House vote turned against it. The next steps were not immediately clear but supporters were scrambling to put it up for another vote."
"The measure needs 218 votes for passage. Democrats voted 141 to 94 in favor of the plan, while Republicans voted 65 to 133 against. That left the measure with 206 votes for and 227 against."
∙ Bailout plan rejected [CNN]
∙ Once Again, We’ll Simply Go With The Worst (In Terms Of The Bailout) [SocketSite]
We Are Suckers For "Grandeur & Old World Charm" (2860 Pierce)
Like there’s any chance we could pass up “grandeur & old world charm” or to sneak a peek inside. Unfortunately it's not entirely "old" (or charming).
Designed by Albert Schroepfer (of Dunn & Schroepfer) circa 1931, it’s one parcel with two properties (a 7,000 square foot single-family (2860 Pierce) and four units adjoining (2383 Union)), garages for seven cars and a side lot to store eight (or play hoops).
∙ Listing: 2860 Pierce/2383 Union (4/4 + 4 units) - $16,950,000 [MLS]
Joint Giants/Kenwood Proposal For SWL 337 Into Extra Innings
After deciding to jointly pitch the development San Francisco's Seawall 337 last month, the San Francisco Giants and Kenwood Investments requested and received a 30-day extension to submit a new proposal.
And while the new deadline was set for Friday, another extension was requested (60 days) and received (45 days). Their final proposal is now due by November 13.
Once again, scoring of the RFP’s will be based 60% on the Design and Development Program and 40% on the Financial Proposal and will likely take between 90 and 120 days (only now from November).
∙ Giants balk at deadline for lot proposal [San Francisco Examiner]
∙ The Development Of Seawall Lot 337: And Then There Were Three [SocketSite]
SocketSite's San Francisco Listed Housing Inventory Update: 9/29/08
Inventory of Active listed single-family homes, condos, and TICs in San Francisco continued to climb over the past two weeks, briefly broke through the 1,700 units mark, and is currently running 14.2% higher on a year-over-year basis.
At the same time and based on our calculations, the number of new contracts written for listed properties in the fourth week of September was down roughly 25% as compared to the year prior (which was down roughly 17% as compared to the year prior to that), and is running roughly 22% lower on a year-over-year basis with respect to the last two weeks of the month.
The standard SocketSite Listed Inventory footnote: Keep in mind that our listed inventory count does not include listings in any stage of contract (even those which are simply contingent) nor does it include listings for multi-family properties (unless the units are individually listed).
152 Banks In Bernal Heights Reduced (And Not Moving So Fast)
To recap: 152 Banks in Bernal Heights was purchased for $675,000 in July of 2005; sold in April of 2006 for $900,000; appears to have been bought back by the bank three weeks ago; and returned to the market two weeks ago for $749,900 (“will go fast at 750K” according to one rather bullish "anon[ymous]" commenter). Just reduced to $699,900.
As a plugged-in reader notes, “just hope no one used that silly $900K price a few years ago as a comp!”
∙ Listing: 152 Banks (3/2) - $699,900 [MLS]
∙ Bad Data In Bernal Heights Or Something Else Afoot? (152 Banks) [SocketSite]
September 26, 2008
San Francisco Rising And A Fresh Perspective On Millennium Tower
A plugged-in tipster passes along a few shots of San Francisco rising (with room to grow). And a fresh perspective on Millennium Tower (real not rendered).
One Day On The Market (But You Might Have Seen This View Before)
Five months ago 175 Grand View Avenue hit the market with a list price of $1,200,000.
Reduced to $1,149,000 a month later (“New price! Condo alternative!”), and then to $1,090,000 about a month after that, it’s now back on the MLS with a new listing, one official day on the market (average DOM statistics anyone?), and asking $995,000.
∙ Listing: 175 Grand View Avenue (2/2) - $995,000 [MLS]
It’s Friday And We Can’t Pass Up A Pretty
No real story that we know of (readers?), but it’s Friday and we simply couldn’t pass up the Colonial Revival façade. And yes, we’re choosing to ignore the buildings on either side.
∙ Listing: 1612 Vallejo (4/3) - $2,395,000 [MLS]
If Only Averages And Appreciation Were The Same Thing
93 San Pablo Avenue is a 1927 Tudor on the outside, but now bit more modern within.
Purchased as a fixer for $1,260,000 seven months ago and completely overhauled, it’s no where near being an apple.
Its sale, however, will boost the average sales price in the neighborhood (asking $2,575,000). If only that and appreciation were the same thing (but alas they're not).
