November 17, 2008
SocketSite's San Francisco Listed Housing Update: 11/17/08
Inventory of Active listed single-family homes, condos, and TICs in San Francisco remained flat over the past two weeks but is running 28.4% higher on a year-over-year basis with sales volume off by 22% (down 38% over the past week alone).
The number of listings that have undergone at least one price reduction is now up over 75% on a year-over-year basis, a new record on both an absolute and percentage basis (currently 43.1% of all listings versus 31.6% at the same time in 2007 and 28.9% in 2006).
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).
∙ SocketSite's San Francisco Listed Housing Update: 11/03/08 [SocketSite]
First Published: November 17, 2008 7:45 AM
Comments from "Plugged In" Readers
Wait a minute ... inventory is going UP but its supposed to be dropping off for the holidays. What's going on?? Could this be a harbinger of the beginning of "the end" (of appreciation), even in real SF?
Posted by: Jimmy (Bitter Renter) at November 17, 2008 7:55 AM
Yes, with our unseasonably warm weekend, and open houses on every corner, yesterday definitely felt like September. Lots of houses for sale out there.....
Posted by: curmudgeon at November 17, 2008 7:59 AM
That chart tells me we are going to see a big reduction in prices finally in SFO in the next quarter. This 15-20% depreciation so far is mice nuts.
Posted by: Cooper at November 17, 2008 8:12 AM
I was browsing through the paper RE section of the Chronicle yesterday and was surprised by one word that I hadn't noticed 2 years or even 6 months ago...:
There are still too many overpriced product around though. Average 2/2s close or over to a Million in any neighborhood is still too much for most potential buyers.
Posted by: San FronziScheme at November 17, 2008 8:13 AM
My guess is that Election Day's timing has kept the inventory levels "high" this year. I know of a few instances where people wanted to wait until after the 4th to hit the market. I'd be curious to hear what others' take is on this.
Posted by: Binnings Team at November 17, 2008 8:20 AM
"This chart tells meThat chart tells me we are going to see a big reduction in prices finally in SFO in the next quarter. This 15-20% depreciation so far is mice nuts."
Oh really. Because to me the chart looks like it has 162 more listings than fall 2006, when there was a downturn for about a quarter or perhaps four or five months.
Posted by: fluj at November 17, 2008 8:51 AM
Uh listings are up by 506 compared to the same period 2006.
Posted by: Jimmy (Bitter Renter) at November 17, 2008 8:54 AM
Whoops that was 1788 not 1708, make that 206 higher than in 2006.
Before anyone puts droves of words in my mouth, I don't think we're going to experience the enormous spring 2007 bounce that 4th quarter 2006 saw. But I also expected to see this chart running much, much higher than fall 2006 levels.
Posted by: fluj at November 17, 2008 8:54 AM
Fluj: To the rest of us that use normal math, 1788 - 1282 = 506, not 162.
Posted by: gmh at November 17, 2008 8:54 AM
"But I also expected to see this chart running much, much higher than fall 2006 levels."
Um, and it is. I think 8:54 am is a little early in the morning for hitting the sauce. ;-)
Posted by: gmh at November 17, 2008 8:58 AM
Fluj - I'd be interested to hear how your feel these days, things have gotten significantly worse in the economy since you were regularly posting, do you still think the "real" SF RE market is not due for a significant comeuppance? Has watching basically every asset class worldwide drop by 40% in 2 months made you change your mind a bit on how SF can be isolated from this? I'm curious as to how you see it now.
Posted by: The Bunk at November 17, 2008 9:03 AM
Part of the question is whether or not people are selling by choice or doing so perforce. Are there any good dataoints on that distinction? I suspect that many wealthy homeowners put their houses up for sale to test the market but will take it off when they don't get the results they want. But if a big portion are selling out of necessity, then ouch.
Posted by: NewBuyer at November 17, 2008 9:04 AM
Oh, I see.
Well, you obviously aren't going to get anything good out of me today. My subtraction was wrong on the last incorrect point anyway.
Posted by: fluj at November 17, 2008 9:04 AM
Hitting the sauce? More like not hitting it. Coffee, that is.
Sigh. "The real SF" -- like Bayview wasn't a "real place" all of last year when it was affecting mix, averages, etc. "The Real SF" -- all of San Francisco except Bayview and Oceanview, right? "It's all micro," blah dee blah blah blah. Six posters goosing each other on here paraprhasing stuff, that's what "The Real SF" connotes in my mind.
But I will answer your question Bunk. Poor math notwithstanding. I think the market is experiencing a correction right now. I also see sales occurring on nearly every block, still. These sales are getting 2007 type numbers. They're usually top notch properties or fixers. But the effect is that these sales in turn cause sellers with less than stellar properties to think that they too can obtain such levels. So despite those of you who may think that it's possible to go into an open house and write an offer for 15 to 20 percent under, and get it, you probably by and large cannot. It's more like an uncomfortable stasis. And the things that are selling for under asking, and reduced, are more like a few points under. Not 20.
UNLESS the sellers have to sell. Then the 15 and 20 percent reductions might actually occur.
