CATEGORY ARCHIVE: Real Estate Economics

April 15, 2014

Two-Year Payout For Evicted Tenants Accelerated And Approved

Originally written to become operative within 120 days, the legislation which will require landlords in San Francisco who evoke the Ellis Act to pay their evicted tenants an upfront sum equal to the difference between their current rent and a market rate unit over the course of two years has been amended to become operative 60 days after enactment and the amended legislation was approved by the Board of Supervisors in its first reading this afternoon by a vote of 9 to 2.

As we first noted last month, any tenant who has not yet vacated their unit by the operative date of the ordinance shall be entitled to the full two-year subsidy, regardless of whether their eviction notice was served prior.

Assuming the legislation is passed in a second vote next week, it will be sent to the Mayor to sign, veto or ignore. The countdown to the operative date will start ticking once the Mayor returns the ordinance, signed or unsigned; a veto is overridden by the Board; or the Mayor ignores the ordinance for ten days.

Positioned as an act "to combat displacement" rather than to discourage use of the Ellis Act which is state law, expect the ordinance to be challenged in the courts after adoption.

Posted by socketadmin at 4:00 PM | Permalink | Comments (25) | (email story)

April 11, 2014

Proposed "Housing Balance" Ordinance Could Be Out Of Whack

Introduced by Supervisor Kim and co-sponsored by Supervisors Avalos, Campos and Mar, a proposed "Housing Balance" ordinance would require new developments of ten or more housing units to obtain special permission from the Planning Commission if the development would cause the overall ratio of affordable housing in Supervisorial District 6 to fall below 30 percent, as measured by the ratio of units constructed since 1993.

According to Kim, "Nothing in this legislation discourages development," but according to prominent developer Oz Erickson, chairman of the Emerald Fund, "the economics of trying to provide this ratio will eliminate the possibility of building any market rate housing."

Supervisorial District 6 includes Mid-Market, South of Market, Mission Bay, the Tenderloin and Treasure Island, and within which there are over 17,000 units of housing in the development pipeline, over a third of all the housing in the works in San Francisco.

Posted by socketadmin at 6:30 AM | Permalink | Comments (44) | (email story)

April 10, 2014

Mortgage Rates Tick Down, Demand Remains Down As Well

The average rate for a conforming 30-year mortgage ticked down from 4.41 to 4.34 percent over the past week and is 24 basis points below the three-year high rate of 4.58 percent recorded this past August.

Having averaged 6.67 percent since 1990, the average rate for a 30-year fixed mortgage was 3.43 percent at this time last year while the all-time low of 3.31 percent was recorded in November of 2012.

In terms of the rate for Jumbo loans, Wells Fargo is currently advertising a rate of 4.25 percent for mortgages over $625,500, a discount of 0.25 percentage points as compared to the 4.5 percent rate they're advertising for both regular conforming and super conforming loans over $417,000 in high cost areas like San Francisco.

And in terms of mortgage activity across the nation as we head into the spring homebuying season, mortgage application volume for home purchases is running 14 percent lower versus the same time last year according the Mortgage Bankers Association.

Posted by socketadmin at 8:00 AM | Permalink | Comments (1) | (email story)

April 7, 2014

The Descendants (And City) Fare Well In Presidio Heights

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Eighteen days ago, the Presidio Heights home at 3867 Jackson Street which had been owned by the granddaughter of Herbert and May Fleishhacker was listed for sale at $4,250,000. An "offers due" date was set for seven days later on March 28.

Officially in contract on March 29, the Trust sale of the 3,940 square foot home closed escrow today with a reported contract price of $5,125,000.

Having stayed within the family of Fleishhacker descendants since being built in 1936, the property tax bill for 3867 Jackson Street was $2,885 in 2012. The new tax bill for the property should be closer to $60,885 a year.

Posted by socketadmin at 5:00 PM | Permalink | Comments (6) | (email story)

April 2, 2014

The City Opts For New Office Tower Over More Housing

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The City's official Request For Proposals to develop a 550-foot tower with ground-floor retail and 15,000 square feet of open space on San Francisco's Transbay Block 5 has just been issued with an explicit note attached: "Proposals that include any amount of residential and/or hotel space will not be accepted."

While the Transbay Block bounded by Beale, Howard and Main was originally slated for a residential tower and townhomes, San Francisco's Office of Community Investment and Infrastructure has determined that "economic conditions create a strong preference for commercial development over residential and hotel development on Block 5."

In addition, "unforeseen circumstances" have required an unexpected configuration for the site and tower.

Posted by socketadmin at 4:45 PM | Permalink | Comments (5) | (email story)

March 26, 2014

Purchase Mortgage Activity Ticks Up, But Drops Year-Over-Year

The Mortgage Bankers Association's Purchase Index, a measure of mortgage loan application volume for home purchases across the country, ticked up 3 percent over the past week. At the same time, the Purchase Index fell two points on a year-over-year basis and application volume is 17 percent lower than during the same week last year.

Having characterized it as a sign of "seller confidence" and "an indication of a strong early beginning to the spring home buying season," last week the National Association of Realtors revealed that the number of homes for sale across the country is currently 10 percent higher than at the same time last year, as we first reported last month.

Posted by socketadmin at 7:30 AM | Permalink | Comments (0) | (email story)

March 24, 2014

San Francisco's "Twitter Tax Break" Zone

While the so-called "Twitter Tax Break" was created with Twitter specifically in mind, and the impact of which Supervisor Campos is formally calling into question, the defined area within which businesses can claim the payroll tax exclusion extends well beyond the Market Square building between Ninth and Tenth in which Twitter is headquartered.

In fact, the exclusion area includes 73 office buildings with 3.3 million square feet of office space, both Mid-Market and within the Tenderloin (click the map to enlarge).

Posted by socketadmin at 8:30 AM | Permalink | Comments (21) | (email story)

March 21, 2014

Supervisor Calls For Formal Review Of The "Twitter Tax Break"

1355 Market Street

With chants of "Twitter you’re no good, pay your taxes like you should" emanating from the lips of protesters in front of San Francisco's City Hall this week, Supervisor David Campos has requested a formal hearing to review the impact that the 2011 legislation which created the Mid-Market tax break, commonly known as the "Twitter Tax Break," has had on the city.

The focus of the proposed hearing includes "a discussion on the amount of the tax break, its impact on commercial rents, including rents for non-profit tenants, as well as its impact on residential housing prices and tenant displacement in San Francisco, and a discussion on the impacts of the City’s decision not to collect Stock Based Compensation."

Originally estimated to cost the city an estimated $22 million in foregone payroll tax revenue, recent estimates put the cost at closer to $55 million. But those "costs" don't account for any of the benefits associated with having kept Twitter and other companies in the city.

Twitter had 350 employees at the time the tax break was passed, a tax break which Supervisor Campos opposed. Twitter now employes closer to 2,500.

And since April of 2011 when the Central Market/Tenderloin Payroll Expense Tax Exclusion became effective, investment in San Francisco's Mid-Market area has exploded and overall employment in San Francisco has increased by 52,800.

Posted by socketadmin at 7:00 PM | Permalink | Comments (42) | (email story)

San Francisco Employment Within Reach Of All-Time High

With the number of San Francisco residents with jobs having increased by 3,400 since the beginning of the year, the unemployment rate in San Francisco has dropped to 5.2 percent and employment in the city is within 1,000 people of San Francisco's all-time high.

With a current labor force of 490,100, the number of employed San Francisco residents now totals 464,600, an increase of 11,500 residents with jobs over the past year and within 900 of the 465,500 people employed at December 2000's dot-com peak when the unemployment rate in the city measured 3 percent.

The unemployment rate in San Francisco topped out at a little over 10 percent in January of 2010 when 56,900 fewer San Francisco residents were employed than today.

The unemployment rates in Marin and San Mateo ticked up 0.1 percentage points to 4.8 percent and 5.0 percent respectively in February while the unadjusted unemployment rate for California was unchanged at 8.5 percent as a 70,300 person increase in the labor force was met with 74,700 new jobs.

Posted by socketadmin at 9:40 AM | Permalink | Comments (0) | (email story)

March 20, 2014

Mortgage Rates Tick Down, But Likely Headed Back Up This Week

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The average rate for a conforming 30-year mortgage ticked down from 4.37 to 4.32 percent over the past week and remains 26 basis points below the 34-month high rate of 4.58 percent recorded this past August. That being said, the rate on the 10-year treasury increased around 10 basis points following the Fed’s announcement of another round of stimulus cuts yesterday, a move which is likely to drive mortgage rates up this week.

Having averaged 6.71 percent since 1990, the average rate for a 30-year fixed mortgage was 3.54 percent at this time last year while the all-time low of 3.31 percent was recorded in November of 2012.

In terms of the rate for Jumbo loans, Wells Fargo is currently advertising a rate of 4.250 percent for mortgages over $625,500, a discount of 0.375 percentage points as compared to the 4.625 percent rate they're advertising for both regular conforming and super conforming loans over $417,000 in high cost areas like San Francisco.

Posted by socketadmin at 7:45 AM | Permalink | Comments (0) | (email story)

March 17, 2014

A Near Meaningless Analysis Of Ellis Act Profiteering That's Likely To Make The News

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At the request of Supervisor Campos and based on "a random sample of 15 properties" as outlined above, San Francisco's Budget and Legislative Analyst has just completed an analysis "on the level of profit landlords have made when they sell a building after evicting tenants using the Ellis Act over the last ten years."

Based on the data collected by the Budget and Legislative Analyst, the average level of profit owners earned selling their properties after Ellis Act evictions was $1,545,949 or 116 percent. Inflation-adjusted profits ranged from -$278 to $4,785,522 for the properties reviewed. The median period between sales for these properties was 3.4 years.

The fatal flaw(s) in the analysis with respect to calculating the average profit:

This return rate does not account for any owner expenditures for improvements made to the properties.

And in addition, "the calculations of profit are not adjusted for the impact of elapsed time between the original purchase of the property and post-eviction sale."

Analysis of Profits of Ellis Act Eviction Property Sales [sfbos.org]

Posted by socketadmin at 3:00 PM | Permalink | Comments (43) | (email story)

Number Of Homes For Sale In SF Hits New Low, But Ticking Up

Having closed the gap in the fourth quarter of 2013, the number of single-family homes and condominiums listed for sale in San Francisco (389) is back to being lower on a year-over-year basis, down 21 percent and a new low in the absolute for the Ides of March.

In fact, the number of homes currently listed for sale in San Francisco is roughly a quarter the number which were listed at the same time in 2009 (1,648), the year in which spring inventory levels last peaked.

That being said, the number of new listings has outpaced the number of sales over the past two months, inventory levels are ticking up, and the number of new listings last week was nearly three times the number listed over the same week a year before. Inventory levels in San Francisco will typically build from the beginning of the year through June or July.

Posted by socketadmin at 12:30 PM | Permalink | Comments (13) | (email story)

342 Furnished Square Feet In San Francisco

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Measuring 342 square feet, the Nob Hill studio TIC number Two at 1615 Jones Street between Broadway and Pacific has just been listed for $385,000 or $1,126 per square foot.

The list price does, however, include all the furnishings. And according to the seller, "two corporate rental agencies have expressed interest in renting property for $3250 a month on renewable 3 month contracts."

We'll let you do the math and forecasting for month number four and one step beyond.

∙ Listing: 1615 Jones Street #2 (0/1) 342 sqft - $385,000 (TIC) [billwygant.com]

Posted by socketadmin at 8:00 AM | Permalink | Comments (6) | (email story)

March 12, 2014

Mortgage Application Volume Dips, Down 17 Percent Year-Over-Year

The Mortgage Bankers Association's Purchase Index, a measure of mortgage loan application volume for home purchases across the country, dropped 1 percent on a seasonally adjusted basis last week. On an unadjusted basis, the index increased 1 percent but remains down 17 percent year-over-year.

While a lack of inventory continues to be fingered for the slowdown in applications, according to the National Association of Realtors' accounting, inventory levels of existing-homes for sale are up 10.9 percent year-over-year.

Posted by socketadmin at 7:30 AM | Permalink | Comments (12) | (email story)

March 7, 2014

San Francisco Employment Hits Second Highest Level In History

Having dropped to 4.8 percent in December, its first time below 5 percent since early 2008, the unemployment rate in San Francisco ticked back up to 5.3 percent in January.

The up-tick in San Francisco’s unemployment rate, however, was driven by a 4,100 person increase in the labor force and the number of employed in the city actually increased by 1,400 from December to January and is now at its second highest point in history.

With a current labor force of 488,300, the number of employed residents in San Francisco now totals 462,600, an increase of 14,000 people with jobs over the past year and within 2,900 of the 465,500 people employed at December 2000's dot-com peak when the unemployment rate measured 3 percent.

The unemployment rate in San Francisco topped out at a little over 10 percent in January of 2010 when 54,900 fewer San Francisco residents were employed than today.

The unemployment rates in Marin and San Mateo ticked up to 4.7 percent and 4.9 percent respectively in January while the unadjusted unemployment rate for California jumped from 7.9 to 8.5 percent as 68,100 jobs were lost across the state.

Posted by socketadmin at 9:05 AM | Permalink | Comments (37) | (email story)

February 27, 2014

Fixed Mortgage Rates Tick Up, Jumbos Remain Relatively Cheap

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The average rate for a conforming 30-year mortgage ticked up from 4.33 to 4.37 percent over the past week and is within 21 basis points of the 33-month high rate of 4.58 percent recorded this past August.

The average rate for a 30-year fixed mortgage was 3.51 percent at this time last year while the all-time low of 3.31 percent was recorded in November of 2012.

In terms of the rate for Jumbo loans, Wells Fargo is currently advertising a rate of 4.125 percent for mortgages over $625,500, a discount of 0.375 percentage points as compared to the 4.5 percent rate they're advertising for both regular conforming and super conforming loans over $417,000 in high cost areas like San Francisco.

Posted by socketadmin at 7:45 AM | Permalink | Comments (2) | (email story)

February 26, 2014

Home Loan Purchase Activity At Lowest Level Since 1995

On a seasonally adjusted basis, the Mortgage Bankers Association's Purchase Index, a measure of mortgage loan application volume for home purchases in the U.S., has fallen to its lowest level since 1995. On an unadjusted basis, the index is down 15 percent year-over-year having ticked up a nominal 0.1 percent over the past week.

To quote MBA's Chief Economist, Mike Fratantoni: "Purchase applications were little changed on an unadjusted basis last week, but this is the time of a year we would expect a significant pickup in purchase activity, and we are not yet seeing it."

While a lack of inventory is certain to be fingered for the slowdown in applications, according to the National Association of Realtors' own data, inventory levels of existing-homes for sale are up 10.9 percent on a year-over-year basis.

Posted by socketadmin at 10:15 AM | Permalink | Comments (8) | (email story)

February 25, 2014

A Couple Of Interesting Notes For Tomorrow's Home Price Reports

A couple of things to keep in mind when reading tomorrow's reports of home prices in San Francisco having gained 22.6 percent in 2013.

The rate of appreciation has been on the decline for the past nine months and 98 percent of 2013's gains were recorded in the first nine months of the year. In fact, the price index for single-family homes gained less than half a percent in the last quarter of 2013.

And with respect to San Francisco index for condo prices which gained 24.6 percent in 2013, 100 percent of the gain was recorded in the first nine months of the year. The condo price index actually slipped a nominal 0.3 percent in the last quarter of 2013.

Posted by socketadmin at 7:00 PM | Permalink | (email story)

February 21, 2014

Plans For A Sixty-Foot Nob Hill Building On An Eighty-Foot Lot

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Currently a parking lot with space for twenty-two cars, half of which are designated for car sharing services, a six-story building is proposed to rise at 832 Sutter Street.

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The proposed Nob Hill building includes 20 dwelling units over a 400 square foot retail space. And as designed, the development would not include any parking, for which it will need a waiver from the city as five spaces are required by code.

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Originally designed to rise 80 feet, the height for which the parcel is zoned and which would have yielded 27 units of housing, neighborhood opposition to the 80-foot project when first proposed in 2008 is being fingered for the development's downsizing today.

And to be clear, the majority of the now five-year-old opposition was related to the building's impact on neighborhood parking rather than the building's height per se.

As the six-story building would look in context with the rest of the Sutter Street block (click the rendering to enlarge):

Posted by socketadmin at 4:15 PM | Permalink | Comments (30) | (email story)

Existing-Home Sales Drop Despite Double-Digit Increase In Inventory

A year ago today, the chief economist for the National Association of Realtors, Lawrence Yun, cited "plenty of demand but insufficient inventory" as the reason for a lackluster up-tick in home sales across the country.

While the number of existing homes on the market is now 10.9 percent higher on a year-over-year basis, existing-home sales last month were 5.1 percent lower versus the year before, their lowest level in a year-and-a-half on a seasonally adjusted basis.

Continuing to cite limited inventory as a reason for the decline (despite the double-digit increase in the number of homes for sale), increasing interest rates, higher prices, and disruptive weather patterns also shared the blame for the slowdown this time around.

Existing home sales in the West were down 13.7 percent in January, year-over-year.

Posted by socketadmin at 2:00 PM | Permalink | Comments (31) | (email story)

Impact Of Waterfront Ballot Initiative Slated For Widespread Review

Sponsored by Supervisor Wiener, the Port of San Francisco, Planning Department, City Administrator, Controller, Office of Economic and Workforce Development, Municipal Transportation Agency, and Mayor’s Office of Housing and Community Development will all have a chance to report on the impact of adopting the Waterfront Height Limit Right to Vote Act with respect to the City's future housing, transportation, and open space needs.

The reports may include analysis of:

(1) Any fiscal impacts of the Initiative, should it pass, on the City at large as well as the Port specifically, including the Port’s ability to fund required capital improvements;
(2) The consistency of the measure with the City’s General Plan, including Housing Element goals for meeting the City's housing needs;
(3) Any impacts on the City’s ability to meet its housing production goals, including affordable housing and generation of impact fees for affordable housing;
(4) Whether individual affordable housing projects seeking a height increase would have to be placed on the ballot, and if so, the impact of that requirement on the cost of producing affordable housing;
(5) The effect of the Initiative on the use of land; its impact on the availability, location, and affordability of housing, and the ability of the City to meet its fair share of regional housing needs;
(6) The impact of the Initiative on the cost of and funding for infrastructure of all types, including, but not limited to, transportation, schools, parks, sewers, and open space;
(7) The impact of the Initiative on the City’s ability to attract and retain business and employment;
(8) A description of waterfront development projects currently in the planning process that could be affected by the Initiative, including a history of community planning processes and state legislation relating to those projects;
(9) A list of past projects that would have had to be placed on the ballot had the Initiative been in place at the time;
(10) The impact of the Initiative on planned waterfront development projects, including the impact of a voter approval requirement on the nature, design, and costs of such projects (including impacts on the cost of producing housing and affordable housing) and on the community planning process, and;
(11) The consistency of the measure with the City’s obligations under the Burton Act and related law;
(12) Other subjects that the Departments deem relevant to a full analysis and understanding of the Initiative.

Assuming Wiener's resolution authorizing the review is adopted by San Francisco’s Board of Supervisors next week, the departments will be asked to produce their reports by March 7.

And per the terms of the resolution, the reports "shall include only objective, impartial information and analysis, shall not recommend changes to the Initiative, and shall not make a recommendation as to whether the voters should adopt the Initiative."

Posted by socketadmin at 8:45 AM | Permalink | Comments (14) | (email story)

611 Tax-Defaulted Properties In San Francisco Facing Public Auction

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While mostly timeshares but including houses, condos and undeveloped parcels of land, including the Telegraph Hill parcel facing the Filbert Street steps outlined above, there are currently over 600 properties in San Francisco which have been in a tax-defaulted state for over five years and which the City's Tax Collector would like to sell at public auction.

With the backing of its Budget and Finance Committee, next week San Francisco's Board of Supervisors is poised to authorize the sale which would occur in May.

The list of all 611 properties which could be sold:

Posted by socketadmin at 7:30 AM | Permalink | Comments (11) | (email story)

February 20, 2014

As Mortgage Rates Tick Up, Applications And Home Sales Are Falling

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The average rate for a conforming 30-year mortgage ticked up from 4.28 to 4.33 percent over the past week and is now within 25 basis points of the two-year high of 4.58 percent recorded this past August, one percentage point and change above the all-time low of 3.31 percent recorded in November 2012.

The average 30-year fixed mortgage rate was 3.56 percent at this time last year, a little over half the 6.71 percent it has averaged since 1990. The fixed 30-year mortgage rate has averaged 8.61 percent over the past 40 years.

As we reported yesterday, despite an increase in the number of existing homes listed for sale in U.S. on a year-over-year basis, applications for mortgages to purchase a home are down 17 percent and the National Association of Realtors Pending Home Sales Index has fallen to its lowest level since 2011, down 8.8 percent year-over-year.

Home sales in San Francisco were down 10.2 percent on a year-over-year basis in January.

Posted by socketadmin at 11:30 AM | Permalink | Comments (15) | (email story)

A Hard Lesson For CA Teachers: $44M Lost On 8 Washington Project

A public records request has uncovered that The California State Teachers Retirement System (CalSTRS) invested $45 million and has lost $44 million on the failed waterfront development known as 8 Washington.

From CalSTRS' statement in response to an inquiry from SF Weekly with respect to how their millions were spent on the project which never broke ground: "Disclosure of the requested information prior to the completion of this investment is likely to cause substantial harm to CalSTRS' competitive position."

In addition to the development's defeat at the ballot box, a judge has since ruled that the State Lands Committee improperly exempted the project from additional environmental review. As such, simply lowering the height of the proposed project to meet existing height limits for the parcels won't be enough to move forward with the development.

Planning Approves 8 Washington Street Development As Proposed [SocketSite]
Voters Reject Measures B/C And Designs For 8 Washington Street [SocketSite]
The Fate Of The 8 Washington Street Site: What Happens Now? [SocketSite]
State Teachers' Pension Fund Blew $44 Million on the 8 Washington Project [SFWeekly]

Posted by socketadmin at 8:00 AM | Permalink | Comments (27) | (email story)

February 19, 2014

Purchase Loan Activity At Lowest Level Since September 2011

The Mortgage Bankers Association's Purchase Index, a measure of mortgage loan application volume for home purchases in the U.S., has fallen to its lowest level since September of 2011 on a seasonally adjusted basis. On a non-adjusted basis, the Purchase Index is down 17 percent year-over-year, as it was at the beginning of February.

As we noted two weeks ago, while a lack of inventory is certain to be blamed for holding back applications, according to the National Association of Realtors' own data, inventory levels are up on a year-over-year basis, with 1.86 million existing homes on the market at the end of December versus 1.82 million homes on the market at the end of 2012.

Posted by socketadmin at 3:15 PM | Permalink | Comments (2) | (email story)

February 14, 2014

Recommendation To Crackdown On Illegal Rentals Goes Missing

As we first reported last month, in response to an executive directive from Mayor Ed Lee, a working group co-chaired by the directors of San Francisco's Planning Department and Department of Building Inspection drafted a list of recommendations to accelerate the production of new housing in San Francisco and protect the city's existing housing stock.

With the estimated number of existing dwelling units in the city currently used for short-term occupancy versus their legal use as permanent housing running as high as 5,000 units, one of the draft recommendations was to crackdown on the enforcement of illegally renting an apartment for less than 30 days in San Francisco.

As we wrote at the time:

While a crackdown on illegal short-term rentals could quickly move the needle with respect to available housing supply and affordability, it would likely put the Mayor at odds with ["sharing" sites such as] airbnb, a site that he has championed. It will be interesting to see which side he favors.

The official list of recommendations has since been put in ink and sent to the Mayor by way of DBI Director Tom Hui and Planning Director John Rahaim. Missing from the official list, the working group's recommendation to crackdown on illegal short-term rentals and the draft list has been removed from the Planning Department's website.

Executive Directive 13-01: Housing Production and Preservation [sfplanning.org]
The Recommendations For Accelerating Housing Production In SF [SocketSite]

Posted by socketadmin at 3:00 PM | Permalink | Comments (48) | (email story)

February 12, 2014

Economists: Formula Retail Controls Could Hurt Consumers/Economy

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Prepared in response to proposed legislation which would further expand formula retail controls in San Francisco, San Francisco's Office of Economic Analysis (OEA) has concluded that formula retail controls could actually hurt consumers and the local economy.

Research by the OEA suggests that local retailers charge prices that average 17% more than chain stores. From their full report:

"Restricting chain stores will therefore likely increase the average cost of retail distribution in the city. Higher costs usually have two effects on markets: higher prices and reduced sales. Businesses pass their higher costs on to consumers in the form of higher prices, who react by spending less in the local economy.
Higher prices harm consumers, and reductions in sales harm other businesses."

Anecdotal evidence does suggest, however, that non-formula retailers may spend up to 9.5% more within the local economy than chain stores on business services. That being said, "the economic cost of higher prices on local consumers outweighs the potential benefit of greater local spending by non-formula retailers, and the net local spending impact is somewhat negative."

The OEA was unable to quantify or account for the impact of formula retail on perceptions of "neighborhood quality," the economic value of which is priced into neighborhood rents and housing values.

In the end, the OEA concludes that "expanding the definition of formula retail in the city will not expand the local economy;" a new chain store "could benefit the economy without benefitting existing [local] businesses by offering lower prices to consumers;" and that Planning decisions with respect to allowing or blocking formula retailers should "explicitly consider the views of residents and whether a proposed store could prevent blight."

Expanding Formula Retail Controls: Economic Impact Report [sfcontroller.org]
The Formula For Success Or Protectionism In San Francisco? [SocketSite]

Posted by socketadmin at 4:30 PM | Permalink | Comments (36) | (email story)

Tenant Right Of First Refusal And Assistance Fund Floated

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Board of Supervisors President David Chiu is calling for legislation that would not only give tenants in San Francisco the right of first refusal to purchase their building "at fair market value" should their landlord want to sell, but would also increase the City's Small Site Acquisition Fund to assist said tenants in their purchases.

"We need to do more to put housing in the hands of San Francisco tenants who are in danger of being evicted by speculative investors," said Supervisor Chiu.

The parameters for the proposed legislation have yet to be defined, but similar legislation in Washington, D.C. and Baltimore allows tenants to match sale terms offered by another party. Expect the proposed legislation in San Francisco to include the option for tenants to allow a designated affordable housing nonprofit to act on their right of first refusal as well.

Posted by socketadmin at 1:30 PM | Permalink | Comments (46) | (email story)

6,000 Housing Units Under Construction In San Francisco, Another 44,000 Units In The Pipeline

While fewer than 2,000 new housing units and 140,000 square feet of commercial space in San Francisco was completed in 2013, there were roughly 6,000 housing units and 2.8 million square feet of commercial space under construction at the end of the year, units which will hit the market over the next year or two.

Permits for another 6,600 housing units to be built in San Francisco have either been approved or requested, units which should start hitting the market in two to four years along with another 4 million square feet of commercial space.

In addition to the nearly 12,600 housing units which are either under construction, ready to break ground or awaiting a permit, another 27,300 units have been approved to be built across the city. The approved projects, however, include 10,500 units by Candlestick, 7,800 units on Treasure Island and 5,680 units in Park-Merced, projects which still have overall timelines measured in decades, not years.

And with proposed plans for an additional 10,500 housing units under the Planning Department’s review, San Francisco's Housing Pipeline currently totals over 50,000 units. For context, a total of roughly 12,000 housing units have been built in San Francisco since 2007, a total of 26,000 new units since 2000.

With respect to commercial development in San Francisco, in addition to the nearly 6.6 million square feet under construction, ready to break ground or awaiting a permit, another 5.9 million square feet of commercial development has been approved and plans for an additional 3.5 million square feet are being reviewed.

A breakdown of the residential developments in the works across San Francisco by neighborhood, not including those at Candlestick, Park-Merced or Treasure Island (click the chart to enlarge):

San Francisco Pipeline Report: Fourth Quarter 2013 [sf-planning.org]
San Francisco's Housing Pipeline Breaks The 50,000 Unit Mark [SocketSite]

Posted by socketadmin at 11:15 AM | Permalink | Comments (23) | (email story)

February 11, 2014

Bay Area Tops List Of California Incomes, San Francisco Ranks Sixth

Based on 2012 tax returns, the median income for joint filers in California was $70,938, an increase of 4.1 percent over 2011 according to the Franchise Tax Board.

The California county with the highest median income based on joint returns was Marin ($127,471), followed by San Mateo ($109,827), Santa Clara ($109,309), Alameda ($93,557), and Contra Costa ($93,367).

San Francisco ranked 6th with a median income of $87,446 based on joint returns, up 7.7 percent versus 2011 and the largest percentage gain of any county in California.

In terms of individual returns, San Francisco County ranked 4th in California with a median income of $47,655, just above Contra Costa ($47,140) and behind Santa Clara ($49,921), San Mateo ($52,025), and Marin ($54,894). The statewide median for individual returns was $35,910.

Posted by socketadmin at 11:30 AM | Permalink | Comments (53) | (email story)

February 6, 2014

Mortgage Rates Continue To Fall Along With Home Sales

With weaker housing data continuing to weigh on the market, the average rate for a conforming 30-year mortgage fell from 4.32 to 4.23 percent over the past week and is now 35 basis points below the 4.58 percent two-year high rate recorded this past August and within one percentage point of the all-time low of 3.31 percent recorded in November 2012.

The average 30-year fixed mortgage rate was 3.53 percent at this time last year, a little over half the 6.71 percent it has averaged since 1990. The fixed 30-year mortgage rate has averaged 8.61 percent over the past 40 years.

As we reported yesterday, despite an increase in the number of existing homes listed for sale in U.S. on a year-over-year basis, applications for mortgages to purchase a home are down 17 percent and the National Association of Realtors Pending Home Sales Index has fallen to its lowest level since 2011, down 8.8 percent year-over-year.

Posted by socketadmin at 9:45 AM | Permalink | Comments (30) | (email story)

February 5, 2014

More Homes On The Market, But Loan Applications Are Down

While the application volume for home purchase loans in the U.S. increased 14 percent last week versus the week before, a typical seasonal move, the volume is down 17 percent year-over-year according to the Mortgage Bankers Association's latest survey.

While a lack of inventory is certain to be blamed for holding back applications, according to the National Association of Realtors' own data, inventory levels are actually up on a year-over-year basis, with 1.86 million existing homes on the market at the end of December versus 1.82 million homes on the market at the end of 2012.

Posted by socketadmin at 8:45 AM | Permalink | Comments (0) | (email story)

February 4, 2014

Two Year Subsidy For Evicted Tenants In San Francisco Proposed

Supervisor David Campos will introduce legislation this afternoon that would require landlords in San Francisco who evoke the Ellis Act to pay evicted tenants the difference between their current rent and a comparable market rate unit, times twenty-four.

Currently, the city requires building owners to pay each tenant evicted under the Ellis Act $5,261 in relocation fees, with a cap of $15,783 per unit. Disabled or elderly tenants receive an extra $3,508. The amounts are adjusted annually for inflation, and half must be paid at the time an eviction notice is served, the other half once the tenant moves out.
Under Campos' proposal, the difference between a unit's monthly rent and a "comparable" unit would be determined by the city controller's office, multiplied by 24 months and divided among the evicted tenants. An evicted tenant would receive either the $5,261 or the difference in rent, whichever is more.

Likely to be challenged in the courts should it pass, Campos is positioning the proposed legislation as an act "to combat displacement" rather than to discourage the use of the Ellis Act which is state law.

Posted by socketadmin at 8:30 AM | Permalink | Comments (128) | (email story)

January 30, 2014

The Recommendations For Accelerating Housing Production In SF

Responding to an executive directive from Mayor Lee last month, a working group co-chaired by the directors of San Francisco’s Planning Department and Department of Building Inspection has drafted a list of recommendations to accelerate the production of new housing in San Francisco and protect the city's existing housing stock.

The working group’s thirty-six recommendations are a mix of short-term, mid-term, and long-term ideas and include the priority processing for projects with at least 20% on-site affordable housing; encouraging maximum permitted density for development sites; requiring property owners to justify the removal, rather than legalization, of existing illegal units in the city; lifting the 375 unit cap on the production of micro-units; and building code amendments to facilitate building up to seven stories in height.

With the estimated number of existing dwelling units in the city currently used for short-term occupancy versus their legal use as conventional, permanent housing running as high as 5,000 units thanks to "sharing" sites such as airbnb, another recommendation of the working group is to crackdown on the enforcement of illegally renting an apartment for less than 30 days in San Francisco.

While a crackdown on illegal short-term rentals could quickly move the needle with respect to available housing supply and affordability, it would likely put the Mayor at odds with airbnb, a site that he has championed. It will be interesting to see which side he favors.

The draft memo which details all of the working group's recommendations to date: Executive Directive 13-01 Recommendations.

Posted by socketadmin at 3:30 PM | Permalink | Comments (54) | (email story)

Mortgage Rates Dip On Weakness While The Fed Cuts On Strength

The average rate for a conforming 30-year mortgage ticked down from 4.39 to 4.32 percent over the past week, 26 basis points below the 4.58 percent two-year high rate recorded this past August but 1.01 percentage points higher than the all-time low of 3.31 percent in November 2012.

The average 30-year fixed mortgage rate was 3.53 percent at this time last year, a little over half the 6.71 percent it has averaged since 1990. The fixed 30-year mortgage rate has averaged 8.61 percent over the past 40 years.

While the move in rates has been attributed to weaker housing data, yesterday the Federal Reserve announced another $10 billion reduction in their monthly bond purchase program based on "underlying strength in the broader economy."

Posted by socketadmin at 9:15 AM | Permalink | Comments (0) | (email story)

January 24, 2014

San Francisco Unemployment Rate Under 5%, First Time Since 2008

The unemployment rate in San Francisco fell from 5.2 percent in November to 4.8 percent in December, the first time the unemployment rate in the city has been below 5 percent since May of 2008 when 432,700 people out of a labor force of 454,100 were employed.

With a current labor force of 484,200, the number of employed residents in San Francisco now totals 461,200, up by 13,400 workers over the past year and within 4,300 of the 465,500 people employed at December 2000's dot-com peak when the unemployment rate measured 3 percent. The unemployment rate in San Francisco topped out at a little over 10 percent in January of 2010 when 53,500 fewer San Francisco residents were employed than today.

The unemployment rates in Marin and San Mateo are down to 4.2 percent and 4.6 percent respectively while the unadjusted unemployment rate for California has fallen to 7.9 percent.

Posted by socketadmin at 10:00 AM | Permalink | Comments (0) | (email story)

January 21, 2014

The Framework For Developing San Francisco's Publicly-Owned Sites

The framework for a new inter-agency strategy to coordinate the potential development of underutilized publicly-owned sites across San Francisco will be presented to them Planning Commission this week. The Commission will be responsible for providing direction on the program and approving any proposed rezoning, development entitlements and public benefits package for individual sites.

In the high-cost and dense urban environment of San Francisco, certain underutilized publicly-owned sites throughout the city could help contribute towards the City’s needs for housing, jobs, transportation and other services. These sites provide a valuable resource that could often be better utilized, repurposed or redeveloped to maximize opportunities.
In order to support land-owning agencies in their efforts for more productive use of their real estate assets, the City is launching an effort to holistically evaluate use of such underutilized sites. This effort parallels the work by the City’s Real Estate Division to address the findings of a recent report by the Civil Grand Jury on surplus and underutilized properties, which called for revisions to the Surplus City Property Ordinance.

The scope of the program will be refined over the next month with the priority sites set to be identified, and site-specific community meetings slated to be initiated, in March.

A Grand Jury's Call To Optimize San Francisco's City-Owned Real Estate [SocketSite]
Public Sites Framework Presentation [sfplanning.org]

Posted by socketadmin at 8:30 AM | Permalink | Comments (4) | (email story)

San Francisco Named Third Least Affordable Major Housing Market, Worldwide

Demographia%2010th%20Annual%20Survey.gif

According to the 10th Annual Demographia Housing Affordability Survey of 360 housing markets worldwide, "San Francisco" is the third least affordable major metropolitan area, behind only Vancouver and Hong Kong, the least affordable market by a wide margin.

The Demographia rankings are based on "Median Multiples," median house prices
divided by gross annual median household incomes. The major markets are those with populations over a million. And for the purposes of Demographia's survey, San Francisco includes Oakland as part of the greater metropolitan area.

Demographia ranked Pittsburgh as the most affordable major housing market in the word, followed by Detroit. In fact, the ten most affordable major markets were all in the United States.

Including areas with under a million in population, Honolulu, which should soon break through the one million mark, ranked as less affordable than San Francisco, as did Santa Barbara, and was the absolute least affordable metropolitan area in the United States, the third worldwide.

Demographia International Housing Affordability Survey 2014 [demographia.com]

Posted by socketadmin at 8:00 AM | Permalink | Comments (57) | (email story)

January 17, 2014

The Mayor’s Seven Point Plan To Solve San Francisco's Housing Crisis

At the heart of Mayor Lee's state of the city address this morning, a seven point plan to address San Francisco's housing "crisis" with a goal of adding at least 30,000 new housing units in the city by the year 2020, a third of which the Mayor would like to be "affordable":

1. Additional legislation to protect tenants from eviction
2. Protect at-risk rent controlled units from being converted to TICs or condos
3. Push forward with HOPE SF to rebuild public housing in San Francisco
4. Double the City's down-payment assistance program ceiling from $100,000 to $200,000
5. Streamline the approval process for the development of below market rate housing
6. Build more market rate housing with an emphasis on rental units and outlying areas
7. Reduce obstacles to development in San Francisco

Posted by socketadmin at 12:15 PM | Permalink | Comments (76) | (email story)

January 16, 2014

Mortgage Rates Drift Down Amid Signs Of Weakening Recovery

The average rate for a conforming 30-year mortgage ticked down from 4.51 to 4.41 percent over the past week, 17 basis points below the 4.58 percent two-year high rate recorded this past August but 1.10 percentage points higher than the all-time low of 3.31 percent in November 2012.

The average 30-year fixed mortgage rate was 3.38 percent at this time last year, roughly half the 6.71 percent it has averaged since 1990. The fixed 30-year mortgage rate has averaged 8.61 percent over the past 40 years.

As we wrote two weeks ago: "While money remains historically cheap, the pace of pending home sales in the U.S. has slowed and is down 1.6 percent on a year-over-year basis. Recorded home sales in San Francisco were down 14 percent on a year-over-year basis in November and the city is on track to close 2013 with fewer recorded sales than in 2012."

December home sales have since been reported and 2013 has closed with 3.5 percent fewer recorded home sales in San Francisco than the year before. And in the words of Freddie Mac's Chief Economist this morning, "Mortgage rates drifted downward this week amid signs of a weakening economic recovery."

Posted by socketadmin at 7:45 AM | Permalink | Comments (6) | (email story)

January 15, 2014

Mortgage Bankers Lower Forecast As Mortgage Applications Drop

"Despite an economic outlook of steady growth and a recovering job market, mortgage applications have been decreasing – likely due to a combination of rising rates and regulatory implementation, specifically the new Qualified Mortgage Rule."

As such, the Mortgage Bankers Association has lowered its forecast for mortgage originations in the US and is now expecting a 3.8 percent increase in dollar volume for purchase loans in 2014 versus 2013.

The MBA's index for purchase loans was 10 percent lower last week as compared to the same week a year before.

Posted by socketadmin at 8:45 AM | Permalink | Comments (16) | (email story)

January 9, 2014

Office Rents In San Francisco Are Up 65 Percent Since 2010

With a current vacancy rate of just over 8 percent, the lowest rate since the fourth quarter of 2000, the average asking rent for office space in San Francisco is just over $51 a square foot per year, up 19 percent over the past year and up 65 percent since early 2010 according to Cassidy Turley.

With a little over 1.1 million square feet of net office space leased in 2013, the rate of absorption has significantly slowed as compared to 2012, however, when over 2 million square feet of space was absorbed and is roughly a third the 3.2 million square feet of net space leased in 2011, driven in part by a backlog in the pipeline of new construction which is set to start flowing over the next couple of years.

As we noted yesterday, the East Bay is poised to gain from the spike in San Francisco’s rents.

Posted by socketadmin at 12:45 PM | Permalink | Comments (0) | (email story)

January 3, 2014

The Mayor's Resolve To Rein In Speculative Evictions

Concerned that the Ellis Act is increasingly "being used, not by long-term owners of rental property as the law intended, but instead by new owners who purchase the building with the intent of evoking the Ellis Act purely for speculative purposes," the Mayor and Supervisors Campos, Chiu and Cohen are pushing forward with a resolution to stem the tide of speculative evictions in San Francisco.

While the resolution itself is mostly symbolic, it sets the stage for an effort to urge Bay Area legislators to amend state law and return greater control over the Ellis Act to local municipalities and it establishes a foundation for the Mayor and Supervisors to pursue local strategies to financially penalize an owner for invoking the Ellis Act by restricting the buy-outs of tenants and increasing required relocation assistance for tenants that are displaced.

A state bill to amend the Ellis Act so that only property owners who had owned a property for at least 5 years would be able to invoke the Ellis Act to evict tenants was proposed back in 2007 but died on the Senate floor.

A Rush To Restrict Ellis Act Evictions And Buyouts In San Francisco [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (43) | (email story)

January 2, 2014

Mortgage Rates Are Back Above 4.5 Percent And Sales Have Slowed

The average rate for a conforming 30-year mortgage ticked up to 4.53 percent over the past week to within 5 basis points of the 4.58 percent two-year high recorded this past August. The 30-year rate is now 1.22 percentage points higher than the all-time low of 3.31 percent in November 2012.

The average 30-year fixed mortgage rate was 3.34 percent at this time last year, less than half the 6.71 percent it has averaged since 1990. The fixed 30-year mortgage rate has averaged 8.61 percent over the past 40 years.