∙ Listing: 93 San Pablo Avenue (5/3) - $2,575,000 [MLS]
398 Eureka Officially Priced ($2,450,000) And Additional Photos Online
Posted by socketadmin at 10:15 AM
Not A Perfectly Clean Apple In Bernal, But You'll Get The Gist
After three weeks on the market the list price for 22 Coleridge on the edge of Bernal has been dropped from $599,000 to $587,000. Purchased in April of 2005 for $607,000.
Unfortunately it's not a perfectly clean “apple” as the kitchen was completely renovated in 2006 (new cabinets, appliances, flooring, etc.), but you'll get the gist. And as a plugged-in reader notes, “seller is a licensed real estate agent.” You know, in the trenches and all.
∙ Listing: 22 Coleridge (1/1) - $587,000 [MLS]
Speaking Of Office Space (And Absorption) In San Francisco
Office leasing in San Francisco by the numbers and by way of the Business Times: 550,000 square feet of negative absorption in the third quarter (including 111,000 square feet in SoMa) and 684,000 square feet of negative absorption for the year.
∙ San Francisco tenants dump office space [Business Times]
659 Greenwich: Two For One And A Peek Inside
New construction in 2002, the four bedroom 659 Greenwich was purchased for $3,200,000. Back on the market today and asking $3,795,000.
And wouldn’t you know it, it’s actually the 1800’s two-bedroom cottage out back (and above) that ended up catching our eye.
∙ Listing: 659 Greenwich (4/3 + 2/1) - $3,795,000 [MLS]
September 25, 2008
Once Again, We’ll Simply Go With The Worst (In Terms Of The Bailout)
Perhaps it was a bit understated last week when we simply wrote “We'll Go With [The] Worst” (with respect to Paulson’s proposed $700 billion bailout and approach). But hey, that's how we roll. A few (hundred) others, however, not so much.
In a letter yesterday to congressional leaders, 166 academic economists said they oppose Treasury Secretary Henry Paulson's plan because it's a "subsidy" for business, it's ambiguous and it may have adverse market consequences in the long term. They also expressed alarm at the haste of lawmakers and the Bush administration to pass legislation.
"The structure [of Paulson's plan] is designed for the Treasury to be the first line of defense," said [University of California-Berkeley economics professor David I. Levine], who studies organizations and incentives. "A whole lot of people made money supposedly by putting their capital at risk, and those are supposed to be the first line of defense, that's how capitalism works."
Bay Area represent (in more ways than one). And for some reason, this all sounds strangely familar. At least if you're plugged-in.
To the Speaker of the House of Representatives and the President pro tempore of the Senate:
As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:
1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.
2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.
3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.
For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.
And the 166 who signed.
∙ QuickLinks: A Bloomberg Bailout Trio (And We'll Go With Worst) [SocketSite]
∙ Hundreds of Economists Urge Congress Not to Rush on Rescue Plan [Bloomberg]
∙ Economists Letter To Congress [chicagogsb.edu]
A Noe Valley Apple Ripens As The Orchard Expands: 1604 Castro
Purchased for $920,000 in December of 2004, a sale of 1604 Castro at the current list price of $1,050,000 would represent average annual appreciation of roughly 3.5% over the past four years for this renovated single-family Noe Valley home assuming the entirely of said renovations occurred prior to the last sale (and we didn't see any recent permits).
In related news, Noe Valley listed inventory continues to build with 29 single-family homes and 39 condos/TICs currently active, available (i.e., not contingent) and competing for your attention.
∙ Listing: 1604 Castro (2/1) - $1,050,000 [MLS]
U.S. New Home Sales Continue To Decline, Builder Angles For Bailout
The pace of new home sales in the U.S. were down 35 percent on a year-over-year basis last month (“the lowest annual rate since the 1991 recession”) led by a 36 percent drop from July to August in the West.
Lennar Corp., the second-largest U.S. homebuilder, this week reported its sixth straight quarterly loss and said the government must take measures to boost home prices that are down by nearly a fifth from their 2006 peaks.
"Consensus is building that falling home prices are not only detrimental to the economy at large, but in order to repair our failing financial system we will have to stop the decline," Chief Executive Officer Stuart Miller said.
No word on whether or not Mr. Miller would be willing to help fund such government “measures” by donating the record monies earned by Lennar prior to said decline.
∙ U.S. Economy: Home Sales, Durable Goods Orders Drop [Bloomberg]