January 30, 2009
4356 25th: A Modern Mid-Century Modern AIA Home Tour Home
To those who partook in the 2008 AIA San Francisco Home Tour it's the “Choy Residence.”
Neighbors in Noe Valley will recognize it as 4356 25th Street.
And to others it's simply that sweet Terry + Terry Architecture Mid-Century Modern inspired renovation with a killer kitchen, dining room and deck. Now listed for $2,579,000 with a brokers tour next week and a public open house (assuming it’s still available) as well.
Game, Set, Match To The San Francisco Tennis Club (645 5th)
"Lena Grotz, a club member who has been active with Save Our San Francisco Tennis Club, said the Western Athletic Club is taking over the facility at 645 5th St. and would not only preserve the tennis club, but also expand it. Four of the outdoor, rooftop courts will be covered, and new workout facilities will be built."
∙ Western Athletic rescues the S.F. Tennis Club [San Francisco Business Times]
∙ First Game Pulte (But Many Sets To Go) [SocketSite]
∙ Seven Hundred Fewer Condos In The San Francisco Pipeline [SocketSite]
Eviction Moratorium Extended And Freddie Becomes A Landlord
"Freddie Mac and Fannie Mae, the mortgage-finance companies under federal control, are extending by one month a freeze on evictions for homeowners in foreclosure as delinquencies soar in a slumping economy.
Freddie, the second-largest source of U.S. home loan money, said it will now allow renters in homes the company has repossessed to remain using monthly leases at market rates. Homeowners who have lost their houses to foreclosure can also rent the properties back from the company at market rates, McLean, Virginia-based Freddie said today in a statement."
∙ Freddie, Fannie Extend Eviction Freeze Until March [Bloomberg]
∙ Actual San Francisco Foreclosures Down 42% QOQ (Up 70% YOY) [SocketSite]
Millennium Sales Update: Another Penthouse (#59A) In Contract
It’s seven new contracts at San Francisco’s Millennium Tower since instituting a 15% price cut two weeks ago: six units with an average price point of ~$1.5M, and Penthouse 2A (a.k.a. 301 Mission #59A) at $10,200,000 for 5,555 square feet of raw space.
Approximately 100 of the 419 Millennium condos are now in contract with non-refundable 10% deposits (or roughly 40 net-new contracts since their first penthouse sale). The first closing and move-ins should occur around the end of April. And Michael Mina’s RN74 restaurant is on track to open at the same time. We'll see you at the wine bar.
∙ The SocketSite Scoop: Millennium Cuts Prices 15% Across The Board [SocketSite]
∙ The Millennium: A Few Things You Might Know (And A Few You Don’t) [SocketSite]
∙ Millennium Tower San Francisco (301 Mission): Sales Update/Facts [SocketSite]
January 29, 2009
Avalon At Mission Bay Phase III (240 Berry): True To Design
While the 192 units of Strata at Mission Bay should be renting in March, the 260 rental units of Avalon at Mission Bay III should be online by the middle of the year (about 18 months after having started its ascent).
∙ Coming Soon: "Strata At Mission Bay" (A.K.A. 555 Mission Rock) [SocketSite]
∙ Avalon At Mission Bay Phase III (240 Berry) Rises Up Aside Arterra [SocketSite]
∙ Avalon At Mission Bay Phase III (240 Berry) Starts Its Ascent [SocketSite]
∙ Avalon at Mission Bay III (240 Berry) [avalonatmissionbayiii.com]
A Reader Asks, We Respond, You Add The Scoop: 21 Lafayette
Your Question: What’s happening at corner of Layfayette and Minna (“I heard they are going to be rentals rather than for sale”)?
Our response: It’s a three unit building (21 Lafayette) that we believe was mapped as condos but could very well end up being rented out.
The Opportunity: To prove us wrong (or just add the inside scoop).
Coming Soon: "Strata At Mission Bay" (A.K.A. 555 Mission Rock)
The Mission Bay new development previously known as 555 Mission Rock has been branded “Strata at Mission Bay.” The 192 new units of rental inventory will be coming online in March of 2009 with an interest list now forming.