While money remains historically cheap, the pace of pending home sales in the U.S. has slowed and is down 1.6 percent on a year-over-year basis. Recorded home sales in San Francisco were down 14 percent on a year-over-year basis in November and the city is on track to close 2013 with fewer recorded sales than in 2012.

Posted by socketadmin at 10:30 AM | Permalink | Comments (33) | (email story)

December 30, 2013

While Still Cheap, Higher Mortgage Rates Are Slowing Home Sales

The National Association of Realtors Pending Home Sales Index inched up a nominal 0.2 percent in November, the second lowest level for the seasonally adjusted index in 2013 and down 1.6 percent on a year-over-year basis, the third year-over-year decline in as many months.

As we wrote in August: Rising Rates Start Reeling In Pending Home Sales.

While higher borrowing costs are bearing the brunt of the blame for the slowdown in home sales, and mortgage rates have increased 35 percent from an all-time low of 3.31 percent in November of 2012 to around 4.5 percent today, keep in mind mind that mortgage rates remain over 30 percent lower than their average of 6.7 percent since 1990 and are nearly 50 percent lower than average over the past 40 years.

Posted by socketadmin at 8:30 AM | Permalink | Comments (4) | (email story)

December 23, 2013

Having Peaked In 2012, Foreclosures Plummeted In 2013

As we first reported last December, with over 500 homes being taken back by the bank or sold to a third party on the courthouse steps, 2012 was the peak for homes being foreclosed upon in San Francisco and we expected foreclosure activity to dry up in 2013.

Having forecast fewer than 100 foreclosures in 2013, a drop of 80 percent from 2012 and fewer foreclosures than occurred in 2007, San Francisco in on track to end the year with just over 80 properties having been foreclosed upon in 2013, a drop of 84 percent versus the previous year.

There are currently just over 100 properties scheduled for auction in San Francisco versus 330 at the same time last year, 39 percent of which are in District 10*. Roughly 85 percent of scheduled auctions were cancelled over the past year versus 70 percent in 2012 and the number of San Francisco properties in pre-foreclosure currently totals 160 versus 286 at the same time last year.

*Editor's Note: In an attempt to match and map two disparate data sets, we include 94124, 94134 and 94112 in "District 10," which results in a slightly larger area than the District as defined by the San Francisco Association of Realtors.

Posted by socketadmin at 12:00 PM | Permalink | Comments (0) | (email story)

December 20, 2013

San Francisco Is Closing In On Dot-Com Days Peak Employment

The unemployment rate in San Francisco ticked down from 5.3 percent in October to 5.2 percent in November, matching the lowest unemployment rate in the city since June of 2008 when 434,000 people out of a labor force of 457,800 were employed.

With a current labor force of 483,700, the number of employed residents in San Francisco now totals 458,800, up by 14,300 workers over the past year and within 6,700 of the 465,500 people employed at December 2000's dot-com peak when the unemployment rate measured 3 percent. The unemployment rate in San Francisco topped out at a little over 10 percent in January 2010 when 51,100 fewer San Francisco residents were employed than today.

The unemployment rates in Marin and San Mateo are down to 4.6 percent and 5.0 percent respectively while the unadjusted unemployment rate for California remains at 8.3 percent.

Posted by socketadmin at 10:00 AM | Permalink | Comments (9) | (email story)

December 19, 2013

2,806 Applications For 60 Affordable Apartments South Of Market

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With 2,806 applications for Bridge Housing's new 60-unit below market rate building at 474 Natoma Street off Sixth, the Natoma Street Family Apartments, 98 percent of the applicants will need to keep looking for an affordable new home in San Francisco.

Targeting families with incomes of between 40 and 60 percent of the Area Median Income, $42,000 to $63,000 for a family of four, rents for the 60 apartments on Natoma will range from $700 for a studio to $1,600 a month for a three-bedroom.

The lucky two percent of qualifying applicants selected by a lottery will begin moving into the South of Market building in late January.

Posted by socketadmin at 12:30 PM | Permalink | Comments (21) | (email story)

December 18, 2013

Stock Market Rockets After Fed Announces Stimulus Cuts

As we noted last month, the minutes from the Federal Open Market Committee's October meeting suggested that the Fed was "likely to trim their monthly purchase of $85 billion in bonds "in [the] coming months," perhaps even "before an unambiguous further improvement in the [economic] outlook [is] apparent."

This afternoon the Fed announced it would cut its bond purchases by $10 billion a month beginning in January, an announcement that sent stock market indexes to all-time highs.

The Committee also announced it would likely keep the federal funds rate near zero "well past the time that the unemployment rate declines below 6-1/2 percent." The 10-Year Treasury ended the day up 4 basis points.

Posted by socketadmin at 1:30 PM | Permalink | Comments (0) | (email story)

December 17, 2013

San Francisco's Housing Pipeline Breaks The 50,000 Unit Mark

Pipeline%20Q32013%20Image.jpg

While only 1,600 new housing units were completed in San Francisco over the past year and commercial space in the city declined by 183,000 square feet (due to conversions to residential use), there are now over 6,000 housing units under construction in the City which should hit the market over the next year or two along with 900,000 feet of commercial space.

Building permits for another 9,500 housing units in San Francisco have either been approved or requested, units which should start hitting the market in two to four years along with another 5,000,000 square feet of commercial space.

In addition to the nearly 16,000 housing units which are either under construction, ready to break ground, or waiting for a permit, another 27,000 housing units have been entitled to be built in San Francisco which includes 10,500 units by Candlestick, 7,800 units on Treasure Island and 5,680 units in Park-Merced, projects which still have timelines measured in decades, not years.

And with plans for an additional 7,650 housing units on the boards, San Francisco's Housing Pipeline currently totals over 50,000 units. For context, a total of roughly 12,000 housing units have been built in San Francisco since 2007; a total of 26,000 new units since 2000.

With respect to commercial development in San Francisco, in addition to the nearly 6,000,0000 square feet already under construction, ready to break ground or awaiting a permit, plans for another 6,000,000 square feet of commercial development have been approved.

A breakdown of the residential developments in the works across San Francisco by neighborhood, not including those at Candlestick, Park-Merced or Treasure Island (click the chart to enlarge):

San Francisco Pipeline Report: Third Quarter 2013 [sf-planning.org]

Posted by socketadmin at 3:00 PM | Permalink | Comments (42) | (email story)

December 13, 2013

The Push To Legalize Up To 40,000 Illegal Units In San Francisco

With an estimated 30,000 to 40,000 dwelling units having been illegally built in the basements, garages and attics of buildings throughout San Francisco, units which often meet life and safety standards and may only require exceptions from density, open space, and other Planning Code requirements in order to become legal, an ordinance to provide a proposed process for legalizing the units has been drafted.

Unless a significant number of the illegal units are currently being kept off the market out of respect for the law, the proposed ordinance wouldn't actually expand the effective supply of housing units in the City, but it could help the city ensure that the units are safe and habitable and allow the City to include the units in their official counts and reports of housing supply.

If passed, challenges with illegal unit owner's adoption of the ordinance include a legitimization of rent control for both the unit and the building it's within and relocation expenses for tenants should the city find a unit is in need of work in order to be legalized.

And while intended to help ease San Francisco's current housing crunch, an unintended consequence of the ordinance could be an effective increase in rents as illegal units which are being rented at below market rates in exchange for flying below the City's radar would no longer require a discount.

Language to Legalize Dwelling Units Installed Without a Permit [sfbos.org]

Posted by socketadmin at 9:30 AM | Permalink | Comments (33) | (email story)

December 11, 2013

Adjustable-Rate Activity Up As Applications For Mortgages Decline

With mortgage rates continuing to tick up and the current 30-year rate hovering around 4.6 percent, mortgage applications to purchase property in the U.S. were down 10 percent on a year-over-year basis last week while the share of adjustable-rate mortgage activity has increased to 8.1 percent, the highest level since July of 2008.

Posted by socketadmin at 8:15 AM | Permalink | Comments (2) | (email story)

December 10, 2013

An Elegant Three-Bedroom Nob Hill Condo For $550 A Square Foot

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Listed for $1,449,000 two months ago, the asking price for the three-bedroom Nob Hill condo #106 at 850 Powell Street (a.k.a. The Francesca) has recently been reduced to $1,349,000.

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With a box beam ceiling in the dining room, a wood burning fireplace in the living room and a remodeled kitchen, the elegant 2,461 square foot unit is now priced at $548 per square foot.

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Not included in the list price, however, is parking in the building (which is leased and "available on a seniority basis") and HOA dues of $2,058.82 a month.

The condo was purchased for $587,000 in 1999 at which point the average 30-year mortgage rate was around 7 percent, a rate at which a $2,059 monthly payment would have serviced around $350,000 in debt versus closer to $550,000 at today’s 30-year rate.

∙ Listing: 850 Powell Street #106 (3/3) 2,461 sqft - $1,349,000 [850powell106.com]

Posted by socketadmin at 2:00 PM | Permalink | Comments (25) | (email story)

December 5, 2013

Mortgage Rates Tick Up To Near Two-Year High

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As we wrote two weeks ago:

Absent any big negative economic news, the Fed’s talk of tapering its bond purchase program will likely cause mortgage rates to tick back up despite the Fed's concerns and intentions.

The average rate for a conforming 30-year mortgage has since ticked up from 4.22 to 4.46 percent and to within 12 basis points of the 4.58 percent two-year high recorded this past August, 1.15 percentage points higher than the all-time low of 3.31 percent recorded in November of 2012.

The average 30-year fixed mortgage rate was 3.34 percent at this time last year having averaged 6.71 percent since 1990 and 8.61 percent over the past 40 years.

In terms of the 30-year rate for Jumbo loans over $625,500, Wells Fargo is currently advertising a rate of 4.125 percent, a discount of half a percent as compared to the 4.625 percent rate they’re advertising for both regular conforming and super conforming loans over $417,000 in high cost areas like San Francisco.

Fixed Mortgage Rates Jump [Freddie Mac]

Posted by socketadmin at 8:15 AM | Permalink | Comments (10) | (email story)

November 26, 2013

Former Giants Party Pad Facing Strike Three

3157 Baker Street

The one-time Marina party pad of former San Francisco Giants' pitchers Brian Wilson and Barry Zito, 3157 Baker Street was on the market in 2008 for $5,000,000 before being relisted for $3,695,000 in 2010 as the "former residence to celebrity chef, CEOs, [and] professional athletes" and then offered for rent at $13,500 a month via Craigslist.

Having avoided being foreclosed upon 2011 despite being in default since 2009 when $35,875 behind on a $2,283,000 loan, the five-bedroom "Marina Mansion" at 3157 Baker Street is once again scheduled to hit the courthouse steps this afternoon in San Francisco with what would appear to be over $800,000 in past due payments and fees now owed on that aforementioned loan.

Posted by socketadmin at 10:30 AM | Permalink | Comments (2) | (email story)

November 22, 2013

San Francisco Unemployment Drops But Employment Drops As Well

The unemployment rate in San Francisco ticked down to 5.3 percent in October, the second lowest level since the 5.2 percent rate in June of 2008 when 434,000 people out of a labor force of 457,800 were employed in the city.

The drop in San Francisco’s October unemployment rate, however, was driven by a 4,100 person decrease in the current labor force to 481,900 rather than an increase in employment, with the number of employed in San Francisco dropping by 3,600 as the number of unemployed dropped by 500. That being said, some impact from the Federal shutdown was likely in play.

The number of employed in San Francisco now totals 456,400 which is up by 12,600 workers on a year-over-year basis but is 9,100 workers below a December 2000 dot-com peak at which point the unemployment rate measured 3 percent. The unemployment rate in San Francisco peaked at 10.1 percent in January of 2010 when 48,700 fewer San Francisco residents were employed than today.

The unadjusted unemployment rate in California ticked up to 8.3 percent from September to October as the number of unemployed increased by 7,600 and employment fell by 152,600. The unemployment rate in Marin ticked up by 0.1 points to 4.8 percent while it remained at 5.1 percent in San Mateo.

Posted by socketadmin at 10:30 AM | Permalink | Comments (0) | (email story)

November 21, 2013

A Year Ago Mortgage Rates Hit An All-Time Low, And Now?

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The average rate for a conforming 30-year mortgage ticked down to 4.22 percent over the past week, 36 basis points lower than the two-year high of 4.58 percent measured in August. Absent any big negative economic news, the Fed’s talk of tapering its bond purchase program will likely cause mortgage rates to tick back up despite the Fed's concerns and intentions.

The average 30-year fixed mortgage rate was 3.31 percent at this time last year, the all-time recorded low, having averaged 6.71 percent since 1990 and 8.61 percent over the past 40 years.

In terms of the 30-year rate for Jumbo loans over $625,500, Wells Fargo is currently advertising a rate of 4.125 percent, a discount of .375 points as compared to the 4.50 percent rate they’re advertising for both regular conforming and super conforming loans over $417,000 in high cost areas like San Francisco.

Posted by socketadmin at 8:00 AM | Permalink | Comments (3) | (email story)

November 20, 2013

While Concerned About Rising Rates, Fed Positioning To Act

The minutes from the Federal Open Market Committee's October meeting suggest that the Fed is likely to trim their monthly purchase of $85 billion in bonds "in [the] coming months," perhaps even "before an unambiguous further improvement in the [economic] outlook [is] apparent."

At the same time, concerns about the impact of the trimming on interest rates remain, with the Fed discussing options to keep rates down or at the very least "signal its intention" to do so.

Posted by socketadmin at 12:00 PM | Permalink | Comments (1) | (email story)

Two Concepts For Rebuilding A Damaged Dogpatch Victorian

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Damaged by a fire, while the façade of the Dogpatch Victorian at 911 Minnesota Street has been restored and the rear reframed, the interior remains "a blank canvas."

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From the listing for the property across the street from the Homes on Esprit Park:

"Architectural concepts for two floor plans are available. The first envisions a 2 bedroom/ 2 1/2 bath home of 1,630 square feet within the existing envelope. The second plan would expand the home to 4 bedrooms/4 1/2 baths in 2,570 square feet."

On the market for $799,000 as-in, which concept might you choose to pursue? Keep in mind that neither of the new concepts/plans have been submitted to City for approvals.

∙ Listing: 911 Minnesota Street - $799,000 [911minnesota.com]

Posted by socketadmin at 9:00 AM | Permalink | Comments (9) | (email story)

November 19, 2013

2755 Fillmore Sells For $9,999,998 And The Likely Reason Why

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Originally listed for $12,500,000 in mid-October prior to being "modified" to $10,950,000 after a week on the market, the sale of 2755 Fillmore has closed escrow with a reported contract price of $9,999,998.

While the $9,999,998 sale price might seem a bit odd to some, keep in mind that a sale at $10,000,000 would have increased the transfer tax for the transaction by $50,000 (from $200,000 to $250,000) as the transfer tax rate jumps by 25 percent for sales of $10,000,000 or more.

And while a 25 percent jump in the transfer tax rate might seem stiff, it's nothing compared to the 167 percent jump in the rate for sales as soon as they hit the $5,000,000 mark.

Posted by socketadmin at 12:00 PM | Permalink | Comments (12) | (email story)

October 31, 2013

San Francisco’s Key Economic, Building, And Transportation Trends

San%20Francisco%20Commerce%20and%20Industry%202012.gif

The summary bullet points from the Planning Department’s just completed 2012 Commerce and Industry Inventory for San Francisco which covers a 10-year time-series of data, including population, employment, wages, business growth, retails sales, government expenditures/revenues, building, and transportation trends:

• Employment, the simplest key indicator of economic activity, grew 5% in 2012 to 586,250 jobs (27,250 additional jobs versus 2011) while the unemployment rate fell to 7.8% from 8.6%. [Editor's Note: As plugged-in people know, the unemployment rate in San Francisco is now under 6% and employment is up by 16,600 jobs on a year-over-year basis, up by 49,400 since 2010.]
• The number of business establishments increased slightly in 2012 to 55,470 firms, 0.4% growth over 2011.
• Workers’ earnings in the San Francisco economy increased to $49 billion, almost 9% over 2011, with average earnings per job increasing to $83,500 per worker, up 1% since last year.
• Building permit applications increased by 7% over 2011 levels to 24,300 applications in 2012 and the estimated value or spending those projects represent in terms of project cost (not all of which will be spent locally in San Francisco) increased to $4 billion, or 16% over 2011. [Editor's Note: San Francisco's current construction pipeline.]
• Taxable retail sales increased 4% over 2011 levels, to $16 billion in 2012.
• City revenue was $4.26 billion in 2012, up 3% over 2011. City expenditures were $4.06 billion in 2012, up 7% from last year.

San Francisco’s population was estimated to have hit 825,100 in 2012, up 1.5% from 2011, with daily transit ridership at roughly 664,326 trips, up 1.1% since 2008 with ridership on the 9-San Bruno line up 25 percent since 2008 and the most used transit line in the City with 59,900 daily trips. The 38-Geary is the second most used Muni line in the city with 55,000 daily trips.

The full report will be presented to San Francisco's Planning Commission next week.

San Francisco’s 2012 Commerce and Industry Inventory [sfplanning.org]
Unemployment Drops In San Francisco, But Employment Drops As Well [SocketSite]
The 48,000 San Francisco Units In The Works By Neighborhood [SocketSite]

Posted by socketadmin at 8:45 AM | Permalink | Comments (36) | (email story)

October 22, 2013

A Contemporary Potrero Hill And Mortgage Comparison: 2007 To Today

2130 24th Street

As we wrote in July of 2012:

Having hit the market in late 2006 asking $1,295,000, the 1,792 square foot 2130 24th Street #A sold for $1,274,000 in the middle of 2007.
With its Scavolini cabinets, Carrara marble counters, and Black Walnut floors still looking rather fresh, the contemporary Potrero Hill condo is back on the market and listed for $1,389,000.
With twenty percent down and a thirty-year mortgage at current rates, the monthly mortgage payment would be around $5,300 a month at asking. In 2006, the payments on the purchase would have been closer to $6,500 at rate of 6.56 percent.

Having failed to sell in 2012, the Potrero Hill condo is back on the market today and listed for $1,499,000. With the current rate for a 30-year Jumbo loan running around 4.0 percent, the monthly mortgage payment with 20 percent down at asking is now around $5,700 a month, 12 percent less than in 2006 but 8 percent higher than at asking in 2012.

2130 24th Street Kitchen

UPDATE: Our original calculation of a $6,700 monthly payment at asking today included property taxes and HOAs which should not have been included for the sake of comparison and has since been updated above.

∙ Listing: 2130 24th Street #A (3/2) 1,792 sqft - $1,499,000 [Redfin]
Apples-To-Apples: Prices, Rates And Payments...Oh My! [SocketSite]

Posted by socketadmin at 12:00 PM | Permalink | Comments (7) | (email story)

October 18, 2013

Governor Brown Vetos Affordable Housing Bill 1229

Passed in California’s State Assembly last month, Assembly Bill (AB) 1229 was written to expressly authorize any county or city in California to include inclusionary housing requirements (a.k.a. Below Market Rate units) as a condition of approval for the development of new housing, a requirement which was successfully challenged in the case of Palmer versus the City of Los Angeles.

In 2009, in the case of Palmer v. City of Los Angeles, the Second District California Court of Appeal opined that the city’s affordable housing requirements associated with a particular specific plan (akin to an inclusionary zoning ordinance), as it applied to rental housing, conflicted with and was preempted by a state statute known as the Costa-Hawkins Rental Housing Act. The Costa-Hawkins Act limits the permissible scope of local rent control ordinances. Among its various provisions is the right for a rental housing owner generally to set the initial rent level at the commencement of a tenancy, even if the local rent control ordinance would otherwise limit rent levels across tenancies. This provision is known as vacancy decontrol because the rent level is temporarily decontrolled after a voluntary vacancy. The act also gives rental housing owners the right to set the initial and all subsequent rental rates for a unit built after February 1, 1995. The court opined that “forcing Palmer to provide affordable housing units at regulated rents in order to obtain project approval is clearly hostile to the right afforded under the Costa-Hawkins Act to establish the initial rental rate for a dwelling or unit.”

This past Sunday, Governor Jerry Brown vetoed the bill. From the Governor:

This bill would supersede the holding of Palmer v. City of Los Angeles and allow local governments to require inclusionary housing in new residential development projects.
As Mayor of Oakland, I saw how difficult it can be to attract development to low and middle income communities. Requiring developers to include below-market units in their projects can exacerbate these challenges, even while not meaningfully increasing the amount of affordable housing in a given community.
The California Supreme Court is currently considering when a city may insist on inclusionary housing in new developments. I would like the benefit of the Supreme Court's thinking before we make legislative adjustments in this area.

AB-1229 Land use: zoning regulations [ca.gov]

Posted by socketadmin at 11:00 AM | Permalink | Comments (14) | (email story)

October 17, 2013

Silicon Valley Rents Remain Up But Pressure Is Building

The average monthly rent for an apartment in a complex with 50 or more units in Santa Clara County remains up 8.1 percent year-over-year with rents in San Jose averaging $2,105 a month, up $26 in the third quarter.

With a backlog of new developments hitting the market in Silicon Valley, however, the occupancy rate in Santa Clara has dropped 1 percentage point year-over-year to 94.4 percent and the occupancy rate in San Jose has dropped to 93.4 percent, down 2.1 points which should put some downward pressure on rents over the next quarter.

Silicon Valley's red-hot rental market shows signs of cooling [Business Times]

Posted by socketadmin at 11:45 AM | Permalink | Comments (0) | (email story)

October 16, 2013

Listed For $30 Million In Pacific Heights

2724%20Pacific%20Avenue.jpg

Having been on the market for almost a year for $30 million but not officially listed, the 13,500 square foot mansion on over half an acre of prime Pacific Heights land at 2724 Pacific Avenue has just been added to the MLS with an official "one day" on the market.

Designed by architect E.A. Hermann and built in 1894, the seven-bedroom home was purchased from the Verdier family in 1983 by Doug Engmann, former chairman of the Pacific Stock Exchange.

According to San Francisco's Office of the Treasurer and Tax Collector, the property tax bill for 2724 Pacific Avenue will be $5,167.75 for the Fiscal Year 2013-2014, a tax bill which would go to $356,400 a year with a sale at asking.

∙ Listing: 2724 Pacific Avenue (7/7) 13,500 sqft - $30,000,000 [stevegothelf.com]
San Francisco Property Tax To Increase, Where The Dollars Will Go [SocketSite]

Posted by socketadmin at 12:30 PM | Permalink | Comments (67) | (email story)

October 10, 2013

What's A Terrace, Parking And Modern Interior Worth On Nob Hill?

30%20Miller%20Place%20%233%20Living.jpg

While the sale of 30 Miller Place #1 which we featured last month has closed escrow with a reported contract price of $2,000,001, a neighbor notes that the unit two floors above (30 Miller Place #3) has recently cut its list price from $1,500,000 to $1,299,000.

While both units offer 1,782 square feet of interior space and the same big San Francisco views, keep in mind that unit number three doesn’t have number one's big private terrace or deeded parking spot, and its interior isn't nearly as contemporary (which can be changed).

∙ Listing: 30 Miller Place #3 (3/2) 1,782 sqft - $1,299,000 [nobhillview.com]
A Rather Great Room And Terrace With Even Greater Views [SocketSite]

Posted by socketadmin at 9:15 AM | Permalink | Comments (3) | (email story)

October 9, 2013

Got Cash? Noe Valley Home Scheduled For Foreclosure (Again)

4287%2023rd%20Street.jpg

Purchased for $1,450,000 in 2006 with a first mortgage for $1,000,000, a second mortgage for $304,500 and $145,500 (10 percent) down, the owner of the Noe Valley home at 4287 23rd Street has been in default since 2010.

While the past due amount on the one million dollar mortgage was $23,376 back in 2010, there's now $1,279,499 owed including past due payments, interest and fees.

With five scheduled auctions having been cancelled over the past three years, 4287 23rd Street is once again scheduled to hit the courthouse steps Thursday afternoon with an expected opening bid of $1,284,686.

Posted by socketadmin at 4:30 PM | Permalink | Comments (5) | (email story)

October 2, 2013

Shutdown Slowdown For Mortgage Approvals

With only 67 of the FHA’s 2,972 workers working through the current government shutdown, and fewer federal workers to verify Social Security numbers and provide Internal Revenue Service tax records, be prepared for potential delays if you're seeking to get a mortgage approved.

U.S. Government Shutdown Threatening Housing Recovery [Bloomberg]

Posted by socketadmin at 6:00 AM | Permalink | Comments (0) | (email story)

September 19, 2013

Mortgage Rates Dip And The Discount For Borrowing More Grows

Mortgage%20Market%20Survey%209-19-13.gif

Having ticked up to 4.57 percent last week and to within one basis point of last month's 4.58 percent rate, the highest average rate in over two years, the average rate for a conforming 30-year mortgage has ticked back down to 4.50 percent and should fall at least another ten basis points based on the Fed's move yesterday.

The 30-year fixed mortgage rate which has averaged 6.75 percent since 1990 was 3.49 percent at this time last year.

As the advertised rate for a conforming 30-year loan at Wells Fargo has ticked down to 4.50 percent, the rate for a Jumbo 30-year loan of over $625,500 in San Francisco has ticked down to 4.125 percent and the discount for a Jumbo loan has widened to 0.35 percentage points versus a historical premium for the larger non-conforming loans.

Mortgage Rates Move Lower [Freddie Mac]
Spike In Sales Due To, Rather Than Despite, A Spike In Rates [SocketSite]
Fed Backs Off Tapering Talk, Expect Mortgage Rates To Ease [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (0) | (email story)

September 18, 2013

Fed Backs Off Tapering Talk, Expect Mortgage Rates To Ease

Concerned that rising interest rates might stall the consumer spending and economic growth which the Federal Reserve engineered by driving down the cost of borrowing and incentive to save, the Fed is backing away from hints that a tapering in their bond buying program will commence before the end of the year which should cause mortgage rates to ease over the next few weeks.

Posted by socketadmin at 1:30 PM | Permalink | Comments (2) | (email story)

September 16, 2013

San Francisco Property Tax To Increase, Where The Dollars Will Go

The Property Tax rate for the City and County of San Francisco is slated to increase 1.62 percent from $1.1691 per $100 of assessed value in the current Fiscal Year to $1.1880 per $100 of assessed value for Fiscal Year 2013-2014.

The proposed allocation of San Francisco's property tax dollars is as follows:

SF%20Property%20Tax%20Allocation%202013-2014.gif

Thanks to Proposition 13, the State has once again authorized a maximum allowable increase of 2 percent in assessed value this year for properties that haven't changed hands or been improved.

The proposed pass-through rate to residential tenants will increase to $0.088 per $100.00 of assessed value for landlords, up from $0.081 in the current fiscal year.

SF%20Property%20Tax%20Comparison%20-%202013-2014.gif

San Francisco's Board of Supervisors is slated to ratify the new rates this week.

San Francisco's Property Tax Rate Ordinance for FY 2013-2014

Posted by socketadmin at 8:00 AM | Permalink | Comments (19) | (email story)

September 11, 2013

San Francisco Home Sales Set For Double-Digit Drops

Following two months of year-over-year declines in sales volumes while inventory levels have been ticking up, homes sales in San Francisco spiked in July, a spike which was driven by, rather than despite, a spike in mortgage rates.

If recorded sales activity matches what has happened with the market for properties listed on the MLS, however, expect the recorded sales volume for San Francisco homes to have once again dropped by double digits in August, both month-over-month and year-over-year.

Home Sales Spike In San Francisco To Nine Year High In July [SocketSite]
Spike In Sales Due To, Rather Than Despite, A Spike In Rates [SocketSite]

Posted by socketadmin at 12:15 PM | Permalink | Comments (6) | (email story)

September 5, 2013

As Mortgage Rates Tick Up, Discount For Borrowing More Grows

Mortgage%20Market%20Survey%209-5-13.gif

Having ticked down to 4.51 percent last week, the average rate for a conforming 30-year mortgage has ticked back up to 4.57 percent versus 3.55 percent at the same time last September, within one basis point of last month’s 4.58 percent rate which was the highest average rate in over two years.

As the advertised rate for a conforming 30-year loan at Wells Fargo has ticked up to 4.875 percent, the rate for a Jumbo 30-year loan of over $625,500 in San Francisco has only ticked up to 4.625 percent and the discount for a Jumbo loan has widened to 0.25 percentage points versus a historical premium for the larger non-conforming loans.

Mortgage Rates up on Signs of Stronger Economic Recovery [Freddie Mac]
Spike In Sales Due To, Rather Than Despite, A Spike In Rates [SocketSite]
Premium For Going Big Is On The Decline, Cheaper In Some Cases [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (14) | (email story)

August 30, 2013

Rising Rates Start Reeling In Pending Home Sales

The National Association of Realtors Pending Home Sales Index fell 1.3 percent in July with the greatest decline in the West which fell 4.9 percent and is down 0.4 percent on a year-over-year basis despite an increase in listed inventory levels.

At the same time, the pace of closed sales ticked up 6.5 percent in July, up 13.2 percent year-over-year in the West as the Pending Home Sales Index jumped in May alongside mortgage rates.

Repeating two of our headlines from earlier this month: Home Sales Spike In San Francisco To Nine Year High In July, and Spike In Sales Due To, Rather Than Despite, A Spike In Rates.

The average 30-year rate is currently hovering around 4.5 percent. While that's up from 3.35 percent in May (which was within four basis points of an all-time low), the 30-year fixed mortgage has averaged 6.75 percent since 1990, 8.67 percent since 1971.

Posted by socketadmin at 11:00 AM | Permalink | Comments (0) | (email story)

Can You Name This Burning Man Camp? Oh, Wait...

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We're not sure which Burning Man camp this came from, but we thought we’d pass it along.

2271-2273%2015th%20Street%20Shed%20Interior.gif

UPDATE: Our apologies for any confusion, apparently it's not a Burning Man camp at all, but rather the "storage" unit behind the duplex for sale at 2271-2273 15th Street.

2271-2273%2015th%20Street%20Living.jpg

With an unwarranted flat below the two legal two-bedroom units, the building is currently occupied by three different tenants with three different styles who are paying between $1,802 and $993 a month in rents.

∙ Listing: 2271-2273 15th Street - $1,300,000 | Virtual Tour [Keller Williams]

Posted by socketadmin at 10:00 AM | Permalink | Comments (14) | (email story)

August 26, 2013

A Day Late To Easily Convert, So What's The New Vacancy Worth?

1281-1285%20Filbert.jpg

With two of three units vacant, the triplex at 1281-1285 Filbert Street was listed for $1,499,000 this past April and sold for $2,000,000 within two weeks. Having occupied the top floor two-bedroom since 2003, the tenant was paying $2,337 a month in rent.

In June, San Francisco’s Condominium Lottery Bypass was adopted, restricting the condo conversion of TIC units which weren't occupied by the converting owners of record on April 15, 2013. The purchase of 1281-1285 Filbert closed escrow on April 16.

Last month the triplex returned to the market listed for $2,795,000 without any substantive changes to the building save one: all three units are now listed as vacant. No word on what the tenant was offered to move, but we're guessing less than $795,000.

∙ Listing: 1281-1285 Filbert Street - $2,795,000 [via Redfin]
Condo Conversions: The Clock Is Ticking For The Mayor To Act [SocketSite]

Posted by socketadmin at 2:00 PM | Permalink | Comments (6) | (email story)

August 22, 2013

Spike In Sales Due To, Rather Than Despite, A Spike In Rates

Mortgage%20Market%20Survey%208-22-13.gif

Commenting on the second-highest level of sales for previously owned U.S. homes in more than six years last month, a former senior vice president at Fannie Mae notes:

It’s not unusual, when you see a spike in mortgage rates, to see a couple months later a spike in closed sales. People saw the beginning of the trend and accelerated their pattern of buying. In all likelihood, within a month or two, you're likely to see the pace of sales slow.

It was at the beginning of June we first noted the average 30-year rate had ticked up to over 4 percent for the first time since 2011, up from an all-time low of 3.31 percent this past November and 3.35 percent this past May. And in July, homes sales in San Francisco spiked to a nine-year high.

As of today, the average 30-year rate is hovering around 4.6 percent, up from 4.4 percent the week before. The rate for a 30-year fixed mortgage has averaged 6.75 percent since 1990, 8.67 percent since 1971.

Sales of U.S. Existing Homes Rise to Highest Since 2009 [Bloomberg]
Fixed Mortgage Rates Tick Up To Near Two-Year High [SocketSite]
Home Sales Spike In San Francisco To Nine Year High In July [SocketSite]

Posted by socketadmin at 10:30 AM | Permalink | Comments (4) | (email story)

August 19, 2013

Builders Follow Citizens' Suit, Challenge Plan For Bay Area Growth

BIA%20Plan%20Bay%20Area%20Suit.gif

Earlier this month, a citizens group calling themselves "Bay Area Citizens" filed a lawsuit in Alameda County Superior Court challenging the approved Plan Bay Area which calls for up to 660,000 new housing units to be built around the Bay Area over the next thirty years, 92,480 of which would be built in San Francisco alone, double San Francisco's current pipeline of development.

The underlying concern of the Citizens: the impact on their property values.

This past Friday, the Building Industry Association of the Bay Area literally followed suit and filed a lawsuit of their own in Superior Court, charging that Plan Bay Area "illegally locks future workers out of the Bay Area housing market and relies on hundreds of thousands more commuters driving long distances from outside the region to get to work."

According to the Final Environmental Impact Report (FEIR) conducted by the agencies themselves, Plan Bay Area would result in a massive increase in the number of Bay Area workers who would commute long distances by freeway. In fact, the FEIR shows that by 2040, Plan Bay Area will result in 40,000 more individual inbound trips a day (14.6 million each year) than an alternative approach also studied in the FEIR that plans for more housing in the region.
The primary contributor, the FEIR shows, was the series of decisions by regional planners at [the Association of Bay Area Governments and Metropolitan Transportation Commission] to artificially reduce the total number of new housing units provided for under Plan Bay Area—which started out at 902,000 but was ratcheted down to 660,000 in the final version.

It's not exactly an altruistic challenge, however, as the Building Industry Association is angling for the adopted plan to be dismissed and a competing plan that provides for the construction of 770,000 new housing units be adopted instead.

Bay Area Plan To Support 2 Million More People Up For Vote [SocketSite]

Posted by socketadmin at 2:30 PM | Permalink | Comments (27) | (email story)

August 16, 2013

Unemployment Up In San Francisco, But Employment Up Even More

Having ticked up to 5.7% in June, the unemployment rate in San Francisco ticked up another 0.2 points to 5.9% in July as the number of unemployed in San Francisco increased by 1,100 to 28,800. The unemployment rate in Marin and San Mateo increased last month as well, up 0.2 and 0.3 points to 5.3% and 5.7% respectively.

While the ranks of the unemployed ticked up, however, the number of employed in San Francisco ticked up even more, increasing 2,100 to 456,600 as the total labor force increased by 3,200 to 486,400.

Employment in San Francisco is currently up by 17,300 workers on a year-over-year basis and is now only 7,900 workers below a December 2000 dot-com peak at which point the unemployment rate measured 3 percent. The unemployment rate in San Francisco peaked at 10.1 percent in January of 2010 when 49,900 fewer San Francisco residents were employed than today.

The unadjusted unemployment rate in California ticked up to 9.3% in July as the number of employed fell by 92,400 and the number of unemployed increased by 89,600.

SF Employment Slips In June To 10,000 Workers Below Peak [SocketSite]
San Francisco Employment Trends And Dot-Com Context [SocketSite]
Monthly Labor Force Data for Counties: July 2013 (Preliminary) [EDD]

Posted by socketadmin at 10:15 AM | Permalink | Comments (1) | (email story)

August 9, 2013

For The First Time In Over Two Years, Inventory Is Even In SF

Make no mistake, the number of single-family homes and condos which are currently listed for sale in San Francisco (570) is still roughly half the number which were on the market at this time of the year back in 2007 (1,190), a number which increased by another thirty percent by 2010 (1,600) and then started to drop in 2011 as the typical turnover of homes and the supply of new listings was upended by an inability to sell for more than had been paid.

At this time last year, however, there were roughly 570 homes on the market in San Francisco, which means that while inventory is still a third of what it was at its peak, it's now even on a year-over-year basis for the first time in over two years.

On an absolute basis, the supply of homes for sale in San Francisco typically spikes in September, peaks in October and then drops through the end of the year.

Posted by socketadmin at 4:15 PM | Permalink | Comments (11) | (email story)

August 7, 2013

Unreal Expectations For Castro Street Corner Of Condos

With approved designs for 24 condos to be built at 376 Castro Street now in hand, the owner of the gas station site is trying to sell the parcel for $12,000,000, not including the cost of construction, a whopping $500,000 per door (industry speak for potential unit).

Keep in mind that the average cost per door for entitled land deals of this size in San Francisco is currently running around $150,000. And while that's up from closer to $50,000 per door in 2010, it's still a long way from $500,000 which would be quite a record and could spell trouble for those hoping for a quick development of the corner.

That being said, according to the listing on craigslist, "financing for 12,000,000 may be available depending on down payment & credit," so there's that.

The Refined Designs For A Prime Market And Castro Street Corner [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (22) | (email story)

The Actual Appreciation For A Single-Family San Francisco Home

14%20Ventura%20Avenue.jpg

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.

Posted by socketadmin at 8:00 AM | Permalink | Comments (8) | (email story)

August 6, 2013

San Francisco Tops Silicon Valley In VC Investment

Two great maps (click to enlarge) and top ten lists from the Atlantic Cities (Why San Francisco May Be the New Silicon Valley) with respect to where the venture dollars are flowing and the deals are getting done across the Bay Area.

The city of San Francisco is the leader with $4.39 billion in venture capital investment, roughly a third of the Bay Area total. This is by far the largest amount of venture investment of any jurisdiction in the region, and a whopping 16 percent of total venture investment nationally. Palo Alto is a distant second with $1.29 billion (4.8 percent of the national total), followed by Redwood City ($1.06 billion), Mountain View ($918 million), Sunnyvale ($800 million), Santa Clara ($733 million), and San Jose ($688 million).
Investment has also begun to spread up and down the Peninsula, filling in the cities that stretch between San Jose and San Francisco proper. And, within the Bay Area broadly, according to these zip code level data, the San Francisco metro attracted nearly 70 percent more venture capital ($8.5 billion) than the Silicon Valley region ($5 billion).

The top ten zip codes into which the venture dollars flowed in 2011, with San Francisco's 94107 (Potrero Hill, South Beach, South Park) atop the list:

1. 94107 (Potrero Hill, South Beach, South Park) San Francisco - $1,885.8M
2. 94105 (Rincon Hill, Embarcadero South) San Francisco - $693M
3. 94043 (Suburban Mountain View, including Google headquarters) Mountain View - $660.5M
4. 94063 (Centennial, Stambaugh Heller, Redwood Village, Friendly Acres) Redwood City -$575.2M
5. 94103 (South of Market) San Francisco - $554.6M
6. 95054 (Suburban Santa Clara, north) Santa Clara - $548.3M
7. 94065 (Redwood Shores) Redwood City - $433.5M
8. 94301 (Crescent Park, University South, Old Palo Alto) Palo Alto - $412.7M
9. 94085 (North-central Sunnyvale) Sunnyvale - $389.7M
10. 94089 (North Sunnyvale, including Lakewood, Lockheed Martin HQ) Sunnyvale - $378.2M

The Bay Area attracted $13.5 billion in venture investment in 2011, "more than four times that of greater Boston or greater New York, the nation's second and third largest centers for venture capital investment." Have we mentioned that the number of employed in San Francisco has grown by 47,800 since the beginning of 2010 and is closing in on a December 2000 dot-com peak?

Why San Francisco May Be the New Silicon Valley [theatlanticcities.com]
SF Employment Slips In June To 10,000 Workers Below Peak [SocketSite]

Posted by socketadmin at 12:45 PM | Permalink | Comments (31) | (email story)

August 2, 2013

Forecast For San Francisco Rents: Plateau, Flatline And Dip

The current vacancy rate for apartments in San Francisco is holding at under 4 percent, driven by a backlog in development while employment in the City has jumped, leading to an expected spike in rents.

As plugged-in people know, a wave of new units are on the way with over 800 new units delivered last quarter and another 6,000 to be delivered over the next two years.

Noting the pipeline of new development and income growth which hasn't kept pace with the increase in rents, Cassidy Turley is expecting rental rates in San Francisco to plateau over the next couple of months, flatline in early 2014, and then dip a bit, but not by much.

Posted by socketadmin at 10:00 AM | Permalink | Comments (15) | (email story)

August 1, 2013

Mortgage Rates Seesaw On Parsed Words, Tick Back Up This Week

Having ticked down to 4.31 percent from 4.51 percent three weeks ago, the average rate for a conforming 30-year mortgage ticked back up to 4.39 percent last week as rates seesaw on parsed words and speculation as to when the Fed will end their commitment to the bond buying program which was engineered to keep rates low.

At the same time, while the advertised rate for a conforming 30-year loan at Wells Fargo has ticked back down to 4.5 percent, the rate for a Jumbo 30-year loan of over $625,500 in San Francisco has dropped to 4.375 percent, maintaining a discount of 0.125 percentage points versus a historical premium for the non-conforming larger loans.

It's Cheaper To Borrow More, Not Less, This Week [SocketSite]
Mortgage Rates Seesaw [Freddie Mac]
Premium For Going Big Is On The Decline, Cheaper In Some Cases [SocketSite]

Posted by socketadmin at 8:00 AM | Permalink | Comments (0) | (email story)

July 29, 2013

Condo Conversion Program Kicks-Off With A Lawsuit In The Works

Upheld by San Francisco's Board of Supervisors and signed into effect by Mayor Ed Lee, the first round of applications for expedited condominium conversion in San Francisco are being accepted as of today.