Posted by: fluj at November 17, 2008 9:15 AM
I have a question for SS or the realtor stat experts out there: how is the number of months of inventory generally calculated? There are a number of possibilities -- pending/active ratio; sales closed in the last X weeks vs. active inventory, etc. It has clearly gone up considerably in SF in the last year, with 28% more inventory and 22% (or 38%) fewer sales. I recall reading that in Miami the s*** had really hit the fan when they were at 10 months inventory (of course, we can always debate the relevant threshold), and I'm just wondering where SF stands right now by that measure.
Posted by: Trip at November 17, 2008 9:18 AM
talk about the bunk,
" Has watching basically every asset class worldwide drop by 40% in 2 months made you change your mind a bit on how SF can be isolated from this?"
Posted by: paco at November 17, 2008 9:36 AM
How do these numbers compare with the complete inventory index (CII)? IS socketsite seeing this big of a jump in the complete inventory?
Posted by: spencer at November 17, 2008 9:46 AM
I agree with fluj that some people HAVE TO sell just like some people HAVE TO buy to follow their family path. This has always been true in any market. Life happens, period.
What this means though for a down market is that whether those who can "wait it out" like it or not, re-pricing happens. Desperate sellers will get the best offer they can get and suck the wind out of other people's expectations.
This "life's needs" is actually the baseline of the market. People buying to start/expand a family. People who scale-down and so on. Everything around it is investor speculation. When that part of the market gets burned, prices need to get a new footing.
Posted by: San FronziScheme at November 17, 2008 9:51 AM
Second Fronzi's point. Let's accept fluj's premise that if sellers have to sell, we very well may have a 15-20% reduction in the selling price over the recent past. That pool of sales then sets the new market price. Fluj is correct, of course, that a seller who does not have to sell has the option of simply refusing to sell. But the fact remains that the market price for that seller's home has also been reduced in kind. If he merely WANTS to sell, he has no more power to demand a higher-than-market price than those who HAVE to sell.
We've seen this all over the state where foreclosures are high -- the foreclosure price becomes the market price.
Posted by: Trip at November 17, 2008 9:59 AM
Mr. bank and Ms. Pink Slip are going to tell a lot of sellers they have to sell, and a lot of buyers who "have to" buy (?) that the only thing they have to do is wait.
Posted by: tipster at November 17, 2008 10:03 AM
How many people HAD to sell stocks for them to go down 40%+ in a year? And that is not (typically) a highly leveraged asset, as real estate is. And they do not have to sell stocks when the owners move....
Looking at the SF market for a while now, I'm going with a 40% decline on average from peak prices, with some areas more than 60-70% down. I think we will see 1998-type pricing all over the city, with the largest declines happening starting in Q3 2009 and continuing for about a year. I don't think the market will bottom absolutely until after 2012, but the lion's share of declines should be done by end 2010. Just a guesstimate forecast on my part - hope you're prepared.
Posted by: Laughing Millionaire Renter in Marin at November 17, 2008 10:07 AM
Trip, I've always felt that months of supply is the best measure (= active inventory / sales closed over the past month or 30-day period). The most direct method is just to divide the active inventory (excluding active-contingent and pending listings) by the actual sales closed over the past month (or 30 days or 4 weeks). Keep in mind that it often (too often) takes some realtors many days (or weeks) to update their listings after the sale event - so you have to wait a while to get an accurate count of the past 30 days (or whatever).
Per the MLS at this moment, there were 383 total sales of SFH's and condos in San Francisco during the month of October. The active inventory stands at 1,788 - so this implies about 4.7 months of supply. 4.7 is higher than the 2-3 months of supply back in the boom period - but it's also way less than the multi-year inventory in other parts of the country (and state).
For the first two full weeks of Nov (Nov 1 - Nov 14), total sales as of this moment are only 89. This number will rise as additional reportings are made (ie the realtors will finally get around to updating their listing status for sales that occured last week and the week before). But it does suggest that we may be heading for a very low total month - maybe 250 or so - which would yield a months of supply of around 7+. This would likely be a record high (at least over the past 20 years).
The other metrics that use the "in-process" categories of pending and active-contingent can be useful to see changes in the closing and approval process - but I prefer the simple months of supply measure based only on what got sold.
Posted by: FSBO at November 17, 2008 10:08 AM
Some people "have to" buy. Or else they'll be priced out forever ;)
Seriously, home ownership often is a need for people who want to live in a certain community. You want good schools for your kids and sometimes the only places where you can get them is in owner-occupied areas, especially in a renter-protected city where good rentals turnover is low.
Posted by: San FronziScheme at November 17, 2008 10:12 AM
@paco I may have overstated a bit, but I mean; commodities, equities both foreign and domestic, real estate in many countries and most of the US, but obviously not all fixed income vehicles. My "well diversified" 301k (quickly becoming a 201K) can show you what it looks like pretty well.
I don't ever really disagree with Fluj on the fact that some people are still transacting RE for pretty close to peak numbers, but I just think that is always going to be the truth until it isn't any longer. I think we are seeing a phenomenal crash the likes that none of us have seen in this country (unless you are over 70), so thinking that this RE market will escape what is turning out to be a global meltdown just seems totally out of touch to me.