∙ 555 Mission Rock: Yesterday, Today And Tomorrow (And A Recap) [SocketSite]
∙ Strata at Mission Bay [stratasf.com]
JustQuotes: Damn Those
Bad News Bloomberg “Bears”
“Prospects for an economic recovery this year dimmed after reports today showed new-home sales collapsed, durable-goods orders slumped and a record number of Americans collected unemployment benefits.” Huh.
∙ U.S. Economy: Sales of New Homes, Durable Goods Orders Tumble [Bloomberg]
∙ SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]
But Don’t Buyers In Noe Know That "Prices" Are Up?
While 651 27th Street is now in escrow (listed for 20% under its last close), 525 27th Street #2 is still active and available. As a reader notes, purchased for $1,349,000 in October of 2006, listed for $1,495,000 in September of 2008, and reduced four times since.
Currently asking $1,195,000 for this Noe Valley condominium with three bedrooms/baths and panoramic city views. Don’t buyers in Noe know that "prices" are up?
∙ Listing: 525 27th Street (3/3) - $1,195,000 [MLS]
∙ On The Market (But Not The Public Facing MLS): 651 27th Street [SocketSite]
January 28, 2009
JustQuotes: A First (And Second Zero) For The Fed, Not SocketSite
"The Federal Reserve left the benchmark interest rate as low as zero, said it’s prepared to purchase Treasury securities to resuscitate lending and warned inflation may recede too quickly."
“Deflation is an increased worry,” said William Ford, a former Atlanta Fed chief who’s now at Middle Tennessee State University in Murfreesboro. “They have switched from worrying about inflation to being focused on deflation. It is the first time they have talked about that in a straightforward way.”
∙ Fed Keeps Rate Near Zero, Prepared to Buy Treasuries [Bloomberg]
∙ Did Somebody Say Deflation? [SocketSite]
∙ Promoted From Comment To Post: Satchel Does Deflation [SocketSite]
Actual San Francisco Foreclosures Down 42% QOQ (Up 70% YOY)
Bay Area Notices of Default (NODs) fell 12% on a year-over-year basis in the fourth quarter of 2008, down 9.6% in San Francisco proper (from 353 to 302). And while the number of new NODs in San Francisco also fell 25% from the third quarter, the lead time changing state law took effect in September is likely to still be skewing the comparisons.
At the same time, actual Bay Area foreclosures rose 68% year-over-year (from 4,573 to 7,677) with Contra Costa (up 48% to 2,310), Alameda (up 64% to 1,681) and Santa Clara (up 120% to 1,347) leading the way with respect to volume.
Fourth quarter recorded foreclosures in San Francisco totaled 112, up 70% on a year-over-year basis but down 42% (80 homes) from the third quarter 2008. Think aforementioned state law (reducing the number of pipeline foreclosures) and last month's foreclosure moratorium by Fannie Mae and Freddie Mac (which was extended through January 31).
Most of the loans that went into default last quarter were originated between October 2005 and January 2007 [versus October 2005 to February 2007 last quarter]. The median age was 29 months, up from 21 months a year earlier.
We continue to move from those who were simply undercapitalized to begin with to those who had a bigger cushion in the bank.
∙ Temporary Drop in California Foreclosure Activity [DataQuick]
∙ Actual San Francisco Foreclosures Up 36% QOQ (191% YOY) [SocketSite]
The 8 Washington Development Website: New And Improved!
As a tipster notes, Pacific Waterfront Partners’ website for the development of 8 Washington (and San Francisco’s Seawall Lot 351) has been updated to include a couple of snazzy new renderings of the proposed SOM design (the faux-French design is no longer) and a copy of the developers' RFP (big but worth a gander for design wonks).
As proposed, up to 170 residential units over ground floor retail and restaurants, up to 420 parking spaces, and 27,900 square feet of public open space not including a new recreation club and tennis courts.