As the program which is slated to suspend San Francisco’s annual condominium conversion lottery until at least 2024 goes into effect, word on the street is that the owners of a five-unit building are preparing a legal challenge of the program, the impact of which could bring the program to a premature halt (and shouldn’t catch any plugged-in people by surprise).

Expedited Condominium Conversion Application: Group 1 [sfdpw.org]
Condo Conversions: The Clock Is Ticking For The Mayor To Act [SocketSite]
Potentially Problematic Condo Conversion Legislation Approved [SocketSite]

Posted by socketadmin at 9:45 AM | Permalink | Comments (21) | (email story)

July 16, 2013

Cashing Out By Levering Up And Letting Go?

845%20El%20Camino%20Del%20Mar.jpg

The five bedroom Sea Cliff home at 845 El Camino Del Mar was purchased for $1,100,000 in 1993 with $350,000 down. In 1998, the property was refinanced with a $1,000,000 loan.

In 2001 the loan amount was increased to $1,400,000. In 2006 it was increased to $2,000,000. And in 2009, the loan was increased to $2,773,642.

In default since October of 2012, the 2,716 square foot Sea Cliff home on a 4,251 square foot triangular lot is scheduled to hit the courthouse steps this Thursday.

Posted by socketadmin at 12:30 PM | Permalink | Comments (9) | (email story)

July 15, 2013

The Aliotos' Towering Mansion Sells For Millions Under Asking, But Fifty-Two Times Their Purchase Price

2898%20Vallejo%20Facade.jpg

Having hit the market asking $16,500,000 this past March, the list price for the Aliotos' Pacific Heights home at 2898 Vallejo Street was reduced to $13,900,000 in April.

This afternoon, the sale of 2898 Vallejo closed escrow with a reported contract price of $11,750,000, roughly two million "under asking," closer to five million under original list.

As we first reported earlier this year, Frank and Frances Alioto purchased the 9,500 square foot home in 1973 for $225,000 following its use in the filming of The Towering Inferno, serving as the mansion for Richard Chamberlain’s character, the cheapskate electrical engineer who cut corners and was to blame for the tower's fire.

With a tax basis of $439,219 thanks to Proposition 13, the total property tax bill for 2898 Vallejo was $5,205 in 2011. The property tax bill for the new buyers should now be closer to $137,369 per year.

And in terms of the average annual appreciation for the property, call it an effective 10 percent per year over the past 40 years.

Posted by socketadmin at 2:00 PM | Permalink | Comments (47) | (email story)

July 11, 2013

It's Cheaper To Borrow More, Not Less, This Week

Having ticked down to 4.29 percent at the begining of July, last week the average rate for a 30-year fixed mortgage ticked up to 4.51 percent for conforming loans on speculation that the Federal Reserve will reduce future bond purchases following June's strong employment report.

That being said, while the majority of the Federal Open Market Committee participants have shown support for ending the Feds bond buying program by the end of the year, yesterday Ben Bernanke reiterated his commitment to the program which was engineered to keep rates low "for the foreseeable future."

Meanwhile, while the advertised rate for a conforming 30-year loan at Wells Fargo has ticked up from 4.5 to 4.625 percent over the past week, the rate for a Jumbo 30-year loan of over $625,500 in San Francisco is still 4.5 percent as of this morning, a discount of 0.125 percentage points to the rate for smaller conforming loans versus a historical premium.

14 Percent Raise Needed To Keep Pace As Mortgage Rates Rise [SocketSite]
Mortgage Rates Continue Trending Higher [Freddie Mac]
Premium For Going Big Is On The Decline, Cheaper In Some Cases [SocketSite]

Posted by socketadmin at 10:30 AM | Permalink | Comments (0) | (email story)

July 3, 2013

Premium For Going Big Is On The Decline, Cheaper In Some Cases

Having jumped to 4.46 percent last week, the average rate for a 30-year fixed mortgage has ticked down to 4.29 percent for conforming loans, up from 3.62 percent at the begining of July last year.

At the same time, the premium for jumbo loans of over $625,500 in San Francisco has ticked down to a six-year low, an average of only 0.16 percentage points over conforming rates as deposit-rich banks seek returns on their capital and suppress rates to compete for wealthy customers.

In fact, Wells Fargo is advertising a 4.5 percent rate for both conforming and Jumbo 30-year fixed mortgages as of this morning, a discount to the 4.625 percent rate they’re advertising for super conforming loans of over $417,000 in high cost areas like San Francisco.

14 Percent Raise Needed To Keep Pace As Mortgage Rates Rise [SocketSite]
Mortgage Rates Reverse Course and Tick Down [Freddie Mac]
Wealthy Americans Benefit From Banks Hunting Jumbos [Bloomberg]

Posted by socketadmin at 9:15 AM | Permalink | Comments (5) | (email story)

July 2, 2013

14 Percent Raise Needed To Keep Pace As Mortgage Rates Rise

Mortgage%20Market%20Survey%206-27-13.gif

As we first noted two weeks ago, while the average 30-year fixed mortgage rate had eased a few basis points to 3.93 percent, the yield on the 10-year treasury and 30-year mortgage bonds were quickly ticking up in reaction to Federal Reserve Chairman Ben Bernanke’s remarks concerning a tapering of the Fed’s Quantitative Easing program.

Over the next week, the average 30-year mortgage rate jumped to 4.46 percent, up from 3.35 percent at the beginning of May.

With 20 percent down, the average mortgage payment for a median priced home purchase in San Francisco, which was $870,000 in May, would be $3,510 per month at last week's rates versus $3,067 at the rates of two months ago.

At 3.35 percent, an income of roughly $140,000 would have been needed to qualify for a $700,000 loan (an $870,000 purchase). At 4.46 percent, it’s closer $160,000 a year. At 5 percent, it’s $170,000 per year. And at 6 percent, call it roughly $190,000.

Looking at it another way, a monthly budget of $3,000 a month which would have covered the payments on a $680,000 mortgage two months ago would now cover the payments on a mortgage for just under $600,000, a drop from $850,000 to $750,000 in purchase price assuming 20 percent down.

Keep in mind that since 1990 the rate for a 30-year fixed mortgage has averaged 6.75 percent, 8.67 percent since 1971. The income needed to qualify for a $700,000 loan at 8.67 percent? That would be around $240,000 a year.

Uneasy Expectations For Higher Mortgage Rates [SocketSite]
Mortgage Rates Roiling From Taper Talk [Freddie Mac]

Posted by socketadmin at 5:00 AM | Permalink | Comments (13) | (email story)

June 28, 2013

Unconstitutional Takings Closer To Home(s)?

Overshadowed by the overturning of the Defense of Marriage Act, this week the Supreme Court also handed down a big land-use decision in Koontz v. St. Johns River Water Management District, ruling that the District’s denial of Koontz’s application to build a shopping center upon three acres of wetlands constituted an unconstitutional "taking" when the permit for development was denied after Koontz declined to reduce the size of the development or fund wetlands restoration projects, conditions under which the District had indicated it would be willing to approve the development of the land which Koontz owned.

From the majority opinion:

Extortionate demands for property in the land-use permitting context run afoul of the Takings Clause not because they take property but because they impermissibly burden the right not to have property taken without just compensation. As in other unconstitutional conditions cases in which someone refuses to cede a constitutional right in the face of coercive pressure, the impermissible denial of a governmental benefit is a constitutionally cognizable injury.

From the dissenting opinion:

Our core disagreement concerns the second question the Court addresses. The majority extends Nollan and Dolan to cases in which the government conditions a permit not on the transfer of real property, but instead on the payment or expenditure of money. That runs roughshod over Eastern Enterprises v. Apfel, 524 U. S. 498 (1998), which held that the government may impose ordinary financial obligations without triggering the Takings Clause’s protections. The boundaries of the majority’s new rule are uncertain. But it threatens to subject a vast array of land-use regulations, applied daily in States and localities throughout the country, to heightened constitutional scrutiny.

And from a number of wondering readers, to which you're welcome to provide a well reasoned opinon of your own:

Are there any parallels in terms of potential unconstitutional "takings" in San Francisco with respect to condo conversions, Below Market Rate (BMR) requirements for private developers, or the denial of a Chipotle?
Decision: KOONTZ v. ST. JOHNS RIVER WATER MANAGEMENT DISTRICT [supremecourt.gov]

Posted by socketadmin at 10:30 AM | Permalink | Comments (14) | (email story)

June 27, 2013

One Picture, A Thousand Words, And A Greater Number Of New Rights

San Francisco’s City Hall was illuminated in honor of the Supreme Court’s ruling against the so-called Defense of Marriage Act, captured by David Yu (click image to enlarge).

It’s one picture, a thousand words, and an even greater number of recognized rights for married same-sex couples, including a full $500,000 tax-free gain upon the sale of real estate and tax-free transfers of property between spouses.

Posted by socketadmin at 5:00 PM | Permalink | Comments (13) | (email story)

June 24, 2013

Facing Foreclosure Having Cash Out For A Gain

1611%20Broderick.jpg

Purchased for $1,080,000 in November of 2006 with 20 percent down, eight months later the Lower Pacific Heights property at 1611 Broderick was refinanced with a $1,330,000 loan. And four months later, the property was put on the market for $1,995,000 but failed to sell. No building permits were issued for the property in-between.

Permits to renovate the basement were issued in 2008. And in 2011, the property returned to the market first listed for $1,711,000, reduced to $1,599,000 that March.

Withdrawn from the market in September of 2011 and in default since 2012 with $1,519,406 now owed on that aforementioned $1,330,000 loan, 1611 Broderick is scheduled to hit the courthouse steps this afternoon.

Posted by socketadmin at 1:00 PM | Permalink | Comments (2) | (email story)

June 20, 2013

Uneasy Expectations For Higher Mortgage Rates

Mortgage%20Market%20Survey%206-20-13.gif

Having ticked up to 3.98 percent last week, the average rate for a 30-year mortgage had eased to 3.93 percent as of this morning but with an extra 0.1 points at origination (up from 0.7 to 0.8).

Over the past two days, however, the yield on the 10-year treasury has ticked up .24 percentage points and the yield on 30-year mortgage bonds has increased by .38 points, a reaction to Federal Reserve Chairman Ben Bernanke’s remarks concerning a tapering of the Fed’s Quantitative Easing program.

Last year at this time, the rate for a 30-year fixed mortgage averaged 3.66 percent. Since 1990, the rate for a 30-year fixed mortgage has averaged 6.75 percent, 8.67 percent since 1971.

Fixed Mortgage Rates Tick Up To Near Two-Year High [SocketSite]
Mortgage Rates Ease Slightly [Freddiemac]
What’s The Treasury Got To Do With It? (Quite A Bit) [SocketSite]

Posted by socketadmin at 2:00 PM | Permalink | Comments (39) | (email story)

June 12, 2013

A Conscientious Approach To Appreciation And Over Asking Stats

3961%2025th%202013.jpg

Purchased by a plugged-in reader for $2,850,000 in June of 2009, the Noe Valley "house with a conscience" at 3961 25th Street was listed for $3,299,000 this past May.

Reduced to $2,899,000 two weeks later, the sale of 3961 25th Street closed escrow yesterday with a reported contract price of $3,400,000, officially "17 percent over asking" according to industry stats, 3 percent over its original list price.

On an apples-to-apples basis, the sale represents total appreciation of 19 percent for the remodeled Noe Valley single-family home since 2009, an annualized rate of 4.6 percent.

Posted by socketadmin at 12:15 PM | Permalink | Comments (10) | (email story)

June 10, 2013

The New Price For A Parking Spot In South Beach: $82,000

The sale of parking spot #142 at 88 Townsend Street which sold for $65,000 in early 2008 and again for $38,000 in October of 2011 has closed escrow with a reported contract price of $82,000 having been listed for $85,000 in April.

Once again, the spot can be used or leased by a resident or non-resident of the building. And with monthly dues of $32.76, call it a CAP Rate of roughly 4.6 percent for the spot assuming a monthly rent of $350 a month.

Posted by socketadmin at 2:30 PM | Permalink | (email story)

June 7, 2013

Will San Francisco's Condominium Lottery Legislation Be A Winner?

Having been sent back to San Francisco’s Land Use and Economic Development Committee for another round of amendments, the proposed condominium conversion lottery bypass legislation is once again slated to be voted upon by San Francisco’s Board of Supervisors next week.

The proposed legislation would establish a bypass period during which qualifying TICs could condo convert for a fee; establish lifetime leases for tenants in converting non-owner occupied units; restrict future condominium lotteries to buildings with no more than four units; and suspend San Francisco’s annual condominium conversion lottery until at least 2024.

While originally co-sponsored by Supervisor Wiener, he no longer supports the newly amended legislation as proposed which includes a couple of important changes:

Buildings which participated in either the 2012 or 2013 lottery and have been continuously occupied by the required number of applicant owners of record for no less than five years as of April 15, 2013 would immediately qualify for the bypass. Buildings which participated in either the 2012 or 2013 lottery and have been continuously occupied by the required number of applicant owners of record for no less than three years as of April 15, 2014 would qualify on that date.

Buildings which did not qualify or participate in either the 2012 or 2013 lotteries would eventually be eligible to participate in the bypass assuming a formal TIC agreement was in place as of April 15, 2013 and the required number of applicant owners have continuously occupied the building for at least six years by April 15, 2019.

In other words, TIC buildings in which the owner applicants weren't in place by April 15, 2013 would never qualify for the bypass and five or six unit TIC buildings which don't qualify for the bypass would never qualify for conversion as proposed.

And yes, the proposed legislation still contains the provision that if any lawsuit is filed against the legislation (see previous paragraph for a hint as to who might quickly file), the bypass would be suspended until the lawsuit was settled or until 2024, whichever comes first.

UPDATE: Two key changes in the legislation as newly amended: 1. The program has been extended by a year (i.e., the cutoff date for being bypass eligible is now April 15, 2013 rather than April 15, 2012); and 2. The "poison pill" provision would now suspend both the bypass and the lottery until any legal challenges are settled, as previously written the lottery would have resumed.

Amended Condominium Conversion Impact Fee Legislation [sfbos.org]
TIC Owners, Occupiers, Buyers, Agents And Attorneys Take Note [SocketSite]

Posted by socketadmin at 7:45 AM | Permalink | Comments (13) | (email story)

June 4, 2013

Fixed Mortgage Rates Tick Up To Near Two-Year High

Mortgage%20Market%20Survey%206-4-13.gif

At the end of last week, 30-year fixed-rate mortgages averaged 3.81 percent (with 0.8 points), up from 3.63 percent two weeks before, the highest rate in over a year. A year ago the 30-year mortgage rate averaged 3.75 percent. The all-time low of 3.31 percent was recorded this past November.

As we pointed out in January, while rates had been dropping, they were set to start ticking-up this year. And as a plugged-in reader notes, in the past couple of days the average 30-year rate appears to have ticked up to over 4 percent for the first time since 2011.

The 30-year fixed mortgage rate has averaged 8.61 percent over the past forty years.

Mortgage Rates Drop, But Set To Start Ticking Up This Year? [SocketSite]
Fixed Mortgage Rates Highest in a Year [Freddie Mac]

Posted by socketadmin at 10:00 AM | Permalink | Comments (10) | (email story)

May 23, 2013

Proposed Security Deposit Legislation: New Penalties And Payments

As it stands, security deposits for unfurnished apartment rentals in California cannot exceed two months’ rent, must be returned or accounted for within three weeks of a tenant vacating, and any disputes are heard in small claims court.

Under the proposed Senate Bill 603 (SB603), landlords would be required to hold security deposits in separate insured accounts and pay interest on deposits (which the city of San Francisco already requires) at the Federal Reserve six-month CD rate (currently 0.26%).

The proposed Bill would also impose a penalty of twice any amount that's deemed to have been improperly witheld from a deposit or interest owed by a landlord. Passed in committee on May 7, SB603 is scheduled for its third reading in the Senate this afternoon.

UPDATE: To clarify a bit of confusion with respect to the required interest payments on security deposits, the proposed payment of interest at the Fed's six-month CD rate "shall not apply in any city, county, or city and county that by charter, ordinance, or regulation requires the payment to tenants of interest on security, nor does it preempt a local ordinance that requires the payment of security deposit interest."

Security deposit rules in Leno legislation [Chronicle]
Senate Bill 603: Landlord and Tenant Security Deposit Legislation [ca.gov]

Posted by socketadmin at 8:15 AM | Permalink | Comments (12) | (email story)

May 22, 2013

Living On Borrowed Time And Money Up On Russian Hill

1159%20Vallejo.jpg

Speaking of foreclosure activity in San Francisco, auctions, and bankruptcy, a $937,500 mortgage was taken out on the Russian Hill condo at 1159 Vallejo Street in early 2008.

In default since 2010 and with $1,118,399 now owed, including fees, the 1,107 square foot condo is scheduled to hit the courthouse steps in San Francisco this Friday at 2pm.

First scheduled to hit the courthouse steps in 2011 but postponed by way of a bankruptcy filing, don’t be too surprised if this week’s auction happens to be postponed as well.

San Francisco Foreclosure Activity: Falling As Forecast In 2013 [SocketSite]

Posted by socketadmin at 12:00 PM | Permalink | Comments (0) | (email story)

May 21, 2013

As Central Subway Contingency Fund Shrinks, Contract Up For Vote

Central%20Subway%20Map%202013.gif

With six years of construction work to go and the contingency fund for San Francisco’s Central Subway project already down from $200 million to $70 million, this afternoon the San Francisco Municipal Transportation Agency is scheduled to vote on the contract to construct the Subway's three underground stations, elevated platform at Fourth and Brannan, and 1.5 miles of light-rail track.

Originally estimated to cost up to $750 million, the low bid for the Central Subway's station and track work is $840 million, at least $90 million over original estimates. That being said, "Muni officials said the contract can be carried out without going over the $1.6 billion overall budget for the project," a 1.7 mile extension of the T Third Line.

Transit agency board to vote on Central Subway contract [SFExaminer]
San Francisco's Central Subway: Make That 2018 And An Extra $278M [SocketSite]

Posted by socketadmin at 8:00 AM | Permalink | Comments (17) | (email story)

May 17, 2013

Nearly 50,000 More Employed In San Francisco Since 2010

Having ticked down to 6.0 percent in March, the lowest rate since November of 2008, the unemployment rate in San Francisco fell another 0.6 points to 5.4% in April as the unemployment rates in San Mateo and Marin and fell to 5.1% and 4.6% respectively.

The unemployment rate in San Francisco peaked at 10.1 percent in January of 2010 when 48,200 fewer San Francisco residents were employed than today.

On the heels of a drop of 1,000 in March, the number of employed San Francisco residents increased by 3,800 in April to 455,900, the number of unemployed fell by 3,100 to 25,800.

Employment in San Francisco is currently up by 20,900 workers on a year-over-year basis versus 19,500 the month before but remains 9,600 workers below a December 2000 dot-com peak (at which point the unemployment rate measured 3 percent).

The unadjusted unemployment rate in California fell to 8.5% in April as employment fell by 20,900 and the number of unemployed fell by 161,500.

SF Unemployment Rate Drops To 6.0% For First Time Since 2008 [SocketSite]
San Francisco Employment Trends And Dot-Com Context [SocketSite]
Monthly Labor Force Data for Counties: April 2013 (Preliminary) [EDD]

Posted by socketadmin at 9:00 AM | Permalink | Comments (3) | (email story)

May 16, 2013

Foreclosure, Flip, And Remodel: The Circle Of Life For 1164 Church

1164%20Church%20Foreclosure.jpg

Wells Fargo foreclosed upon the two-bedroom Noe Valley home at 1164 Church Street with $1,081,123 then owed, including penalties, on a 2008 era mortgage for $910,000 with no bidders on the courthouse steps in August of 2011.

Having accepted $7,500 to voluntarily leave the property prior to eviction and not sue Wells Fargo, the former owner vacated in April of 2012 and Wells sold the property for $1,200,000 that May, a purchase which was financed with a loan for $840,000.

Having since been completely remodeled with new systems and expanded by over 1,200 square feet, and with $675,000 in additional debt, the now four-bedroom Noe Valley home is back on the market and listed for $2,550,000.

1164%20Church%202013.jpg

The main floor has been reconfigured and opened up into a great room.

1164%20Church%202013%20Living.jpg

And the nearly all new lower level now sports two new bedrooms, two and one-half new baths, and a door to a refinished two car garage:

1164%20Church%202013%20Lower.jpg

∙ Listing: 1164 Church Street (4/5) 2,956 sqft - $2,550,000 [1164church.com]
A Foreclosed Upon Noe Home Sells For Over...What Wells Was Owed [SocketSite]
Will Wells Profit From This Noe Valley Foreclosure? [SocketSite]

Posted by socketadmin at 11:00 AM | Permalink | Comments (23) | (email story)

May 14, 2013

Endorsing The Giants $1.5 Billion Mission Rock Development Deal

Mission%20Rock%20Massing.gif

On the agenda for San Francisco’s Board of Supervisors this afternoon, the endorsement of the financial terms and fiscal feasibility for the Giants proposed development of San Francisco’s Seawall 337, also known as the Giants Parking Lot A, or "Mission Rock."

Once the Term Sheet is endorsed, the Giants can commence the formal Planning process (entitlements, environmental impacts, design approval) for the four phase development, with the team now slated to commence construction in 2016, finishing the final phase of development by 2022 assuming the market doesn't dip.

As proposed, the $1.5 billion project will be financed by $200 million in Port funds (bonds, taxes and development rights) and $1.3 billion in private investment. And in terms of the return, the proposed development is expected to yield annual tax and fee revenues to the City of $21,496,000 in addition to a one-time collection of $60,170,000.

While the Port currently receives just under $5 million in rental revenue for the Giants Parking Lot A and Pier 48 parcels, the Port would receive between $1.4 and $1.7 billion in revenue from the Mission Rock development over the 75-year term of the lease.

Mission Rock Term Sheet And Fiscal Feasibility Report [sfbos.org]
Giants Moving Forward With Massive "Mission Rock" Development [SocketSite]
Mission Rock: The Four Phases, Timing, And Sea Rise Clause [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (3) | (email story)

May 7, 2013

TIC Owners, Occupiers, Buyers, Agents And Attorneys Take Note

With Supervisor Wiener dissenting against the amended legislation which he originally co-sponsored, San Francisco's full Board of Supervisors is scheduled to vote on the proposed condominium conversion lottery bypass this afternoon.

The legislation would establish a bypass period during which qualifying TICs could condo convert for a fee; establish lifetime leases for tenants in converting non-owner occupied units; restrict future condominium lotteries to buildings with no more than four units; and suspend San Francisco’s annual condominium conversion lottery until at least 2024.

Buildings which participated in either the 2012 or 2013 lottery and have been continuously occupied by the required number of applicant owners of record for no less than five years as of April 15, 2013 would immediately qualify for the bypass. Buildings which participated in either the 2012 or 2013 lottery and have been continuously occupied by the required number of applicant owners of record for no less than three years as of April 15, 2014 would qualify on that date.

Buildings which did not qualify or participate in either the 2012 or 2013 lotteries would eventually be eligible to participate in the bypass assuming a formal TIC agreement was in place as of April 15, 2013 and the required number of applicant owners have continuously occupied the building for at least six years by April 15, 2018.

In other words, TIC buildings in which the owner applicants weren't in place by April 15, 2012 would never qualify for the bypass and five or six unit TIC buildings which don't qualify for the bypass would never qualify for conversion as proposed.

And yes, the proposed legislation still contains the provision that if any lawsuit is filed against the legislation (see previous paragraph), the bypass would be suspended and the annual lottery resumed until a final judgment is issued in favor of the City.

Amended Condominium Conversion Impact Fee Legislation [sfbos.org]
Condo Lottery Bypass Legislation: Key Dates, Details, And Legalities [SocketSite]

Posted by socketadmin at 10:30 AM | Permalink | Comments (21) | (email story)

May 3, 2013

Appealing Plans Or Certain To Be Appealed?

1785%2015th%20Street%20Building.jpg

Purchased for $600,000 in 2005, the 765 square foot building at 1785 15th Street between Guerrero and Albion was foreclosed upon in 2011 and resold for $430,000 that November.

Luckily for the buyers, the San Francisco's Planning Department has determined that the shed behind the building which was demolished last year was not a historical resource.

1785%2015th%20Street%20Shed.jpg

Having determined that the building itself isn’t a historical resource either, a finding that could, of course, be appealed under the California Environmental Quality Act, the buyers plan to raze the building and build a 52-foot-tall, 5-story building in its place:

1785%2015th%20Street%20Design.gif

The first floor of the eight-unit building would be finished in stone with the rest of the facade in stucco and Hardie-plank siding with aluminum windows and painted wood bays and window trim. No parking is proposed.

The estimated cost of the project is $2.2 million and the project sponsor hopes to begin construction in January 2014. Any opposition to the project has until May 21 to appeal the Planning Department's determination and attempt to force a full environmental report.

Supervisor Showdown: Wiener Versus Kim, CEQA, And Waste [SocketSite]

Posted by socketadmin at 8:00 AM | Permalink | Comments (22) | (email story)

May 1, 2013

Contemporary Noe Valley And Facebook Year-Over-Year

1507 Noe 2012

In February of 2012, the newly constructed 3,400 square foot home at 1507 Noe Street hit the market listed for $2,750,000 and sold for $2,950,000 that March. The faceless buyer of the Noe Valley home was officially "Hangar Labs LLC," which we reported was formed by a single Facebook engineer.

Two months after the purchase of 1507 Noe and just before Facebook went public at $38 a share, a two million dollar mortgage was taken out on the property. And with Facebook trading around $24 a share, this past November 1507 Noe quickly returned to the market listed for $3,599,000.

Reduced to $3,399,000 in January, the sale of 1507 Noe Street closed escrow on Monday with a reported contract price of $3,230,000, up 9 percent on an apples-to-apples basis, roughly 8.4 percent when annualized.

Facebook closed the day at $27.43 per share, down roughly 28 percent year-over-year while the S&P 500 is up 13.6 percent and the workforce in San Francisco has grown by 19,500 over the past twelve months.

SF Unemployment Rate Drops To 6.0% For First Time Since 2008 [SocketSite]
The Dow Hits An All-Time High, S&P 500 Comes Close [SocketSite]

Posted by socketadmin at 5:00 PM | Permalink | Comments (5) | (email story)

April 30, 2013

Making Money On The Buy (And Perhaps The Possession As Well)

1164 Fulton Street

The four-unit Alamo Square building at 1164 Fulton Street was purchased for $975,000 a year ago, "occupied by [an] un-cooperative family member who [would] not allow showings" and with possession of the property at the time of the trust sale "negotiable."

Deemed a Historic Resource for the Alamo Square Historic District, San Francisco’s Historic Preservation Commission will have to approve the proposed expansion of the building's garage opening and restoration of the building’s façade based upon historic photographs.

Also proposed, a new roof deck at the rear of the building and a Dwelling Unit Merger, the paperwork for which has yet to be filed as far as we know.

As they say, in real estate you make money on the buy, not the sale. Okay, and in San Francisco, sometimes on the possession as well.

San Francisco's Historic <1 Percent And Eleven Landmark Districts [SocketSite]

Posted by socketadmin at 3:45 PM | Permalink | Comments (8) | (email story)

April 25, 2013

What You Can Rent For $17,500 A Month In San Francisco

1097%20Howard%20%23307.jpg

The founders of Bebo purchased 1097 Howard Street #308 for $2,450,000 back in 2007. In 2009, they sold it for $1,900,000 having already moved to a slightly larger pad.

As plugged-in people know, the 4,162 square foot Lighthouse Lofts unit #308 was created by combing three adjacent units and 1097 Howard Street #308 is also known as #307.

And as a reader notes, the two-bedroom loft #307 is now being offered for rent fully furnished with "flexible 1-2 month lease terms," which are key, for $17,500 a month.

We'll let you run the numbers, but don't forget to include a vacancy factor if you do.

∙ Listing: 1097 Howard Street #307 (2/2.5) 4,200 sqft - $17,500/month [mcguire.com]
1097 Howard #308 Shines Some Apples To Apples Style Light [SocketSite]
The SocketSite Scoop On 37 Raycliff Terrace (A.K.A. 2799 Broadway) [SocketSite]
The Lighthouse Lofts Apple Of Our Eye Returns (1097 Howard #308) [SocketSite]

Posted by socketadmin at 8:00 AM | Permalink | Comments (4) | (email story)

April 19, 2013

SF Unemployment Rate Drops To 6.0% For First Time Since 2008

Preliminary labor force counts for San Francisco, Marin and San Mateo counties peg the current unemployment rates at 6.0%, 5.2% and 5.7% respectively, down 0.3 points from February to March in San Francisco, down 0.2 points in Marin and San Mateo.

Following an 4,500 increase in February, the number of employed dwellers in San Francisco fell by 1,000 in March to 452,100 as the labor force fell by 2,500 to 480,900 and the number of unemployed fell by 1,500 to 28,900.

The unemployment rate in San Francisco hasn't been as low as 6.0 percent since November of 2008, peaking at 10.1 percent in January of 2010 when 43,300 fewer San Francisco residents were employed than today.

Employment in San Francisco is currently up by 19,500 workers on a year-over-year (YOY) basis versus 22,500 the month before but remains 13,500 workers below a December 2000 dot-com peak (at which point the unemployment rate measured 3 percent).

The unadjusted unemployment rate in California fell to 9.4% in March as employment fell by 19,300 and the number of unemployed fell by 69,900.

San Francisco Employment Trends And Dot-Com Context [SocketSite]
Monthly Labor Force Data for Counties: March 2013 (Preliminary) [EDD]

Posted by socketadmin at 9:15 AM | Permalink | Comments (0) | (email story)

April 12, 2013

Mansion Owner Minor Tops The List Of California Tax Delinquents

3800 Washington

With $10,856,672.77 in state income tax past due, San Francisco’s Halsey Minor, the co-founder of CNet and current owner of the mansion above, has once again topped the list of the Top 500 Delinquent Taxpayers in California.

As plugged-in people know, Mr. Minor recently cut the list price for his Presidio Heights mansion and two adjacent parcels to $21 million, a million dollars more than he paid for the real estate in 2007 with a loan for $9 million to which a second for $3 million was added in 2008.

As a top 500 delinquent, Mr. Minor is at risk of losing his driver's license as well.

Top 500 Delinquent California Taxpayers [ca.gov]
March Mansion Madness: Minor's Major Price Cut [SocketSite]
Halsey Minor's "Abandoned" $20,000,000 Mansion Hits The Market [SocketSite]

Posted by socketadmin at 12:00 AM | Permalink | Comments (18) | (email story)

April 8, 2013

Neighbors Turn To Environmental Concerns To Keep The Haus Down

Haus Martin: 611 Buena Vista Ave (Image Source: CCS Architecture)

Citing concerns of architectural incompatibility, unacceptable building heights, and the loss of privacy, the neighbors' bids to block a third story addition atop the Cass Calder Smith designed modern Haus Martin at 611 Buena Vista Avenue by way of Discretionary Review (DR) were denied by San Francisco’s Planning Commission. The Commission did, however, impose a three-foot setback for the third story in order for the project to proceed.

While the plans for 611 Buena Vista were redrawn and the setback incorporated to allow greater visibility of the corner turret of the adjacent building at 601 Buena Vista Avenue, the opposing neighbors have turned to California's Environmental Quality Act (CEQA) in another attempt to block the approved project, now citing their environmental concerns.

611%20Buena%20Vista%20Plan.gif

Having reviewed the plans, San Francisco’s Planning Department has found that the 611 Buena Vista project would "not have a significant impact on the environment and is exempt from further environmental review," an exemption which would not be available for the project under Supervisor Kim’s CEQA legislation as proposed.

San Francisco's Board of Supervisors is scheduled to hear the arguments tomorrow and either affirm or reverse Planning's exemption for the project to proceed without further review, delay, and expense.

Haus Martin And Cass Calder Smith Architecture [SocketSite]
Supervisor Showdown: Wiener Versus Kim, CEQA, And Waste [SocketSite]
The Circle Of Life On Buena Vista Avenue Continues [SocketSite]

Posted by socketadmin at 11:00 AM | Permalink | Comments (11) | (email story)

April 1, 2013

A Brazen Move In Bernal Heights?

300 Coleridge

The six-unit Bernal Heights building at 300 Coleridge is on the market for $1,850,000.

With all six two-bedrooms occupied by rent controlled tenants, most of which are protected and paying low rents, the gross income for the building is estimated at $89,575 which includes $8,400 in income for the four car garage and an average apartment rent of $1,127 per month. The building's current expenses are estimated at $34,734 a year for a CAP rate of just under 3 percent at current rents.

While the current owner "will not deliver vacant, Ellis act or evict any tenants," the building is being marketed by the listing agent as "suitable for buyers willing to Ellis act and develop as TIC units or a long term future rental units."

Keep in mind that TIC conversions in buildings with five or more units must go through the state subdivision process and evicted tenants by way of the Ellis Act can file for the first right to return to their units for a period of ten years, during the first five of which they are entitled to sign a new lease at their original rents.

Posted by socketadmin at 2:00 PM | Permalink | Comments (25) | (email story)

March 27, 2013

Plans To Double The Square Footage By Way Of A Two Foot Rise

105%20Hoffman%20Facade%20Existing.jpg

Speaking of variances and plans to raise the roof, the buyer of the 1,170 square foot two-bedroom house at 105 Hoffman over is seeking permission to raise the Noe Valley property two feet and build an all-new first floor with garage underneath.

105%20Hoffman%20Raised%20Facade.gif

In addition to the garage for one car, the expansion would add two new bedrooms, a new bathroom, and a laundry room to the house. Click on the proposed plans to enlarge and see how it's all proposed to be done:

The project would also reconfigure the existing kitchen and rooms on the main floor.

No word on the fate of the vintage O’Keefe & Merritt stove.

105%20Hoffman%20Kitchen.jpg

Already extending 10 feet into the required 34 foot rear yard, the proposed height increase and first floor expansion will require a variance to proceed, a variance which was slated to be decided upon today. The property was purchased for $880,000 last year.

Trying To Raise The Roof And Make Room For A Restaurant To Rise [SocketSite]

Posted by socketadmin at 2:30 PM | Permalink | Comments (12) | (email story)

March 5, 2013

The Dow Hits An All-Time High, S&P 500 Comes Close

The Dow Jones Industrial Average closed the day at 14,253.77, up 8.8 percent for the year and a new all-time high, having doubled in value since 2009. The S&P 500 closed the day at 1,539.79, within 2 percent of an all-time high.

Facebook closed the day at $27.52 a share, 27.58 percent below its IPO price of $38 nine months ago. Speaking of which, having been reduced to $3,399,000 in January and briefly in contract after three months on the market, 1507 Noe is once again active and available.

We've Been Looking Past The Overhyped Facebook Effect, Have You? [SocketSite]
Facebook On The Home Front [SocketSite]
The Facebook Effect On Noe [SocketSite]

Posted by socketadmin at 4:45 PM | Permalink | Comments (12) | (email story)

February 28, 2013

Selling Short For $74,000 More Than Was Paid

610 Illinois

Purchased for $525,000 in April of 2003 with one percent down and loans totaling $520,000 (ah, the good old days), 610 Illinois Street #203 was refinanced at the end of 2006 with $594,000 in debt.

Having just been listed as a "short-sale" for $599,000, five thousand more than was borrowed and $74,000 more than was originally paid for the Central Waterfront one-bedroom condo a few blocks from the newly proposed Café Cocomo development, the math might not make sense to some.

A couple of missing variables which might help to explain the listing: the 2006 era mortgage has been in default since June of 2011 at which point the owner was already $45,000 past due and has since declared bankruptcy.

∙ Listing: 610 Illinois Street #203 (1/1.5) 1,068 sqft - $599,000 [Redfin]
Plans For 120 New Condos Where Café Cocomo Stands (Or Shakes) [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (10) | (email story)

February 7, 2013

San Francisco's Condominium Conversion Lottery Results 2013

While San Francisco’s Land Use Committee couldn’t reach a decision and decided to delay their vote on the proposed condo conversion lottery bypass for another month in hopes of finding an undefined compromise that would satisfy both proponents and opponents of the proposed legislation, San Francisco’s Department of Public Works has drawn the lucky 200 winners and standby list for San Francisco’s 2013 Condominium Lottery.

We're still working on the official numbers, but according to our sources around 2,500 units entered the lottery this time around, including at least one belonging to a plugged-in reader who has entered eight years in a row, has yet to win, and remains stuck with a TIC loan he hasn't been able to refinance.

∙ San Francisco Condominium Lottery 2013 Results: Winner List | Standby List
A Clash Over Condo Conversions At City Hall [SocketSite] 
The Devilish Details For Bypassing SF's Condo Conversion Lottery [SocketSite]

Posted by socketadmin at 9:45 AM | Permalink | Comments (32) | (email story)

February 1, 2013

Noe Valley Apples-To-Apples And The S&P Over The Past Two Years

3715 22nd Street

As we wrote about the renovated Noe home at 3715 22nd Street in January:

Listed for sale at $2,750,000 in 2010, the "exquisitely renovated [with] hi-end finishes & impeccable detail" Victorian home at 3715 22nd Street ended up selling for $2,500,000 that October, which included the legal one-bedroom unit below and Noe Valley views.
Back on the market and listed for $2,825,000, a sale at asking would represent annual appreciation of 5.7 percent over the past two years for the Noe Valley property on an apples-to-apples basis, total appreciation of 13 percent since the fourth quarter of 2010.

The sale of 3715 22nd Street closed escrow last week with a reported contract price of $2,890,000. Call it total appreciation of 16 percent since the fourth quarter of 2010 for the Noe Valley single-family home on an apples-to-apples basis, effective annual appreciation of 6.7 percent over the past two years.

Over the same two years the S&P 500 is up 28 percent, up 16 percent since May of 2012 when Facebook, which is currently trading at $30.16, went public at $38 per share. We'll let you decide which is having more of an effect on the market.

Speaking of Facebook and Noe, the list price for the modern home at 1507 Noe Street was reduced to $3,399,000 in January.

Renovated Noe Valley On An Apples-To-Apples Basis Since 2010 [SocketSite]
Look Past The Overhyped Facebook Effect [SocketSite]
Facebook On The Home Front [SocketSite]
The Facebook Effect On Noe [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (8) | (email story)

January 28, 2013

A Clash Over Condo Conversions At City Hall

TIC Lottery Applicants 2001-2011 (www.SocketSite.com)

At 1 PM today, San Francisco’s Land Use Committee which is chaired by Supervisor Wiener is scheduled to vote on whether or not to allow proposed Condo Conversion Lottery Bypass legislation to move forward to San Francisco’s Board of Supervisors for adoption.

The proposed legislation which was introduced by Supervisors Wiener and Farrell last June would allow eligible TIC owners to condo convert for a one-time fee of $20,000 per unit.

As we first reported last year, while the proposed fee amount is $20,000 per unit, said fee would be reduced for each year a unit has participated in the condominium conversion lottery, a reduction of 20 percent per year starting in year two, up to an 80 percent reduction for units that have participated for 5 years or more.

With roughly 2,500 units already seeking conversion, and a current cap of 200 conversions per year, the expected wait time to condo convert without the bypass is well over a decade, approaching two decades for new entrants.

While the terms of the proposed legislation would provide lifetime leases for existing tenants of converting units, the San Francisco Tenants Union opposes the lottery as an assault on Rent Control as condominiums are exempt from the controls.

Both opponents and proponents of the legislation are trying to rally their supporters to the steps of City Hall this afternoon. As always, we’ll keep you posted and plugged-in.

The Devilish Details For Bypassing SF's Condo Conversion Lottery [SocketSite]
$20K To Condo Convert From TIC As Proposed [SocketSite]
Condominium Conversion 2012 Lottery Deadline And Odds (Against) [SocketSite]

Posted by socketadmin at 9:30 AM | Permalink | Comments (37) | (email story)

January 22, 2013

If The Median Price Is Way Up, Why Wasn't The Value On Valley?

554 Valley

On the market at the end of 2006 asking $2,879,000, at which point it was the most expensive single-family home actively listed for sale in Noe Valley, the four-bedroom home at 554 Valley Street ended up selling for $2,879,000 in March of 2007.

Returned to the market this past June asking $2,895,000, the sale of 554 Valley closed escrow last week with a reported contract price of $2,725,000, five (5) percent or $154,000 less than six (6) years ago. At the same time, the median sale price in Noe Valley is up around 25% over the same period of time as larger and more expensive homes have come to market, changing the mix of sales.

Speaking of larger and more expensive, the most expensive single-family home currently listed for sale in Noe Valley is 1507 Noe Street which tripled in size from 2006 to 2012, was purchased as new for $2,950,000 this past March, was listed for $3,599,000 this past November, and was reduced to $3,399,000 two weeks ago.

Garrett's Quick Peek [SocketSite]
Medians Are Up, But Don’t Confuse That With Increasing "Prices" [SocketSite]
Say Hello To Your Little Friend (In The Shower) At 1507 Noe [SocketSite]
The Facebook Effect On Noe [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (10) | (email story)

January 18, 2013

Nearly 20,000 New Jobs For San Franciscans Over The Past Year

Preliminary labor force counts for San Francisco, Marin and San Mateo counties peg the current unemployment rates at 6.5%, 5.5% and 6.0% respectively, down 0.2 points from November to December in San Francisco and San Mateo, down 0.3 points in Marin.

As the size of San Francisco’s labor force increased by 2,300 to 478,700 in December, the number of unemployed fell by 1,000 to 30,900 and the number of employed city dwellers increased by 3,300 to 447,800.

Employment in San Francisco is currently up by 19,800 workers on a year-over-year (YOY) basis versus 16,700 the month before, but remains 17,700 workers below a December 2000 dot-com peak (at which point the unemployment rate in San Francisco measured 3 percent).