For me, this has always been a math issue, you tell me how many people can afford a $1MM place in SF? And when I say afford, I don't mean buy. I am talking 20% down, and payments that are in line with salaries that leave the owner with enough money to live a life outside just making those payments. The bottom line is, nothing near the numbers that have been buying these places and supporting the current price structure. To think equilibrium pricing is somewhere a few points South of where it is today in the "real SF" seems amazingly short sighted. I make pretty good money and I am not even close to truly being able to "afford" a place like that, but I easily could have bought one, and many of my friends have. They are not feeling very good about it right now,as those 2/2 million dollar condo's don't turn out that great when you have kids or lose your job.
Posted by: The Bunk at November 17, 2008 10:15 AM
"Just a guesstimate forecast on my part - hope you're prepared."
What do you think that preparation should look like? Cash in "safe" places like CDs and T-Bills? Gold? Something else?
I'm absolutely scared stiff about the next 12 months and have no idea where to put my money.
Posted by: Foolio at November 17, 2008 10:17 AM
Many thanks, FSBO. But one more question -- why exclude contingent and pending listings from the numerator? We are including them in the denominator (when they close) so it would seem to make sense to also include them in the numerator for consistency. Or perhaps that's just the way it's always been done?
Posted by: Trip at November 17, 2008 10:17 AM
I'll partly side with LMiM. I believe the target is inflation-corrected 1998 pricing.
In real dollars, maybe 2001 prices, or 2000 at the most. But 1998 would be really really low. There would be no point in renting at all with 300Ks houses everywhere.
But if the geniuses at the Fed and Treasury manage to inflate the economy (and they're trying really hard) then all bets are off.
Posted by: San FronziScheme at November 17, 2008 10:27 AM
Trip, I view the pending and active-contigent listings as no longer on the market. They have a potential buyer and are in the process of becoming sales. They may fall out of contract and become active again - but the pure active count will pick them up when that occurs. Yes, they are unsold inventory, but the customer is standing in line waiting to check out. But it can be a long wait. Many of the current listings in pending or active-contingent status have been in that status for months (and in more than a few cases over one year). Obviously, some of these statuses should be updated - they may have sold or gone inactive.
As info, the pending count stands at 314 and the active-contigent count at 233.
Posted by: FSBO at November 17, 2008 10:41 AM
Many thanks again. I suppose as long as you compare periods consistently, the difference of using contingents and pendings or not is not that critical -- although that may not be entirely true if contingencies are more likely to fall through than in the past.
Posted by: Trip at November 17, 2008 10:52 AM
Fronzi, I tend to agree with all of your posts, but why do you say that some people HAVE to buy? There's no question that some people have to SELL, but I don't agree that anyone really has to buy. In my own situation, for example, if my apartment starts feeling too cramped (it was just my husband and I when we moved in, now we are a family of 3), we'll simply rent a bigger place until it makes financial sense to buy.
Posted by: waiting2nest at November 17, 2008 11:20 AM
Yes, good if that works for you. When you want to trade up you'll probably try and stay in the same neighborhood which is sometimes tougher for rentals. Once your kid(s) go to a local school and have their buddies close-by they basically root you down. Buying is a way to make this a bit more permanent.
Of course, there's the social standards issue which was the point of my comment. Surprisingly enough, a lot of people still follow them to the letter. Maybe not that much in SF though.
Posted by: San FronziScheme at November 17, 2008 11:39 AM
SFO still has another 30% to go before the market starts to clear (that chart shows the market is not clearing)--especially in Condos....those things are so overpriced.
Posted by: Cooper at November 17, 2008 11:43 AM
We are a growing family who happens to be renting a place that has become way too small...and, we are in a position to buy, too.
Today, I will say, "We really need to move but we are waiting for school placement."
I would love to say, "We really need to buy," but given the market, we can take a wait and see attitude.
Posted by: Pumpkin Patch at November 17, 2008 11:51 AM
"UNLESS the sellers have to sell."
How can buyers tell which sellers must sell? (besides obvious things like "short sale" or "foreclosure").
If prices will likely roll back to 2001 levels (post 9/11, I assume), where can I find comps for this timeframe by neighborhood?
It seems like many of the sales right now are for prime properties in prime neighborhoods, at 2007 prices or higher, so I wouldn't be surprised if median price and psf actually go up in some neighborhoods, even though inventory is growing, and some properties are not selling even though they are priced 10% or more below 2007. Price discovery is still several months away--sellers and buyers aren't seeing eye to eye yet.
I'm willing to wait to buy, but it would be nice to know when prices have deflated to a more reasonable level, like 2001. Or even 2003. But 2007--no way.
Posted by: DataDude at November 17, 2008 11:51 AM
My feeling is that all sorts of governmental bailout insanity will occur before they let average prices fall that far everywhere, though the underlying market would probably put it there without intervention.
Posted by: rr at November 17, 2008 11:58 AM
Another graph almost as interesting as the one above:
Does anyone else see a bell-shaped correction?