∙ 8 Washington Development Website [8washington.com]
∙ Cosmic Development Karma For San Francisco's Seawall Lot 351? [SocketSite]
∙ SWL 351 And The Proposed 8 Washington Street Project: Port Hearing [SocketSite]
∙ The SocketSite Scoop On The 8 Washington Street Project [SocketSite]
Just Under $900,000 Originally, Asking Just Under $800,000 Today
Asking just under $900,000 (not including upgrades) when the sales office first opened (acording to a plugged-in Infinity resident). Asking just under $900,000 ($885,000) as a resale last month (and subsequently reduced down to $849,000). Asking just under $800,000 ($799,000) today for 301 Main Street #9E at Infinity.
∙ Listing: 301 Main #9E (2/2) - $799,000 [MLS] [Climb]
∙ Another Infinity Resale (#9E) Within Those "Restricted" Two Years [SocketSite]
∙ Infinity Sales Update: New Contracts Up But Driven By Discounts [SocketSite]
January 27, 2009
SocketSite’s Residential Real Estate Outlook For 2009
We currently see across the board weakness in San Francisco’s residential real estate market throughout 2009 as economic woes compound the impact of tighter credit markets and a shift in market psychology.
Downturns in residential real estate have traditionally been triggered by a downturn in either the local or national economy. The reality which we’ve foreshadowed for quite some time is that the majority of the current market weakness in San Francisco, the Bay Area, and beyond has been driven by a contraction in the credit markets (the deflation of a credit bubble) and a recent shift in market psychology (the deflation of a speculative bubble). The real impact of a weakening economy is yet to come.
With an economy that generally lags the financial markets by nine to twelve months, the full brunt of October’s melt-down won’t be felt for at least another six months. And we expect to see continued weakness in both consumer and corporate spending over at least the next couple of quarters which will further depress corporate earnings and likely lead to additional layoffs and stoke the real real estate killer, unemployment.
With no discernable recovery in sight, we expect the financial market’s destruction of wealth both real (investments) and potential (options) to continue to drag down the San Francisco residential market throughout 2009, and to weigh particularly heavy on the luxury market.
Historically low interest rates will continue to benefit those who buy, but we don’t see rates alone significantly driving demand in San Francisco, or at least not offsetting the decrease in demand due to stricter lending standards and the loss in wealth. And the supply and absorption of new inventory will continue to put downward pressure on housing throughout the city, and not just District 9 as a limited number of active buyers are drawn from other parts of the city by unemotional (well, for the most part...) developer price cuts.
We believe the real estate flight to quality we called two years ago, and up until recently provided support to the upper end of the market, is waning. And value (versus growth) is the new darling of the ball. Oh, and that rents in San Francisco will fall (further challenging values on a fundamental basis).
Our outlook has nothing to do with emotion (other than with respect to acknowledging the psychological shift in the market). And it’s not to suggest that we don’t see any opportunities, especially when it comes to adding real value. It’s simply perspective to help manage expectations and actions (be it in buying, selling, renting or staying put).
And yes, while we are currently bearish on the market in the near-term, we’ll be the first to point out the real bullish signs. As defined by analysts, not sales agents or the industry.
November S&P/Case-Shiller: San Francisco MSA Down, Rate Levels
According to the November 2008 S&P/Case-Shiller Home Price Index (pdf), single-family home prices in the San Francisco MSA fell 3.0% from October ’08 to November '08 and are down 30.8% year-over-year (down 31% in October). For the broader 10-City composite (CSXR), year-over-year price growth is down 19.1% (having fallen 2.2% from October).
All 20 metro areas, and the two composites, posted their third consecutive monthly decline. In addition, eight of the MSAs posted their largest monthly decline on record – Atlanta, Boston, Charlotte, Chicago, Dallas, New York, Portland and Seattle. Although in decline over the past few years, some of these regions have out-performed on a relative basis, when compared to the national average. It is clear, however, that the decline in home prices is affecting all regions regardless of geography or employment opportunities.
Condo values in the San Francisco MSA also continued their decline falling 2.7% from October ’08 to November '08, down 19.2% on a year-over-year basis and down 22.0% from an October 2005 high.
And San Francisco MSA single-family home prices once again fell across all three price tiers.