The unadjusted unemployment rate in California ticked up to 9.7% in December as employment increased by 21,400 but the labor force increased by 50,200 workers and the number of unemployed increased by 28,800.

Monthly Labor Force Data for Counties: December 2012 (Preliminary) [EDD]
Growth Rate Slows, But San Francisco Adds 700 Jobs In November [SocketSite]
San Francisco Employment Trends And Dot-Com Context [SocketSite]

Posted by socketadmin at 9:15 AM | Permalink | Comments (5) | (email story)

January 10, 2013

Tighter Underwriting Rules Set To Take Effect (In A Year)

Set to take effect on January 10, 2014: a new rule forcing lenders to verify borrowers' ability to repay mortgages by confirming their income and assets.

The rule, mandated by Congress in response to lax underwriting standards before the 2008 financial crisis, will also offer some legal protection for lenders who follow guidelines for so-called qualified mortgages, according to an e-mailed statement by the [U.S. Consumer Financial Protection Bureau]. The measure also insulates issuers of qualified mortgages at prime interest rates from future lawsuits.
For qualified mortgages, the borrower must have a debt-to-income ratio of 43 percent or less. Loans that do not meet that criterion but are eligible for purchase, guarantee or insurance by Fannie Mae or Freddie Mac, or are issued by some government agencies, will be considered qualified mortgages for as long as seven years.
Qualified mortgages must also limit points and fees to 3 percent of the total loan amount, according to the bureau. Features that proved highly risky during the housing bubble, such as negative amortization, interest-only payments and terms exceeding 30 years, [will also be] prohibited for qualified mortgages.

Emphasis added.

Lender Review of Borrowers Tightened Under Mortgage Rules [Bloomberg]

Posted by socketadmin at 8:15 AM | Permalink | Comments (11) | (email story)

January 7, 2013

Mortgage Rates Drop, But Set To Start Ticking Up This Year?

Average 30-Year Mortgage Rates Since 1971

According to Freddie Mac’s latest Primary Mortgage Market Survey, 30-year fixed-rate mortgage rates averaged 3.34 percent (with 0.7 points) last week versus 3.91 percent a year ago, down from 3.35 percent at the end of 2012 and within a few basis points of an all-time low.

The average 15-year fixed mortgage rate dropped to 2.64 percent last week versus 3.23 percent a year ago, down from 2.65 percent at the end of 2012.

At the same time, the price of Fannie Mae-guaranteed securities, which lenders use to price loans, "tumbled last week to the lowest since Sept. 12, the day before the Federal Reserve announced plans to add $40 billion of mortgage debt to its balance sheet each month. The drop, as lawmakers struck a budget deal and the central bank signaled it may conclude the open-ended bond-buying program this year, could lead to further increases in homeowner borrowing costs from the record lows set in December."

Mortgage Rates Start the New Year Near All-Time Record Lows [Freddie Mac]
Cheap Money Era That Saved U.S. Housing Seen Bottoming [Bloomberg]

Posted by socketadmin at 9:30 AM | Permalink | Comments (38) | (email story)

January 4, 2013

The Annual Return And Returns Of 2170 Pacific Avenue

2170 Pacifc

Not counting its listings in 2007, 2008, 2009, or 2010, the three-bedroom Pacific Heights condo at 2170 Pacific Avenue is back on the MLS with an official one day on the market and once again asking $2,995,000 having been purchased for $2,350,000 in May of 2004.

2170 Pacific: Stairs, dome, and landing

The three-bedroom had been making the rounds on Craigslist asking $8,500 a month when listed in 2010. And according to the latest listing, the condo is currently rented for $8,925, which would be a current CAP Rate of around 2 percent at asking and annualized appreciation of just under 3 percent since 2004.

∙ Listing: 2170 Pacific Avenue (3/3.5) - $2,995,000 [via Redfin]
It's Deja Vu (But Not DJIA) All Over Again: 2170 Pacific Avenue Edition [SocketSite]
The Dow Continues To Move (While 2170 Pacific Still Hasn’t) [SocketSite]
Warm Thoughts Of A Traditional Thanksgiving Dinner (2010 Edition) [SocketSite]
On Tour As New (For The Fifth Time In Two Years): 2170 Pacific [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (4) | (email story)

December 21, 2012

More Yammerings And Apparent Tax Tomfoolery

2845 Broadway

As we first reported last month with respect to the sale of 2845 Broadway up on Billionaire's Row:

Unless a major miscalculation, fat finger error or tomfoolery by San Francisco's Assessor Recorder's office is in play, based on the recorded transfer tax paid, the copy of the deed we received pegs the sale price of 2845 Broadway at $20 million.
A $20 million sale is just a bit below the original $65 million ask, $18.5 million (48 percent) under its last list price, roughly $32 million less than has been invested in the property to date, and nowhere near the $33 million 2840 Broadway commanded.
In terms of the buyer, while we've heard various yammerings, the legal entity on the deed is Broadcliff LLC with a mailing address of a wealth manager out of Dallas, Texas. We can't yet officially confirm the individual hidden behind the LLC.

Yes, "yammerings," as in David Sacks, CEO of Yammer. From Trulia this week:

Tech mogul David Sacks has reportedly just paid $34.5 million for 2845 Broadway Street in San Francisco, making it the most expensive home ever sold in San Francisco. Sources close to the deal, which is currently in escrow, say that Sacks and his wife Jacqueline are the proud new owners of the partially-completed home on ‘Billionaire’s Row.’
We’re also hearing buzz among local “in-the-know” brokers that the officially recorded purchase price will likely come in lower than $34.5 million, and a portion of the sale will be recorded as alternative personal property for tax reasons, but that is indeed the amount of money it took to get this home sold. We’ll know more when the official docs make their way to public records.

Once again, the sale has closed and we have reviewed the public records which pegs the recorded sale price at $20,000,000 based on the transfer tax paid to the City. Which begs the question, if the "in-the-know" sale price Truila is reporting is correct, are the "tax reasons" for under recording the sale price by $14,500,000 simply an attempt to avoid paying the City an additional $362,500 in transfer tax and reduce the Sacks’ property tax bill by $169,500 a year? And if so, is it a legitimate strategy and will the City stand for it?

UPDATE: Straight from David Sacks:

There's no "tax tomfoolery". You correctly reported the sale price of 2845 Broadway when you checked the public records. Trulia didn't bother to. It's just sloppy reporting on their part. As the publication that appears to do actual research and fact-checking, rather than just quoting unnamed sources, you should have stuck to your guns and stood by your original story.
That said, I remain a fan of your blog.

Cheers. And always, thank you for plugging in.

The Massive 2845 Broadway Misses The Mark And Record Books [SocketSite]

Posted by socketadmin at 5:00 AM | Permalink | Comments (28) | (email story)

December 7, 2012

Three Weeks Left To Discharge Your Mortgage Debt Tax Free

Speaking of the end of the year, the 2007 Mortgage Forgiveness Debt Relief Act is set to expire at the end of 2012.

The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.
This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.

While the expected expiration of the Act likely fed the 35 percent increased in short sale volume across the US over the past year, listings of short sales in San Francisco have dropped dramatically from the middle of 2011 when over 225 properties, 14 percent of all listings and the peak of activity in San Francisco, were being offered as short sales.

Currently, less than 20 properties are listed as short sales in San Francisco, 3 percent of all active listings.

The Mortgage Forgiveness Debt Relief Act and Debt Cancellation [irs.gov]

Posted by socketadmin at 12:00 AM | Permalink | Comments (6) | (email story)

December 3, 2012

The Financial Terms And Plan To Rehab Pier 70's Historic Core

Pier 70 Building 115/116

The term sheet for the $58.5 million rehabilitation of San Francisco's 20th Street Historic Buildings, the historic core of the Pier 70 redevelopment project, is up for review by San Francisco’s Board of Supervisors this week.

Under the proposed terms, Orton Development will invest up to $14 million in equity in exchange for a 66-year ground lease for the six historic buildings. The Port will contribute $1.5 million to the project with the balance financed by way of debt and Federal tax credits.

Orton will earn a 14 percent per year return on their equity, paid by way of collected rents on the renovated buildings in which the City will eventually share. According to the Port, "the 14% return on investor equity in a real estate deal is on the low side of returns demanded by investors for at-risk developments."

The key words in that last sentence with respect to the proposed return: "equity" and "at-risk" (i.e., their money, the return of which is not guaranteed).

Orton's proposed uses for the six buildings once they have been rehabilitated:

Bethlehem Steel Office Building: Office with ground floor food service
Union Iron Works Office Building: Office
Union Iron Works Machine Shop: Manufacturing and light industrial or arts-related use
Union Ironworks Warehouse: Flex space with state-of-the-art data capabilities
The Powerhouse: Restaurant, meeting rooms, classrooms, and a gym
Building 14: Recreation or light industrial with retail and office

Assuming the term sheet and lease are approved, construction is slated to begin spring 2013 with first re-occupancy of the historic buildings in 2014.

That Pier 70's Show: Developer Lined Up For The Historic Core [SocketSite]
Proposed Term Sheet: 20th Street Historic Buildings Renovation [sfbos.org]
Let The Courting Begin For Pier 70’s Historic Core [SocketSite]

Posted by socketadmin at 12:45 PM | Permalink | Comments (35) | (email story)

November 30, 2012

The Economic Value Of Being Labeled Green In California

The Green Label Premium in California

From San Francisco’s Assessor-Recorder’s office with respect to their new Green Labels for properties in San Francisco: "While no re-assessments will be triggered by earning an environmental distinction for your home, there is evidence that a Green Label enhances the re-sale value."

The aforementioned evidence was in the form of an academic study, The Value of Green Labels in the California Housing Market, financed by the San Francisco Department of the Environment and StopWaste.Org. The key finding from the report:

This study, conducted by economists at the University of California, Berkeley and University of California, Los Angeles, finds that California homes labeled by Energy Star, LEED for Homes and GreenPoint Rated sell for 9 percent more (±4%) than comparable, non-labeled homes.
Because real estate prices depend on a variety of factors, the study controlled for key variables that influence home prices including location, size, vintage, and the presence of major amenities such as swimming pools, views and air conditioning.
Considering that the average sales price of a non-labeled home in California is $400,000, the price premium for a certified green home translates into some $34,800 more than the value of a comparable home nearby.

Green Labels Migrate From Marketing Materials To Property Records [SocketSite]
The Value of Green Labels in the California Housing Market [builditgreen.org]

Posted by socketadmin at 12:00 PM | Permalink | Comments (1) | (email story)

November 21, 2012

The Facebook Effect On Noe

1507 Noe 2012

Nine months ago the newly constructed 3,400 square foot modern home at 1507 Noe Street hit the market listed for $2,750,000 and sold for $2,950,000 this past March. The faceless buyer of the Noe home was officially "Hangar Labs LLC," which we'll report was formed by a single Facebook engineer.

Two months after the purchase of 1507 Noe, just before Facebook went public at $38 a share, a two million dollar adjustable rate mortgage was taken on the property.

Two weeks ago, 1507 Noe quickly returned to the market listed for $3,599,000. Facebook is currently trading at $24.43 a share, which is up from $19.05 in August.

And yes, this is the house with the shower from which to see and be seen:

1507 Noe Shower

∙ Listing: 1507 Noe Street (4/3.5) 3,400 sqft - $3,599,000 [1507noestreet.com]
Say Hello To Your Little Friend (In The Shower) At 1507 Noe [SocketSite]
Facebook On The Home Front [SocketSite]
We've Been Looking Past The Overhyped Facebook Effect, Have You? [SocketSite]

Posted by socketadmin at 10:30 AM | Permalink | Comments (16) | (email story)

November 16, 2012

San Francisco Added 2,400 New Workers And Jobs Last Month

Preliminary labor force counts for San Francisco, Marin and San Mateo counties peg the current unemployment rates at 6.8%, 5.8% and 6.3% respectively, down 0.1 points in San Francisco and San Mateo from September to October, unchanged in Marin.

While the number of unemployed in San Francisco remains unchanged from September at 32,600, the labor force has grown by 2,400 (from 474,000 to 476,400) as has the number of employed (from 441,400 to 443,800).

Employment in San Francisco is currently up by 19,100 workers on a year-over-year (YOY) basis but remains 21,700 workers below a December 2000 dot-com peak (at which point the unemployment rate in San Francisco measured 3 percent).

The unadjusted unemployment rate in California ticked up to 9.8% in October as employment increased by 41,600 but the labor force increased by 68,500 and the number of unemployed increased by 27,100.

Monthly Labor Force Data for Counties: October 2012 (Preliminary) [EDD]
San Francisco Unemployment Under 7% For First Time Since 2008 [SocketsSite]
San Francisco Employment Trends And Dot-Com Context [SocketSite]

Posted by socketadmin at 9:30 AM | Permalink | Comments (1) | (email story)

November 14, 2012

Piers 30-32 Citizens Advisory Committee Members Call Foul

Let's forget about whether or not the 13 percent rate return the City is proposing to pay the Golden State Warriors (GSW) on their reimbursable rehabilitation expenses for Piers 30-32 makes any sense for a moment. Instead, let’s look at how long it will take the City to repay those reimbursable expenses under the proposed conceptual financial framework which the Mayor has reviewed and endorsed.

As plugged-in people know, per the term of the City’s proposed financial agreement, the source of funds for the repayment of the $120,000,000 in rehabilitation expense for Piers 30-32 would be limited to rent credits, proceeds from the sale of Seawall Lot 330, and the sale of Infrastructure Financing District (IFD) bonds.

In order to minimize the reimbursable construction costs and interest expense, the Port will attempt to apply the expected proceeds of the Seawall sale ($30,400,000) and IFD bonds ($60,000,000) as early as possible, leaving an expected balance of $29,600,000 subject to the 13 percent interest rate and to be serviced by the aforementioned rent credits from the 66-year ground lease of the Piers.

Per the City’s proposed agreement, the fair market value of the rent credits for Piers 30-32 are expected to run around $1,970,000 per year. At the proposed 13 percent rate of return, the debt service on the outstanding $29,600,000 in reimbursable costs would be around $3,848,000 per year, an annual shortfall of $1,878,000 on the debt service alone.

Luckily, per the terms of the proposed agreement, "in the event that any debt remained at the end of the 66 year lease, the Port would not be required to pay any remaining debt to GSW." That being said, we couldn't find any language with respect to accrued interest.

Under the objections of a number of Piers 30-32 Citizens Advisory Committee (CAC) members, including the Committee Chair, San Francisco's Budget and Finance Committee is scheduled to consider the proposed development framework this morning.

From the objecting members of the CAC:

While we have been very patient and willing to work with the process, the fact that we were not given an opportunity to meet as a body and discuss the details in the Fiscal Feasibility Report prior to its consideration by the Board of Supervisors Budget and Finance Committee leaves us little choice other than voicing our dissatisfaction and disappointment with what was intended to be the primary vehicle for community input about the Warriors Arena project.
More specifically, our concerns and requests for change are:
1. The CAC did not have a formally scheduled meeting to discuss the Fiscal Feasibility document and the details contained therein which is before the Board of Supervisors Budget and Finance Committee this Wednesday, November 14th. Since this report will form the basis of the development's Term Sheet, we believe it is important for the CAC to be able to meet, to ask questions, and to get answers from City staff to our questions before the report is considered for approval by the BOS Budget and Finance Committee. We ask that the Budget and Finance Committee continue their consideration of the Fiscal Feasibility report for a hearing date that follows at least two Piers 30-32 CAC meetings which will first introduce the document and will second hold a meeting where the CAC receives answers to our questions that originate from the first meeting.
2. The CAC meetings seem to be scheduled on an ad hoc basis with no set schedule.
3. CAC meetings to date have been informational public presentations by the developer and various City departments. They do not allow for CAC members to engage in meaningful discussion of the details.
4. The CAC meetings have not considered the most fundamental question for this project and that is whether or not Piers 30-32 is a truly feasible, functional location, as it is located on an already congested primary roadway for many San Franciscans. We believe the first step the City should take before expending tremendous amounts of our, City staff's, and the Warriors time and resources is to have the Planning Department provide at least two more locations they believe might be viable for EIR consideration, and which might require lower infrastructure cost reimbursements to the developer.

The objecting members of the CAC have requested 30-60 days to review, discuss and weigh-in on the Fiscal Feasibility report prior to the Board of Supervisors Budget and Finance Committee’s hearing of the report which is scheduled to take place in an hour.

All The Devilish Details For The Development Of Piers 30-32 [SocketSite]
Reviewed By The Mayor, The Warriors’ Guaranteed Return Remains [SocketSite]
Piers 30-32/Seawall Lot 330 - Warriors Development Project [sfbos.org]
Timeline And Key Milestones For Building The Warriors Arena In SF [SocketSite]
Piers 30-32 Citizens Advisory Committee Tips Off Tonight [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (20) | (email story)

November 7, 2012

Reviewed By The Mayor, The Warriors’ Guaranteed Return Remains

As we reported yesterday morning, while not highlighted in the publicized Fiscal Feasibility and Conceptual Framework for the proposed Piers 30-32 project, according to the detailed Findings of Fiscal Responsibility and Feasibility report, the Golden State Warriors (GSW) will receive a guaranteed 13 percent annual rate of return on the $120 million they spend, and for which they will be reimbursed by the City, to rehabilitate Piers 30-32 to prepare the piers for construction of the proposed Warriors arena.

Having been reviewed by the Mayor, a revised and redlined Conceptual Framework was introduced yesterday afternoon. The proposed 13 percent annual rate of return on the $120 million remains.

The exact terms for the reimbursement of the costs to rehabilitate the piers as proposed:

The parties recognize that the costs to rehabilitate Piers 30-32 will substantially exceed the appraised fair market rental value from the Waterfront Site and the fair market sale value of the Seawall Lot Site. GSW will be reimbursed for its actual and verifiable costs of seismically retrofitting and rehabilitating the piers to provide waterfront public access and support the other uses proposed for the Project, and of removing any fill in or about the Waterfront Site that is part of the Project (collectively, “Pier Substructure Costs”), up to $120,000,000 (the “Maximum Reimbursement Amount”), plus the Annual Cost Return described below.
Such reimbursement will be made through three sources of funds: (1) the Rent Credits due under the Waterfront Site Ground Lease as described in section 6 below; (2) the Seawall Lot Purchase Credit as described in section 7 below; and (3) proceeds of Net Available Property Tax Increment generated from the Site under an IFD as described in section 8 below. The reimbursement for Pier Substructure Costs will include a market return on cost of 13% per year (the “Annual Cost Return”), which reflects the timing and risk of GSW getting repaid for its recognized expenditures, net of the Seawall Lot Purchase Credit described in clause (2) above. The Annual Cost Return will begin when GSW incurs the recognized expenditure and will continue to apply to such expenditure until GSW is repaid as provided above. The Annual Cost Return will not count against the Maximum Reimbursement Amount.
GSW’s conceptual design for the work that is subject to such reimbursement will be subject to the Port’s prior approval generally consistent with other Port DDAs of commercial projects of similar scale, which approval will not be unreasonably withheld or delayed. If through such approval process the Port requests revisions to GSW’s conceptual design that would materially increase the Pier Substructure Costs, then the Maximum Reimbursable Amount stated above will be increased in connection with the negotiations of the Term Sheet and the Transaction Documents to reflect such increased costs.

Once again, with a tight timeline in play, the Port Commission has until to February 1, 2013 to endorse the proposed terms while the Board of Supervisors has until February 15.

All comments on our original term sheet report.

All The Devilish Details For The Development Of Piers 30-32 [SocketSite]
It's No Slam Dunk Nor Layup For A Warriors Arena In San Francisco [SocketSite]
The Design For The Warriors San Francisco Arena On Piers 30-32 [SocketSite]
Findings of Fiscal Responsibility and Feasibility: Piers 30-32 Arena Project [Box.net]
Timeline And Key Milestones For Building The Warriors Arena In SF [SocketSite]

Posted by socketadmin at 3:30 PM | Permalink | (email story)

November 6, 2012

All The Devilish Details For The Development Of Piers 30-32

As we reported last month, the draft development deal with the Golden State Warriors to build an arena upon San Francisco’s Piers 30-32 would cap the City's exposure on the billion dollar project to a $120,000,000 reimbursement (the "Maximum Reimbursement Amount") for pier rehabilitation and potential public improvements with funding of the reimbursement limited to rent credits, the sale of Seawall 330 for an estimated $30,400,000, and new property tax revenue generated by the development.

While not highlighted in the summary Fiscal Feasibility and Conceptual Framework presentation for the Piers 30-32 project, however, as Jamie Whitaker over at Rincon Hill notes, according to the detailed Findings of Fiscal Responsibility and Feasibility report, the Golden State Warriors will receive a guaranteed 13 percent annual rate of return from the City on the $120 million they spend for the rehabilitation of Piers 30-32, a return that's above and beyond the Maximum Reimbursement Amount.

A few other assumptions for the project: 205 events a year with roughly 2 million attendees (1.4 million of which will be from outside the city limits) and an average of around 2,000 cars in need of parking per event.

With a tight timeline in play, the Port Commission has until to February 1, 2013 to endorse the proposed Term Sheet while the Board of Supervisors has until February 15, 2013.

It's No Slam Dunk Nor Layup For A Warriors Arena In San Francisco [SocketSite]
The Design For The Warriors San Francisco Arena On Piers 30-32 [SocketSite]
Plans For Seawall 330 Remain As Murky As The Rendering [SocketSite]
Findings of Fiscal Responsibility and Feasibility: Piers 30-32 Arena Project [Box.net]
Timeline And Key Milestones For Building The Warriors Arena In SF [SocketSite]

Posted by socketadmin at 9:15 AM | Permalink | Comments (53) | (email story)

November 2, 2012

Key Economic, Building And Transportation Trends

The summary bullet points from the Planning Department’s just completed 2011 Commerce and Industry Inventory for San Francisco which covers a 10-year time-series of data, including population, labor force, employment, wages, business growth, retails sales, government expenditures/revenues, building, land use, and transportation trends:

• Employment, the simplest key indicator of economic activity, grew 2% to 559,000 jobs over employment in 2010 (13,300 additional jobs). The unemployment rate fell to 8.6% from 9.5% in 2010. [Editor's Note: As plugged-in people know, the unemployment rate in San Francisco is now under 7% and employment is up by 19,700 jobs on a year-over-year basis.]
• The number of business establishments increased to 55,250 firms or 5% growth over 2010. The faster rate of establishment growth compared to employment growth indicates more small firm expansion than large firm expansion.
• Citywide income from jobs reporting wages and salaries increased to $45 billion, or 8% over 2010. The average earnings per job in the SF economy increased to $81,000 per worker, or 3% since last year.
• Although building permit applications increased by 3% over 2010 levels to 22,600 applications, the estimated value or spending those projects represent in terms of project cost (not all will be spent locally in San Francisco) increased to $3.4 billion, or 52% over 2010. [Editor's Note: San Francisco's current construction pipeline.]
• Taxable retail sales increased 11% over 2010 levels, to $14.9 billion.
• City revenue was $4.1 billion in 2011, up 8% over 2010 while City expenditures were $3.77 billion and did not change from the previous year.

San Francisco’s population was estimated to have hit 812,500 in 2011 with daily transit ridership at roughly 650,000 trips, up 2.9% since 2007 with ridership on the 9-San Bruno line having doubled since 2006 and now the most used transit line in the City.

The full report will be presented to San Francisco’s Planning Commission next week.

San Francisco’s 2011 Commerce and Industry Inventory [sfplanning.org]
San Francisco Unemployment Under 7% For First Time Since 2008 [SocketSite]
San Francisco's Housing Pipeline: 4,200 New Units On The Way [SocketSite]

Posted by socketadmin at 12:30 PM | Permalink | Comments (35) | (email story)

October 30, 2012

Actual Versus "The Index" For A Contemporary Corona Heights Home

438 Roosevelt in 2010 (www.SocketSite.com)

Purchased for $2,275,000 in 2002 and unsuccessfully listed for $2,995,000 in 2007 and $2,295,000 in 2010, the contemporary Corona Heights home at 438 Roosevelt sold last week with a reported contract price of $2,300,000 having been listed for $2,499,000.

438 Roosevelt Interior

Call it an actual apples-to-apples gain of 1.1 percent for the "dramatic and sexy home" since 2002 versus the 0.96 percent gain in the Case-Shiller Index for San Francisco over the same time period, or the 12.9 percent gain in the Index for the top third of homes in the San Francisco MSA or the 22.2 percent gain in the San Francisco Prestige Index.

438 Roosevelt Returns Listed For 24,490 Benjamins [SocketSite]
More Monday Morning Modern (Or Is It Contemporary?) [SocketSite]
The Green Is Gone At 438 Roosevelt [SocketSite]
San Francisco Home Values Tick Up, Condos Up 11.1 Percent YOY [SocketSite]
San Francisco Prestige Index Up 2.9% In Q2 2012, Up 6.6% YOY [SocketSite]

Posted by socketadmin at 3:00 PM | Permalink | Comments (14) | (email story)

It's Time To Acquire A New Garage Up In Pacific Heights

1945 Franklin (www.SocketSite.com)

Once again, previous owners of the Pacific Heights home at 1945 Franklin Street have included Nicholas Cage and Patricia Arquette. And as plugged-in people know, the infamous Excalibur with "ACQUIRE" license plates currently resides in the garage.

As we reported when 1945 Franklin was scheduled to be un-acquired on the courthouse steps last year:

Purchased in June of 2005 for $3,000,000 by way of a $2,350,000 first mortgage and a $790,000 construction loan second (yes, that's over 100% financed), the property was refinanced in September 2006 to the tune of $5,000,000 to which a $500,000 home equity line of credit was added three months later.
Scheduled to hit the courthouse steps [in 2009] with $5,684,086 owed as of [that August], the balance due on the $5,000,000 first was up to $6,157,795 as of [January 2011]. And no, we don’t believe any payments have been made since.

Having received a last minute reprieve two weeks ago, and with over $6,594,973 then owed on that $5,000,000 first alone, the title to 1945 Franklin was taken back by the bank yesterday with no bidders at $3,235,600 in cash on the courthouse steps.

No word from the now ex-owner who runs a boutique investment bank advising clients in ways to borrow money and appears to have walked away with well over $2,000,000 that had been borrowed against the house along with a few years (and counting) of payment free living in Pacific Heights.

On The Verge Of Being Un-Acquired. Again. [SocketSite]
How To Acquire "Free" Money: Borrow, Then Don’t Pay It Back... [SocketSite]
1945 Franklin On The Verge Of Being Un-Acquired [SocketSite]

Posted by socketadmin at 12:00 PM | Permalink | Comments (14) | (email story)

October 26, 2012

San Francisco's Housing Pipeline: 4,200 New Units On The Way

San Francisco's Housing Pipeline: Q2 2012 (www.SocketSite,.com)

As we first reported earlier this year, with 372,831 total housing units in San Francisco, a third of which are single-family homes and only a quarter of which are in buildings with over 20 units, total new housing production in 2011 totaled 418 units, the lowest production since 1993 and versus an average of 1,890 units per year from 2000-2010. In addition, 149 units were lost through demolition, merger or the removal of illegal units in 2011 for a net gain of only 269, less than a hundred of which were market rate.

Today, there are over 4,200 net new housing units under construction in San Francisco with building permits for another 1,450 units having been approved and permits for another 2,610 having been requested, units which should hit the market over the next three years.

Another 28,060 housing units have been approved to be built by Planning, but that includes 10,500 units by Candlestick, 7,800 units on Treasure Island and 5,680 units in Park-Merced, projects which have timelines measured in decades, not years.

For context, a total of 10,438 housing units have been constructed in San Francisco since 2007, a total of 24,519 net new units since 2000.

With respect to the pipeline of commercial development in San Francisco: 830,000 square feet are under construction; building permits for 964,000 square feet have been issued; building permits for another 2,423,000 square feet have been requested; and another 5,822,000 square feet of commercial development has been approved.

The detailed San Francisco Pipeline Report which includes a breakdown by neighborhood:

San Francisco’s Total Housing Inventory And Pipeline Report [SocketSite]
Is A Lack Of Density Cooking San Francisco's Golden Tech Goose? [SocketSite]
Hunters Point Redevelopment Plan For 10,500 New Units Approved! [SocketSite]
Treasure Island Redevelopment Plans Approved! (Appeal Rejected) [SocketSite]
The Parkmerced Thirty Year Plan: Public Scoping Meeting Tonight [SocketSite]

Posted by socketadmin at 11:30 AM | Permalink | Comments (17) | (email story)

October 19, 2012

San Francisco Unemployment Under 7% For First Time Since 2008

Preliminary September labor force counts for San Francisco, Marin and San Mateo counties peg the unemployment rates at 6.9%, 5.8% and 6.4% respectively, down 0.5 points in San Francisco and Marin, down 0.4 points in San Mateo. It's the first time unemployment in San Francisco has measured under 7% since 2008.

On a revised basis, the number of unemployed in San Francisco fell by 2,500 in September (from 35,100 to 32,600) as the labor force contracted by 1,600 (from 475,600 to 474,000) and the number of employed increased by 900 (from 440,500 to 441,400).

Employment in San Francisco is up by 19,700 workers on a year-over-year (YOY) basis but remains 24,100 workers below a December 2000 dot-com peak (at which point the unemployment rate in San Francisco measured 3 percent).

Overall unadjusted California unemployment fell to 9.7% in September as employment increased by 109,800, the labor force contracted by 31,300, and the number of unemployed fell by 141,300.

Monthly Labor Force Data for Counties: August 2012 (Preliminary) [EDD]
San Francisco Employment Up By 200 In August, Up 22,100 YOY [SocketsSite]
San Francisco Employment Trends And Dot-Com Context [SocketSite]

Posted by socketadmin at 11:30 AM | Permalink | Comments (0) | (email story)

October 17, 2012

On The Verge Of Being Un-Acquired. Again.

1945 Franklin (www.SocketSite.com)

Previous owners of the Pacific Heights home at 1945 Franklin Street have included Nicholas Cage, Howard Grossman, and Patricia Arquette. And as plugged-in people know, the infamous Excalibur with "ACQUIRE" license plates currently resides in the garage.

As we reported when 1945 Franklin was scheduled to be un-acquired on the courthouse steps last year:

Purchased in June of 2005 for $3,000,000 by way of a $2,350,000 first mortgage and a $790,000 construction loan second (yes, that's over 100% financed), the property was refinanced in September 2006 to the tune of $5,000,000 to which a $500,000 home equity line of credit was added three months later.
Scheduled to hit the courthouse steps last September with $5,684,086 owed as of August 2009, the balance due on the $5,000,000 first was up to $6,157,795 as of this past January. And no, we don’t believe any payments have been made since.

Having survived yet another year in foreclosure, and now with $6,594,973.24 owed on that $5,000,000 first alone, 1945 Franklin is once again scheduled to hit the courthouse steps in just a few minutes with an opening bid of $3,235,600.

From an Examiner piece on the eccentric owner of the home back in 2006:

He owns Hudson & Hudson, a private "boutique investment bank" that specializes in mergers and acquisitions. He said he hooks up people looking to buy or refinance a company with lenders. He charges his clients on a percentage scale based on how many millions they’re financing.
"What I try to do instead of being a broker … I try to work with underwriters. I say, ‘Don’t pay us [Hudson & Hudson], take it off the borrower’s interest rate,’" Hudson said, explaining that he advises his clients in ways to borrow money, which underwriters themselves are barred from doing legally.
Throughout his career, he's endeavored to come up with innovative concepts to make money.

UDPATE: A plugged-in tipster reports today's auction was postponed at the last minute, now scheduled for 10/29/2012 at 2pm. That's at least another couple weeks of mortgage free living in Pacific Heights. Innovative, indeed.

How To Acquire "Free" Money: Borrow, Then Don’t Pay It Back... [SocketSite]
1945 Franklin On The Verge Of Being Un-Acquired [SocketSite]
Going On Four Years Of "Free" Foreclosure Living Over In Noe [SocketSite]

Posted by socketadmin at 2:00 PM | Permalink | Comments (6) | (email story)

October 5, 2012

Zynga's Business Is Now Worth Less Than Its Building

650 Townsend

Having cut projections once again, Zynga is currently trading at $2.32 a share for a market cap of $1.76 billion. With around a billion and a half dollars of cash on its books, however, Zynga’s enterprise value is currently $223 million, five million less than the $228 million it paid for its headquarters building at 650 Townsend in San Francisco earlier this year.

As we wrote in July when we broke the news of Pincus' Pacific Heights purchase:

While Zynga is currently trading at $5.57 per share, 44 percent under its IPO price of $10 per share, a few insiders including CEO Mark Pincus managed to dump over $500 million worth of Zynga stock at $12 per share in a secondary offering, the proceeds of which went into the insiders' pockets rather than the coffers of the company.

If the thought of Pincus having bought a home with its fortresslike qualities and security in mind seemed like a stretch, perhaps it seems like foresight now.

While Zynga Trades Down, Pincus Trades Up [SocketSite]
Will Zynga Be A One House Wonder? [SocketSite]
It’s Game On With A Hand Out As Zynga Demands Tax Breaks As Well [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (33) | (email story)

September 21, 2012

San Francisco Employment Up By 200 In August, Up 22,100 YOY

Preliminary August labor force counts for San Francisco, Marin and San Mateo counties peg the unemployment rates at 7.4%, 6.3% and 6.8% respectively, down 0.3 points in San Francisco, down 0.4 points in Marin, and down 0.2 points in Marin.

On a revised basis, the number of unemployed in San Francisco fell by 1,400 in August (from 36,500 to 35,100) as the labor force contracted by 1,200 (from 476,800 to 475,600) and the number of employed increased by 200 (from 440,300 to 440,500).

Employment in San Francisco is up by 22,100 workers on a year-over-year (YOY) basis but remains 25,000 workers below a December 2000 dot-com peak (at which point the unemployment rate in San Francisco measured 3 percent).

Overall unadjusted California unemployment fell to 10.4% in August as employment increased by 14,900, the labor force contracted by 80,400, and the number of unemployed fell by 95,100.

Monthly Labor Force Data for Counties: August 2012 (Preliminary) [EDD]
Employment In San Francisco Up By 4,600 In July, Up 24,900 YOY [SocketsSite]
San Francisco Employment Trends And Dot-Com Context [SocketSite]

Posted by socketadmin at 9:10 AM | Permalink | Comments (1) | (email story)

September 20, 2012

Mortgage Rates Return To All-Time Lows

According to Freddie Mac’s latest Primary Mortgage Market Survey, 30-year fixed-rate mortgage rates averaged 3.49 percent (with 0.6 points) for the week ending today, down from 3.55 percent last week, versus 4.09 percent a year ago, and back to the all-time low recorded this past July.

The average 15-year fixed mortgage rate has dropped to a new all-time record low of 2.77 percent, down from 2.85 percent last week and versus 3.29 percent a year ago.

As rates dropped, mortgage applications to purchase homes in the U.S. increased 8 percent last week on an unadjusted basis, year-over-year, but fell 4 percent on an adjusted basis, week-over-week. Refinancing activity increased 1 percent last week according to the Mortgage Bankers Association.

Mortgage Rates Back To Record Lows [Freddie Mac]
Whoops, They Did It Again: Mortgage Rates Hit New All-Time Lows [SocketSite]
Mortgage Rates Drop to New Survey Lows [mbaa.org]

Posted by socketadmin at 9:00 AM | Permalink | Comments (13) | (email story)

September 18, 2012

Boom Goes 2300 Broadway

2300 Broadway

Built as the sister project to 2306 Broadway in 1989, the 4,084 square foot home at 2300 Broadway has hit the market listed for $6,200,000 with three bedrooms, three baths, and two parking spaces as well, but only one shared wall and a rather modern(e) kitchen.

2300%20Broadway%20Kitchen.jpg

As plugged-in people know, the 3,910 square foot home at 2306 Broadway most recently sold for $5,235,000 in 2009 having been purchased for $6,600,500 in the year 2000, down 21 percent from the height of San Francisco’s dotcom days and previous economic boom.

2300 Broadway

∙ Listing: 2300 Broadway (3/3) 4,084 sqft - $6,200,000 [2300broadway.com]
An Überprime Data Point Closes Escrow Down On Upper Broadway [SocketSite]
San Francisco Employment Trends And Dot-Com Context [SocketSite]

Posted by socketadmin at 1:00 PM | Permalink | Comments (18) | (email story)

September 17, 2012

City Bonds Slated To Finance 2175 Market Street Development

2175 Market Street Rendering

According to the City and County of San Francisco Residential Mortgage Revenue Bond Law, the City of San Francisco is empowered to issue and sell mortgage bonds "to finance the development of multi-family housing including units for lower income households and very low income households."

With 15 percent of the proposed 88 apartments to be built at 2175 Market Street earmarked to be affordable, as is required for development per San Francisco's Planning Code, this week San Francisco’s Board of Supervisors is slated to approve the issuance of up to $31,000,000 in tax-exempt mortgage revenue bonds to help finance Forest City's mostly market rate project.

From 76 Station To 88 Apartments At 2175 Market Street As Proposed [SocketSite]
A Negative Yet Positive Step Forward For 2175 Market Street Project [SocketSite]
Multifamily Housing Revenue Bonds Resolution: 2175 Market Street [sfbos.org]
Raising The Threshold For Requiring Below Market Rate (BMR) Units [SocketSite]

Posted by socketadmin at 5:15 PM | Permalink | Comments (4) | (email story)

September 14, 2012

A Million Dollars Under Dotcom Days For The Brannan's Penthouse

As we wrote in February with respect to the penthouse atop the Brannan’s tower one:

Purchased as new for $3,980,000 as the dotcom days were in decline in December 2000, the Brannan’s tower one penthouse #18D resold for $2,810,000 in August 2005 at which point its HOA dues were $780 per month.
The HOA dues for 219 Brannan #18D are now $999 per month and the 2,005 square foot condo is back on the market and listed for $3,310,000. Call it 17 percent ($670,000) under 2000, but 18 percent ($500,000) over 2005 at asking for the penthouse.

The sale of 219 Brannan Street #18D closed escrow yesterday with a reported contract price of $2,942,500. Call it 26 percent ($1,037,500) under 2000, but 5 percent ($132,500) over 2005 for the South Beach penthouse in 2012.

From The Dotcom Days To Today As Viewed From A Penthouse [SocketSite]
San Francisco Employment Trends And Dot-Com Context [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (8) | (email story)

September 12, 2012

Deadline For Appealing Assessed Values In San Francisco Nears

Speaking of San Francisco property tax changes and assessments, this coming Monday, September 17, is the deadline for property owners who believe their property's assessed value is greater than its market to file a case with the Assessment Appeals Board in an attempt to reduce their property tax bill.

The assessed values for nearly 20,000 San Francisco properties were reduced last year.

San Francisco Property Tax Rate Set To Drop 0.23 Percent [SocketSite]
San Francisco's Assessment Appeals Board [sfbos.org]
Assessed Values Drop $2.4 Billion In San Francisco, Appeals By 9/15 [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (17) | (email story)

September 10, 2012

San Francisco Property Tax Rate Set To Drop 0.23 Percent

The proposed Property Tax rate for the City and County of San Francisco will decrease 0.23 percent from $1.1718 per $100 of assessed value in the current Fiscal Year to $1.1691 per $100 of assessed value for Fiscal Year 2012-2013.

Allocation of the tax dollars is as follows:

Fiscal Year 2012-2013 Property Tax Allocation

The State has authorized a maximum allowable increase of 2.0% in assessed value this year for properties that haven't changed hands or been improved while the proposed pass-through rate to residential tenants will increase to $0.081 per $100.00 of assessed value for landlords, up from $0.06 in the current fiscal year.

San Francisco Property Tax Comparison: FY 2011-2012 to FY 2012-2103

San Francisco’s Board of Supervisors is set to vote on the changes tomorrow afternoon.

San Francisco Property Tax Rate Set To Increase 0.67 Percent [SocketSite]
San Francisco's Property Tax Rate Ordinance for FY 2012-2013

Posted by socketadmin at 8:30 AM | Permalink | Comments (11) | (email story)

September 4, 2012

Chinese Hospital's Plans Set For Approval As CPMC's Are Stalled

835 Jackson Proposed

As we reported in July, "while most eyes remain on the wrangling between CPMC and Mayor Ed Lee, San Francisco’s Planning Commission is scheduled to certify the Chinese Hospital’s development and expansion plans, plans which require a zoning variance, conditional use authorization, and a General Plan amendment."

Having been approved by Planning, San Francisco's Board of Supervisors are scheduled to certify the Chinese Hospital’s development and expansion plans this afternoon.

While CPMC’s long-range development and expansion plans were also approved by Planning, San Francisco’s Board of Supervisors have refused to affirm and stalled as the Mayor has since upped his previously agreed upon demands and CPMC sent their pre-construction teams packing.

Once again, as the existing building at 835 Jackson Street and area currently appear:

835 Jackson Existing

Inharmonious San Francisco Hospital Happenings (Beyond CPMC) [SocketSite]
Mayor Lee To CPMC: Save St. Luke's Or Cathedral Hill Campus Is DOA [SocketSite]
The Chinese Hospital's Plans, Will The Mayor Make Demands? [SocketSite]
Supervisors Affirm Commitment To St. Luke's, Delay On Cathedral Hill [SocketSite]
CPMC And The City Reach Agreement For Cathedral Hill Hospital Plan [SocketSite]
CPMC's Pre-Construction Teams Sent Packing [SocketSite]
Is Bruce Lee's Birthplace Historic Or Soon To Be History? [SocketSite]

Posted by socketadmin at 10:45 AM | Permalink | Comments (5) | (email story)

August 28, 2012

The Case For A Shorter (Or Perhaps Taller) Tower At 706 Mission?

