August 7, 2013
The Actual Appreciation For A Single-Family San Francisco Home
Two months ago, the already remodeled and nicely kept single-family Forrest Hill home at 14 Ventura Avenue hit the market listed for $1,495,000 having been purchased for $1,680,000 in May of 2012, a year-over-year and "apples-to-apples" sale in the making.
As we noted at the time, since May of 2012 the oft-quoted "median price" for single-family homes in San Francisco has increased 36 percent while the median price in Forrest Hill’s District 4 is up nearly 32 percent, changes which are frequently misreported as representing changes in values.
Last week, the sale of 14 Ventura Avenue closed escrow with a reported contract price of $1,950,000, up 16 percent on an apples-to-apples basis since May of 2012, a little less than half the movement of the median.
And yes, having been listed for less than its 2012 purchase price, the sale was amazingly "over asking" and attracted a fair amount of attention, as the listing was designed to do.
First Published: August 7, 2013 8:00 AM
Comments from "Plugged In" Readers
Back in 2009 I thought the volume and viciousness of posts saying the market would continue to fall were a contra indicator. So many people praying for the market to fall so they could buy was in fact a bullish sign. For a long while, bears came up with all sorts of nonsense statistics and weird apples to prove that the market continued to decline. The bears have mostly gone away, clobbered by massive rises. This latest seems a vestige of some of that logic - Hah! here is a house that only went up 16 percent in a year while you fools think the market rose 32 percent.
Posted by: Unwarrantedinlaw at August 7, 2013 8:25 AM
In 2009 bears that had been clamoring for a sizable (some would call it major) correction for a few years were being proven right. The market stayed low until late 2011 at which time the overhanging inventory had been all churned away.
Now bears should have read the writing that was clearly on the wall: bear market over. What happened after that is nothing short of phenomenal and mostly regional.
Posted by: lol at August 7, 2013 8:52 AM
I think very few people are claiming that prices have risen as much as the median. In down markets the types of property selling drive down the median, and push it back up in good times.
But this only seems to get mentioned in up times. For example, there was very little talk of this "mix effect" 2009 through 2011 and into 1st half 2012.
Median per sq foot statistics were analysed closely over that time period on this site, but much less, or none, of it is seen now.
One wonders why..
20% down on this would have yielded a rate of return of over 100%.
[Editor’s Note: We’ve consistently talked about the affect of mix in both good times and bad. Or as we wrote at the end of 2009:
And for the last time (we can dream), while median sales price isn’t a bad measure of what people are buying, using changes in median sales price as a proxy for market appreciation (or depreciation) is a lousy if not misleading measure when mix is changing as well.
It’s not a matter of being "bearish" or "bullish," it’s simply a matter of understanding the metrics which are in play.
In terms of price per square foot trends, we still like them, but mix in the current market is wreaking havoc on them as well as fixers with expansion potential and demand for new classes of developed properties are skewing the stats.
In the end, it brings us right back to our apples-to-apples to comparisons which for some reason aren’t being characterized as being “cherry picked” now that they’re showing appreciation. And it leaves us scratching our heads on how a post about double digit annual appreciation becomes evidence of a bearish stance.]
Posted by: REpornaddict at August 7, 2013 9:31 AM
1148 Dolores is apples to apples 550k over what it couldn't sell for on the market in 2010, and 875k over what it sold for offmarket in 2011.
Posted by: Anowned at August 7, 2013 10:45 AM
Another apples to apples. 1466 Revere in central Bayview. Not next to public housing or corner liquor stores. Client bought for $350k in March 2012. Put about $5000 into various smaller repairs. Listed in June, closed in late July for $555,000. That is a cool 58.5% appreciation. One could infer from this that some of the dramatic increase in median is due to significant appreciation in the outer neighborhoods hardest hit in the crash. Bayview prices were hitting $800,000's in the peak and now seeing a number of sales in the mid $500's. I expect this trend to continue with no construction of entry level SFR's and similar houses in neighboring Bernal, Dog Patch regularly hitting 7 figures.
Posted by: johnbarnette at August 7, 2013 10:53 AM
444 30th Street has been a great Apple, as it has changed hands a number of times over the last decade with little work done:
Most recently it was sold for $1.28M in May 2011 and for $1.7M in June of this year for a 32% or 16% annual gain.
That seems about right to me.
Posted by: NoeValleyJim at August 7, 2013 9:43 PM
277 Chattanooga is another good apple in Noe:
May 06, 2013 Sold (Public Records) $2,107,000
Mar 28, 2012 Sold (Public Records) $1,708,000
20.9%/yr, not bad.
Posted by: NoeValleyJim at August 7, 2013 11:23 PM
and WHOSE stats are you using to come up with the 36% yoy???? I ask because if it is Case Shiller we won't find out what they think of "this" ^ market for another 3 months (actually, never since they don't even do the City let alone a neighborhood), so looking back on some 3 month old stat is meaningless. Further, we all know real estate is local - sometimes block to block, but most certainly neighborhood to neighborhood. To one commenters point above - Bayview which fell FAR more than most, if up far more than most. The same is true of SOMA/South Beach. For an example, look at what's happening in The Palms now. Yet one-bedrooms in the Marina only started catching fire in the past couple of months.
The bottom line - if you're in the market as either a buyer or seller, median prices as reported by anyone other than your own (or agent's) research is meaningless.
Oh, and where are the Facebook articles now that it is back to IPO prices? Kidding - I don't want to see them now any more than I did back then. Now the stock market as a whole, and interest rates, and employment.... those stories are more relevant. PS - I predict interest rates are going back down over the next few months.... not up like every fear monger website is trying to convince people of
[Editor’s Note: Case-Shiller doesn’t report changes in median price, it reports changes in actual value. The stats above were based on MLS data.
We’re glad you think "the stock market as a whole, and interest rates, and employment" are more relevant than "the Facebook effect," so do we. And that’s exactly, and consistently, what we’ve been telling people all along. Even before Facebook went public, rather than after the fact when the industry headlines suddenly dried up.]
Posted by: hangemhi at August 8, 2013 8:03 AM