The bottom third (under $342,467 at the time of acquisition) fell 2.2% from October to November (down 40.2% YOY); the middle third fell 1.6% from October to November (down 26.9% YOY); and the top third (over $591,729 at the time of acquisition) fell 1.9% from October to November (down 14.6% YOY).
According to the Index, single-family home values for the bottom third of the market in the San Francisco MSA have retreated to December 2000 levels, the middle third has returned to February 2003 levels, and the top third has fallen to June 2004 levels.
The standard SocketSite S&P/Case-Shiller footnote: The S&P/Case-Shiller home price indices include San Francisco, San Mateo, Marin, Contra Costa, and Alameda in the "San Francisco" index (i.e., the greater MSA) and are imperfect in factoring out changes in property values due to improvements versus actual market appreciation (although they try their best).
January 26, 2009
123 Laidley: Same Sales Flair Now Available For Rent (And Analysis)
And now that we have an idea of potential income (or at least a ceiling), it’s interesting context for both the sale in 2003 ($1,042,500) as well as this past October's asking price ($1,700,000).
JustQuotes: Remember That "Positive" Sales Surprise? Surprise!
"Fannie Mae, the largest source of home-loan money in the U.S., said it will need to tap as much as $16 billion in emergency funds from the U.S. Treasury Department to stay afloat as deterioration in the housing market persists.
Fannie’s planned request, announced today, follows Freddie Mac, which said Jan. 23 that it will need as much as $35 billion more in federal aid. Unprecedented mortgage losses drove the net worth of both companies below zero last quarter, they said in separate securities filings."
∙ Fannie to Tap U.S. for as Much as $16 Billion in Aid [Bloomberg]
∙ U.S. Existing Home Sales Rise on Record Price Slump [Bloomberg]
On The Market (But Not The Public Facing MLS): 651 27th Street
A single-family home over in Noe Valley, 651 27th Street was purchased for $1,200,000 in February of 2004, was extensively remodeled in 2005 (“Design award-winner of Calif Home and Design in 2006! New kitchen, bath, and master-suite.”), and sold for $1,500,000 in November of 2007.
∙ Listing: 651 27th Street (3/2) - $1,195,000 [Sue Bowie] [Prudential via Pacunion]
∙ Not Exactly A Slam Duncan: 1005 Duncan Returns (This Time Reduced) [SocketSite]
The Answer: To Comp (555 4th Street #521 Closes Escrow)
The sale of unit #521 at the Palms (555 4th Street) has closed escrow with a reported contract price of $690,000 (with all appliances intact). As we wrote in December:
In August the sale of unit #421 at The Palms (555 4th Street) closed escrow with a reported contract price or $700,000, purchased for $789,000 in 2006. The sale was "subject to lender’s approval," however, so perhaps not a "real" comp.
Then again, as a plugged-in tipster notes 555 4th Street #521 has been on the market for seven months and the price reduced five times. Now asking $699,000 after a month at $749,000, and once again, purchased for $789,000 in 2006.
We’re going with "to comp."
∙ To Comp Or Not To Comp, Perhaps We Have An Answer [SocketSite]
The Royal Towers Developer’s Unit Returns (1750 Taylor #1701)
As we wrote in our September 2007 scoop:
Originally the developer’s unit, #1701 in The Royal Towers (1750 Taylor) boasts panoramic bridge to bridge (and everything in between) views, as well as the only gas range in the building (yes, it’s good to be the developer). And the 3,300 square foot three bedroom, four and one-half bath coop is now on the market for $7,000,000 (and $3,354 a month).
In contract a month later and closed for what tax records would suggest was around $6.8M (assessed value of $6,854,000 in 2008), the rather incredible (and almost incomparable) 1750 Taylor #1701 is back on the market today and asking $6,500,000. And interstingly enough, it appears the gas range is no longer (but there's now a built-in BBQ). Sweet.
∙ Listing: 1750 Taylor #1701 (3/4.5) 3,300 sqft - $6,500,000 [MLS]
∙ The SocketSite Scoop On Two In The Royal Towers (1750 Taylor) [SocketSite]
∙ From Rumor To Reality: The Royal Towers #1201 Gets Listed [SocketSite]