706 Mission Rendering

As we reported when we first published the details and renderings for the proposed 550-foot tower to rise at 706 Mission last month:

Currently zoned for 400-feet, the project will require a zoning map amendment to see its full potential versus being cut short. Assuming an amendment, a determination that new shadows cast on Union Square are not adverse will be required as well.
The shadow calculations prepared for the proposed project indicate that it would cast net new shadow on Union Square during the morning hours from early October through early November and from early February through early March. The proposed project would not cast net new shadow on Union Square after 9:30 AM on any day during the year.
On an annual basis, the proposed project would cast 337,744 sfh of net new shadow on Union Square, which would be an increase of about 0.22 percent relative to the existing annual shadow on the park. This amount of net new shadow would exceed the remaining shadow budget of 323,123 sfh of shadow that could be cast on Union Square by proposed future development projects.

Whiling acknowledging that city planners seem to believe the proposed tower will complement Jessie Square, John King plays the "but what if they’re wrong" card and suggests a shorter tower makes more sense on the site:

A better approach here would be a high-rise in the 25-story range, exquisitely detailed and shaped to capture the eye from the street. In other words, along the lines of such diminutive standouts as 101 Second St. and the city's most recent condominium tower, One Hawthorne.
It wouldn't turn heads on the skyline. Instead, you could imagine it catching the eye when seen from Yerba Buena Gardens, glowing against the mundane slabs behind it to the north and east.
This approach would mean no shadows on Union Square. It also would silence the most vocal critics of the tower, speeding up the approval process. And in San Francisco, that might be the most valuable subsidy of all.

Based on our estimates, a 25-story tower would reduce the residential gross square footage of the building by 285,000 square feet, over half the proposed density for the site in San Francisco’s urban core.

We’ll also conservatively estimate that a loss of 285,000 gross square feet at this site would represent at least $425 million in sales, which if realized, would represent initial transfer taxes of over $3 million and property taxes of over $5 million a year.

UPDATE: While we’re well aware Mr. King isn’t suggesting the current design simply be shrunk, an approximation of how the site would look with the current design at 25 stories:

706 Mission rendered at roughly 25 Stories

The 706 Mission Scoop: Design, Details And Timing For Museum Tower [SocketSite]
Plaza could suffer if tower climbs high [SFGate]
Sue Hestor Seeks To Stop Transit Center Tower Development Short [SocketSite]
Sneak Peek: 706 Mission Tower Design And Aronson Building Rehab [SocketSite]
San Francisco Property Tax Rate Set To Increase 0.67 Percent [SocketSite]

Posted by socketadmin at 12:15 PM | Permalink | Comments (36) | (email story)

August 27, 2012

Tech Jobs Up By A Third In San Francisco, Filled Mostly By Commuters

From the Examiner, to SFAppeal, to TechCrunch, news sites across the country have been misreporting that the number of tech jobs in San Francisco has tripled from January through June of this year, from 13,000 to 44,000. The actual increase was 13,000, up a third from 31,000 to 44,000.

Directly from San Francisco's Center for Economic Development in response to our inquiry into the reported tripling that simply didn't make any sense:

Since early 2012 the number of workers in San Francisco's tech sector has grown by 13,000 to total 44,000. During the same time period, 150 more technology firms moved to the city, bringing the total number to 1,850. This growing trend is helping eliminate commutes to Silicon Valley for many San Francisco-based workers and, analysts believe, strengthening the city's housing and rental markets.

Note that employment within San Francisco has increased by 6,200 workers from January through June, suggesting that over half of those 13,000 new tech jobs have been filled by workers commuting from housing outside the city.

UPDATE: Four hours after we uncovered the link to the correct data and first published our report, the Chronicle figured it out. The first line of the Chronicle's report: "SF Appeal, Tech Crunch, the Examiner and others are all reporting that tech jobs tripled in San Francisco this year — a growth rate that would be stunning, if only it were true." Stunning, indeed.

Tech jobs in SF triple in first half of 2012 [SF Examiner]
SF Tech Job Numbers Triple In 2012 [SFAppeal]
Tech Jobs Have Tripled In San Francisco Since The Start Of 2012 [TechCrunch]
Employment In San Francisco Up By 4,600 In July, Up 24,900 YOY [SocketSite]

Posted by socketadmin at 2:45 PM | Permalink | Comments (17) | (email story)

The Tale Of Armistead Maupin's "37 Percent Over Asking" Sale

27 Belmont Avenue (www.SocketSite.com)

Last month we first reported Armistead Maupin's 1,606 square foot home was about to hit the market at 27 Belmont Avenue. As we noted at the time, the property had been priced by Bernie "Fifty Offer" Katzmann at $1,198,000, under $750 per square foot for the Parnassus Heights property with views.

As a plugged-in reader noted soon thereafter:

Around this neighborhood the lore is that nice houses go for $1000/square foot. This one counts as nice -- not only views, but green outlooks in multiple directions. Plus, the house has gotten a lot of love from somebody with taste. So yeah, there are comps for a 1.6M price.

The sale of 27 Belmont closed escrow last week with a reported contract price of $1,640,000 ($1,021 per square foot). Yes, that’s 37 percent "over asking" yet more or less right at market having simply been priced well below.

Keep an eye out for the press release and postcards, perhaps even an article in the paper!

Armistead Maupin's Storied San Francisco Home Hitting The Market [SocketSite]
Have You Heard The One About The House With Over 50 Offers? [SocketSite]
It's Not This Mid-Century Modern Noe Valley Home That Was Flawed [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (20) | (email story)

August 23, 2012

Standard & Poor's Raises Odds Of Double-Dip Recession To 25 Percent

Standard & Poor's has raised its odds of the U.S. slipping back into recession next year from 20 to 25 percent, citing risks from the European debt crisis, China's economy and mandated budget tightening by the federal government at the end of 2012.

Posted by socketadmin at 1:00 PM | Permalink | Comments (20) | (email story)

August 22, 2012

The Local Scoop: Behind The Purchase Of 740 Church Street

740 Church Street

When 740 Church Street first hit the market in April listed for $5,250,000 including the undeveloped lot at 222 Cumberland, a number of plugged-in people estimated the lot to be worth $1 million.

Having sold for a combined $5,250,000 in August, the recorded value for the house at 740 Church Street was $4,275,000 while the lot at 222 Cumberland was recorded at $975,000.

As best we can tell, it wasn't Facebook, Zynga or other web 2.0 money behind the purchase which was financed with a $2 million mortgage and line of credit for up to $1.3 million more, but professional services to the tech industry are in play.

And no, the buyers aren't from overseas. In fact, the buyers are from two blocks away, having purchased 366 Liberty for $2,575,000 in 2009, the sale of which we featured at the time and a property we wouldn't be surprised to soon see returned to the market.

Inside The Rather Spectacular Spanish Colonial Home At 740 Church [SocketSite]
A Rather Spectacular Property Draws A Rather Spectacular Price [SocketSite]
We've Been Looking Past The Overhyped Facebook Effect, Have You? [SocketSite]
The Liberty Belle (366 Liberty) Is Rung Again And By The AIA [SocketSite]

Posted by socketadmin at 3:15 PM | Permalink | Comments (19) | (email story)

August 21, 2012

Endangering The Last Vestige Of Why People Would Buy A Home?

The Republican party has backed off their defense of the mortgage-interest deduction for homeowners, defeating an amendment which would have put the party on the record for preserving the deduction as a matter of policy.

From a Republican National Convention delegate, disagreeing with the apparent platform shift: "The mortgage-interest deduction is high on the list for all Realtors…[and] the last vestige of why people would be interested in buying a home."

Republican Platform Won’t Protect Mortgage Tax Deduction [Bloomberg]

Posted by socketadmin at 11:30 AM | Permalink | Comments (51) | (email story)

August 17, 2012

We've Been Looking Past The Overhyped Facebook Effect, Have You?

S&P 500 versus Facebook (8/17/2012)

We took a bit of heat for suggesting our readers Look Past The Overhyped Facebook Effect in February. As we wrote at the time:

Forget the overhyped Facebook effect (a.k.a. "buy now or be priced out forever 2.0") and simply turn your attention to the S&P 500 which closed the day at 1,363.05, just below its April 2011 high of 1,363.61 (its highest close since June 2008) and the Dow’s 12,986.81, its highest close since May 2008.

Having since gone public at $38 a share, Facebook shares closed at $19.05 today.

As a plugged-in reader noted, the current Market Cap for the company is roughly $41 billion according to Google (see UPDATE below), 18 percent less than the $50 billion at which the company was valued by Goldman Sachs in January 2011, since which more than half of the current employees have joined the company and been awarded shares.

That being said, the S&P 500 closed at 1,418.16 today, one point below its four year high, and the Dow closed at 13,275.20. And the number of employed people in San Francisco is currently up by 9,700 over the past five months, up 24,900 over the past year.

UPDATE: As a plugged-in reader quickly points out and assuming Henry Blodget is correct, Google’s share count for Facebook is wrong and should be 2,741,423,185, undercounting the effective number of shares by 22 percent and the market cap by as much as well.

As such, Facebook should have a current market cap of $52 billion, not $41 billion, 4 percent over its $50 billion valuation at the beginning of 2011.

We’ll also take this opportunity to note that of those 2,741,423,185 shares, only 692 million are currently tradable while the potential float will increase by another 1.6 billion shares over the next three months.

Look Past The Overhyped Facebook Effect [SocketSite]
What's The Point? [SocketSite]
Facebook On The Home Front [SocketSite]
Employment In San Francisco Up By 4,600 In July, Up 24,900 YOY [SocketSite]

Posted by socketadmin at 4:00 PM | Permalink | Comments (95) | (email story)

Employment In San Francisco Up By 4,600 In July, Up 24,900 YOY

Preliminary July labor force data counts for San Francisco, Marin and San Mateo counties pegs the unemployment rates at 7.7%, 6.7% and 7.0% respectively, down 0.1 points in San Francisco and San Mateo, up 0.1 points in Marin.

On a revised basis, the number of unemployed in San Francisco fell by 200 in July (from 36,700 to 36,500) as the labor force increased by 4,500 (from 472,300 to 476,800) and the number of employed increased by 4,600 (from 435,700 to 440,300).

Employment in San Francisco is up by 24,900 workers on a year-over-year (YOY) basis but remains 25,200 workers below a December 2000 dot-com peak (at which point the unemployment rate in San Francisco measured 3 percent).

Overall unadjusted California unemployment increased to 10.9% in July as employment increased by 3,000 workers but the labor force increased by 41,600.

Monthly Labor Force Data for Counties: June 2012 (Preliminary) [EDD]
San Francisco Employment And Unemployment Both Tick Up In June [SocketsSite]
San Francisco Employment Trends And Dot-Com Context [SocketSite]

Posted by socketadmin at 9:10 AM | Permalink | Comments (5) | (email story)

August 6, 2012

The Permit Fee Schedule For Building (Or Blocking) In San Francisco

Wondering how expensive the permits might be to demo, rebuild or remodel a property in San Francisco? Or perhaps how high (or rather low) the financial barriers are to appeal Planning's approval of a project or file a dreaded Discretionary Review (DR) in an attempt to protect a view or extract a settlement in the name of preservation? Here's the full fee schedule which will be 2.23% more expensive and effective as of August 31, 2012.

Schedule of San Francisco Planning Department Application Fees [sf-planning.org]
Sue Hestor Seeks To Stop Transit Center Tower Development Short [SocketSite]
A $225,000 America's Cup Settlement That's For The Birds [SocketSite]

Posted by socketadmin at 2:30 PM | Permalink | Comments (2) | (email story)

August 1, 2012

Full FOMC Text: Economic Activity Has Decelerated, Ready To Ease

The full text from the latest Federal Open Market Committee meeting with respect to the state of our economy, the Feds expectations and their signals to ease:

Information received since the Federal Open Market Committee met in June suggests that economic activity decelerated somewhat over the first half of this year. Growth in employment has been slow in recent months, and the unemployment rate remains elevated. Business fixed investment has continued to advance. Household spending has been rising at a somewhat slower pace than earlier in the year. Despite some further signs of improvement, the housing sector remains depressed. Inflation has declined since earlier this year, mainly reflecting lower prices of crude oil and gasoline, and longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth to remain moderate over coming quarters and then to pick up very gradually. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee anticipates that inflation over the medium term will run at or below the rate that it judges most consistent with its dual mandate.
To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.
The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. The Committee will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who preferred to omit the description of the time period over which economic conditions are likely to warrant an exceptionally low level of the federal funds rate."

Federal Reserve FOMC Full Statement: August 1, 2012 [federalreserve.gov]
Expect An Exceptionally Low Federal Funds Rate Through Late 2014 [SocketSite]
The Fed's "Twist" And The Markets Tumble [SocketSite]

Posted by socketadmin at 1:45 PM | Permalink | Comments (6) | (email story)

July 25, 2012

Will Zynga Be A One House Wonder?

As we wrote three weeks ago when we broke the news of Pincus' Pacific Heights purchase:

While Zynga is currently trading at $5.57 per share, 44 percent under its IPO price of $10 per share, a few insiders including CEO Mark Pincus managed to dump over $500 million worth of Zynga stock at $12 per share in a secondary offering, the proceeds of which went into the insiders' pockets rather than the coffers of the company.

Following a just reported $22.8 million loss in the second quarter, versus a $1.4 million gain last year, the stock is currently trading at $3.20 per share, down 37 percent in after-hours trading, down 47 percent since June 1.

While Zynga Trades Down, Pincus Trades Up [SocketSite]
A Tough Week On The Street And Close To Home [SocketSite]

Posted by socketadmin at 3:00 PM | Permalink | Comments (43) | (email story)

July 20, 2012

San Francisco Employment And Unemployment Both Tick Up In June

Preliminary June labor force data counts for San Francisco, Marin and San Mateo counties pegs the unemployment rates at 7.8%, 6.6% and 7.1% respectively, up 0.4 points in San Francisco, up 0.3 points in both Marin and San Mateo.

On a revised basis, the number of unemployed in San Francisco increased by 2,000 in June (from 34,700 to 36,700) as the labor force increased by 2,600 (from 469,700 to 472,300) and the number of employed increased by 700 (from 435,000 to 435,700).

Employment in San Francisco remains up by 23,300 workers on a year-over-year basis, but remains 29,800 workers below a December 2000 dot-com peak (at which point the unemployment rate in San Francisco measured 3 percent).

Overall unadjusted California unemployment increased to 10.7% in June as the labor force increased by 13,300 workers while the ranks of the unemployed increased by 59,900.

Monthly Labor Force Data for Counties: June 2012 (Preliminary) [EDD]
Reported San Francisco Employment Unchanged In May [SocketSite]
San Francisco Employment Trends And Dot-Com Context [SocketSite]

Posted by socketadmin at 9:10 AM | Permalink | Comments (8) | (email story)

July 19, 2012

Affordable Housing Headwinds And TNDC's New Tack In San Francisco

168-186 Eddy Rendering

From Don Falk, Executive Director at Tenderloin Neighborhood Development Corporation (TNDC), with respect to the challenges of financing affordable housing development in San Francisco and the development of 168-186 Eddy Street at the corner of Taylor:

In a short time, we have seen dramatic changes in the world of affordable housing financing. The elimination of Redevelopment Agencies stripped $50 million of annual subsidy from San Francisco, and combined with State budget problems and long-term Federal deficit reduction, nonprofits’ ability to develop affordable housing faces more constraints now than any other time in the past 30 years. At the same time, the main sources of income for our senior and disabled residents—social security and disability—have been reduced multiple times.
Against this backdrop, San Francisco has become the most expensive rental market in the nation. While the economy is improving, this has not trickled down to affordable housing financing. The private real estate market cannot build for low income people profitably, so for San Francisco to remain a city for all – families and workers, not just the privileged – we cannot look to market rate developers to fulfill the need.
As a result of shrinking public resources, TNDC is thinking differently about how to finance affordable housing, and we are working on mixed-income developments at four different sites. Having shopped the site at the corner of Eddy and Taylor to multiple market-rate developers as potential joint venture partners, however, we know that new construction market-rate housing is not yet financially feasible there…though it’s a lot closer than it was a year ago, and we think we will ultimately succeed. Sites South of Market are significantly more viable than in the Tenderloin from a market-rate development standpoint.
"Affordable housing" is typically defined as rents of 30% of the area median income for people earning no more than 60% of the area median income, adjusted for household size. In real-life terms, that means maximums of about $42,000 for an individual and $62,000 for a 4-person household.

Also noted by Mr. Falk, "TNDC has never opened a pot club in the ground floor of an SRO; perhaps someone is getting us mixed up with another organization" (as was intimated by another).

Fresh Groceries In The Tenderloin Stymied By Poor Fiscal Conditions [SocketSite]
California Supreme Court Rules Against Redevelopment Agencies [SocketSite]

Posted by socketadmin at 1:15 PM | Permalink | Comments (24) | (email story)

July 13, 2012

How's Your Memory?

Just over 25 percent of new homes built and sold in the U.S. were larger than 3,000 square feet last year, the highest percentage since 2007.

"It’s about opportunity," Jack McCabe, chief executive officer of Deerfield Beach, Florida-based McCabe Research and Consulting, said in a telephone interview. "It’s about interest rates. And it’s about short memories."

What can you remember about buying based on payments versus the value of an asset?

U.S. New Home Sales: Up 19.8% YOY In May But Well Below Average [SocketSite]
Americans Living Larger As New-Home Sizes Defy Economy [Bloomberg]
Whoops, They Did It Again: Mortgage Rates Hit New All-Time Lows [SocketSite]

Posted by socketadmin at 8:45 AM | Permalink | Comments (6) | (email story)

July 12, 2012

Apples-To-Apples: Prices, Rates And Payments...Oh My!

2130 24th Street

Having hit the market in late 2006 asking $1,295,000, the 1,792 square foot 2130 24th Street #A sold for $1,274,000 in the middle of 2007. With its Scavolini cabinets, Carrara marble counters, and Black Walnut floors still looking rather fresh, the contemporary Potrero Hill condo is back on the market and listed for $1,389,000.

2130 24th Street Kitchen

With twenty percent down and a thirty-year mortgage at current rates, the monthly mortgage payment would be around $5,300 a month at asking. In 2006, the payments on the purchase would have been closer to $6,500 at rate of 6.56 percent.

UPDATE: As a number of readers quickly figured out, our original mortgage rates and payment calculations of $5,000 and $6,200 a month were based on conforming loans which these would not be and has since been corrected above.

∙ Listing: 2130 24th Street #A (3/2) 1,792 sqft - $1,389,000 [Redfin]
2130 24th Street #A: It’s On [SocketSite]
2130 24th Street #A: It’s On (Again) [SocketSite]
Whoops, They Did It Again: Mortgage Rates Hit New All-Time Lows [SocketSite]

Posted by socketadmin at 12:30 PM | Permalink | Comments (22) | (email story)

Whoops, They Did It Again: Mortgage Rates Hit New All-Time Lows

According to Freddie Mac’s latest Primary Mortgage Market Survey, 30-year fixed-rate mortgage rates averaged 3.56 percent (with 0.7 points) for the week ending today, another new all-time low, down from 3.62 percent last week, down from 3.67 percent last month and versus 4.51 percent a year ago.

The average 15-year fixed mortgage rate also recorded a new all-time record low of 2.86 percent, down from 2.89 percent last week, down from 2.94 percent last month and versus 3.65 percent a year ago.

As rates dropped, mortgage applications to purchase homes in the U.S. increased 3 percent last week adjusted for the Fourth of July, down an unadjusted 3 percent year-over-year. Refinancing activity decreased 3 percent according to the Mortgage Bankers Association.

Another Week Of Record-Breaking Lows For Fixed-Rate Mortgages [Freddie Mac]
Mortgage Rates Hit All-Time Lows (Yes, Again) [SocketSite]
Mortgage Applications Decrease in Latest MBA Weekly Survey [mbaa.org]

Posted by socketadmin at 9:30 AM | Permalink | Comments (10) | (email story)

July 9, 2012

Noe Valley TIC Picked: September 2008 To Today

1278-1282 Church Street (www.SocketSite.com)

Purchased for $1,368,000 in September 2008, the sale of 1278 Church Street has closed escrow with a reported contract price of $1,425,000, up 4 percent on an apples-to-apples basis versus late 2008 for the three-bedroom Noe Valley Tenancy In Common (TIC).

No word on how the proposed TIC to condo conversion lottery bypass legislation was factored into the purchase, price or marketing.

Green Construction (But Red Comp) Returns On Church [SocketSite]
TIC-Tock It's Apple O'clock [SocketSite]
The Devilish Details For Bypassing SF's Condo Conversion Lottery [SocketSite]

Posted by socketadmin at 7:00 AM | Permalink | Comments (7) | (email story)

June 26, 2012

Turning To China For Capital To Kick-Start Developments In SF

Seeking nearly $2 billion to kick-start the development of Hunters Point and Treasure Island in San Francisco, according to the Wall Street Journal, developer Lennar is in talks with the China Development Bank (CDB) to provide the capital with former deputy mayor of San Francisco Kofi Bonner leading Lennar's charge.

In recent years, Chinese state money—in large part provided by CDB and its counterpart the Export-Import Bank of China—has been pivotal in funding major infrastructure and resource projects around the world, but the bulk of that activity has been in developing countries in Africa, South America and Asia.
That has resulted in the construction of dams, airports, railways, highways and sports arenas that otherwise wouldn't get built, primarily in developing countries. Funding is typically conditional upon Chinese developers and contractors being used to build the projects. And in order to keep costs down, and in many cases to ensure the necessary expertise, at least a portion of the workforce is flown in from China.
This would be difficult or impossible in San Francisco, where local regulations and deals cut with local governments generally require developers to use local labor and pay prevailing wages.

We'll call that last paragraph an understatement.

Chinese Target U.S. Homes [Wall Street Journal]
Treasure Island Redevelopment Plans Approved! (Appeal Rejected) [SocketSite]
Hunters Point Redevelopment Plan For 10,500 New Units Approved! [SocketSite]

Posted by socketadmin at 8:00 AM | Permalink | Comments (33) | (email story)

June 21, 2012

Will Wells Profit On This Condo's Foreclosure?

1945 Washington Street

Purchased for $610,000 in 2004, the two-bedroom Pacific Heights condo #409 at 1945 Washington Street was refinanced in 2007 with a first mortgage for $615,000.

Having fallen $13,274 behind on payments, seven months ago a notice of default was issued for the aforementioned first. And last month, the 924 square foot property was taken back by the bank with no bidders at $615,000 in cash on the courthouse steps.

The property is now listed on the MLS and asking $739,900 versus the $644,138 owed to Wells Fargo at the time of foreclosure, including penalties and principal.

∙ Listing: 1945 Washington #409 (2/2) 924 sqft - $739,900 [Redfin]
A Foreclosed Upon Noe Home Sells For Over...What Wells Was Owed [SocketSite]

Posted by socketadmin at 11:30 AM | Permalink | Comments (16) | (email story)

June 18, 2012

How Are Bay Area Henrys Feeling About Housing?

Defined by Bloomberg as earning between $100,000 and $250,000 a year, the Bay Area has more than its fair share of High Earner Not Rich Yet "Henrys."

In 2010, retailers didn’t need Henrys to come roaring back. The demographic above them, the so-called ultra-affluents who belong to the top 2 percent of earners, went shopping again after the 2009 recession forced even them to cut back.
Henrys followed last year as the economy appeared to improve and helped bring another solid year of retail sales growth. Their confidence might not last. While they have discretionary income to spend, they can be fickle, according to Michael McNamara, vice president at Mastercard Advisors SpendingPulse, which tracks consumer spending. Their desire to make purchases hinges on how rich they think they are -- the so- called wealth effect -- and there are a lot of reasons they might be feeling more middle-class.
Negative headlines, stock market performance and home values have much more sway on Henrys’ spending habits. Many are also small-business owners and see shifts in the economy first. [Mac McKay, whose flower] shop is in one of the wealthiest counties in the country, said a top customer went from spending $2,000 on Mother’s Day to less than half that. Another long-time client recently lost his job as a rocket scientist.

How confident are the Bay Area homebuying Henrys feeling today?

UPDATE: As a number of plugged-in readers have noted, while Bloomberg defines the income range for Henrys as $100,000 to $250,000, Fortune Magazine defined it as $250,000 to $500,000 back in 2003, a range that makes more sense around here.

The Problem With Henry May Derail U.S. Recovery [Bloomberg]
A Tough Week On The Street And Close To Home [SocketSite]

Posted by socketadmin at 9:15 AM | Permalink | Comments (34) | (email story)

June 11, 2012

Palm(s) Reading: The Rent Versus Buy Line And Rate Of Return

As we originally reported in April:

Purchased for $760,000 in late 2006, the two-bedroom number 606 at 555 4th Street (The Palms) is currently rented for $3,200 a month, a rent which will increase to $3,500 on Tuesday according to the owner.
On the market listed for $699,000, monthly HOA dues are $544 and the property tax rate is currently 1.17%. We’ll let you run the numbers in terms of rent versus buy or as an investment (for which we calculate a CAP Rate under 4 percent).

The sale of 555 4th Street #606 has closed escrow with a reported contract price of $724,000, over asking but 4.7 percent under late 2006 when it wasn’t occupied and with a cap rate of under 4 percent at the higher rent.

To Rent, Buy, Or Invest At The Palms By The Numbers (Not The Heart) [SocketSite]
San Francisco Property Tax Rate Set To Increase 0.67 Percent [SocketSite]
To Rent Or To Buy, That Is The Question (That Only You Can Answer) [SocketSite]

Posted by socketadmin at 7:45 AM | Permalink | Comments (18) | (email story)

June 7, 2012

Mortgage Rates Hit All-Time Lows (Yes, Again)

According to Freddie Mac’s latest Primary Mortgage Market Survey, 30-year fixed-rate mortgage rates averaged 3.67 percent (with 0.7 points) for the week ending today, another new all-time low, down from 3.75 percent last week, down from 3.83 percent last month and versus 4.49 percent a year ago.

The average 15-year fixed mortgage rate also recorded a new all-time record low of 2.94 percent, down from 2.97 percent last week, down from 3.05 percent last month and versus 3.68 percent a year ago.

As rates dropped, however, mortgage applications to purchase homes in the U.S. fell 13 percent last week affected by the Memorial Day holiday, down 3 percent year-over-year. Refinancing activity increased 2 percent according to the Mortgage Bankers Association.

Record-Setting Low Fixed Mortgage Rates Persist [Freddie Mac]
Fixed Mortgage Rates Hit All-Time Lows (Again) [SocketSite]
Mortgage Applications Increase in Latest MBA Weekly Survey [mbaa.org]

Posted by socketadmin at 10:30 AM | Permalink | Comments (24) | (email story)

June 1, 2012

A Tough Week On The Street And Close To Home

As we wrote under the headline, "Look Past The Overhyped Facebook Effect" in February:

Forget the overhyped Facebook effect (a.k.a. "buy now or be priced out forever 2.0") and simply turn your attention to the S&P 500 which closed the day at 1,363.05, just below its April 2011 high of 1,363.61 (its highest close since June 2008) and the Dow’s 12,986.81, its highest close since May 2008.

The S&P 500 closed today at 1,278.04, down 2.46% for the day, down 6.24% from our post in February. The Dow closed the day at 12,118.60, down 2.22% for the day and into the red for 2012. The S&P 500 remains up 1.6% for the year.

Having priced at $38 and closed its first day of trading at $38.23, Facebook (FB) closed today at $27.72, down 6.35% for the day, down 27.49% over the past two weeks.

A little closer to home, Zynga (ZNGA) closed the week at $6.01, down 3.99% for the day, down 40% from its December IPO price of $10 per share.

Look Past The Overhyped Facebook Effect [SocketSite]
What's The Point? [SocketSite]
Facebook On The Home Front [SocketSite]

Posted by socketadmin at 2:15 PM | Permalink | Comments (43) | (email story)

May 25, 2012

Condo Lottery Bypass Legislation Coming, Mayoral Support Unclear

While conspicuously absent from the Mayor’s Housing Trust Fund proposal, according to a plugged-in reader, condo conversion lottery bypass legislation will be introduced before San Francisco’s Board of Supervisors in the next few weeks. It remains unclear, however, whether the Mayor will be openly supportive or not.

Keep in mind that despite the then Mayor's support, it was San Francisco's Budget and Finance Committee that killed a proposed lottery bypass in 2010.

The Mayor's Housing Trust Fund And Missing Lottery Bypass Fee [SocketSite]
TIC Conversion Lottery Bypass And Mayoral Take Two [SocketSite]
Condominium Conversion 2012 Lottery Deadline And Odds (Against) [SocketSite]
Condo Lottery Bypass For A Fee Resurfaces In Mayor's New Budget [SocketSite]
Budget and Finance Committee Kills Condo Lottery Bypass For A Fee [SocketSite]

Posted by socketadmin at 9:45 AM | Permalink | Comments (30) | (email story)

May 23, 2012

The Mayor's Housing Trust Fund And Missing Lottery Bypass Fee

Yesterday, San Francisco Mayor Ed Lee presented a proposed "Housing Trust Fund Charter Amendment" to the Board of Supervisors for consideration. If adopted by the Board and voters in November, the fund would create a permanent source of revenue to fund the creation of affordable housing for low and moderate income households in San Francisco.

As proposed, the Housing Trust Fund would begin with $20 million in general fund revenue, increasing to $50 million over time, and generate an estimated $1.1 billion in affordable housing production over the next 30 years in San Francisco.

Specific goals of the fund include:

1. Developing 9,000+ units of permanently affordable housing for residents at 60 percent or below the average median income (AMI), including the HOPE SF rebuild of Sunnydale and Potrero, and the Hugo Hotel;

2. Investing over $15 million over the first five years of the program in a down payment assistance program for residents to purchase a home in San Francisco with no-interest loans for first-time homebuyers;

3. Creating a Homeowner Stabilization Program to help distressed homeowners remain in their homes; and

4. Purchasing up to 20% of a development’s units to create permanent below market rate units available for moderate income renters and home buyers.

The fund would be funded by way of property tax revenues formerly earmarked for the now defunct redevelopment agency, a percent of existing hotel taxes, and a companion ballot initiative that would increase the real estate transfer tax for properties valued at $1 million or more by 0.2 percent.

Missing from the Mayor’s proposed amendment, press release and presentation, any mention of a condo-lottery bypass fee which many had hoped would be included as a source of funding and politically pave the way for the adoption of a lottery bypass.

Mayor Lee Announces San Francisco Housing Trust Fund [sfmayor.org]
TIC Conversion Lottery Bypass And Mayoral Take Two [SocketSite]
JustQuotes: Additional Details (Like Dollars) On Keeping Hope SF Alive [SocketSite]
Hugo Hotel Hangs On As Redevelopment Agency Is Dropped [SocketSite]

Posted by socketadmin at 12:00 PM | Permalink | Comments (15) | (email story)

May 18, 2012

San Francisco Employment Up By 2,400, Unemployment Under 8%

Preliminary April labor force data counts for San Francisco, Marin and San Mateo counties pegs the unemployment rates at 7.4%, 6.4% and 6.8% respectively, down 0.7 points in San Francisco and San Mateo, down 0.6 points in Marin.

On a revised basis, the number of unemployed in San Francisco fell by 3,500 in April (from 38,200 to 34,700) while the labor force contracted by 1,200 (from 470,900 to 469,700) and the number of employed increased by 2,400 (from 432,600 to 435,000).

Employment is up by 23,200 workers in San Francisco year-over-year but remains 30,500 workers below a December 2000 dot-com peak (at which point the unemployment rate measured 3 percent).

Overall unadjusted California unemployment fell to 10.5% in April as the labor force contracted by 131,800 workers and the ranks of the unemployed fell by 189,300.

Monthly Labor Force Data for Counties: April 2012 (Preliminary) [EDD]
San Francisco Employment Up By 2,000 In March, Up 20,000 YOY [SocketSite]
San Francisco Employment Trends And Dot-Com Context [SocketSite]

Posted by socketadmin at 10:15 AM | Permalink | Comments (1) | (email story)

A Foreclosed Upon Noe Home Sells For Over...What Wells Was Owed

1164%20Church%20Foreclosure.jpg

As we reported last month:

With a 2008 era mortgage for $910,000 long past due, last year Wells Fargo foreclosed upon the Noe Valley home of Kathryn Galves at 1164 Church Street [with $1,081,123 then owed including penalties and no bidders at that price on the courthouse steps].
Ms. Galves ended up accepting $7,500 to voluntarily leave the property prior to eviction by the Sheriff and not sue Wells Fargo, she has since vacated the property.
Yesterday, 1164 Church Street hit the MLS listed for $849,000 and touting "Great price, won't last!" with "offers due 5/1 by noon." And yes, priced at $494 per square foot, we’d be willing to bet the sale will be "over asking!" (and perhaps even more than was owed).

The sale of 1164 Church Street closed escrow yesterday with a reported contract price of $1,200,000 ($697 per square), well "over asking" and over what Wells was owed.

Will Wells Profit From This Noe Valley Foreclosure? [SocketSite]
Have You Heard The One About The House With Over 50 Offers? [SocketSite]

Posted by socketadmin at 6:15 AM | Permalink | Comments (19) | (email story)

May 15, 2012

Is A Lack Of Density Cooking San Francisco's Golden Tech Goose?

As we first wrote back in 2007:

Going green might be trendy (and we’re all for it), but as far as we’re concerned it’s a focus on density (and infill) that will define the next era in San Francisco’s development, neighborhoods, and lifestyle.

As San Francisco startups scramble to secure increasingly expensive talent and space in which to house them, are local planning policies, regulations and NIMBY’s to blame? And are we at risk of slow cooking our golden technology goose?

The Next Era In San Francisco’s Development: It’s All About Density [SocketSite]
Why The Bay Area Should Have 11 Million Residents Today [forbes.com]

Posted by socketadmin at 10:15 AM | Permalink | Comments (50) | (email story)

May 14, 2012

Behind Salesforce's San Francisco Campus Debacle

Salesforce Mission Bay Rendering

A few days before Salesforce.com was poised to receive the City's approval, Salesfoce pulled the plug on their plans for a 14-acre campus in San Francisco’s Mission Bay.

From Reuters on Friday:

The company's stated reason for changing course was that the new campus would not be big enough for its growing workforce. But people closely involved with the ill-fated development paint a picture of an out-of-control project that lurched forward even in the face of stratospheric costs and tepid support among employees. Only a construction expert hired late in the planning process convinced Benioff that moving forward would be folly.
The canceled development has already cost Salesforce tens of millions of dollars, and the price tag could rise further if the Web-based software maker fails to find a ready buyer for the land it bought, according to recent regulatory filings.
The cancellation has also singed the company's relationships with city officials, including San Francisco Mayor Ed Lee, who had touted the development as an economic boon and was stunned when it was suddenly abandoned.

From 2010 to 2011, the projected cost of constructing the campus ballooned from $750 per square foot to roughly $1,000 per square and a project cost of roughly $2 billion.

First Four Salesforce.com Campus Buildings Poised For Approval [SocketSite]
Salesforce.com Campus Key Elements And Design Preview [SocketSite]
Salesforce.com Kills Mission Bay Campus, Open To Offers For Land [SocketSite]
Insight: Salesforce's plan for opulent campus a costly debacle [reuters.com]
Salesforce.com Acquires 14 Mission Bay Acres To Build 2 Million Feet [SocketSite]

Posted by socketadmin at 7:15 AM | Permalink | Comments (22) | (email story)

May 10, 2012

Fixed Mortgage Rates Hit All-Time Lows (Again)

According to Freddie Mac’s latest Primary Mortgage Market Survey, 30-year fixed-rate mortgage rates averaged 3.83 percent (with 0.7 points) for the week ending today, a new all-time low, down from 3.84 percent last week, down from 3.88 percent last month, and versus 4.63 percent a year ago.

The average 15-year fixed mortgage rate has hit an all-time record low of 3.05 percent, down from 3.07 percent last week, down from 3.11 percent last month, and versus 3.82 percent a year ago.

As rates dropped, mortgage applications to purchase homes in the U.S. increased 3.8 percent last week but are down 0.4 percent year-over-year, and refinancing activity increased 1.3 percent according to the Mortgage Bankers Association.

Second Consecutive Week Of Record-Low Fixed Mortgage Rates [Freddie Mac]
15-Year Mortgage Rates Hit All-Time Low As Purchase Activity Drops [SocketSite]
Mortgage Applications Increase in Latest MBA Weekly Survey [mbaa.org]

Posted by socketadmin at 12:15 PM | Permalink | Comments (10) | (email story)

$100,000 Of Free Federal Money For Underwater Homeowners

With a budget of $772 million, the California Housing Finance Agency’s Keep Your Home California program was ready to reduce over 15,000 underwater homeowners’ loan principal by up to $50,000 as long as loan servicers agreed to match any reductions.

With lenders balking and less than 1,000 California homeowners having qualified for a reduction, the required matching from loan servicers will be eliminated next month.

Homeowners can still get up to $100,000 in principal reduction, but it will all come from the federal money.
To qualify under the new rules, homeowners must use the home as their primary residence, owe more than it's worth, fall below the income limit for their county [which is $121,900 in San Francisco], demonstrate a financial hardship and owe no more than $729,750 on a first mortgage originated on or before Jan. 1, 2010.
The program originally prevented people who had taken cash out of their homes - through a cash-out refinance or home equity loan - from getting a principal reduction but it lifted that restriction last fall.

Reductions will be structured as a five-year forgivable loans versus the current three.

Keep Your Home California [keepyourhomecalifornia.org]
Underwater California homeowners to get more help [SFGate]

Posted by socketadmin at 8:45 AM | Permalink | Comments (10) | (email story)

May 9, 2012

BofA Offers To Forgive Principal (If It Makes Economic Sense)

If you happen to be underwater on your home, were at least 60 days past due on a Bank of America mortgage as of January 31, and your housing expenses are more than 25 percent of your household’s gross income, don’t toss any letters from the bank before opening the envelope.

Bank of America Home Loans has begun reaching out to customers who may be eligible for forgiveness of a portion of the principal balance on their mortgage under terms of a recent settlement among five major banks, 49 state attorneys general and the federal government.
The first letters in a targeted outreach to more than 200,000 potential candidates for this assistance are arriving in homes this week; most of the letters will be mailed by the third quarter of this year. The bank estimates average monthly savings of 30 percent on mortgage payments of customers who qualify for this program.
Under the terms of the government settlement, the bank will strive to provide an affordable payment to qualified under-water homeowners by first reducing the principal balance to as low as 100 percent of the current property value, then lowering the interest rate and forbearing additional principal, as necessary, to reach the target payment.

Have no fear shareholders, the settlement is anything but altruistic and the offers will only be approved "if the cost incurred by the mortgage investor to modify [a] loan does not exceed the expected loss to the investor if it goes to foreclosure instead."

Bank of America Extends Modification Offers [bankofamerica.com]

Posted by socketadmin at 11:15 AM | Permalink | Comments (12) | (email story)

April 27, 2012

San Francisco Employment Trends And Dot-Com Context

San Francisco Employment

As we first reported a week ago, roughly 20,000 workers have joined the workforce in San Francisco over the past year with total employment at 432,600 and an unemployment rate of 8.1 percent. For context with respect to our last boom, employment in San Francisco peaked at 465,500 in December 2000 with an unemployment rate at 3.0 percent.

Including Marin and San Mateo, total employment is currently 919,000 with an unemployment rate of 7.7 percent, up 31,000 jobs year-over-year but versus a peak of 1,000,600 in December 2000 when the unemployment rate totaled 2.6 percent.

San Francisco Employment Up By 2,000 In March, Up 20,000 YOY [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (17) | (email story)

April 12, 2012

Cash Is King But Loans Can Be Leveraged

2030 3rd Street

Having sold as new for $459,000 in the year 2000 and refinanced in 2007 with a $525,000 first, 2030 3rd Street #9 returned to the market in November 2010 listed for $649,000 with the seller in default and over $30,000 past due on that new note.

Failing to find a buyer despite being reduced to $589,000, the two-bedroom condo was foreclosed upon and sold on the courthouse steps for $440,001 in cash that December.

Flipped with conventional financing in place for $535,000 three months later (March 2011), today the Central Waterfront condo returned to the market listed for $599,900 ($566 per square foot) having been spruced up a bit but otherwise looking rather apples-to-apples.

2030 3rd Street #9 Living

∙ Listing: 2030 3rd Street #9 (2/2.5) 1,059 sqft - $599,900 [obeo.com]
15-Year Mortgage Rates Hit All-Time Low As Purchase Activity Drops [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (17) | (email story)

April 9, 2012

Market Rate Development On Track In SF, Affordable Housing Isn’t

As determined by the state Department of Housing and Community Development (HCD) and the regional Association of Bay Area Governments (ABAG), the current Regional Housing Needs Allocation (RHNA) calls for a target of 31,193 housing units to be built in San Francisco between 2007 and 2014.

With 7,826 market rate units having been produced from 2007 to 2011, market rate production is at 95 percent of the RHNA goal to date with a final goal of 12,315 units, 40 percent of the total RHNA target, by 2014.

With 4,500 affordable units, including those deemed to be affordable for those with household incomes up to 120 percent of the area median, having been produced from 2007 to 2011, the production of affordable housing is at 36 percent of the RHNA goal to date with a final goal of 18,878 units, 60 percent of the total RHNA target, by 2014.

It's Two Years Later And Time To Adopt San Francisco’s Housing Plan [SocketSite]
Regional Housing Needs Allocation (RHNA) Production to Date [sfplanning.org]

Posted by socketadmin at 9:30 AM | Permalink | Comments (2) | (email story)

April 2, 2012

Airbnb: A Potential Civil And Criminal Penalty Hit List?

According to San Francisco Administrative Code Chapter 41A, it is "unlawful for any owner to offer an apartment unit for rent for tourist or transient use," defined as "occupancy for less than a 30-day term of tenancy."