Posted by: San FronziScheme at November 17, 2008 12:08 PM
"You want good schools for your kids and sometimes the only places where you can get them is in owner-occupied areas"
I don't think this applies to San Francisco proper.
From SFSU's website FAQ:
"Will my child be guaranteed placement in the school nearest to my home?
A: No. ... If there are not enough spaces at a school to accommodate all students who want to attend, there is no guarantee that a student from the attendance area will receive an assignment offer."
Instead, kids are assigned to schools based on a bizarre lottery system that apparently can send kids far across town. I've heard this is a major reason why parents move out of SF.
Posted by: PRFB at November 17, 2008 12:12 PM
Good grief, do people really buy a place in SF for schools?
My understanding is that your school is not assigned based on where you live anyway, so why anyone would need to buy in SF is beyond me.
Posted by: tipster at November 17, 2008 12:13 PM
even if one could secure a spot in a particular school by buying a home, i'd love to know which public school in SF it is that people would spend millions on a home to secure a spot in? i'm not being totally facetious; it would be good to know.
Posted by: condoshopper at November 17, 2008 12:22 PM
@ San FronziScheme
Nice chart -- This suggests prices have gone back to 2003 levels, but anecdotally, that doesn't seem true for San Francisco.
Plus Case Schiller is looking at San Francisco as an MSA, which includes east bay--very different supply-demand dynamics.
Posted by: DataDude at November 17, 2008 12:23 PM
I guess this school talk is in reference to my posting. We are looking at private as well as public. We just want a good school so we can stay in the city. If we don't get anything, we are packing our bags (Nice to be in this situation as a renter when housing stock isn't moving, huh? I know owners who are freaking out over next year's school placement right now). Finally, we did something smart: We did NOT buy into the hype that SF home prices will always go up and we can sell whenever we want to sell.
I am looking at Redfin, too. I am seeing prices dipping below 2007 so, I don't know what all that hype is on this thread. I think if you have a home and want/need to sell, you are doing pretty decent if you get 2005 prices right now.
Posted by: Pumpkin Patch at November 17, 2008 12:29 PM
Not sure I understand why people assume that if prices stabilize or go down every homeowner *has* to sell. Simply not true, particularly since many people bought their properties 5+ years ago and have a lot of equity and also small mortgage payments. Plus, many people's household income and net worth is substantially higher now than when they initially purchased. So why would they sell at a loss unless they were laid off?
In my 'hood and more than a few parts of the bay area, prices really haven't declined at all so far. I don't forsee Hillsborough or Palo Alto all of a sudden becoming affordable, ever!
Posted by: anon at November 17, 2008 12:40 PM
There are a few selective public schools in the city where a person's chances of winning a seat in the lottery are between 2-8%. Claire Lilienthal, Clarendon are just two of these public schools (there are a few more on this short list) where parents pour money into....
Posted by: Pumpkin Patch at November 17, 2008 12:40 PM
"If we don't get anything, we are packing our bags (Nice to be in this situation as a renter when housing stock isn't moving, huh?"
The public school system in SF is an absolute joke - don't even consider it. We even have friends whose children got into the "good schools" (Clarendon, West Portal, and, to a lessser extent, Dianne Feinstein) who are regretting what they are getting for their children.
Many of the private schools are similarly a joke, and academics are often the furthest thing from the administrators' minds. You'd be surprised at the poor preparation and abilities of the children in even some of the most well-regarded private elementary schools, as some of our friends are (Towne, Cathedral). Recently, a promising "corporatist" school that many swear by in the South Bay opened a campus in the southern part of the city - Stratford - that might prove promising, but many parents were unhappy with some of the hiring decisions and withdrew their kids from the first class.
My advice: if you don't get into Clarendon (but check it ou first closely to make sure it's right for you - we never bothered with the public system), move to Tiburon. That's what we did.
Here's a promising rental in a fantastic part of the town, it's been vacant for months and I bet you could get it for $3K/mo and never worry about getting kicked out (none of the old timers here sell the houses because carrying costs are nothing with the low prop 13 tax basis assured):
If you feel like spending more than $3.5K there are many options (look at the $5K/mo market and lowball - nothing is renting it seems...)
Best of luck!
Posted by: Laughing Millionaire Renter in Marin at November 17, 2008 12:50 PM
Don't be so elitist LMR... there are decent schools in Lamorinda and you can BART to Ess Eff. :-) Not saying I would live there, but I started looking at Craiglist to see if there were any Prop 13 priced rentals. Got one classic "first time in rental market in 15 years" -- nice rent and boy, want to take a guess on their tax base.
Quite frankly, with all these "intelligent" people in SF, you think more folks would be trying to game the school lottery like Pumpkin Patch.
Posted by: EBGuy at November 17, 2008 1:57 PM
LMRM, a little off topic (and a ways off), but do you have an opinion on the southern Marin public high schools (Redwood, Tam) v. the private schools (Branson, Marin Cath, Marin Academy)? Thanks.