Any interested party may institute proceedings for injunctive and monetary relief for violation of this Chapter. In addition, the owner may be liable for civil penalties of not more than $1,000 per day for the period of the unlawful rental. If the interested party is the prevailing party, such party shall be entitled to the costs of enforcing this Chapter, including reasonable attorneys’ fees, pursuant to an order of the Court. If the interested party is a permanent resident, then the interested party shall retain the entire monetary award.

And in terms of Criminal Penalties:

Any owner who rents an apartment unit for tourist or transient use as defined by this Chapter shall be guilty of a misdemeanor. Any person convicted of a misdemeanor hereunder shall be punishable by a fine of not more than $1,000 or by imprisonment in the County Jail for a period of not more than six months, or by both. Each apartment unit rented for tourist or transient use shall constitute a separate offense.

An apartment is defined as a "room or rooms in any building, or portion thereof, which is designed, built, rented, leased, let or hired out to be occupied…provided that the apartment unit was occupied by a permanent resident on or after February 8, 1981."

And according to the Administrative Code, "It is presumed that an apartment unit was occupied by a permanent resident on or after February 8, 1981, and the owner has the burden of proof to show that an apartment unit is not subject to this Chapter."

This afternoon San Francisco’s Land Use and Economic Development Committee will review an amendment to Chapter 41 sponsored by Supervisor Chiu which would "extend the restrictions against converting apartment units to short-term occupancies to tenants or guests of corporate entities that rent such apartments" and allow civil actions to be brought by certain non-profit entities.

With respect to being offered for tourist or transient use, there are currently 1,938 rooms, homes or apartments in San Francisco listed on airbnb alone.

Proposed San Francisco Administrative Code Chapter 41 Amendment [sfbos.org]

Posted by socketadmin at 7:30 AM | Permalink | Comments (75) | (email story)

March 26, 2012

To The Infinity And Beyond 2008?

301 Main #14D Living

With a built-in media cabinet, Sub-Zero wine storage, and dry bar installed since purchased for $1,225,000 in June 2008, the resale of 301 Main Street #14D won’t be perfectly apples-to-apples, plus there’s a tenant in place paying $4,800 month-to-month.

That being said, the Infinity two-bedroom is back on the market and listed for $1,275,000 with HOA dues of $781 per month. We'll let you run the numbers, assume and speculate.

∙ Listing: 301 Main Street #14D (2/2) - $1,275,000 [301main-14d.com]
To Rent Or To Buy, That Is The Question (That Only You Can Answer) [SocketSite]

Posted by socketadmin at 11:15 AM | Permalink | Comments (16) | (email story)

March 22, 2012

Take Three (And Three Hundred Thousand Off) For 1391 Clayton

1391 Clayton Living

As we reported back in March of 2009:

On the market last October asking $2,795,000 and then relisted in January for $100,000 less, 1391 Clayton has hit Craigslist as a rental asking $7,500 per month. We’ll let you run your own numbers, but be sure to show your work if you do.

The 2,885 square foot contemporary Clarendon Heights home at 1391 Clayton is now back on the market and listed for $2,395,000 with possession at close of escrow.

∙ Listing: 1391 Clayton (4/4.5) 2,885 sqft - $2,395,000 [1391clayton.com]
From Coming Soon To On The Market To Up For Rent: 1391 Clayton [SocketSite]
From Coming Soon To On The Market And A Peek Inside: 1391 Clayton [SocketSite]
To Rent Or To Buy, That Is The Question (That Only You Can Answer) [SocketSite]

Posted by socketadmin at 10:15 AM | Permalink | Comments (6) | (email story)

March 19, 2012

Bay Area Economic Outlook And Challenges

While acknowledging the Bay Area holds a productivity edge with respect to the tech sector, which has been responsible for 100% of the Bay Area’s growth since 2005, and that the Bay Area has maintained its distinctiveness as an innovation hub, the latest Bay Area Council Economic Institute’s Economic Profile raises a few concerns.

While the resilience recently displayed by the Bay Area and its innovation economy is impressive, the benefits are not being evenly felt. Employment levels remain near their lowest point in fifteen years, and jobs are particularly scarce for blue collar workers, who account for only 16% of the current employment. Budget shortfalls are creating strains. Education, infrastructure, and the business environment pose serious challenges to the Bay Area’s ability to maintain its competitive edge.
Today, although the economy has largely persevered, the increased intensity of these underlying structural problems poses a challenge to the region’s ability to sustain economic leadership in the longer term. Overall economic growth has been anemic when one takes a longer view, at only approximately 2% over the past 5 years. The region needs to look to itself to truly address these problems.

In the words of the Council, while the outlook "does not suggest that the Bay Area is on the verge of an economic crisis" (phew!), it does recognize "a pressing need to work through the region’s many challenges."

Bay Area Economic Profile: March 2012 [bayareaeconomy.org]

Posted by socketadmin at 8:15 AM | Permalink | Comments (45) | (email story)

February 29, 2012

Like 8,000 New Tech Jobs Expected This Year In San Francisco

According to a poll by the newly formed San Francisco Citizens Initiative for Technology & Innovation (sf.citi), their 125 member companies are expecting to hire "like 8,000 new jobs this year and counting," according to Ron Conway, sf.citi’s founding Chairman.

Tech companies hiring 8,000-plus in San Francisco [Business Times]

Posted by socketadmin at 6:15 AM | Permalink | Comments (53) | (email story)

February 23, 2012

Look Past The Overhyped Facebook Effect

Forget the overhyped Facebook effect (a.k.a. "buy now or be priced out forever 2.0") and simply turn your attention to the S&P 500 which closed the day at 1,363.05, just below its April 2011 high of 1,363.61 (its highest close since June 2008) and the Dow’s 12,986.81, its highest close since May 2008.

UPDATE (2/24): The S&P 500 closed the day at 1,365.74, its highest close since June 2008.

What's The Point? [SocketSite]

Posted by socketadmin at 1:30 PM | Permalink | Comments (72) | (email story)

February 13, 2012

TIC Conversion Lottery Bypass And Mayoral Take Two

TIC Lottery Applicants 2001-2011 (www.SocketSite.com)

The statement and question from Supervisor Farrell that Mayor Lee is scheduled to answer in a scripted five minute fashion tomorrow at two:

Tenancies-in-common (TICs) in San Francisco have traditionally been a vehicle to allow residents in our City to realize their goal of home ownership. San Francisco has always promoted a path towards converting TICs to condominiums, which has a number of benefits - principally the ability to obtain lower interest rates for their property.
Over the past decade, however, the condo conversion lottery has created a bottleneck for TIC owners, and the chances of prevailing in the condo lottery have continued to diminish year after year. To compound matters, during the recent recession the vast majority of lenders who financed TICs stopped lending into the market, leaving only a handful of financing options - at the same time many TIC owners are now facing adjustable-rate mortgages that are resetting and threatening to place many TIC owners into foreclosure. Especially given these dynamics, compounded with our looming annual budget deficits and the dismantling of our redevelopment agency, the concept of condo lottery bypass legislation whereby condo owners would be offered a one-time opportunity to pay a fee to bypass the lottery, should be a win-win situation for everyone, especially given these fees would be specifically directed towards affordable housing in San Francisco.
Would you support this condo lottery bypass legislation, which would serve the dual purpose of helping vulnerable TIC owners in San Francisco, and provide a significant source of funding for our affordable housing community to plug our current budget deficit?

In 2010, San Francisco's Budget and Finance Committee voted 3-1 to kill a one-time condo conversion lottery bypass for a fee sponsored by the then mayor Newsom, a vote the then Board of Supervisors could have overturned but didn’t.

An Estimated 2,500 Units Entering 2011 Condo Conversion Lottery [SocketSite]
Condo Lottery Bypass For A Fee Resurfaces In Mayor's New Budget [SocketSite]
Budget and Finance Committee Kills Condo Lottery Bypass For A Fee [SocketSite]

Posted by socketadmin at 2:00 PM | Permalink | Comments (47) | (email story)

February 9, 2012

The Banks Paid $25 Billion And All I Got Was This Lousy $2,000 Check

While the deal needs to be approved by a federal judge, a $25 billion settlement to be paid by Bank America, Wells Fargo, JPMorgan Chase, Citigroup and Ally Financial as penance for abusive foreclosure practices has been reached.

From Bloomberg:

The $25 billion settlement with banks over foreclosure abuses may trigger a wave of home seizures, inflicting short-term pain on delinquent U.S. borrowers while making a long-term housing recovery more likely.
Lenders slowed the pace of foreclosures as they negotiated with attorneys general in all 50 states for more than a year over allegations of faulty and fraudulent paperwork used to repossess homes. With today’s agreement, banks are likely to resume property seizures.

The rough terms of the agreement calls for $10 billion in write-downs for at-risk mortgage holders; $7 billion for homeownership programs; $3.5 billion to the states; $3 billion for refinancing loans for homeowners that are underwater; and $1.5 billion worth of $2,000 checks to be written to those who were improperly foreclosed upon.

Foreclosure Deal to Spur U.S. Home Seizures [Bloomberg]
San Francisco Foreclosure Trends And 2011 And Retrospective [SocketSite]

Posted by socketadmin at 2:00 PM | Permalink | Comments (81) | (email story)

February 7, 2012

Selling Short And Still Walking Away With Cash At Settlement

From Bloomberg with respect to a move by major lenders to incentivize delinquent homeowners to short-sell their properties rather than occupy mortgage free for years by offering the debtors up to $35,000 in cash to move on:

Lenders have routinely delayed or blocked such transactions, known as short sales, in which they accept less from a buyer than the seller’s outstanding loan. Now banks have decided the deals are faster and less costly than foreclosures, which have slowed in response to regulatory probes of abusive practices. Banks are nudging potential sellers by pre-approving deals, streamlining the closing process, forgoing their right to pursue unpaid debt and in some cases providing large cash incentives, said Bill Fricke, senior credit officer for Moody’s Investors Service in New York.
Losses for lenders are about 15 percent lower on the sales than on foreclosures, which can take years to complete while taxes and legal, maintenance and other costs accumulate, according to Moody’s. The deals accounted for 33 percent of financially distressed transactions in November, up from 24 percent a year earlier, said CoreLogic Inc., a Santa Ana, California-based real estate information company.

In San Francisco where $35,000 can represent less than six months of mortgage free living, fifty-five percent of distressed listings (which account for eighteen percent of all listings) are currently short sales, versus seventy-one percent at the same time last year.

Banks Pay Homeowners to Avoid Foreclosures [Bloomberg]
Five Years Of "Free" Foreclosure Living At 333 First Nears An End [SocketSite]
Going On Four Years Of "Free" Foreclosure Living Over In Noe Valley [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (6) | (email story)

February 3, 2012

Always Expect The Unexpected

A week ago the Federal Open Market Committee stated an intent to keep interest rates low through late 2014 due to "low rates of resource utilization" amongst other economic conditions. Today, payrolls in the U.S. increased 243,000, the unemployment rate dropped to 8.3%, and the markets are currently happy.

Expect An Exceptionally Low Federal Funds Rate Through Late 2014 [SocketSite]
Unemployment Drops to 8.3%; Payrolls in U.S. Jump 243,000 [Bloomberg]

Posted by socketadmin at 7:45 AM | Permalink | Comments (2) | (email story)

January 27, 2012

Quintessential Noe Valley (And Price Per Square Foot Trend)

Having undergone a major remodel in 1999 following its purchase for $410,000 in 1998, the "quintessential renovated and expanded Noe Valley home" at 4245 23rd Street sold for $1,700,000 in September of 2004.

The 2,302 square foot four-bedroom, which is much larger and scarcer than the median neighborhood home, is now back on the market and listed for $1,795,000.

Although their records appear to be incomplete for 2011, if PropertyShark is to correct, the median sale price per square foot for 94114 single-family homes was $697 in 2004, peaked at $953 in 2008, dropped to $840 in 2010, and was $773 last year on median sized home sales of 1,360, 1,530, 1,512, and 1,650 square feet respectively.

Based on PropertyShark’s stats, the median neighborhood price per square foot is up 11 percent since 2004 having increased 37 percent from 2004 to 2008, dropping 19 percent from 2008 to 2011, and having dropped 8 percent from 2010.

Keep in mind that with a 21 percent increase in the size of the median home sold from 2004 to 2011, even if the price per square foot had dropped 20 percent the median price paid would have shown "appreciation," one of the reasons simply quoting changes in median or average sale price often misleads.

And yes, size matters when it comes to comparing price per square foot for homes.

∙ Listing: 4245 23rd Street (4/3) 2,302 sqft - $1,795,000 [4245-23rdst.com]
Size Matters (At Least With Respect To Dollars Per Square Foot) [SocketSite]

Posted by socketadmin at 11:45 AM | Permalink | Comments (21) | (email story)

January 18, 2012

Condominium Conversion 2012 Lottery Deadline And Odds (Against)

With over 2,500 units expected to enter San Francisco’s 2012 condominium conversion lottery to be held on the first of February, and with only two hundred (200) rights to convert to be won, under one in twelve of the entering units will win this year versus one in five when 994 units applied in 2003.

The deadline to enter the 2012 lottery is this Friday, January 20 at 4:45 PM. And based on the current lottery structure and backlog, new entrants can expect to apply for up to 15 years before winning the right to start navigating the waters to convert as charted above.

In 2010, San Francisco's Budget and Finance Committee voted 3-1 to kill a proposed one-time condo conversion lottery bypass for a fee intended to help clear the lottery backlog while raising a projected $8 million dollars for affordable housing.

San Francisco Condominium Conversion: 2012 Lottery Details [sfdpw.org]
Condo Conversion 2011: Are You Feeling Lucky Punk? Well, Are You? [SocketSite]
Budget and Finance Committee Kills Condo Lottery Bypass For A Fee [SocketSite]
Condo Lottery Bypass For A Fee Resurfaces In Mayor's New Budget [SocketSite]

Posted by socketadmin at 12:00 PM | Permalink | Comments (7) | (email story)

January 13, 2012

Die By The Comp

378 Park

As we wrote last April:

In March 2007 the south Bernal Heights single-family home at 378 Park was refinanced with two mortgages totaling $763,000 for which the home would have had to appraise based on comps at the time (whether or not said comps were on a busy street or their buyers had "overpaid" in retrospect).
Yesterday, 378 Park returned to the market listed as a short sale for "$499,000" but without any mention of being pre-approved. That being said, we will note that both loans were underwritten by the same lender which might make negotiating a bit easier.

The sale of 378 Park closed escrow this week with a reported contract price of $460,000.

Live By The Comp… [SocketSite]

Posted by socketadmin at 12:15 PM | Permalink | Comments (13) | (email story)

January 11, 2012

Now Asking $38M (And Still Contributing Under $8K In Taxes Per Year)

2901 Broadway: Aerial

As we reported when the list price for 2901 Broadway was reduced to $45,000,000 in 2009:

It was the 2007 Decorator Showcase Home and has been on the market for over two years (an "official" DOM of 690). It was initially listed for $55,000,000 in early 2007 and received a rumored four offers a few months later (which were all countered at asking and all walked away). And it was reduced to $48,000,000 on March 6, 2008.

With 1,727 days on the market, the list price for 2901 Broadway has just been reduced another $7,000,000, now asking $38,000,000 and now the second most expensive listing in San Francisco, just behind 2845 Broadway which was reduced to $38,500,000 last year.

And yes, the property tax bill for the Gold Coast mansion totaled $7,790 last year.

∙ Listing: 2901 Broadway (7/7.5) - $38,000,000 [2901broadwaystreet.com]
A $3,000,000 Reduction (That Might Not Seem Like So Much To Some) [SocketSite]
Your Chance To Slip Inside 2901 Broadway [SocketSite]
If You Have To Ask (2901 Broadway) [SocketSite]
Go Ahead And Ask: 2901 Broadway Is Listed (And Priced) [SocketSite]
Rumor Has It: Four Offers On The 2007 Decorator Showcase Home? [SocketSite]
Over $50 Million Invested And Now Asking $38.5M For 2845 Broadway [SocketSite]
Proposition 13 In Practice Along San Francisco’s Gold Coast [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (100) | (email story)

January 10, 2012

Demanding Validation And Disputing One's Own 2008 Era Debt

In September 2009, a notice of default was filed on the $671,995 first mortgage employed to purchase 425 First Street #1307 for $830,000 in February 2008. At the time of the notice, the buyer of the 819 square foot condo was already $25,338 past due on his debt.

Having signed a promissory note for the $671,995 first mortgage back in 2008, as well as for an $83,910 second, the buyer of the One Rincon Hill one-bedroom subsequently decided that "fraudulent and deceptive" banking practices were to blame for his mortgage woes. And in February 2010, the buyer filed a 190 point DEMAND for validation of his debt, without which he would have "no choice but to dispute the validity [of the bank's] lawful ownership, funding, entitlement right, and the current debt [they] allege [he owes]."

As best we can tell, and including disputed fees, the past due amount is now over $100,000 on the first mortgage alone without a currently scheduled auction.

Posted by socketadmin at 5:00 PM | Permalink | Comments (19) | (email story)

January 3, 2012

The "$2.8 Million Dream Home" Finally Sells For $2.36 Million

65 Mountain Spring Avenue

As we wrote this past September:

Having failed to be awarded in the third annual San Francisco Dream House Raffle, the "$2.8 million" dream house at 65 Mountain Spring Road has returned to the market listed for $2,675,000. As we first reported at the time of the raffle:
Listed for sale at $3,950,000 [by the agent owners in June of 2010], the list price for 65 Mountain Spring was reduced five times over the next four months before being withdrawn from the MLS [that December] last asking $2,775,000 for the 4,139 square foot (per its old listing) four-bedroom home.

Having been reduced to $2,495,000 shortly thereafter, the sale of 65 Mountain Spring Avenue finally closed escrow on 12/29/2011 with a reported contract price of $2,360,000.

A Regularly Recurring Dream [SocketSite]
San Francisco Dreaming At 65 Mountain Spring Avenue [SocketSite]
The "$2.8 Million Dream Home" On Mountain Spring Drops To $2.5M [SocketSite]

Posted by socketadmin at 7:30 AM | Permalink | Comments (5) | (email story)

December 30, 2011

Up, Down, And Back To Where It Started For The S&P 500 In 2011

S&P 500 in 2011

The S&P 500 closed the day and 2011 at 1,257.60, down .04 points (0.0%) from where it started the year and down 7.8% from an April high, but up 14.4% from an October low.

What's The Point? [SocketSite]

Posted by socketadmin at 3:30 PM | Permalink | Comments (48) | (email story)

December 23, 2011

Apples To Oranges To Apples (And Three "Free" Years) At 501 Beale

501 Beale

Already $87,355 past due on a $652,000 loan by the time a notice of default was filed last December, a past due amount which had grown to $115,828 this past July, last month 501 Beale #14E was finally taken back by the bank with no bidders at $477,000 in cash.

Purchased for $711,500 in April 2006, the Watermark one-bedroom has just returned to the market listed for $499,900, priced 30 percent below its comp setting sale in 2006.

∙ Listing: 501 Beale #14E (1/1) 759 sqft - $499,900 [Redfin]

Posted by socketadmin at 9:00 AM | Permalink | Comments (11) | (email story)

December 20, 2011

Challenge Of BMR Resale Restriction Misses By Two Months

Having purchased resale restricted BMR condominiums in San Francisco at below market rates, a group of BMR owners filed suit against the City in May 2009 claiming the right to resell their units at market rates and challenging a December 2008 ordinance which clarified "the City’s intent that the requirements of the BMR Program apply in perpetuity" versus for only 20 years.

The December 2008 ordinance also provided owners of BMR units a two-year window in which to buy their way out of the program if they wished.

Earlier this year it appeared as though the plaintiffs might actually prevail, but last week the First District Court of Appeal overturned an injunction which had suspended the aforementioned two-year window to exit the program.

In this interlocutory appeal, the City claims the court erred in issuing a preliminary injunction to maintain the status quo while plaintiffs’ claims were being litigated. Among other arguments, the City claims that plaintiffs did not have a reasonable probability of prevailing at the trial––one of the requirements for issuing a preliminary injunction––because all of plaintiffs’ causes of action were time-barred.
We agree with the City that…the statute of limitations governing any subdivision-related decision under the SMA, required plaintiffs’ facial challenge to the Ordinance to be filed within 90 days of the enactment of the Ordinance. Because plaintiffs’ claims were not filed within the 90-day timeframe, plaintiffs have not shown a likelihood of success on the merits. For this reason, we reverse the preliminary injunction, and remand the case to the trial court for further proceedings.

We'll keep you posted and plugged-in.

Aiuto v. City and County of San Francisco Appellate Opinion [ca.gov]

Posted by socketadmin at 10:30 AM | Permalink | Comments (12) | (email story)

December 16, 2011

San Francisco County Employment Up By 3,100 In November

Preliminary November labor force data counts for San Francisco, Marin and San Mateo counties pegs the unemployment rates at 7.8%, 6.9% and 7.5% respectively, down 0.3 percentage points in San Francisco and Marin, down 0.4 in San Mateo.

On a revised basis, the number of unemployed in San Francisco fell by 1,400 in November (from 37,600 to 36,200) while the labor force increased by 1,700 (from 462,300 to 464,000) and the number of employed increased by 3,100 (from 424,700 to 427,800).

Overall unadjusted California unemployment fell to 10.9% as the labor force fell by 35,900 workers and the ranks of the unemployed fell by 71,100.

Monthly Labor Force Data for Counties: November 2011 (Preliminary) [EDD]
San Francisco County Employment Up By 2,700 In October [SocketSite]

Posted by socketadmin at 9:30 AM | Permalink | Comments (140) | (email story)

December 7, 2011

The Details Behind Yesterday’s 'Day Of Action' Home In San Francisco

As we reported, the property at 1479 Quesda Avenue which was picked to be the rally point for yesterday’s "National Day of Action" against unfair foreclosure proceedings in San Francisco was purchased for $215,000 in 1999, refinanced in 2007 with a $590,000 loan, and taken back by the bank earlier this year.

Protest organizers and members of the press have characterized Vivian Richardson, the foreclosed upon ex-owner of 1479 Quesada, as a victim of predatory lending. Or in the words of Ms. Richardson earlier this year:

Families have been ripped off by banks, scammed by brokers and nothing’s done to them. It’s time for the families and the community to stand up and take back what’s theirs.
We are losing families every day…The banks got bailed out, and we are being pushed out. But we’re going to fight, even if we have to do it one home at a time.

Yesterday, we took some heat for showing a perceived lack of concern for Ms. Richardson and for suggesting the "Occupy" movement wasn’t doing itself any favors by associating themselves with this case as an example of economic injustice in San Francisco.

Today, we offer a few more details and wonder if they might change a few minds.

Once again, Ms. Richardson acquired 1479 Quesada in 1999 from John Pereira with a recorded transfer price of $215,000. In 2002, Ms. Richardson refinanced the home with a $281,250 mortgage.

In 2003, Ms. Richardson refinanced the property with a new first mortgage for $318,760. And in 2004, Ms. Richardson refinanced the property with a new first for $381,000.

In early 2005, Ms. Richardson added a second loan to the property in the amount of $39,750, a loan which was paid off later in the year when the property was refinanced with a $500,000 first.

In March 2006, Ms. Richardson refinanced her home with a first mortgage for $556,000 to which another loan for $50,000 was added that October.

In July 2007, Ms. Richardson once again refinanced her home with a $590,000 first mortgage. At the same time, Ms. Richardson also secured a second for $74,000.

By the end of 2008, Ms. Richardson was already $14,695 past due on her first mortgage. And in May of this year, the bank foreclosed on the property with $728,129.33 in principal, fees and accrued interest due on that $590,000 loan alone.

Keep in mind that the foreclosing note from 2007 was fixed for five years with the $2,180,75 monthly payment spelled out in the note Ms. Richardson had signed, promising to pay the bank back in full or give up the property.

And that’s how Ms. Richardson came to be "pushed out" of her home.

Over A Half Million Reasons It's Just And The "Occupiers" Aren't [SocketSite]
Bayview Families Refusing to Leave Despite Foreclosures [rebuildthedream.com]

Posted by socketadmin at 4:00 PM | Permalink | Comments (97) | (email story)

December 6, 2011

Over A Half Million Reasons It's Just And The "Occupiers" Aren't

1479 Quesada Avenue

Purchased for $215,000 in 1999, the owners of 1479 Quesada Avenue borrowed $590,000 in July of 2007 and pledged their property as collateral. By the end of 2008 the owners were already $14,695 past due on their payments. And this past April, title to the house was taken back by the bank with no bidders at $379,000 on the court house steps.

This morning, "Occupy" organizers plan to rally at 1479 Quesda Avenue to protest "unfair foreclosure proceedings" at the property. No word on how being evicted for borrowing over a half-million dollars and then failing to pay it back constitutes being unfair, other than to those who made the loan.

Posted by socketadmin at 10:00 AM | Permalink | Comments (81) | (email story)

December 1, 2011

Ciao!

In response to continuing concern surrounding the stability of the European economy, six central banks cut the cost of borrowing yesterday and the financial markets rallied with the S&P 500 jumping 4.3 percent, up 7.6 percent over the past three days.

Ciao? [SocketSite]
What's The Point? [SocketSite]

Posted by socketadmin at 9:15 AM | Permalink | Comments (5) | (email story)

November 23, 2011

What's The Point?

As we wrote two weeks ago and for which we took a bit of heat:

Just when the financial markets seemed to have recovered from the Great Greek Debacle, the S&P 500 dropped 3.67 percent today stoked by uncertainty over Italy and the stability of the Euro as a whole.

The S&P 500 has dropped 8.93 percent since November 9 and is now down 1.60 percent year-over-year. And no, it’s not the daily moves we’re focused on, nor simply the dips, but rather potential turning points, be they bearish or bullish, and the trends.

And with respect to the IPO market and its ups and downs, let’s consider this a safe place to discuss and debate its impact on the San Francisco real estate market as we try to keep our other discussions on topic and track.

Ciao? [SocketSite]
Financial Markets Balk At Vote To Accept Voluntary Writedowns [SocketSite]
Dow Crosses 11,000 As Market Volatility (A.K.A. Skittishness) Wanes [SocketSite]
It Must Just Be Because We're "Bearish," Why Else Would We Care? [SocketSite]

Posted by socketadmin at 3:00 PM | Permalink | Comments (262) | (email story)

November 21, 2011

It Must Just Be Because We're "Bearish," Why Else Would We Care?

S&P Posts Worst Losing Streak in Two Months [Bloomberg]
Kostin: S&P 500 May Fall to 1,100 [Bloomberg]
Ciao? [SocketSite]

Posted by socketadmin at 3:00 PM | Permalink | Comments (27) | (email story)

Demand Up, Supply Down, And Yet The Median Falls?

The pace of seasonally adjusted existing-home sales in the U.S. rose 1.4 percent from 4.90 million in September to a 4.97 million pace in October, up 13.5 percent from the 4.38 million unit pace recorded in October 2010.

Total housing inventory at the end of October fell 2.2 percent to 3.33 million existing homes actively on the market, an 8.0 month supply, down from an 8.3 month supply in September and down from a 10.5 month supply in October 2010.

While demand appears to have increased, and supply appears to have declined, the median sale price for existing-homes was down 4.7 percent year-over-year in October to $162,500 as distressed sales accounted for 28 percent of sales volume, down two points from last month, down six points year-over-year.

Existing-home sales in the west increased 4.4 percent from September to October, up 15.5 percent on a year-over-year basis on a median sales price that’s 1.6 percent lower.

October Existing-Home Sales Rise, Unsold Inventory Continues to Decline [realtor.org]

Posted by socketadmin at 8:30 AM | Permalink | Comments (5) | (email story)

November 17, 2011

FHA Loan Limits Up To $729,750 Close To Being Resuscitated

Having expired at the end of September following a three year run, and having effectively been out of reach since August, it would appear that the $729,750 loan limit for FHA loans in high cost areas, such as San Francisco, will be resuscitated.

From the Wall Street Journal today:

...late Monday a bipartisan Congressional committee announced an agreement to increase FHA's maximum mortgage limits to $729,750 from $625,500 through Dec. 31, 2013. The bill is linked to a continuing resolution to fund Congress past Saturday, increasing the likelihood that this backroom deal will become law. The House is scheduled to vote on the bill today without debating these changes...

As we wrote when the "super conforming" limits first expired: "While we don’t expect the change to have a radical impact on the market, we do expect to see an impact on liquidity and values in the $650,000 to million dollar segment due to potentially higher down payment requirements and rates." And now, vice versa.

The Housing Lobby Strikes Again [Wall Street Journal]
Loan Limits Set To Fall From $729,750 To $625,000 In San Francisco [SocketSite]
Conforming Loan Limit Extension Gains Obama's Support [SocketSite]

Posted by socketadmin at 10:30 AM | Permalink | Comments (33) | (email story)

November 9, 2011

Ciao?

Just when the financial markets seemed to have recovered from the Great Greek Debacle, the S&P 500 dropped 3.67 percent today stoked by uncertainty over Italy and the stability of the Euro as a whole.

Financial Markets Balk At Vote To Accept Voluntary Writedowns [SocketSite]
U.S. Stocks Fall on Concern About Euro Exit [Bloomberg]

Posted by socketadmin at 2:00 PM | Permalink | Comments (29) | (email story)

November 1, 2011

Financial Markets Balk At Vote To Accept Voluntary Writedowns

With bondholders agreeing to "voluntarily" accept 50 percent writedowns on Greek debt, last Thursday the Euro STOXX 50 jumped 5.9 percent and the S&P 500 over two percent.

Today, the Euro STOXX 50 dropped 5.3 percent while the S&P 500 is trading down 2.6 percent as the Prime Minister of Greece has promised to put the terms of the bailout plan (and its austerity measures) to a (not so popular) vote amongst the people of Greece.

Equity Markets Jump As Holders Of Greek Debt Are Jabbed [SocketSite]
U.S. Stocks Slump as Greek Referendum Threatens Bailout [Bloomberg]

Posted by socketadmin at 8:15 AM | Permalink | Comments (34) | (email story)

October 28, 2011

The San Francisco Foreclosure Rigging Four

Amongst eight Northern California real estate investors who have pleaded guilty to rigging public foreclosure auctions are Laith Salma, Patrick Campion, Keith Goodman and Craig Lipton, all of San Francisco.

The men agreed not to bid against each other for foreclosed properties auctioned off outside the county courthouse in Redwood City and in San Francisco County. Instead, they kept the winning price low which, in turn, federal prosecutors say, damaged the real estate market and defrauded those expecting a fair marketplace.
When property is auctioned, the proceeds pay off the mortgage and debt with any remaining money going to the homeowner. Squelching competitive bids limits how much money is available for both.
The men used the U.S. mail and Federal Express to send the Trustee’s Deeds Upon Sale and other title documents to others in the conspiracy, leading to the mail fraud charges.
For their roles, the investors face up to a decade in federal prison for violating the antitrust law known as the Sherman Act and up to 30 years for conspiring to commit mail fraud, the DOJ announced yesterday.

And amongst the properties purchased on the courthouse steps by Craig Lipton was 2209 9th Avenue, a property with which plugged-in readers should be rather familiar.

Investors guilty of rigging real estate auctions [smdailyjournal.com]
FBI Looks Into Auction Bid Rigging (And Shouldn’t Have To Look Far) [SocketSite]
The Full 2209 9th Avenue Scoop: Sold And...Coming Back Soon [SocketSite]
2209 9th Avenue Sports An Open Market Eight In 2011 [SocketSite]

Posted by socketadmin at 10:45 AM | Permalink | Comments (40) | (email story)

October 27, 2011

Equity Markets Jump As Holders Of Greek Debt Are Jabbed

With bondholders set to "voluntarily" accept 50 percent writedowns on Greek debt, the Euro STOXX 50 jumped 5.9 percent while the S&P 500 opened the day up 2 percent. With the writedowns in place, Greece’s debt will be cut to just 120 percent of GDP by 2020.

EU Sets 50% Greek Writedown, $1.4T in Rescue Fund [Bloomberg]
Euro Deal, if Vague, Draws Positive First Reaction [NYT]

Posted by socketadmin at 7:15 AM | Permalink | Comments (15) | (email story)

October 24, 2011

No Equity? No Appraisal? No Problem!

From Bloomberg with respect to a new plan to save the housing market and economy:

U.S. regulators will let qualified homeowners refinance mortgages regardless of how much their houses have dropped in value, expanding a government effort to chip away at one of the economy’s most unyielding problems.
The Federal Housing Finance Agency will also enhance the Home Affordable Refinance Program by eliminating some fees, reducing others and waiving some risk for lenders, Edward J. DeMarco, the agency’s acting director, said today.

And the paragraph at which readers might start raising an eyebrow or two:

The changes should encourage more lenders to participate, DeMarco said. Lenders can’t be faulted for a bad appraisal, for example, because under the new program they won’t be required in most cases, he said.

U.S. Plan Expands to Underwater Borrowers [Bloomberg]

Posted by socketadmin at 11:15 AM | Permalink | Comments (34) | (email story)

October 21, 2011

A Homeowner’s Counterintuitive Wish Comes True

741 Noe

As we first reported back in July of 2007:

A tipster directs our attention to the listing for 741 Noe, a two bedroom "Tales-of-the-Cityesque" condo "on Eureka Valley's famed Liberty Street Stairs" that could "make Armistead Maupin green w/ envy!" It’s part of a two bedroom condo association along with 494 Liberty (which according to our tipster "recently sold for $1,315,000 after being listed at $1,085,000"). Oh, and apparently the two units "were bought as TIC's on 7/15/2004 for $1,141,500 total."
And then there's the last paragraph of the tip: “I'm a homeowner who has owned for quite a while and although I like to see properties appreciate, I would prefer it to be less crazy. I can never never afford to move unless I move out of the city.” Oh, the irony (and only in San Francisco).

Having sold for $1,057,000 that August, it’s another tipster that notes 741 Noe has been back on the market for three months, originally asking $1,029,000 but listed at $959,000 for the past four weeks, nine percent more affordable than four years ago and not accounting for a 240 basis point (37 percent) drop in 30 year mortgage rates as well.

∙ Listing: 741 Noe (2/1) - $959,000 [MLS]
Tales Of San Francisco (On So Many Different Levels) [SocketSite]
30-Year Mortgage Rates Fall Below 4 Percent And...Activity Drops [SocketSite]

Posted by socketadmin at 12:00 AM | Permalink | Comments (9) | (email story)

October 13, 2011

An Unwarranted Drop In Value?

260 Claremont

Purchased for $1,053,000 in 2005, the West Portal Craftsman at 260 Claremont returned to the market this past April listed for $1,130,000.

Reduced to $990,000 in May (after which it was in contract for a month) and then $889,000 in September (after which it was in contract for two days), the list price for the property has just been reduced to "$799,000" as a short sale (24 percent below its 2005 price).

Keep in mind the main floor master suite remains unwarranted, as does the lower level bonus room, which leaves a reader to wonder how unwarranted work is affecting the ability to obtain financing and buyers these days.

∙ Listing: 260 Claremont (4/2) - $799,000 (short sale) [MLS]

Posted by socketadmin at 10:00 AM | Permalink | Comments (29) | (email story)

October 6, 2011

30-Year Mortgage Rates Fall Below 4 Percent And...Activity Drops

According to Freddie Mac’s latest Primary Mortgage Market Survey, 30-year fixed-rate mortgage rates averaged 3.94 percent with an average 0.8 point for the week ending October 6, 2011, down from 4.01 percent last week and versus 4.27 percent a year ago.

At the same time, mortgage applications to purchase homes in the U.S. dropped 1.7 percent last week (refinancing activity fell 5.2 percent), down 12.1 percent on a year-over-year basis according to the Mortgage Bankers Association.

30-Year Fixed Mortgage Rate Falls Below 4 Percent [Freddie Mac]
Mortgage Applications, except Government Refinances, Decrease [mbaa.org]

Posted by socketadmin at 11:30 AM | Permalink | Comments (13) | (email story)

October 4, 2011

The Rising Rents Versus Falling Prices Paradox And Salary Debate

A reader's comment from our report on 44 Rockaway Avenue that sparked a discussion that’s topical and worth its own place for debate:

[Here] is the explanation of how SOMA rental units can be doing pretty well, but why that has not correlated with more home sales and thus prices keep falling: local tech jobs just don't pay all that well. It's enough for a 28-year-old to rent a decent small-ish pad. But it is not nearly enough to buy a nice SF place, especially if you have kids.

Feel free to join in, but if you do, please stick with a unique identity that's your own.

Look Out Below [SocketSite]
Tech Job Quote Triptych [SocketSite]
Here Are The Top 7 Highest Paying Companies In Silicon Valley [businessinsider.com]

Posted by socketadmin at 11:00 AM | Permalink | Comments (185) | (email story)

September 28, 2011

Loan Limits Set To Fall From $729,750 To $625,000 In San Francisco

As we reported two weeks ago:

While industry groups furiously lobby, it’s now t-minus two weeks until the super/jumbo conforming loan limits that provide for federally backed mortgages up to $729,750 in high cost areas like San Francisco are set to expire on September 30.
As we first reported two weeks ago, it would appear as though Obama’s administration has changed its position and would now support a two-year extension despite the Treasury Department’s recommendation to let the limits reset lower.
Co-sponsored by California Senator Diane Feinstein, the Homeownership Affordability Act of 2011 which would extend the higher loan limits through the end of 2013 has been referred to the Committee on Banking, Housing, and Urban Affairs but hasn't made much progress since being introduced at the beginning of August.

With two days to go, we’re calling it 99 percent certain that super conforming loan limits are dead in the water and the upper limit for qualifying loans in San Francisco will officially drop from $729,750 to $625,500, having effectively been in place for a month.

While we don’t expect the change to have a radical impact on the market, we do expect to see an impact on liquidity and values in the $650,000 to million dollar segment due to potentially higher down payment requirements and rates.

T-Minus Two Weeks Until Higher Loan Limits Set To Expire [SocketSite]
If Lowering Rates Isn’t Working, Perhaps Increasing Limits Will [SocketSite]
Conforming Loan Limit Extension Gains Obama's Support [SocketSite]
Homeownership Affordability Act of 2011 [loc.gov]

Posted by socketadmin at 12:30 PM | Permalink | Comments (51) | (email story)

September 23, 2011

San Francisco's "Wall Street Wrecking Ball" Report And Rally

Wall Street Wrecking Ball Report San Francisco

At 12:30 this afternoon, Assessor-Recorder Phil Ting along with Supervisors Avalos, Cohen and Mirkarimi will gather at City Hall to address the "Wall Street Wrecking Ball" report for San Francisco, "uniting behind solutions to help homeowners facing foreclosure and City Hall deal with the economic and budget impact of the mortgage crisis."

The Supervisors and Assessor-Recorder will be joined by leaders of the Alliance of Californians for Community Empowerment (ACCE) and California Reinvestment Coalition (CRC) which are publishing the new findings, as well as foreclosure victims from Bayview-Hunter’s Point and Ingleside-Excelsior who will detail their individual accounts of how foreclosures are wreaking havoc on our families and neighborhoods.

No word on whether or not Supervisor Cohen plans to detail her account of walking away from the condo she purchased with no money down in 2006, leaving "Wall Street" to absorb her $261,500 loss.

The Wall Street Wrecking Ball: San Francisco Report [calorganize.org]
Scheduled Auctions Flat As Pre-Foreclosure Activity Ticks Down [SocketSite]
San Francisco Supervisor Cohen Walks Away From Underwater Condo [SocketSite]
Cohen’s The Bank’s Candlestick Point Condo Closes Escrow [SocketSite]

Posted by socketadmin at 10:15 AM | Permalink | Comments (76) | (email story)

September 21, 2011

The Fed's "Twist" And The Markets Tumble

Citing "significant downside risks to the economic outlook, including strains in global financial markets," and in a move dubbed "Operation Twist," the Federal Reserve announced it will sell $400 billion of short-term debt holdings and purchase an equal amount of longer-term Treasuries in an attempt to further reduce borrowing costs "and keep the economy from relapsing into a recession."

The S&P 500 responded to the Fed's news by dropping 2.94 percent, the Dow dropped 2.49 percent, and the Nasdaq dropped 2.01 percent. And keep in mind that mortgage rates are already at historic lows.

Fed Will Shift Treasury Holdings to Longer-Term Securities [Bloomberg]
How Low Can They Go? [SocketSite]

Posted by socketadmin at 1:45 PM | Permalink | Comments (29) | (email story)

September 15, 2011

T-Minus Two Weeks Until Higher Loan Limits Set To Expire

While industry groups furiously lobby, it’s now t-minus two weeks until the super/jumbo conforming loan limits that provide for federally backed mortgages up to $729,750 in high cost areas like San Francisco are set to expire on September 30.

As we first reported two weeks ago, it would appear as though Obama’s administration has changed its position and would now support a two-year extension despite the Treasury Department’s recommendation to let the limits reset lower.

Co-sponsored by California Senator Diane Feinstein, the Homeownership Affordability Act of 2011 which would extend the higher loan limits through the end of 2013 has been referred to the Committee on Banking, Housing, and Urban Affairs but hasn't made much progress since being introduced at the beginning of August.

We’ll keep you plugged-in.

If Lowering Rates Isn’t Working, Perhaps Increasing Limits Will [SocketSite]
Conforming Loan Limit Extension Gains Obama's Support [SocketSite]
Homeownership Affordability Act of 2011 [loc.gov]

Posted by socketadmin at 8:15 AM | Permalink | Comments (20) | (email story)

September 8, 2011

How Low Can They Go?

According to Freddie Mac's latest Primary Mortgage Market Survey, mortgage rates have hit all-time record lows "amid market and employment concerns and economic uncertainty."

The average rate for a 30-year fixed loan has dropped to 4.12 percent versus 4.32 percent last month and 4.35 percent a year ago, while the average 15-year rate has fallen to 3.33 percent versus 3.5 percent last month and 3.83 percent year-over-year.

Mortgage Rates Attain New All-Time Record Lows Again [Freddie Mac]
Silver Lining: The Cost Of Mortgage Money Drops [SocketSite]

Posted by socketadmin at 9:30 AM | Permalink | Comments (12) | (email story)

August 30, 2011

Conforming Loan Limit Extension Gains Obama's Support

As plugged-in people are well aware, the super/jumbo conforming loan limits that provide for federally backed mortgages up to $729,750 in high cost areas like San Francisco were first passed as part of an economic stimulus bill back in 2008, were extended by President Obama last year, and are currently set to expire on September 30, 2011.

This past May, the New York Times quoted an Obama administration’s position paper on reforming the housing market stating: "Larger loans for more expensive homes will once again be funded only through the private market." In other words, another extension was not to be expected.

Today, it’s a plugged-in reader that points to a research note by Capital Alpha Partners in Washington DC that suggests the Obama Administration has decided to support a two-year extension for the higher conforming loan limits.

If Lowering Rates Isn’t Working, Perhaps Increasing Limits Will [SocketSite]
Another Year For Super Conforming Limits (Assuming Obama Signs) [SocketSite]
Super Conforming Limits In San Francisco Set To Expire September 30 [SocketSite]

Posted by socketadmin at 2:30 PM | Permalink | Comments (133) | (email story)

How To Acquire "Free" Money: Borrow, Then Don’t Pay It Back...

1945 Franklin (www.SocketSite.com)

Speaking of "free" foreclosure living in San Francisco, it was a year ago that we first wrote about 1945 Franklin, the six bedroom Pacific Heights home whose previous owners have included Nicholas Cage, Howard Grossman, and Patricia Arquette.

Purchased in June of 2005 for $3,000,000 by way of a $2,350,000 first mortgage and a $790,000 construction loan second (yes, that's over 100% financed), the property was refinanced in September 2006 to the tune of $5,000,000 to which a $500,000 home equity line of credit was added three months later.

Scheduled to hit the courthouse steps last September with $5,684,086 owed as of August 2009, the balance due on the $5,000,000 first was up to $6,157,795 as of this past January. And no, we don’t believe any payments have been made since.

As plugged-in people know, that infamous Excalibur seen about town with "ACQUIRE" license plates currently resides in the garage (alongside a Range Rover). Once again, apparently "BorrowSpendDefault" didn’t fit nor have the same ring to it.

The Pacific Heights home is currently scheduled to be un-acquired by way of the courthouse steps in two weeks. And yes, Washington Mutual underwrote the loan for 1945 Franklin as it did for 869 Alvarado. We’ll keep you plugged-in.

1945 Franklin On The Verge Of Being Un-Acquired [SocketSite]
Going On Four Years Of "Free" Foreclosure Living Over In Noe [SocketSite]

Posted by socketadmin at 10:30 AM | Permalink | Comments (18) | (email story)

August 29, 2011

Going On Four Years Of "Free" Foreclosure Living Over In Noe Valley

869 Alvarado

Speaking of kicking the foreclosure can down the road, as we first wrote in May 2008:

Described as a “gut check for SF realtors” when it sold on 6/1/2005 (establishing a new Noe Valley neighborhood comp at $1,500,000), 869 Alvarado appears to have been refinanced a few times since closing escrow. And if PropertyShark is correct, the property is currently facing foreclosure with an unpaid mortgage balance of $1,497,746.

That balance due of $1,497,745 grew to $1,638,054 in 2009; to $1,800,473 in 2010; and to $1,878,099 as of three months ago. Keep in mind that’s simply the amount owed on the first mortgage which was written for $1,350,000 in 2006. There's also a 2006 vintage second mortgage for $300,000 and a 2008 vintage third for $133,000.

Next Tuesday, 869 Alvarado is once again scheduled to hit the courthouse steps. While we’re not holding our breath, it’s always better to be prepared (and plugged-in, of course).

A "Gut Check" Then And Now? (869 Alvarado Facing Foreclosure) [SocketSite]
Apparently They’re Selling Expensive Lemon Trees At 861 Alvarado [SocketSite]

Posted by socketadmin at 4:00 PM | Permalink | Comments (15) | (email story)

August 26, 2011

No New Stimulus For You! (At Least Not This Month)

According to Federal Reserve Chairman Ben Bernanke, although problems still exist (think unemployment and sagging home prices), "the growth fundamentals of the United States do not appear to have been permanently altered by the shocks of the past four years" and the Chairman remains "optimistic" as the U.S. economy grew at a 1 percent pace in the second quarter of 2011, down from a previously estimated 1.3 percent.

And while Bernanke set the stage for more stimulus back in July, he didn’t signal any intent to let the stimulus players take the stage at this point but implied the curtain, or at least script, could be raised next month.

Ben Drops The D Word (And Sets The Stage For More Stimulus) [SocketSite]

Posted by socketadmin at 8:10 AM | Permalink | Comments (37) | (email story)

August 25, 2011

Scheduled Auctions Flat As Pre-Foreclosure Activity Ticks Down

Pre-foreclosure activity in San Francisco has dropped from 576 properties in the pipeline in June to 549 today, 32 percent of which are in District 10*, down from 34 percent in January but up from 30 percent in March.

That being said, the number of properties actually scheduled for auction has remained relatively flat over the past two months at 691 today versus 689 in June, 43 percent of which are in District 10 (versus 41 percent in June).

And once again, while 39 percent of San Francisco foreclosures last year were in District 10, that’s down from 48 percent in 2009, and down from 58 percent in 2008.

Editor’s Note: In an attempt to match and map two disparate data sets, we include 94124, 94134 and 94112 in "District 10," which results in a slightly larger area than the District as defined by the San Francisco Association of Realtors.

Scheduled Auctions Up, But Pre-Foreclosure Activity Ticks Down In SF [SocketSite]
San Francisco Bucks CA Foreclosure Trends, But Not In A Good Way [SocketSite]
San Francisco Foreclosure Activity Climbs Outside Of District 10 [SocketSite]
San Francisco Association Of Realtors New Neighborhood Map [SocketSite]

Posted by socketadmin at 6:30 AM | Permalink | Comments (7) | (email story)

August 24, 2011

Capital Preservation Versus Cash Flow At 310 Townsend

Last listed as a short sale for $410,000 following twelve price changes and relistings since March of last year, and having been purchased for $640,000 in 2007, 310 Townsend #309 is back in contract for the fifth time. The unit remains scheduled to hit the courthouse steps in two weeks with $516,043 owed on a first mortgage and $69,240 in other debt.

At the same time, 310 Townsend #408 has just hit the market listed as a short sale for $425,000 having been purchased for $665,000 in 2007 as well. From the listing: "Currently tenant occupied, the condo commands $3100 per month in rent, making it an excellent investment vehicle for cash flow." Of course, there's also capital preservation to consider.

∙ Listing: 310 Townsend #408 (1/1) 803 sqft - $425,000 (short sale) [MLS]
Shorter Still For 310 Townsend From The Beginning To End Of 2010? [SocketSite]

Posted by socketadmin at 11:15 AM | Permalink | Comments (8) | (email story)

August 17, 2011

Purchase Mortgage Volume Down 1.1% Year-Over-Year

With average 30-year mortgage rates falling by 5 basis points over the past week to a 2011 low of 4.32 percent, mortgage application volume for purchases in the U.S. is running 1.1% lower on a year-over-year basis (down 10.1% week-over-week) while refinancing activity increased 8.0% last week, down 16.3% on a year-over-year basis.

Silver Lining: The Cost Of Mortgage Money Drops [SocketSite]
Mortgage Bankers Association Applications Survey: 8/17/10 [mortgagebankers.org]

Posted by socketadmin at 8:45 AM | Permalink | Comments (1) | (email story)

August 11, 2011

Silver Lining: The Cost Of Mortgage Money Drops

"Mortgage rates for 30-year loans in the U.S. declined to a nine-month low as concern grew that the nation’s economy is slowing. The average rate for a 30-year fixed loan dropped to 4.32 percent in the week ended today from 4.39 percent, according to Freddie Mac. The average 15-year fixed-loan rate fell to 3.5 percent, the lowest on record..."

30-Year Mortgage Rates Fall to 9-Month Low [Bloomberg]
Numerology Nuts (And Everyone Else) Take Note [SocketSite]

Posted by socketadmin at 8:45 AM | Permalink | Comments (20) | (email story)

August 9, 2011

To Short Sale Or Foreclose, That Is The Question Of The Day

The proposed short sale of 2040 Broadway #301 has been in contract since June 1 but still hasn’t closed escrow per the MLS. Purchased for $1,850,000 in 2004, the 2,052 square foot view condo has since been refinanced with $2,320,000 in debt which has been in default for over two years.

Speaking of which, the Pacific Heights condo is also scheduled to hit the courthouse steps on Thursday with $2,585,553 owed on a $2,000,000 note.

∙ Listing: 2040 Broadway #301 (3/3.5) 2,052 sqft - $2,100,000 [MLS]

Posted by socketadmin at 1:00 PM | Permalink | Comments (3) | (email story)

August 8, 2011

Numerology Nuts (And Everyone Else) Take Note

While the number eight is lucky, the number four is death, and on Friday the Dow Jones Industrial Average closed the day at a rather inauspicious 11,444. Today, the Dow fell 5.55 percent, closing at 10,809 while the S&P 500 fell to 1,119, a drop of 6.66 percent.

S&P 500 Extends Worst Slump Since 2008 Bear Market [SocketSite]

Posted by socketadmin at 3:15 PM | Permalink | Comments (115) | (email story)

August 5, 2011

Cash Remains King As 3322 Market Street Is Successfully Flipped

3322 Market

As we reported in June:

With $2,060,000 in loans past due including a first for $1,460,000, a second for $250,000, and a third for $350,000, last month 3322 Market street (the top two floors above) was purchased on the courthouse steps for $1,017,000 cash.
Yesterday, the 2,496 square foot condominium hit the market listed for $1,375,000.

And as a plugged-in reader reports, the resale of 3322 Market Street has closed escrow with a reported contract price of $1,375,000. Yes, cash remains king.

3322 Market: The View From Behind The Scenes (And Building) [SocketSite]

Posted by socketadmin at 11:45 AM | Permalink | Comments (8) | (email story)

July 25, 2011

Apples-To-Apples-To-Apples-To-Apples 1470 Noe Closes Down

1470 Noe 2011

As we first wrote in June:

As plugged-in people know, Moises Alou paid $1,875,000 for the rebuilt house at 1470 Noe in March 2005 and sold it for $1,865,000 in January 2007. Two years after that the contemporary Noe home traded for $1,850,000 in March 2009.
And yes, 1470 Noe is now back on the market two years later and listed for $1,849,000.
Assuming a sale at asking, approximately $370,000 worth of brokerage commissions will have been generated from buying and selling 1470 Noe over the past six years (while the value of 1470 Noe itself would be $26,000 less).

The sale of 1470 Noe closed escrow on Friday with a reported contract price of $1,800,000. Make that $369,500 in commissions paid over the past six years while the value of the Noe home has fallen $75,000 (4 percent), down $50,000 (3 percent) since 2009.

Apples To Apples To Apples To Apples At 1470 Noe [SocketSite]
Another On Noe (1470 Noe Street) [SocketSite]
1470 Noe Closes For 100% Of Asking (But $25,000 Less Than In 2005) [SocketSite]
1470 Noe Steps Back Up To The Plate (And A Plugged-In Peek Inside) [SocketSite]

Posted by socketadmin at 2:45 PM | Permalink | Comments (23) | (email story)

The Manhattanization Hotelization Of San Francisco

"We call it the ‘hotelization’ of San Francisco," [executive director of the San Francisco Tenants Union, Ted Gullicksen] said. "Seniors, families and low-income tenants are being pushed out. We have to fight for every affordable unit."

Conversion of Apartments to Rentals for Tourists Is Surging [nytimes.com]

Posted by socketadmin at 9:00 AM | Permalink | Comments (30) | (email story)

July 15, 2011

San Francisco’s Commercial Market Drives Transfer Tax Boom

Driven by a 66 percent increase in commercial transactions (from 90 to 149 sales valued at $5 million or more), and Proposition N which created a new tax bracket for properties transacting for $5 million or more (which resulted in an additional $14 million in revenue alone), San Francisco collected $135 million in transfer tax revenue in fiscal year 2010/2011, exceeding budget forecasts by $64 million and up 39 percent year-over-year.

The Day After: November 2 Real Estate Related Election Results [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (6) | (email story)

July 13, 2011

Ben Drops The D Word (And Sets The Stage For More Stimulus)

"The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might reemerge, implying a need for additional policy support," [Federal Reserve Chairman Ben] Bernanke said in prepared testimony before the House Financial Services Committee in Washington today. "The Federal Reserve remains prepared to respond should economic developments indicate that an adjustment of monetary policy would be appropriate."

"At the same time, Bernanke also reiterated that sagging home prices, high unemployment and hard-to-get loans pose long- term obstacles to growth, while leaving open the door to additional monetary stimulus if the economy were to falter."

Fed Prepared With Stimulus If Needed: Bernanke [Bloomberg]

Posted by socketadmin at 8:30 AM | Permalink | Comments (57) | (email story)

June 23, 2011

A Bit Of (Unnecessary) Salesforce Saber Rattling

Salesforce Mission Bay Rendering: Plaza

From the Wall Street Journal today with respect to the proposed designs for Salesforce’s new global headquarters campus in Mission Bay:

Renderings of the Salesforce.com campus, released earlier this month, feature a flashy design. A public square is anchored by a hot-pink Jumbotron video screen.
"That was my idea," Mr. Benioff, the Salesforce.com CEO, said of the screen. "Putting something like that there can add a lot of energy." The Jumbotron could be used for things such as employee presentations and public entertainment, he said.
Salesforce.com is hoping for design-review approval from the city by September. "If we can't get the approvals we could also end up somewhere else," Mr. Benioff said.
The redevelopment agency's Ms. Kahn said that while she didn't anticipate problems with the design review, the pink Jumbotron might face additional environmental scrutiny. Overall, Ms. Kahn said, "we're generally, based on what we've seen, pleased."

And in the words of JK Dineen:

Let's be real. It’s highly unlikely that the redevelopment agency board, which has rubber stamped pretty much everything that has been proposed for the 303-acre Mission Bay campus, will give Salesforce a hard time. We are talking about 10,000 Salesforce jobs. We are talking about at least $700 million of 100 percent union construction over the next five years. In Marc Benioff we are also talking about a philanthropic superstar who, along with his wife, donated $100 million for the UCSF Hospital that is driving much of the investment into Mission Bay.

Designs For Salesforce's Global Headquarters Complex in Mission Bay [SocketSite]
A Bit Of Color On (And For) Salesforce's Campus In Mission Bay [SocketSite]
Mission Bay Prepares for Makeover [WSJ]
Salesforce CEO: approve our HQ plan, or else... [Business Times]
The Building Of UCSF’s New Mission Bay Medical Center Is Underway [SocketSite]

Posted by socketadmin at 3:45 PM | Permalink | Comments (19) | (email story)

June 14, 2011

Below Market Rate For Above Market Down (And A Bit Of Irony)

888 7th Street

The Mayor's Office of Housing Below Market Rate (BMR) homeownership program was established to offer "low to moderate income" households "the option of purchasing homes that are priced below the typical market rate price" but are restricted in terms of resale price and the qualified buyer pool.

One such unit is 888 7th Street #351, a 691 square foot one-bedroom which was purchased for $267,000 in May 2008 and is now listed on the MLS for $299,000 or $305,200 on the Mayor’s Office of Housing site. As noted, eligible single buyers for this unit can make no more than $69,600, a two person household no more than $79,500.

Also noted on the Mayor's site, "due to a pending lawsuit in the building…only all-cash buyers will be able to purchase the unit." That’s right, per the terms of the program, the low to moderate income buyers for this unit will need to have three-hundred thousand dollars of disposable cash on hand.

∙ BMR Resale: 888 7th St. #351 - $305,200 (cash) [sf-moh.org]
∙ Listing: 888 7th Street #351 (1/1) 691 sqft - $299,000 [MLS]
Below Market Rate (BMR) Homeownership Programs [sf-moh.org]

Posted by socketadmin at 1:00 PM | Permalink | Comments (60) | (email story)

June 9, 2011

But Would It Surprise You?

By way of Bloomberg:

Robert Shiller, the economist who co- founded the S&P/Case-Shiller Index, said a 10 percent to 25 percent decline in U.S. home prices in the next five years "wouldn’t surprise me at all."
A model for the U.S. may be Japan, where home prices fell for 15 years after that country’s real estate bubble burst in the early 1990s, Shiller said.
"They lost close to two-thirds of their value," Shiller said. "Then they went up for one year in 2006 and then they started going down again."

Would it surprise you?

Shiller Says Home-Price Drop of 10%-25% ‘Wouldn’t Surprise Me’ [Bloomberg]
S&P/Case-Shiller: San Francisco Top Tier And Condos Tick Up In March [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (53) | (email story)

June 7, 2011

The Chairman Speaks Of A "Frustratingly Slow" Recovery

From Federal Reserve Chairman Ben Bernanke this afternoon summarizing the outlook for the U.S. economy:

Although it is moving in the right direction, the economy is still producing at levels well below its potential; consequently, accommodative monetary policies are still needed. Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.

Specific concerns: "the very high level of long-term unemployment" and "loss of momentum in the labor market," the "depressed state of housing," and "additional headwinds ranging from the effects of the Japanese disaster to global pressures in commodity markets."

The U.S. Economic Outlook [federalreserve.gov]

Posted by socketadmin at 1:15 PM | Permalink | Comments (14) | (email story)

June 2, 2011

2008 Versus 2011 At ORH With Some Courthouse Steps In Between

As we first reported in January:

Closing escrow with a recorded contract price of $628,000 in February 2008, within two months 425 1st Street #1805 was listed for sale with an asking price of $719,000.
Following a series of price cuts, and at one point seeking a short sale for "$499,000," this past August the One Rincon Hill one-bedroom was purchased on the courthouse steps for $441,886 cash.
Back on the market at $599,000 this past October, in November the list price was reduced to $579,000 and yesterday it was reduced to $559,000.

While just updated on the MLS, the sale of 425 1st Street #1805 appears to have closed escrow on 3/15/11 with a reported contract price of $535,000, effectively splitting the difference between its 2008 closing price and 2010 all cash sale on the courthouse steps.

There are currently five other condos at One Rincon Hill scheduled to hit the courthouse steps within the next five weeks and at least two other units in default.

From Failed To Foreclosure Flip (And Five Others) At One Rincon Hill [SocketSite]

Posted by socketadmin at 8:45 AM | Permalink | Comments (6) | (email story)

May 23, 2011

On This Farm He Had A Short Sale (And Foreclosure In The Works)

Clinton Mews

One of ten Donald MacDonald designed petit townhomes that comprise the Clinton Mews urban infill development off Guerrero, 170 Guerrero Street #F was purchased for $507,000 in November 2003.

170 Guerrero #F: Living

Refinanced in June of 2007 with a first for $517,500 and a second for $130,000, as of this past November the first mortgage was $43,976 past due and the home is currently scheduled to hit the courthouse steps in a month.

In the meantime, 170 Guerrero #F has been listed for $568,000 as a short sale.

∙ Listing: 170 Guerrero #F (2/1) 800 sqft – “$568,000” (short sale) [MLS]

Posted by socketadmin at 2:30 PM | Permalink | Comments (46) | (email story)

Higher Down Payments And Lower Limits For FHA Loans As Proposed

Last month 29.9 percent of Bay Area home purchases were made by way of FHA backed loans, up from 25.4 percent in April 2010.

On Wednesday, a House subcommittee will discuss a draft bill which would raise the minimum down payment for FHA loans from 3.5 percent to 5.0 percent and lower the maximum loan size to 125 percent of the county’s median home price (versus the current maximum of up to $729,750 in high-cost areas).

San Francisco Recorded Sales Activity Down 1.4% In April [SocketSite]
Super Conforming Limits In San Francisco Set To Expire September 30 [SocketSite]

Posted by socketadmin at 2:00 PM | Permalink | Comments (12) | (email story)

May 20, 2011

SF Mayor To CPMC: $108 Million To Approve Cathedral Hill Hospital

CPMC Cathedral Hill Rendering

From the San Francisco Business Times:

San Francisco Mayor Ed Lee is asking California Pacific Medical Center to pay to play on its proposed $1.7 billion Cathedral Hill hospital project, and $800 million in other major construction projects in the city that require San Francisco permits and approvals.
The mayor wants California Pacific, the city's largest private hospital, to fund $108 million in affordable housing, transit and other community projects in return for the city's OK on the controversial 555-bed hospital.
"We welcome the mayor's statement and thank him for his leadership on this issue," hospital spokesman Kevin McCormack told the San Francisco Business Times early Friday. That said, "We think this is a rather ambitious request of a non-profit hospital trying to meet its legally required seismic obligations."

No word on whether or not Mayor Lee has recently started frequenting the Buck Tavern.

Hospital approval? That will be $108M, S.F. tells California Pacific [Business Times]
CPMC’s Long Range Development Plan Renderings And Draft EIR [SocketSite]
CPMC: Latest Designs, Renderings, And Architecture Review [SocketSite]

Posted by socketadmin at 4:00 PM | Permalink | Comments (37) | (email story)

May 18, 2011

Fed Favors Raising Rates (And Tighter Credit) To Fight Inflation

"Federal Reserve policy makers began to coalesce last month on a strategy to reverse record monetary stimulus by first ending their reinvestment policy and later raising interest rates and selling assets."

Minutes of the Federal Open Market Committee: April 26-27, 2011 [federalreserve.gov]
Fed Favors Exit Strategy of Raising Rates Before Selling Assets

Posted by socketadmin at 11:45 AM | Permalink | Comments (27) | (email story)

May 17, 2011

Rolling Easy Eights Up North (And Here At The High-End)

While San Francisco has seen its fair share of lucky number eight sales, especially at the high-end, over the past few months, it’s nothing compared to the impact buyers from mainland China appear to be having on Vancouver.

Sales of detached homes, townhouses and condominiums in metropolitan Vancouver jumped 70 percent in February from January, to 3,097 units from 1,819, and were up 25 percent from a year earlier, according to the Real Estate Board of Greater Vancouver. In March, sales climbed 32 percent from February, to just shy of a record for the month of 4,371 transactions set in 2004. Sales increased by 80 percent from two years ago.

And developers and remodelers take note, "Every new house has two kitchens: a large Western- style one and a small "wok" kitchen with a stove, sink, strong exhaust fan and door to seal off cooking aromas."

1209 Filbert: LEED Platinum At $1,188 Per Ounce Square Foot [SocketSite]
Chinese Spreading Wealth Make Vancouver Homes Pricier Than NYC [bloomberg.com]

Posted by socketadmin at 9:00 AM | Permalink | Comments (26) | (email story)

May 16, 2011

The Economist Calls Another Rather San Francisco Centric Bubble

Economist New Tech Bubble Cover

A few excerpts from the Economist’s current cover story, The New Tech Bubble:

"SOME time after the dotcom boom turned into a spectacular bust in 2000, bumper stickers began appearing in Silicon Valley imploring: "Please God, just one more bubble." That wish has now been granted. Compared with the rest of America, Silicon Valley feels like a boomtown. Corporate chefs are in demand again, office rents are soaring and the pay being offered to talented folk in fashionable fields like data science is reaching Hollywood levels. And no wonder, given the prices now being put on web companies."
"This time is indeed different, though not because the boom-and-bust cycle has miraculously disappeared. It is different because the tech bubble-in-the-making is forming largely out of sight in private markets and has a global dimension that its predecessor lacked."
"Irrational exuberance rarely gives way to rational scepticism quickly. So some bets on start-ups now will pay off. But investors should take a great deal of care when it comes to picking firms to back: they cannot just rely on somebody else paying even more later. And they might want to put another bumper sticker on their cars: "Thanks, God. Now give me the wisdom to sell before it’s too late."

And of course, the wisdom to understand the impact and potential outcomes on San Francisco's real estate market if another bubble is indeed being blown.

Irrational exuberance has returned to the internet world [economist.com]

Posted by socketadmin at 10:30 AM | Permalink | Comments (63) | (email story)

May 13, 2011

San Francisco Housing P/E Ratio History And Three Year Drop

To repeat what we first wrote in January 2008:

There’s no doubt Bay Area average rents are up. And while we wouldn’t be surprised to see another 10-15% increase in 2008 (at least for San Francisco proper), keep in mind that the current housing Price-to-Earnings ratio is still well above its long-term average for the San Francisco MSA.
An analysis by Credit Suisse pegged the historical housing P/E ratio for the San Francisco MSA at 24x Earnings (or annual rent) versus a top 52 market average of 16.6x. So yes, we have long paid a premium (compared to most other areas) to buy versus rent in the Bay Area (or as many often comment, "it has always been expensive to buy here").
That being said, the same Credit Suisse analysis pegged the housing P/E ratio for the San Francisco MSA at 42x in 2006. Assuming no change in property values and a 9.4% increase in rents during 2007, the current P/E ratio would be 38.4x. And a return to the historical 24x would either require rents to rise another 60%, property values to fall 37.5%, or a combination of the two.

At the end of 2010 the P/E ratio for the San Francisco MSA weighed in at 27 as rents have risen and values fell. And once again, a return to the historical 24x would either require rents to rise another 12.5%, property values to fall 11.1%, or a combination of the two.

Bay Area Rents Surge, But Housing P/E Ratio Remains Out Of Line [SocketSite]
San Francisco’s Housing P/E [SocketSite]

Posted by socketadmin at 11:00 AM | Permalink | Comments (20) | (email story)

May 9, 2011

Wiener Wonders: What Happens If Locals Can’t Afford To Live Here?

Having questioned the impact of San Francisco’s historic preservation polices on public policy goals last week, this week Supervisor Wiener has a question for the Mayor:

We in San Francisco do a very good job building market rate housing and, while we need to do more, we build almost 80% of our state goal for low-income housing. We do a poor job building moderate income housing, meeting only 12% of our state goal. Since middle-income housing is not reported separately from market rate housing, it is unknown how much middle- income housing we produce.
Implementing our local hiring ordinance will be very difficult if we don't produce the needed moderate and middle income housing for these local hires. How do you propose increasing the amount of housing affordable to middle income people, so that we can house our workforce locally?

Mayor Lee is slated to answer address Supervisor Wiener’s question at the beginning of tomorrow’s Board of Supervisors meeting.

Historic Preservation Versus Public Policy Goals In San Francisco [SocketSite]
San Francisco Board of Supervisors Agenda: 5/10/11 [sfbos.org]

Posted by socketadmin at 9:45 AM | Permalink | Comments (42) | (email story)

May 6, 2011

Well, It Really Wasn’t The Seller Who Came Up Short On 12 Auburn...

As we wrote in January:

So there's no deeded parking and Nob Hill, but it is a rather cute little two-bedroom at 12 Auburn that’s just returned to the market after a one-month hiatus, only it's now listed as a short sale for "$699,000" having been purchased for $700,000 in May 2005.
The property had been listed for as much as $898,000 just four months ago prior to three prices reductions and then being withdrawn from the MLS at the end of December.

The sale of 12 Auburn closed escrow today with a reported contract price of $678,400, three percent ($21,600) under its 2005 price. Don’t feel too sorry for the seller, however, as the property was refinanced in 2007 with a first mortgage for $712,500 and a second for $142,000, a total of $854,500 in debt for which the property would have had to appraise.

And yes, the short-seller, who was also the agent, was in default with JPMorgan Chase at the time of the sale.

12 Auburn Comes Up Short On Nob Hill [SocketSite]

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April 18, 2011

Standard & Poor's Cuts And The S&P Tumbles

"U.S. stocks sank the most in a month, longer-term Treasuries declined and gold gained after Standard & Poor’s cut the nation’s credit outlook to negative....The S&P 500 tumbled 1.5 percent to 1,299.95 at 10:41 a.m. in New York and the yield on 10-year Treasuries rose two basis points to 3.43 percent, erasing an earlier decline."

Standard & Poor’s Puts ‘Negative’ Outlook on U.S. AAA [Bloomberg]
Stocks, 10-Year Treasuries Slide as S&P Lowers U.S. Outlook [Bloomberg]

Posted by socketadmin at 8:00 AM | Permalink | Comments (75) | (email story)

March 21, 2011

25-35 Dolores Development Hits Precedence Setting Resistance

25-35 Dolores (Image Siource: MapJack.com)

As plugged-in people know, the proposed and far from approved development of 25-35 Dolores would result in the demolition of the two 25-foot-tall "S&C Ford" commercial garages and the construction of a four-story, 40-foot-tall, residential building with 47 units and below-grade parking for 40 in their place.

25-35 Dolores Rendering

As we first noted in July when the project's Draft Environmental Impact Report (DEIR) was released, while characterized as potentially cost prohibitive by the developer, an "Alternative B" design for the project would preserve the existing facades in the name of preservation but only yield 18 units and parking spaces versus the 47 and 40 as proposed.

25-35 Dolores Alternative Design

Since the publication of the project's DEIR, San Francisco’s Historic Preservation Commission has come to the conclusion that 25 and 35 Dolores are eligible for both the National and California Registers of historic resources. And California’s State Historic Preservation Officer has weighed in as well:

My office is concerned that the City of San Francisco may be setting a disturbing precedent with the demolition of the resources at 25-35 Dolores Street. Within the DEIR the buildings were determined eligible for the California Register by the Planning Department’s preservation specialist while the Frederick Knapp Architects Report concluded that the two Buildings retained their integrity as historic resources.
The City of San Francisco has a legal obligation to comply with [California Environmental Quality Act's (CEQA's)] procedural and substantive mandates, and moreover, as a lead agency, "to identify the significant effects on the environment of a project, to identify alternatives to the project, and to indicate the manner in which those significant effects can be mitigated or avoided." The California Appellate courts have held that a demolition is an adverse impact that cannot be mitigated below a level of significance.
My office is concerned that the Planning Department’s use of the Historic American Building Survey (HABS) documentation as a mitigation measure sets a dangerous precedent and is a misuse of the HABS standards. As the DEIR states, HABS documentation "would reduce the Impact CP-1 [demolition], but not to a less-than-significant level." For the purposes of CEQA HABS documentation is clearly inadequate as mitigation for demolition of a historic resource.
Given the alternatives provided in the DEIR my office would prefer the adoption of Alternative B: Preservation Alternative, or another similar alternative. Although Alternative B, "could be financially prohibitive," this alternative would not demolish the resources and would also restore them in compliance with the Secretary of the Interior’s Standards. With CEQA’s stated purpose to, "Prevent significant, avoidable damage to the environment by requiring changes in projects through the use of alternative or mitigation measures when the governmental agency finds the changes to be feasible," we encourage the Planning Department to adopt Alternative B or a similar preservation alternative for the 25-35 Dolores Street project.

The Planning Commission hearing to review the 25-35 Dolores street Environmental Impact Report is currently scheduled for April 7, 2011.

And in terms of precedence, keep in mind that a number of other proposed projects in San Francisco, including those for the Fairmont Hotel and North Beach Library, have proposed the use of HABS as a mitigation measure for the demolition of historic resources as well.

The Plans For 25-35 Dolores Street (S&C Ford Garage) As Proposed [SocketSite]
25-35 Dolores Street DEIR Comments and Responses [sfplanning.org]
Fairmont Hotel Plans Front And Center And Up For Approval Thursday [SocketSite]
North Beach Library/Joe DiMaggio Playground Master Plan Report [SocketSite]

Posted by socketadmin at 3:45 PM | Permalink | Comments (71) | (email story)

March 4, 2011

From 100 Percent Financing To Two Short Sales And An Auction

It’s not just a short sale but a "very short sale" for 2225 23rd Street #316 which has been listed at $150,000 versus the $395,000 which was paid in 2005, a purchase which was financed with a $316,000 first, a $41,000 second, and a $39,450 third. And yes, that totals $396,450 in financing to which a tax and HOA lien has been added since.

The unit below (2225 23rd Street #216) has been listed as a short sale for the past 344 days at $269,000 having been purchased for $395,000 eight months after the unit above. Any ideas what sale they might have used as a comp?

Oh, and 2225 23rd Street #116 is scheduled to hit the courthouse steps next week having been purchased for $395,000 with $355,500 in debt four months after the unit above sold. Any ideas what sale they might have used as a comp?

∙ Listing: 2225 23rd Street #216 (1/1) 602 sqft – "$269,000" (short sale) [MLS]
∙ Listing: 2225 23rd Street #316 (1/1) 602 sqft – "$150,000" (short sale) [MLS]

Posted by socketadmin at 11:45 AM | Permalink | Comments (14) | (email story)

March 3, 2011

A False Starter Home And Shadow Inventory On The Myra Way?

449 Myra Way

Listed for $585,000 as a short sale and "delightful [starter] home with fabulous views in a terrific location" up in Miraloma Park, hopefully 449 Myra Way wasn’t a false start for the sellers who purchased the 970 square foot property for $790,000 in April 2007.

And then there’s the 1,561 square foot home at 660 Myra Way which isn’t on the market.

Purchased for $760,000 in December 2003 with two loans totaling $760,000 and since refinanced with a first for $650,000 in 2005 and a second for $300,000 in 2007 (for which the comp setting sale of the smaller home at 449 Myra Way might have helped pave the way for the appraisal), a month ago a notice of default was filed against 660 Myra's first.

∙ Listing: 449 Myra Way (2/1) 970 sqft – "$585,000" (short sale) [MLS]

Posted by socketadmin at 10:30 AM | Permalink | Comments (11) | (email story)

March 1, 2011

SF Supervisors Today: Public Auctions And Building On Ord

Amongst the items on the agenda for San Francisco’s Board of Supervisors this afternoon, a resolution authorizing the public auction of 117 tax-defaulted properties that have been in default for more than five years.

The 117 properties include 96 timeshare units, 8 single-family homes, 5 condominiums, 3 apartment buildings, 2 duplexes, 1 vacant lot, a commercial retail store, and a hotel.

And in a special order at 4pm, the proposed construction of a new single-family home at 134 Ord, in front of the "charming single-family home…behind a white picket fence" at 136 Ord, is back in front of the board for a vote having been continued from January.

San Francisco Board of Supervisors Agenda: March 1, 2011 [sfbos.org]
Resolution Authorizing Public Auction of Tax-defaulted Real Property [sfbos.org]
Appealing To The Board To Overturn Planning On Lundys And Ord [SocketSite]

Posted by socketadmin at 6:00 AM | Permalink | Comments (2) | (email story)

February 15, 2011

Easing, Not Eliminating, The Option ARM Collateral Damage

"This was the year thousands of U.S. homeowners with option adjustable-rate mortgages were supposed to default as their payments spiked. Low interest rates and a surge of early delinquencies mean the numbers probably won’t be as bad as forecast, softening the blow to a housing market where prices have resumed falling."

Option ARM Time Bomb Blows Early, Easing Damage to U.S. Housing [Bloomberg]

Posted by socketadmin at 10:30 AM | Permalink | Comments (53) | (email story)

February 9, 2011

A Plan To Ease The GSE Burden And Prompt The Public Sector To Act

On Friday the Treasury Department will present Congress with recommendations for reducing the government’s role in making the market for home loans, 95 percent of which are currently guaranteed by Fannie Mae and Freddie Mac.

Options are expected to include increasing insurance premiums for Fannie and Freddie loans, reducing the cap for qualifying loans (currently slated to drop from $729,750 to $625,500 on October 1), and shifting more default risk to those originating and securitizing the mortgages (imagine that).

Fannie, Freddie to Shrink Under Treasury Housing Plan [Bloomberg]

Posted by socketadmin at 1:15 PM | Permalink | Comments (46) | (email story)

February 8, 2011

100 Percent Doobie Debt Financed On Potrero Hill

890 De Haro

In 2007 the Potrero Hill home at 890 De Haro sold for $1,350,000. The sale is yet another example of a "winning" offer in San Francisco that was financed with 100 percent debt, a first for $1,080,000 and a second for $270,000. And here you couldn’t understand how you kept getting outbid or what was driving appreciation (less than two years before the property had traded for $1,185,000).

A year later the owner posted a "make me move" price of $1,650,000 which was withdrawn in March 2010, three months after a notice of default was filed with $50,289 past due.

The property was subsequently listed as a short sale for $1,150,000 this past November, was in and out of contract, and has now returned to the MLS listed for $1,013,000. And while its courthouse sale has been postponed in the past, the home is once again scheduled to hit the steps in San Francisco next week.

For some reason the current listing for the property doesn’t tout the "sophisticated indoor marijuana cultivation/processing room" which last occupied the back half of the garage. Oh, did we not mention the seller was arrested for cultivating marijuana here and at another home back in 2009?

We’d sure love to see Merrill Lynch’s loan documentation for the purchase in 2007. And no, we don’t believe the Mercedes is still parked in the other half of the garage.

∙ Listing: 890 De Haro (3/1) 1,517 sqft – “$1,013,000” (short sale) [Redfin]
Working All The Angles And Coming Up Short In The Marina [SocketSite]
Groveland Marijuana Investigation Moves To San Francisco [SocketSite]

Posted by socketadmin at 1:00 AM | Permalink | Comments (62) | (email story)

February 7, 2011

No, Not In Indiana But Rather On (And Off In San Francisco)

1578 Indiana (Image Source: MapJack.com)

In July of 2003 the 1,243 square foot Central Waterfront condo known as 1578 Indiana #9 sold for $439,000. Three short years later it resold for $625,000 in October 2006, a purchase which was financed with a $500,000 first mortgage and a second for $125,000.

A year later the fully leveraged buyer who had offered the most for District 9 property and established a new neighborhood comp added a third loan for an additional $150,000.

This past July a notice of default was filed on that first with just $7,589 past due and a trustee sale was scheduled for this past November. Postponed due bankruptcy, the condo is once again scheduled to hit the courthouse steps this Wednesday with a published opening bid of $520,996.

As best we can tell, the slightly larger and upgraded 1578 Indiana #8 which had been listed for $600,000 in 2008 (and a few times after) never sold.

Now Priced To Catch Your Attention (As It Did Ours): 1578 Indiana #8 [SocketSite]

Posted by socketadmin at 1:00 PM | Permalink | Comments (59) | (email story)

February 4, 2011

Working All The Angles And Coming Up Short In The Marina

Down in the heart of the Marina just a block from the bay, 1921 Jefferson Street #204 sold for $180,000 in 1997. Over the next nine years it changed hands three more times with holds of one to five years, each time with a higher price and annual appreciation between 9 and 25 percent on an apples-to-apples basis.

The last sale occurred five years ago with a comp setting price of $510,000. And it wasn’t one of those funny money five percent down deals. No, in this case the purchase appears to have financed with a first mortgage for $408,000 and a second for $100,000. That’s right, two thousand dollars or under one percent down.

Two months ago a notice of default was filed on the property with $20,363 past due, but don’t worry, that two thousand dollars of "prime" equity isn’t at risk. No, a year after purchase the property was refinanced in 2007 with a first mortgage for $464,000 (the one foreclosing) and a second for $58,000. Yes, a total of $522,000 in debt.

A few months after refinancing the owner posted a "make me move" price of $699,000, an offer that was just withdrawn four weeks ago when the property was listed on the MLS for $549,000, a price that has since been reduced to $529,000 and the seller is now angling for a short sale.

UPDATE: Just reduced to "$499,000."

∙ Listing: 1921 Jefferson #204 (1/1) 558 sqft – $529,000 (short sale) [MLS]

Posted by socketadmin at 11:15 AM | Permalink | Comments (10) | (email story)

February 1, 2011

Dow Closes Above 12,000 For First Time Since June 2008

The Dow Jones Industrial Average closed the day at 12,040.16, its first close above the 12,000 mark since June 2008 while the S&P 500 closed the day at 1,307.59, its first close over 1,300 since August 2008.

Market volatility has fallen 15 percent since October 2010, down 37 percent as compared to this past June as measured by the VIX.

Dow Crosses 11,000 As Market Volatility (A.K.A. Skittishness) Wanes [SocketSite]
S&P 500 Back To Even For The Year To Date As Skittishness Remains [SocketSite]

Posted by socketadmin at 1:45 PM | Permalink | Comments (13) | (email story)

January 27, 2011

An Estimated 2,500 Units Entering 2011 Condo Conversion Lottery

With an estimated 2,500 units entering San Francisco’s 2011 condominium conversion lottery (up 15 percent from 2,179 in 2010), just under one in twelve of the units will win one of the two hundred rights to convert versus just over one in five when 994 units applied in 2003.

At the same time, according to Plan C San Francisco which plans to hold a condo conversion reform rally on the steps of City Hall before the February 2 lottery drawing at 9am, no fault evictions in San Francisco have dropped from 703 in 2003 to 159 last year.

A bit of conversion background:

In 1982, in response to the conversion of large apartment complexes, then Mayor Feinstein, rather than place a moratorium on condo conversions, recommended legislation to allow only 200 conversions per year and limit conversions to buildings with 6 units or fewer.
Interestingly though, Mayor Feinstein’s recommendation was based upon her understanding that "the figure 200 is realistic under present economic conditions in that it covers the actual number of residential units converted in the past two years in this category."

As always, we’ll keep you plugged-in.

Condo Conversion 2011: Are You Feeling Lucky Punk? Well, Are You? [SocketSite]
It's Golden Ticket Day For 200 Condo Conversions In San Francisco [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (22) | (email story)

January 24, 2011

Tales From The Courthouse Steps And Contrasts Across Town

Perhaps we missed a piece of the puzzle. But if not, and we don't believe we did, these are the types of stories that are difficult to tell but important to hear.

In March 2005 the small ("but bigger than what tax records show") and rather rough looking single-family Bayview home at 1129 Ingerson Avenue was purchased for $426,000 by way of two loans totaling $426,000.