Posted by: FSBO at November 17, 2008 2:47 PM
Now that we've wholly-hijacked this thread into the education realm, anyone have an opinion on Piedmont schools?
Posted by: debtpocalypse at November 17, 2008 3:45 PM
Piedmont schools are supposed to be stellar -- on a par with private schools -- but homeowners pay extra assessments to support the schools.
I imagine homes in this neighborhood are retaining value better than most, and that it's difficult to find rental properties.
Posted by: DataDude at November 17, 2008 3:56 PM
"an opinion on the southern Marin public high schools (Redwood, Tam) v. the private schools (Branson, Marin Cath, Marin Academy)?"
No, not really. We really don't expect our kids to be in the public system past the "age of big government indoctrination", so we'll probably pull them out by 3rd or 4rth grade, but we have been pretty impressed with Reed so far! Great people, great facilities, great kids. High school is a long way off for us!
Posted by: Laughing Millionaire Renter in Marin at November 17, 2008 3:58 PM
Actually, I've gotten several reduced Piedmont listings from my East Bay realtor lately. Probably not posh enough places for most of the SocketSite folks, but definitely in the Piedmont district.
If you care at all about diversity in the student population, then Piedmont, Orinda, and Tiburon are not for you.
Posted by: RenterAgain at November 17, 2008 4:11 PM
Speaking of special assessments, I noticed a 4% surcharge on my lunch bill yesterday in SF for some sort of SF health plan. What's that about, and is that new?
Piedmont schools are supposed to be great and even most hillside schools are okay for early elementary at least. But ZOMG you will need a car!
But be considerate, renters: please ask permission to install your bomb shelters -- not all owners will be cool with that :)
Posted by: dub dub at November 17, 2008 4:19 PM
Diversity in the schools? In what sense? As long as the student population is a mix of whites, arabs, Iranians, asians and indians I have no problem with diversity.
Posted by: Jimmy (Bitter Renter) at November 17, 2008 4:25 PM
debtpocalyse, I've heard that Piedmont public schools are very good, as are Lamorinda and Marin public schools. We considered moving to Piedmont for the schools and proximity to SF, but house prices when we looked last summer were ridiculously high (not as high as SF, but still very expensive). Personally, I don't like being so close to Oakland, and they don't have BART. Lamorinda is also attractive for us - again due to good public schools, proximity to SF (only 17 miles) with direct BART access. Houses are expensive there too, but WAY less psf than SF and still falling. I am starting to see more and more short sales and foreclosures in Lamorinda and the residents there are up in arms about it(from what I hear) because they, like many San Franciscans, feel their little upscale community is "special" and therefore immune to the downturn. In any case, check out www.greatschools.com for more info such as API scores and reviews. We'd love to move to Marin, but can't even consider it because I work in Dublin/Pleasanton.
Many families leave SF because of the lottery system and high private school tuition ($30K-40K per year!). I realize that this has been happening even before the housing bubble, but now we'll have 1) families with school-age children leaving the city, along with 2)people being forced to sell their homes for a variety of reasons (loss of job, ARMS and Alt-A resets, etc.), and 3) far fewer buyers due to tighter lending standards. All of these factors will contribute to rising inventory - with reasons 2&3 having greater impact, of course.
Posted by: waiting2nest at November 17, 2008 4:36 PM
We looked for almost a year, and settled on Orinda. You can certainly get a big, decent house in the top school district in the State here for around 3k a month. We pay $3800 and have a huge 4 bedroom with all top of the line appliances, etc, and a pool w/ a view. Our house is a failed flip, and the owners are probably taking a 2k a month bath right now (by what I can find on propertyshark)to have us live here. We would have preferred to pay a little less, but this place was perfect for us and spent the extra $300-400 a month for it.
Anyway, I have no doubt that prices here will continue down. My guess is we end up buying the house we are living in for around 350k less than what they were asking but could not sell it for. My experience is that Orinda is a better "value" out there if you want proximity to the city, schools, and a decent sized homes as compared to Marin or the Penninsula or Berkeley/Rockridge/Piedmont.
Posted by: The Bunk at November 17, 2008 5:03 PM
Some of these rental listings being posted in "better" suburbs (Tiburon, Orinda, etc.) seem actually like a bargain to someone like me who is presently in Chicago. Could it be that the San Francisco Bay Area is becoming a renters paradise?
Posted by: anoninLincolnPark at November 17, 2008 5:34 PM
OMG, fluj is back. That means we are nowhere near the bottom. We'll have hit bottom when fluj starts getting bearish...
Posted by: anon at November 17, 2008 6:43 PM
Talk about a hijack.
I just had a kid and lots of the chatty types in NV have me thinking about this whole public school thing already! It seems like early primary public school is OK in SF, but once you get beyond, the 'concerned parent factor' has migrated to the burbs.
I'm wondering if anyone can recommend a good website to recommend researching the school distrcits for all grade levels. Our income center of gravity is around San Mateo, but I have no idea if those schools are any good.
Not that test scores tell you as much as you think you know about a school system, but it's a start.
For those worried about 'too much diversity', I can tell you my parents faked my address so I could go to the "good high school" and I had some pretty terrible teachers; there were just lots of spoiled rich kids and some of those scored high on tests becuase of their home situation, not the quality of the teaching. My younger sister went to the school they were originally worried to send me to (much more diverse), and turned out to get a better overall education (this was in the OC, so exactly where bears no relevance).
Posted by: kaya at November 17, 2008 7:02 PM
All the talk about school quality brings back so many memories...der God I can so visualize the chatty types in NV Kaya mentioned.
Glad I moved to Italy where the only discussion about relative school quality is how good the cook is who makes lunch for the students. Here in the "Real Piedmont" (ha ha ha) my daughter comes home singing children's songs about--of course--food.
I'll continue lurking here and if the crash goes well will swoop in to buy my small 1950s ("mid century") retirement house in Bernal (I like the sunshine and have all the "old" I need here in the Real Piedmont.)
Posted by: knavel at November 17, 2008 7:44 PM
Posted by: waiting2nest at November 17, 2008 7:46 PM
Are the public elementary schools in the city *that* bad? It seems to me that there are about ten good ones (Alamo, Alice Fong Yu, Alvarado, Argonne, Claire Lillenthal, Clarendon, George Peabody, Grattan, Rooftop, Sherman) - it's just a question of whether the lottery favors you but I've heard rumblings that the criteria will change in 2010 to take into account proximity to one's home.
Satchel, I mean, LMR, are the Marin public schools really better than the city's elite private schools? I hadn't heard that but it's certainly food for thought.
Many of our friends fled the city as soon as their children reached kindergarten age but we are hoping to stick it out and land in a school with an active PTA as that makes all the difference. Perhaps the downturn will increase the number of like-minded families attending the city's public schools and that, in turn, will go a way toward improving them.
Posted by: Curious at November 17, 2008 7:56 PM
SFUSD has been told by a grand jury that they need to reform the system. They need to come up with a new enrollment process by Spring 2009, which will be implemented in Fall 2010. If you are on the fence about staying in the city, you might want to wait until the spring to find out what they come up with. If I had to bet, I'd say they add a geographic component to the socio-economic diversity index they are currently using, so you'll have a greater chance of getting a school near you.
Posted by: 1st time buyer at November 17, 2008 9:01 PM
Gosh, my blurb of school placement and buying a home really changed this thread!
Since the thread has tipped over a bit, I have a question for everyone, because I think it does impact real estate: How do families with multiple kids afford private school in the city? I am not talking about the mega-wealthy, either. I get that one...I am talking about a family that is *just* wealthy. Are they getting the tuition from an investment portfolio or do they really have an extra $45-$100 each year from a real job to put toward private schooling?
Posted by: Pumpkin Patch at November 17, 2008 9:24 PM
It will be a serious mistake for anyone to buy any of those condos especially 301 mission project. Simply wait and they will discreetly lower their prices substantially as the approach their opening. They will rent out some of them but they will bring their units below a 1000 sq ft. in the next year.
Posted by: George Marcos at November 17, 2008 9:30 PM
There are lots of great public schools in San Francisco, though you have to be persistent to get into one, if you don't win the lottery on the first try. Everyone on my block, save one family, sends their kids to public schools and all are happy with their choice. The one couple that does not, sends their children to St. Paul's, a parochial school.
Even though I could afford it by stretching, I do [not] plan to send my children to private school. It is mostly a world of extreme materialism and shallow values, devoid of diversity of opinion or ideas. There are a few exceptions I would consider, like the San Francisco School, but very few. Many of the so-called "better" suburban school districts are just as bad.
Creating a rich home life, with parents who are intellectually engaged and involved in their children's lives, is more important to academic success than anything your kids would learn in grammar school, anyway.
If you are a paranoid anti-government extremist, of course you would not want to risk having your children "indoctinated" in mainstream cultural values. Homeschooling is probably called for, in this situation.
Posted by: NoeValleyJim at November 17, 2008 10:42 PM
"are the Marin public schools really better than the city's elite private schools?"
You know, I can't really answer that authoritatively, but I suspect that they are not better. They're still public schools, subject to all that implies.
My own belief is that parents (involved, dedicated to having their children learn) and the quality of the kids are ultimately the key factors is creating a good learning environment. No great revelation there.
The southern Marin public schools - in the early years especially because they are wholly local - have tremendous natural advantages because of the demographic pool that they choose from. There is also a large component of self selection, as many parents specifically chose to live there for school reasons. (That dynamic has been playing out for a while. Just the other day, at the gym, I had a chat with an 86-year old Italian-American guy who was riding the exercise bike next to me (!) and he told me about how he moved from North Beach to Larkspur 52 years ago because the SF schools were lousy! His son is now 57!)
At least in Tiburon, there is a tremendous amount of volunteer activity. Probably 50% of the moms and 20% of the dads in the area don't work, and there are always 1-2 volunteers per class per day (plus 1-2 volunteers additional at lunch) in the Reed system from what I can tell. My wife volunteers at least 3 times per week.
Parents also seem generous with donation money, something you don't get in SF. Some people think the presence of school foundations help the education quality (I think volunteering is more important).
Facilities are fantastic! I don't think any of the SF private schools can compete on those grounds.
Academics are not that impressive from my point of view, but neither of us work, and so we have a lot of time to spend with our kids. (Our 4 year old turning 5 entered kindergarten reading better than his 7 year old 1st grade buddy - there's a buddy system there - and he is already doing simple algebra, so I don't think he is going to get too much out of kindergarten academically.) However, we have been VERY impressed with how good the staff and school generally is in fostering social skills, organization, public speaking, etc.
About SF public schools, I can only say that a number of our friends are disappointed with Clarendon, West Portal and Sloat. We also know a number of very sad stories of people who couldn't get a good lottery placement, including one who lived out in Mt. Davidson really near Sloat and yet was placed into Sheridan - about the worst). We don't care about "diversity". Kids are people, not little placeholders that can be moved around a chessboard in order to conform to some worthless administrator's (or judge's) conception of an ideal society. (ok, I'll step off my soapbox now :) ) Similarly, in SF public schools, the political agendas of the schools seem to trump any ability of the parent to control what is taught. I doubt any PTA could thwart that.
Posted by: Laughing Millionaire Renter in Marin at November 18, 2008 6:05 AM
dub dub "Speaking of special assessments, I noticed a 4% surcharge on my lunch bill yesterday in SF for some sort of SF health plan. What's that about, and is that new?"
Some places do that in order to express thier displeasure with the SF mandate that they provide their workers with health coverage. Most places just increased their prices but some are adding the surcharge to make a statement.
Personally I don't like to eat at any place that is being obnoxious about it by having a surchage, there are all sorts of mandates and expenses on employers, include them in your prices dont be a whiner about it. I don't see anyone adding a Social Security Surchage and Medicare surchage to cover the ~7% of wages the employer has to kick in to make a statement that they don't like having to provide social security and medicare coverage for their workers.
I can just imagine a bill, Burger $1*
*additional surcharges apply, 100% rent surcharge, 100% energy surchage, 100% labor surcharge, 100% ingrediant surchage, etc...
Posted by: Rillion at November 18, 2008 9:46 AM
Simple Algebra eh? Like 3X = 6 ?By a 4 year old? Doubt it.
Posted by: fluj at November 18, 2008 10:34 AM
When we started thinking about schools we asked for advice from a relative who is an educational psychologist and has consulted with SF public and private schools extensively, some Marin schools, and some Berkeley schools.
His view was that SF private schools were pretty bad by national standards, although he named one exception I had not heard of before, and that most kids will get a better education in a well-chosen public school. SF private schools are basically cruising because parents hate the lottery so much. This opinion has cost him some income in the last few years. Although there are some bad SF public schools there are far more than 5-10 good ones as people assume (without even checking! it's just gossip) And some of the so-called good ones (Lilienthal, West Portal) are not as good as they are assumed to be. Some of the better K-5 schools are in unexpected places.
He was unimpressed after working with Marin schools; he thought the academics and extra-curriculars were sub-par, and that was in comparison to SFUSD. I was surprised (we had been considering a move to Marin) but he made a good case based on his experience. But students and test scores look good because they're reflecting parental socio-economic status, and people love the facilities and being around other parents who talk up their concern for education and throw money around.
I have a colleague who is sending three kids to SF Day (from income alone; they're both surgeons). I think they're out of their minds. Their three are doing less well socially and academically than another colleague's two who attend a good public school that wasn't getting any good press at the time (and still doesn't). They live down the street from West Portal and didn't even list it in their top seven; they knew they could do better.
Posted by: jordan park at November 18, 2008 11:03 AM
Pumpkin Patch -
Regarding affordability, it depends on how you define "wealthy." Most private schools offer tuition assistance to even those that have an income of $200k. Typically, about 20% of families receive a discount on tuition.
Posted by: satchelfan at November 18, 2008 11:07 AM
"Simple Algebra eh? Like 3X = 6 ?By a 4 year old? Doubt it."
Well, he actually just turned 5 if that helps you accept it. And it's more like, "x+567=954" and he supplies the next two statements, "x=954-567; x=387". We've also worked on all the squares and square roots for whole numbers up to 12 (144 for the X^2 term), and multiplication tables up to 12*12 (he's memorized about 85% of the table). He's fascinated by infinity, but we haven't gotten into any "Cantor counting". He's pretty precocious, but kids are amazing in general. I'd say he'll be able to do the math on the realtor qualification exam by the time he is 6, which is a bit of an accomplishment since ordinarily one would need to be about 8 years old to pass the exam :) BTW, thanks for the gratuitous expression of doubt, and the opportunity to slam your "profession" (lol) once again.
@jordan park - funny you mentioned West Portal. When we talked with the principal there we discovered that he sends his kids to St. Cecilia's. About academics in Marin schools - as I wrote above - I'm not impressed by any of the academics, but that was also the case for the private schools we considered in SF (except for Stratford, which seemed pretty impressive, but regimented). Extracurriculars, however, seem to be great so far, at least in the early years. No question that parental socio-economic status is key, but don't overlook culture. Poor Jews and many poor Italian immigrants 80 years ago (both of which groups had low socio-economic status) did just fine in public schools on the East Coast, and I am sure there are more than a few groups of low socio-economic status kids today who are standouts in the Bay Area today.
One thing that pushes some parents with precocious kids into the Marin (and other suburban) public system is that private (and parochial) schools in SF tend to have very early "cut off" dates, meaning that many kids who are ready for kindergarten but who will not turn 5 until after July 31 (a typical cut off) have to wait until the following year.
Posted by: Laughing Millionaire Renter in Marin at November 18, 2008 12:41 PM
I am not sure there even was a math portion of the realtor exam. If there was, tho, I am sure it was nothing like Etrade's rigid, arduous, and intimidating entry examinations.
[Editor's Note: Tit for tat and now back to the data (or even schools)...]
Posted by: fluj at November 18, 2008 2:27 PM
Another math equation for the Real estate exam:
$6500 mortgage +
$1200 property taxes +
$700 HOA +
$1000 provision for insurance and repairs -
$1500 tax savings
= always less than $3000 rent because prices always go up 15%/year.
Posted by: San FronziScheme at November 18, 2008 2:50 PM
This school conversation was interesting to me. Thanks.
We're bailing on SF in the coming year, and either moving to Kensington or Piedmont. If Kensington, we'll use their elementary school and then shop around for private schools or move again to Piedmont or Lamorinda. If Piedmont, we'll ride them for all 12 years.
This is a useful tool:
Anyone have an opinion on Hilltop Elementary in Kensington?
Posted by: debtpocalypse at November 18, 2008 4:07 PM
Check out Berkeley Parents' Network for reviews of schools throughout the East Bay.
Posted by: 1st time buyer at November 18, 2008 4:15 PM
Well, I couldn't resist (thanks LMR) as PropertyShark and Craigslist can be addictive. How about this 4bed/2bath, 2450sq.ft. home in Orinda. Check out Del Rey Elementary School's numbers in 1st Time Buyers latimes link (hint: they're pretty good). Rents for $3290, but they may be willing to come down in price as their tax base is, ahem, less than $100k.
Posted by: EBGuy at November 18, 2008 6:05 PM
Yep, EBGuy, that's (potentially) a good one. By the trust transfer activity (check prop shark) and the address of record for the tax bills (San Juan Bautista, CA) it looks like the owner has retired or recently moved away and is looking for someone to take care of what looks like a reasonably nice house in a great school district. Note the language in the ad: "Preference given to long term tenant ......."
They pay basically nothing in taxes, and are probably holding the asset so that their grandkids can inherit it (taking advantage of the step up in basis under the estate tax laws, and prop 58 under CA to grandfather the tax basis). You won't have to worry about getting kicked out, and note that there is no problem with a dog (those are some of the worries that are often cited with renting). I bet you could even paint the walls if you wanted to! In fact, with only a $3K security deposit at risk, I bet there's not too much you couldn't do....
Now, you can just go and make a deal! You would not believe how little competition there is for good families for rental SFHs. Every solvent renter has already bought a house or two in California. I'd target no more than $2500/mo. I bet they'd go for it! (But I think you own a TIC that went condo, right? Well, maybe some other deserving family could take advantage of the willingness of the recent purchasers in Orinda to subsidize deserving renters' kids' educations!)
Posted by: Laughing Millionaire Renter in Marin at November 18, 2008 6:29 PM
EBGuy - That house has been on the market for at least 6 months. There are plenty of homes in decent shape in the Del Ray or Glorietta area that are in roughly that shape as the house you link to that I am sure you could get for 3k a month right now. What I have been so amazed at is how many of these homes are owned by speculators, basically just Orinda families that got caught up in the mania and thought it a great investment to buy a new house for themselves to move into, and to keep their old one for rental/flip. These are the people who have been telling us for the past year that they are holding to sell until "things turn around, in a couple of years". At some point the reality is going to fully set in (I think it is setting in right now for many), and they are going to want to dump these homes.
Our new place was listed for 1.15MM, they lowered it a bit, but could not sell it, so are renting it to us for $3800 a month (we can walk to Del Ray school). A bit high, but for the time not a bad deal. They paid 920k for it in 2005, have put at least 75k into it, probably more, and are financing the house with two loans that are north of 820k. These people own 5 similar homes, I don't imagine it ends well for them, but there is a lot of that in Orinda/Lafayette, which makes it a good rental idea now, and a great ramp for people like us that want to buy, but are waiting for the prices to come in line with our earnings.
Posted by: The Bunk at November 19, 2008 9:57 AM
Yes, I'm staying put for now (or until my kid gets jumped at school -- I remember reading about something like that on SS, I believe). Lamorinda CL rental listings and ProperyShark were mostly an exercise in "what if" and to see if there are potential candidates for your rental strategy over here. Also, believe it or not, I encountered a "throwing money away on rent" couple just last week. Concrete counter-examples are always helpful.
Posted by: EBGuy at November 19, 2008 10:03 AM