A year later the home was listed for sale at $499,000, it sold for $530,000 in July 2006. Represented by a Realtor, the buyer appears to have put $132,500 (25 percent) down. Call it an effective $86,700 more skin in the game than the buyer of the $1,249,000 Marina condo at 3208 Pierce across town.

After a four years of making payments (versus two for the property on Pierce), a notice of default was filed against 1129 Ingerson with $10,833 past due. In December a notice of trustee sale was filed. And last week the property was taken back by the bank with no bids at $147,328 on the courthouse steps.

From "Sold" To Actually Sold To Facing Foreclosure At 3208 Pierce [SocketSite]

Posted by socketadmin at 1:30 PM | Permalink | Comments (4) | (email story)

January 21, 2011

FBI Looks Into Auction Bid Rigging (And Shouldn’t Have To Look Far)

Speaking of foreclosure trends and activity in San Francisco, according to bureau spokeswoman Julie Sohn, "last week the FBI conducted interviews and executed search warrants through the entire Bay Area as part of a long-term investigation of anti-competitive practices at trustee sales of foreclosed homes."

The probe is shaking up the tight-knit world of investors who bid at these auctions. The issue, sources say, is that some participants allegedly pay others to refrain from bidding on certain properties to keep their prices low.
Bids are all cash; properties are sold as is, subject to existing liens and with no guarantees as to condition, so only deep-pocketed, experienced investors generally make bids, seeking properties that still have some equity that they can fix and flip, or hold onto for the long term.

Or as we noted last July with respect to whether or not auction sales are legitimate market comps: "It’s a comp for the all cash, no warranties, and no (official) inspections market. And that’s assuming no collusion or games on - or getting to - the courthouse steps."

San Francisco Bucks CA Foreclosure Trends, But Not In A Good Way [SocketSite]
FBI looks into bid rigging at courthouse auctions [SFGate]
Fireplace, Foreclosure And Figurative Fireworks Over (In) Noe Valley [SocketSite]

Posted by socketadmin at 9:30 AM | Permalink | Comments (29) | (email story)

January 13, 2011

Unfortunately Wells Wasn’t Requiring 30 Percent Down At The Time

655 5th Street

Eleven years ago the two bedroom and three bath townhouse known as 655 5th Street #9 sold for $781,000 down in SoMa. Seven years and a thousand or two new neighborhood condos later, the 1,774 square foot unit sold for $1,018,000 in 2007 by way of an $814,400 first and a second for $152,700.

Yes, this was yet another case of only 5 percent down in the "it's different here" San Francisco and with "only" $50,900 in equity at risk. Lo and behold, this past November Wells Fargo foreclosed on the first with no bidders at $746,547.

Yesterday the property was listed for sale on the open market for $777,900, a sale at which would be just below its year 2000 price, "only" 24 percent ($240,100) below 2007.

∙ Listing: 655 5th Street #9 (2/3) 1,774 sqft - $777,900 [MLS]
30 Percent Down Or Interest Rates Up As Proposed By Wells Fargo [SocketSite]

Posted by socketadmin at 4:30 PM | Permalink | Comments (23) | (email story)

30 Percent Down Or Interest Rates Up As Proposed By Wells Fargo

The Wall Street Journal reports:

Wells Fargo & Co., the nation's largest mortgage lender, has asked U.S. regulators to set a down-payment standard of 30% on mortgages that wouldn't have to meet a new requirement that banks retain 5% of a loan if it is securitized. The so-called risk-retention requirement is aimed at preventing future housing meltdowns because lenders could face steeper losses if their loans go bad.
If regulators go along with the San Francisco bank's proposal, mortgage lenders still could make loans with down payments lower than 30%. But those loans would be more costly for the banks because of the risk-retention requirement. Lenders likely would pass those costs along to borrowers in the form of higher interest rates.

Of course that assumes securitization as we know it survives...

Banking Law Hung Up On Down Payments [wsj.com]
Massachusetts Foreclosure Class Action to Resume [bloomberg.com]

Posted by socketadmin at 9:00 AM | Permalink | Comments (33) | (email story)

January 3, 2011

Does Having HIV Make One Disabled?

After seven attempts, the owners of 74-76 Castro who reside in 76 Castro won the right to condo convert their two-unit building by way of the 2010 condominium conversion lottery.

The approved parcel map required for the conversion is, however, being appealed by the tenant in number 74 and will be heard by San Francisco's Board of Supervisors tomorrow.

At issue, whether or not the tenant’s HIV positive condition qualifies as being disabled, and as such entitles the tenant to a lifetime lease of the unit pursuant to San Francisco Subdivision Code 1391. And at stake, a potential eviction (post-conversion) if not.

We’ll note that from a procedural standpoint the tenant will likely be found to have prematurely claimed a lifetime lease, a right the Subdivision Code grants after conversion. And without an eviction on record, the parcel map and condo conversion will likely should be upheld (with the lifetime lease issue likely returning after).

We’ll also note that the building owners assert that the tenant offered to drop his claim in exchange for $150,000.

Appeal of Tentative Parcel Map for 74-76 Castro Street [sfbos.org]
San Francisco Board of Supervisors Agenda: January 3, 2011 [sfbos.org]

Posted by socketadmin at 10:30 AM | Permalink | Comments (79) | (email story)

December 29, 2010

Apples, Schmapples, Look At Those Medians! (Just Not Too Closely)

With 45 recorded sales to date in 2010, the median sale for condominiums in zip code 94123 (which includes the Marina and Cow Hollow) weighs in at $1,175,000, up 26 percent over 2009 ($930,000) and within just 4 percent of a peak $1,219,000 in 2007! Talk about a real estate rebound!

Of course as we pointed out to plugged-in people in September, the median size of condos sold in 2010 (1,525 square feet) is up over 20 percent from 2009 (1,270 square feet) and up 12 percent from 2007 (i.e., the mix of sales has changed). And on a price per square foot basis, so far the median in 2010 ($755) is down 2 percent from 2009 ($767), down 18 percent from 2007 ($921).

And while the median price per square foot for condos in 94123 is up 5 percent from 2004 ($718), the apples-to-apples sale of the two-bedroom condo at 2382 Union Street closed escrow six days ago with a reported contract price of $705,000, down 7 percent from its 2004 sale price of $759,000.

But never mind all that, did you see those medians!

SocketSite Sees Seasonality (Versus Signs Of A Rebound) [SocketSite]
One Percent Down In 2004 (And Perhaps More Down More Since) [SocketSite]
Medians Are Up, But Don’t Confuse That With Increasing "Prices" [SocketSite]

Posted by socketadmin at 1:30 PM | Permalink | Comments (10) | (email story)

December 9, 2010

If Homes In Bayview Are Selling For $770,000 $375,000…

In August 2006 it sold for $550,000 as a fixer, was remodeled (including the addition of two bedrooms and a bath), and then flipped four months later for $770,000 which not only established a neighborhood "comp" but justification for prices elsewhere in San Francisco ("If homes in Bayview are selling for $770,000…").

In October 2008 the single-family home at 1747 La Salle returned to the market asking $560,000 but failed to sell. The home has since been "reconstructed" ("Everything in the home is brand new") and was re-priced at $450,000 ("a must see, won’t last") this past September. And for the past month they’ve been asking $375,000.

Listing: 1747 La Salle Avenue (5/3) - $375,000 [MLS]

Posted by socketadmin at 12:00 PM | Permalink | Comments (24) | (email story)

November 22, 2010

BMR Waivers In A Wavering Economy And Real Estate Market

Plugged-in people saw it coming over a year ago, and on San Francisco’s Land Use and Economic Development Committee agenda this afternoon: An ordinance amending San Francisco’s Residential Inclusionary Affordable Housing Program including a name change to the "Affordable Inclusionary Affordable Housing Program;" the elimination of a provision requiring developments within the Van Ness Market Special Use District to meet at least half of their affordable housing requirement through the construction of housing versus an in-lieu fee; and the easing of restrictions on the resale of Below Market Rate units.

The downturn in the economy has resulted in areas in the City where the restricted, or Below Market Rate ("BMR"), price is close to or, in some instances, below the unrestricted market price of units in the same area. This has led to hardship for some BMR owners who have been unable to resell.
Certain requirements of the Inclusionary Housing Program and the Procedures Manual ensure that the BMR units offer affordable, high-quality housing and not investment opportunities. In particular, BMR units must be purchased by first-time homebuyers; owner-occupied at all times with a limited allowance for renting; BMR households [must have] at least as many people as bedrooms in the unit; a BMR household must meet an asset test in addition to an earned income test; and the unit must resell to a household whose income is no higher than the income level designated for the unit.
However, these rules sometimes prevent interested buyers from being qualified to purchase BMR resale units because they are unable to sell. During economic downturns, especially, this narrowing of the pool of potential buyers can harm households who may need to sell their units in a timely manner in order to avoid default or foreclosure.

The proposed amendments would give the Mayor’s Office of Housing the discretion to waive the first-time homebuyer requirement, to waive the household size requirement, to waive the owner occupancy requirement, to modify the asset test limitation, and to increase the qualifying income level by 20%.

And yes, waivers would apply to developer sales of BMR units in new developments as well.

Land Use and Economic Development Committee Agenda: 11/22/10 [
Amending San Francisco's Inclusionary Housing Ordinance [sfbos.org]
Buy A BMR For $10K $25K More Than Bank-Owned At Candlestick Point [SocketSite]
Buy A BMR...For $10K More Than Bank-Owned At Candlestick Point [SocketSite]

Posted by socketadmin at 7:30 AM | Permalink | Comments (19) | (email story)

November 17, 2010

U.S. Housing Starts Take A Big Hit

Driven by a 44 percent drop in multifamily units, housing starts in the U.S. fell to a 519,000 annual rate in October, down 12 percent from September and the slowest pace since the record low of 477,000 reached in April 2009. Single-family home starts fell 1.1 percent.

Record-low mortgage rates have failed to boost demand, highlighting the limits of Federal Reserve monetary policy in undoing the damage from the bursting of the housing bubble. Companies like D.R. Horton Inc. are bracing for the worst in early 2011 as unemployment hovers near 10 percent and the lifting of foreclosure moratoriums swells the supply of houses.

Now about that Base Case scenario...

Housing Starts in U.S. Drop 12%, More Than Forecast [Bloomberg]
FHA: Not Out Of The Woods Yet Feeling A Little Less Lost [SocketSite]

Posted by socketadmin at 6:45 AM | Permalink | Comments (7) | (email story)

November 16, 2010

FHA: Not Out Of The Woods But Feeling A Little Less Lost

The Federal Housing Administration released its annual report to Congress on the financial status of its Mutual Mortgage Insurance Fund today. Since last year, the FHA's capital reserve ratio fell from 0.53 to 0.50 percent, insurance claims were 21 percent lower than predicted, and the economic value of FHA’s single-family insurance program increased from $3.6 to $4.7 billion.

Like last year’s report to Congress, this accounting shows that FHA is sustaining significant losses from loans insured prior to 2009 and its capital reserve ratio remains below the congressionally mandated threshold of two percent of all insurance-in-force. However, the report concludes that under conservative assumptions of future growth of home prices, and without any new policy actions, FHA’s capital ratio is expected to approach two percent in 2014 and exceed the statutory requirement in 2015.
FHA’s capital reserve ratio measures reserves in excess of those needed to cover projected losses over the next 30 years. The independent actuarial reviews of the MMI Fund estimate FHA’s capital reserve ratio to be 0.50 percent of total insurance-in-force this year, falling fractionally from 0.53 percent in 2009. The difference is primarily attributed to the use of much more conservative assumptions regarding future house price growth than were used last year, which also resulted in an $8.5 billion decrease in economic value. However, that decrease was offset by a variety of factors, including an $8.7 billion increase in value due to better credit quality, loan performance, and the premium increase implemented earlier this year.
Due in large part to the performance of recently originated loans, FHA’s total capital resources increased by $1.5 billion since last year, to $33.3 billion, and are at their highest level ever – $5.5 billion greater than predicted last year. If the economy were to suffer a further significant downturn, recovery of the capital ratio could be delayed beyond the projected timeframe. However, even in the actuaries’ worst-case stress test scenario, FHA’s capital resources remain sufficient to cover projected claim losses and FHA would not require a taxpayer subsidy, an improvement over last year’s assessment and due to new loans having higher credit quality than had been anticipated.
Loans insured before 2009 are responsible for 70 percent of the expected single family loan losses. Though they are now prohibited, so-called “seller-financed down payment assistance loans” produced $6.6 billion in claims to-date and may ultimately cost FHA $13.6 billion. Without these seller-financed loans, FHA’s capital ratio would be above the congressionally mandated two percent threshold. Conversely, loans insured since 2009 earned $4.8 billion in economic value to the MMI Fund and are estimated to generate $28.3 billion in economic value by 2016. Expected economic value of FY 2010 and FY 2011 loans alone are estimated to reach $11 billion.

The FHA’s forecast assumes an average peak-to-trough housing price drop of 17% from 2007 based on a "Base Case" economic scenario which Moody’s considers to have a 50 percent probability of being as bad or worse than predicted.

A mild second recession (25 percent probability) which "assumes that financial policy initiatives such as foreclosure mitigation are put in place and access to credit improves moderately, but that the improvement is too gradual to allow for a substantial rebound in the housing market until 2012" would result in an average 25% peak-to-trough drop in housing prices and yield a -1.03% capital ratio for the FHA.

A deeper second recession (10 percent probability) which "assumes that the moderate rebound in housing construction in the first half of 2009 pauses and reverses course due to restricted access to credit and continuing high unemployment [with] no significant recovery...until mid-2012" would result in a forecast 31% peak-to-trough drop in housing prices and yield a -1.80% capital ratio for the FHA.

And a complete collapse which "assumes that foreclosure mitigation policies are unproductive, house prices resume their decline, and the NAR median existing sale price falls cumulatively by 45 percent from its 2005 peak to the third quarter of 2012" would result in an average 35% peak-to-trough drop in housing prices and yield a -2.29% capital ratio for the FHA, but is given a probability of only 4 percent.

Annual Report to Congress Regarding the Financial Status of the FHA [hud.gov]
OMG For The FHA [SocketSite]
Financial Status of the FHA Mutual Mortgage Insurance Fund FY 2010 [hud.gov]

Posted by socketadmin at 2:15 PM | Permalink | Comments (14) | (email story)

November 1, 2010

Do You Really Think So?

"There has been a political and intellectual arrogance in San Francisco the United States that it won’t happen to us,” said Adam S. Posen, a senior fellow at the Peterson Institute for International Economics in Washington. “We shouldn’t be so smug. You can get there without being Japan."

U.S. Hears Echo of Japan’s Woes [New York Times]
Promoted From Comment To Post: Satchel Does Deflation [SocketSite]

Posted by socketadmin at 8:15 AM | Permalink | Comments (15) | (email story)

October 26, 2010

That's A Negative, Ghost Rider...

"The Treasury sold $10 billion of five-year Treasury Inflation Protected Securities at a negative yield for the first time at a U.S. debt auction as investors bet the Federal Reserve will be successful in sparking inflation."

Treasury Draws Negative Yield for First Time During TIPS Sale [Bloomberg]

Posted by socketadmin at 9:30 AM | Permalink | Comments (9) | (email story)

October 20, 2010

The Mortgage Buyback Brouhaha (So Far) In Three Easy Links

Pimco, NY Fed Said to Seek BofA Mortgage Repurchases [Bloomberg]
Fed’s ‘Weight’ Joins Mortgage Investor Bid for Relief [Bloomberg]
BofA Will ‘Defend’ Shareholders in Mortgage Buybacks [Bloomberg]

Posted by socketadmin at 10:00 AM | Permalink | Comments (4) | (email story)

October 13, 2010

2207 Scott Versus The Underlying Shares

2207 Scott Street

Purchased for $3,425,000 in May 2006 with what would appear to have been "Google money," in 2008 the rear foundation at 2207 Scott Street was replaced, a three-quarter bath added, and a bit of garage space reclaimed for living.

At a permit estimated cost of $200,000, let's call it $3,625,000+ invested in the property.

Back on the market today and listed for $3,600,000, a sale at asking would appear as "appreciation" of 5% over the past four years in MLS based reports, newsletters and statistics but wouldn’t exactly be so.

Closing the day at $543.30, shares of Google are up 47% over the same timeframe.

∙ Listing: 2207 Scott Street (4/4.5) 3,035 sqft - $3,600,000 [MLS]

Posted by socketadmin at 3:30 PM | Permalink | Comments (39) | (email story)

October 8, 2010

Bank Of America Extends Foreclosure Sale Moratorium To All States

From Bank of America this morning:

Bank of America has extended our review of foreclosure documents to all fifty states. We will stop foreclosure sales until our assessment has been satisfactorily completed. Our ongoing assessment shows the basis for our past foreclosure decisions is accurate.

While sales have been halted, notices of default (NOD) will continue.

Statement from Bank of America Home Loans [bankofamerica.com]

Posted by socketadmin at 9:15 AM | Permalink | Comments (45) | (email story)

September 30, 2010

Another Year For Super Conforming Limits (Assuming Obama Signs)

Passed by congress last night, H.R. 3081 will once again extend $729,750 "super conforming" loan limits for high cost areas like San Francisco, this time through September 30, 2011 assuming President Obama signs.

One More Year! For Super Conforming Limits Assuming Obama Signs [SocketSite]
If Lowering Rates Isn’t Working, Perhaps Increasing Limits Will [SocketSite]

Posted by socketadmin at 1:45 PM | Permalink | Comments (18) | (email story)

September 28, 2010

1167 Bosworth Is Back And Seeking Another Outlier Bid

1167 Bosworth

While the sale of 48 Chenery closed escrow on Friday, 1167 Bosworth returned to the market. Having sold for $1,000,000 in 2004, the single-family Glen Park home was listed for $850,000 this past February and closed escrow for $1,051,000 this past March.

If a plugged-in tipster recalls correctly, the second highest bid this past March was under $900,000. There’s nothing quite like finding out you paid over $150,000 (18 percent) more than the next highest bidder.

Perhaps hoping for another 30 percent over asking outcome (and another outlier bid), 1167 Bosworth has been listed for $925,000 (the sellers are "relocating"), a sale at which would represent a 7.5 percent decline in value below its year 2004 price (12 percent less than this past March).

∙ Listing: 1167 Bosworth (3/2) - $925,000 [MLS]
While One Glen Park Apple Improved Resale Is Picked… [SocketSite]

Posted by socketadmin at 8:00 AM | Permalink | Comments (15) | (email story)

September 15, 2010

QuickLinks: But What About That Bottom?

U.S. Home Prices Face Three-Year Drop as Supply Gains [Bloomberg]
Home Price Double Dip Begins [CNBC]

Posted by socketadmin at 11:45 AM | Permalink | Comments (4) | (email story)

September 9, 2010

Purchase Mortgage Volume Remains Down 38.8% YOY

While mortgage rates remain at historic lows (with plugged-in readers securing 4.375% 30-year rates), mortgage application volume for purchases in the U.S. remains down 38.8% on a year-over-year basis (up 4% week-over-week) according to the latest MBA survey.

Mortgage Bankers Association Applications Survey: 9/03/10 [mortgagebankers.org]
Rates Hit 20-Year Low Yet Purchase Activity Is Down 38.8% YOY [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (11) | (email story)

September 2, 2010

A Winner’s Circa 2005 Curse (And Seller’s Boon)

819 Haight Street

Sold for $1,635,000 in August 2005 having been listed for $1,395,000, this past Friday the re-sale of 819 Haight Street closed escrow with a reported contract price of $1,380,000 (15.6% under its 2005 sale) having been listed for $1,595,000 a year ago.

As a plugged-in reader wrote about the property two weeks ago:

The posts that comment on the costs to add bathrooms are probably right, particularly given the finishes on this house. Some of the best possible materials were chosen throughout--tile, fixtures, etc. The front porch is an aberration. A quick fix prior to the sale in 2005, replacing even more inappropriate and very damaged Spanish tiles.
As for the neighborhood, that block is entirely residential, with the exception of Zephyr. There are several families on the street who enjoy the proximity of Duboce and the dog park up the street. It's a very walkable neighborhood, and contrary to the suggestions above, safe. You might find graffiti on your trashcans, but aside from that, no car break ins or the usual petty things you'd expect. (Petty criminals don't like hills.)
We'd buy it. Again. But then, we'd be buying it for less than we sold it for in 2005, so we'd consider it a bargain. ;)

Keep in mind that competitive bids were more the rule than exception in San Francisco circa 2005. And as soon as a property sold, it became a comp for the next sale. And so on. And so forth.

A Four Year Hold For A Renovated 819 Haight: A Winner's Return [SocketSite]
819 Haight Street’s Return Redux: Winner's Curse In Action? [SocketSite]
A Winner’s Curse That Has Yet To Be Cured [SocketSite]

Posted by socketadmin at 8:45 AM | Permalink | Comments (10) | (email story)

August 26, 2010

Rates Hit 20-Year Low Yet Purchase Activity Is Down 38.8% YOY

Mortgage rates dropped to their lowest levels in at least 20 years last week. And while refinancing activity is up to its highest level in fifteen months, according to the Mortgage Bankers Association’s mortgage activity index, purchase activity in the U.S. fell 1.1 percent last week and is currently running 38.8 percent lower on a year-over-year basis.

Mortgage Bankers Association Applications Survey: 8/20/10 [mortgagebankers.org]

Posted by socketadmin at 9:45 AM | Permalink | Comments (11) | (email story)

August 25, 2010

Who’s Down With OPM In The Marina?

Purchased for $875,000 in June 2004 with a variable rate first for $612,500, a second for $218,750, and all of five (5) percent down, 1471 Francisco was taken back by the bank three weeks ago with what would appear to be $983,741 owed. Ah, the good old days of playing with OPM (other people’s money). Other than the FHA's, of course.

The two-bedroom Marina condo is back on the market today and asking $892,500.

∙ Listing: 1471 Francisco (2/1) 1,344 sqft - $892,500 [MLS]
Three Amigos Of FHA Requirement Changes In Effect Or Coming Soon [SocketSite]

Posted by socketadmin at 3:30 PM | Permalink | Comments (22) | (email story)

Pace Of New U.S. Home Sales Hits New Historic (S)Low In July

On the heels of yesterday’s dismal existing home sale stats and a leading indicator, sales of new single-family U.S. homes fell to annual pace of 276,000 in July, down 12.4 percent from June and down 32.4 percent on a year-over-year basis for a new record (s)low.

Existing U.S. Home Sales Pace Plunges 27.2% In July (25.5% YOY) [SocketSite]
New Residential Sales: July 2010 [census.gov]
New Home Sales Pick Up The Pace But Still Running Second To Last [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (6) | (email story)

August 24, 2010

Existing U.S. Home Sales Pace Plunges 27.2% In July (25.5% YOY)

The pace of U.S. existing home sales fell to an annual rate of 3.83 million units in July, a drop of 27.2 percent from June and a drop of 25.5 percent on a year-over-year basis.

Sales are at the lowest level since [the National Association of Realtors] total existing-home sales series launched in 1999, and single family sales – accounting for the bulk of transactions – are at the lowest level since May of 1995.

At the same time, inventory increased 2.5 percent to 3.98 million units, an effective supply of over twelve months (a metric with which seasonality can wreak havoc), and the median sales price increased 0.7 percent on a year-over-year basis.

As as plugged-in people know, however, increasing medians shouldn’t be confused with increasing values. Consider that a year ago 66.6 percent of home sales were below $250,000 while this past July it was 65.3 percent (i.e., the mix of higher priced home sales has increased).

July Existing-Home Sales Fall as Expected but Prices Rise [realtor.org]
Existing U.S. Home Sales Pace Declines But With Year-Over-Year Gain [SocketSite]
Medians Are Up, But Don’t Confuse That With Increasing "Prices" [SocketSite]

Posted by socketadmin at 8:00 AM | Permalink | Comments (42) | (email story)

August 18, 2010

Currently Asking 17% Less Than Its Last Mortgage In Pacific Heights

2543 Vallejo (www.SocketSite.com)

2543 Vallejo has been on our readers’ radar for just about a year. Purchased in January 2000 with a $1,395,000 variable rate loan, the Pacific Heights property was refinanced in February 2003 with a $1,680,000 variable rate loan, and then again in April 2007 with a $2,900,000 variable rate loan.

A month later a $500,000 line of credit was extended on the house as well.

In April of 2009 a notice of trustee sale (NOTS) was filed with $3,149,895 owned on the mortgage, and this past March the property was taken back by the bank with $3,224,168 due on the mortgage at the time.

Listed on the open market for $2,652,000 this past April, the single-family home has been on the market asking $2,395,000 since the beginning of June.

UPDATE: After we posted this morning, the list price for 2543 Vallejo was reduced from $2,395,000 to $2,349,900 after two months without a change.

∙ Listing: 2543 Vallejo (3/3.5) 2,788 sqft - $2,395,000 [MLS]
An Appreciation (Just Not "Appreciation" Per Se) For 2668 Vallejo [SocketSite]

Posted by socketadmin at 8:45 AM | Permalink | Comments (51) | (email story)

August 12, 2010

Expect The Unexepected

"Companies may be losing confidence in the recovery and are hesitant to hire, raising the risk of further erosion in consumer spending, the biggest part of the economy. Federal Reserve policy makers this week said growth “is likely to be more modest” than they previously projected, prompting central bankers to take additional steps to spur a rebound."

Jobless Claims in U.S. Unexpectedly Climbed Last Week [Bloomberg]

Posted by socketadmin at 7:30 AM | Permalink | Comments (31) | (email story)

August 9, 2010

The Missing Links (Or Rather Notes) for 3346 Clay

How can a Presidio Heights house that was purchased for $800,000 in 1992 and refinanced in 2001 with a $1,350,000 note end up listed as a short sale at $2,895,000 in 2010? When it’s refinanced in 2006 with a $2,800,000 adjustable rate first mortgage and a second for $1,188,024 is added in October 2008 (neither of which are noted on PropertyShark).

As correctly surmised, the transfer in title this past February to an LLC was recorded without consideration (i.e., no money changed hands). And while the Notice of Default on 3346 Clay was filed in April with just over $53,000 past due at the time, the Notice of Trustee sale lists $3,138,115 in principal, interest and fees outstanding on the first note alone.

All comments such as, "Did anyone else find the irony in the 'Parking for Ferrari's Only' sign on the back porch?" on our original post.

Say Aloha To The Short Sale Of 3346 Clay [SocketSite]

Posted by socketadmin at 3:15 PM | Permalink | (email story)

August 4, 2010

Mix? Pshaw! Who's Ever Heard Of Such A Ridiculous Thing...

Morgan Stanley San Francisco MSA Sales Mix Chart

From HousingWire's summary of Morgan Stanley's latest Housing Markets Insights report:

Morgan Stanley analysts are questioning the power of national home price indices, saying that local 'shift-in-mix' impacts may overcome the veracity of such large measurement values.
In their latest Housing Markets Insights report, the analysts for the investment bank are asserting that the notion of a national housing market that can be quantified in an index, such as Case-Shiller, RPX – and even Morgan Stanley's – no longer "reflect what we believe to be the actual changes in home prices," they say.
"While greater macro trends can certainly affect housing across the country, individual markets can deviate substantially from each other," write researchers Oliver Chang, James Egan and Vishwanath Tirupattur. "We remain convinced that actual home prices may have more to fall, regardless of what the major indices may report."

Mix? Who's ever heard of such a ridiculous thing. And specific to the San Francisco MSA:

"For the city that shows the highest YoY gains in the major indices, we find that it is actually showing the beginning of a double-dip with non-distressed prices aggregated across square foot tiers down 1.2% YoY, short sales down 2%, and REO liquidations up 20%," the report concludes.

See chart above.

Morgan Stanley Questions Power of Home Price Indices [HousingWire.com]
Medians Are Up, But Don’t Confuse That With Increasing "Prices" [SocketSite]
May Case-Shiller: San Francisco Tiers Up But Gains Moderating Atop [SocketSite]

Posted by socketadmin at 2:00 PM | Permalink | Comments (43) | (email story)

August 2, 2010

Failing Grades In Auction Buying 101 (And Commenting)

Despite what the Chronicle's most popular commenters seem to think, auctioning off a second mortgage on the courthouse steps isn’t unscrupulous, crooked, or criminal.

Bidding on a courthouse auction without understanding what’s actually being auctioned is, however, negligent, foolish and an outright failure in auction buying 101.

Winning bid on mortgage buys family heartache [SFGate]

Posted by socketadmin at 9:45 AM | Permalink | Comments (55) | (email story)

July 26, 2010

Rent Versus Buy (Or Sell) A Landmark Mansion

1772 Vallejo (www.SocketSite.com)

Listed for $7,900,000 last September, the asking price for the fully restored Landmark Burr Mansion at 1772 Vallejo was reduced to $6,995,000 last October and then withdrawn from the MLS (but not the market) this past May.

As a plugged-in tipster notes, 1772 Vallejo is now being advertised as a rental and asking $26,950 a month (hey, between five roommates that’s only $5,390 apiece).

And while $26,950 a month might seem like an eye-popping number, keep in mind that on a purchase price of $6,995,000, and assuming absolutely no vacancy nor maintenance or upkeep, it would translate to a CAP rate of under 4 percent.

∙ Listings: 1772 Vallejo (5/4.5) - $6,995,000 | $26,950/month
Another Ex-Mayor’s Landmark Mansion Coming Soon (1772 Vallejo) [SocketSite]
Party Of Five Eight Move To San Francisco’s Billionaires Row [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (18) | (email story)

July 20, 2010

Three Amigos Of FHA Requirement Changes In Effect Or Coming Soon

Announced in January, all three amigos of requirement changes for FHA loans should actually be in effect soon:

New FHA borrowers must have a minimum credit score of 580 to qualify for the FHA’s most favorable down payment plan, currently at 3.5%. Borrowers with credit scores of less than a 580 FICO score will be required to put at least 10% down.
Up Front Mortgage Insurance premiums have increased to 2.25% for all FHA case numbers assigned after April 5th, 2010 for purchase money mortgages, plus the FHA’s Streamline Refinance program and full-credit qualifying refinances.
Seller concessions have also changed. The FHA has lowered seller concessions from 6% to 3% in a move FHA officials say is designed to eliminate the temptation to inflate the appraised value of a home for sale.

And once again, the reason why.

FHA Policy Changes You Should Know About [fha.com]
FHA To Tighten Its Belt, But With Its Fly Wide Open? [SocketSite]
OMG For The FHA [SocketSite]

Posted by socketadmin at 6:15 AM | Permalink | Comments (0) | (email story)

July 9, 2010

Perhaps It Really Is Different Here In San Francisco...

Mortgage Delinquency Rates (Image Source: nytimes.com)

From the New York Times:

More than one in seven homeowners [in the U.S.] with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.
By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

Seriously delinquent is considered to be three or more missed payments in a row and the pipeline for foreclosure. The rather important missing statistic that we'd love to see: the difference in cure rates between the two tiers.

Biggest Defaulters on Mortgages Are the Rich [New York Times]

Posted by socketadmin at 8:45 AM | Permalink | Comments (36) | (email story)

July 1, 2010

Movement In The S&P 500 Versus Case-Shiller Since 1987

S%26P%20versus%20Case-Shiller.gif

Sorry folks, but as noted, we screwed the proverbial pooch when we originally posted our reader’s S&P 500 versus Case-Shiller Index chart. Our greatest sin of which we do know better, posting a chart without inspecting the underlying data. That being said:

According to the April 2010 S&P/Case-Shiller Home Price Index, single-family home prices in the San Francisco MSA rose 2.2% from March ’10 to April '10, down 36.0% from a peak in May 2006 but up 18.0% year-over-year.
For the broader 10-City composite (CSXR), home values rose 0.7% from March to April reversing a five month slide but remain down 30.5% from a peak in June 2006 (up 4.6% year-over-year).

On our other axis the S&P 500 is currently up 11 percent year-over-year having fallen 14 percent since the end of April, down 34 percent from an October 2007 peak, and back to September 2003 levels ignoring the roller coaster that commenced at the end of 2008.

April Case-Shiller Index: San Francisco MSA Up At Top But Down Below [SocketSite]

Posted by socketadmin at 2:40 PM | Permalink | Comments (16) | (email story)

Pending Home Sales Plummet And The Markets React

The National Association of Realtors Pending Home Sales Index ("a forward-looking indicator") fell 30 percent from April (110.9) to May (77.6). All seasonality and now stimulus aside, the index fell 15.9 percent on a year-over-year basis (92.3 in May 2009).

And while the National Association of Realtors did employ "as expected" in the headline of their press release, the markets would disagree, at least with respect to the magnitude of the drop. And that’s why it matters in San Francisco.

Pending Home Sales Drop as Expected [realtor.org]
Senate Approves First-Time (And Move-Up) Homebuyer Tax Credits [SocketSite]
The Dow Drops Back Below 10,000. Yes, Skittish. [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (18) | (email story)

June 29, 2010

The Dow Drops Back Below 10,000. Yes, Skittish.

We’re back below 10,000 as the Dow closed the day at 9,870 without any so called "fat fingers" (which were never really) to blame. The S&P closed the day down 3.1% to 1,041 erasing its year to date recovery and dropping to a new year to date low (down 6.6%).

Yes, skittish.

In more upbeat Bay Area market news, newly minted shares of Tesla closed the day up 40.5% on their first day of trading.

Full Disclosure: Our Editor in Chief owns shares of Tesla.

S&P 500 Back To Even For The Year To Date As Skittishness Remains [SocketSite]
(D)ow! And Did We Say Skittish? [SocketSite]
QuickLinks: A Rough Day On A Skittish Street [SocketSite]

Posted by socketadmin at 2:00 PM | Permalink | Comments (32) | (email story)

June 16, 2010

U.S. Housing Starts And Permits Fall But Remain Up Year-Over-Year

U.S. housing starts fell to an annual pace of 593,000 in May, down 10 percent from April but up 7.8 percent year-over-year. Permit activity in the U.S. hit a one-year low falling 5.9 percent from April to May but remains up 4.4 percent year-over-year.

Housing Starts in U.S. Fell to 593,000 Pace in May [Bloomberg]
U.S. Housing Starts Up But New Permits Decline As Tax Credits Expire [SocketSite]

Posted by socketadmin at 11:00 AM | Permalink | Comments (0) | (email story)

June 15, 2010

S&P 500 Back To Even For The Year To Date As Skittishness Remains

The S&P 500 is back to even for the year to date, up 20.73% over the past year. The Dow remains down 116 points from its close on May 6 (10,520), but has bounced 473 points over the past week closing the day at 10,404.

QuickLinks: A Rough Day On A Skittish Street [SocketSite]
(D)ow! And Did We Say Skittish? [SocketSite]

Posted by socketadmin at 4:30 PM | Permalink | Comments (6) | (email story)

June 14, 2010

A Hundered Billion Here, A Hundered Billion There, And Pretty Soon...

"The cost of fixing Fannie Mae and Freddie Mac, the mortgage companies that last year bought or guaranteed three-quarters of all U.S. home loans, will be at least $160 billion and could grow to as much as $1 trillion after the biggest bailout in American history."

Fannie-Freddie Fix at $160 Billion With $1 Trillion Worst Case [Bloomberg]

Posted by socketadmin at 8:30 AM | Permalink | Comments (4) | (email story)

June 10, 2010

41 Ford: Born A Two Bedroom, Rebuilt As A Four And Back

41 Ford Before

Born in 1936 as a 1,315 square foot two-bedroom with one bath and purchased for $1,389,500 in November 2007, 41 Ford has been rebuilt as a 4,260 square foot four bedroom with four and one-half baths and parking for two (completed in 2009).

41 Ford Today

Back on the market in 2010 and asking $3,750,000, a sale at which would boost the neighborhood's average sale price (and possibly even shift the median), irrespective of any actual market appreciation (or not).

∙ Listing: 41 Ford (4/4.5) 4,260 sqft - $3,750,000 [41fordstreet.com] [MLS]

Posted by socketadmin at 4:45 PM | Permalink | Comments (61) | (email story)

June 4, 2010

(D)ow! And Did We Say Skittish?

Our rather succinct headline on May 6 when the Dow closed down 3.2 percent lower at 10,520: "A Rough Day On A Skittish Street."

A comment from auden four days later when the Dow closed at 10,781: "[SocketSite], stick to subjects you are good at reporting on, or, if you aren't any good, at least post the whole story, not just the doomsday downturn on the 6th but the recovery the following week."

Today the Dow closed down 3.1 percent for the day to 9,931. No new updates from auden.

QuickLinks: A Rough Day On A Skittish Street [SocketSite]

Posted by socketadmin at 12:38 PM | Permalink | Comments (79) | (email story)

Pay Shift It Forward

"The federal homebuyer tax credit shifted demand in the U.S. housing market [forward] without having a lasting impact on prices, according to Douglas Duncan, chief economist of Fannie Mae, the largest mortgage financier."

Fannie Mae’s Duncan Says Homebuyer Tax Credit Shifted Demand [Bloomberg]

Posted by socketadmin at 10:30 AM | Permalink | Comments (7) | (email story)

June 2, 2010

Condo Lottery Bypass For A Fee Resurfaces In Mayor's New Budget

Last year when Mayor Newsom released his proposed budget for San Francisco a proposal to allow owners of tenancies in common (TICs) to bypass the city’s condo conversion lottery for a fee had fallen by the wayside.

This year, however, the proposal is in.

Currently, about 1,800 tenancies in common, where a group of people own a building together rather than their individual units, have applied for the city's 200 slots a year for condo conversion, said Greg Wagner, Newsom's budget director.
Charging homeowners $4,000 to $20,000 to forgo the lottery would raise a projected $8 million that would be spent on affordable housing, Wagner said. Similar efforts have failed amid concern that they would increase renter evictions.

As we wrote a year-ago: Condo Conversion For A Fee? Yes Please (But Not Just Once).

Condo Conversion (And TIC Lottery Bypass) For A Fee? Nope. [SocketSite]
Newsom's budget foresees layoffs, program cuts [SFGate]
Condo Conversion For A Fee? Yes Please (But Not Just Once) [SocketSite]

Posted by socketadmin at 12:00 PM | Permalink | Comments (31) | (email story)

June 1, 2010

QuickLinks: Another Foreclosure Wave Forming Just Offshore?

New York Times Graphic: Lengthening Foreclosure Limbo

Owners Stop Paying Mortgages, and Stop Fretting [NYT]
Foreclosures shifting to affluent ZIP codes [SFGate]
Interest-only loans meteoric rise in the Bay Area [SocketSite 2005]

Posted by socketadmin at 8:30 AM | Permalink | Comments (24) | (email story)

May 27, 2010

Requests For Reductions In Residential Assessments Up 46 Percent

Perhaps due in part to the ease of starting the process online this year (as plugged-in people knew), 6,462 requests for reductions in residential property assessments were received by San Francisco’s Assessor-Recorder’s office this year, up from 4,421 last year and 1,673 the year before that.

In all, 11,700 homeowners have received temporary property tax reductions in the current fiscal year that ends June 30; some at the request of the property owners, others at the initiation of the assessor's office. The cumulative total in reduced assessed value added up to $1.4 billion.

Rulings on the requests will be out by early August, appeals will be due by September 15.

Assessing The Potential Upside Of A Down Market: Tax Basis Redux [SocketSite]
Thousands more in S.F. seek property tax breaks [SFGate]
JustQuotes: It's Time To Make Some Property Tax Lemonade [SocketSite]

Posted by socketadmin at 7:00 AM | Permalink | Comments (3) | (email story)

May 26, 2010

Proposition 13 In Practice Along San Francisco’s Gold Coast

The impact of Proposition 13 and the inequities it's created along San Francisco’s Gold Coast has long been a topic of conversation and debate amongst the plugged-in crowd.

Today The Bay Citizen tackles the topic with examples of annual property tax bills along Broadway that range from $4,965 for 2900 Broadway to $336,100 for number 2799.

And of course the annual tax bill of $7,722 for 2901 Broadway (which is currently on the market for $45,000,000) is front and center as well.

On Gold Coast, a Legacy of Low Taxes [baycitizen.org]
The SocketSite Scoop On 37 Raycliff Terrace (A.K.A. 2799 Broadway) [SocketSite]
A $3,000,000 Reduction (That Might Not Seem Like So Much To Some) [SocketSite]

Posted by socketadmin at 11:00 AM | Permalink | Comments (59) | (email story)

May 18, 2010

U.S. Housing Starts Up But New Permits Decline As Tax Credits Expire

"Work began on more U.S. houses in April than at any time in over a year and wholesale prices unexpectedly decreased, showing the economy is strengthening without stoking inflation" but "a decline in U.S. homebuilding permits last month may indicate a renewed housing slump as demand weakens after the expiration of tax credits..."

Feldstein Says Falling Permits May Signal U.S. Housing Slump [Bloomberg]
U.S. Economy: Housing Starts Jump, Wholesale Prices Decrease [Bloomberg]

Posted by socketadmin at 10:15 AM | Permalink | Comments (0) | (email story)

May 17, 2010

Instant (Appraiser's) Equity At 104 Funston

104 Funston

104 Funston was purchased for $2,750,000 in May of 2007 and returned to the market this past March asking $3,150,000. Reduced to a "lucky" $2,988,888 on April 15, the price was further reduced to $2,875,000 eight days later. On Friday it was reduced to $2,750,000.

According to the listing the property "appraised at $2,850,000" and you can "move in with equity." Who are we to suggest that its three weeks on the market at $2,875,000 without a sale would suggest otherwise.

Oh, and it’s also another property with "$400K of recent upgrades" which won’t be accounted for when it comes time to be counted in any industry "appreciation" (a.k.a. median sales price) reports.

∙ Listing: 104 Funston (4/3.5) 3,963 sqft - $2,750,000 [MLS]
A Newly Renovated 355 Bryant #308 Returns [SocketSite]
Medians Are Up, But Don’t Confuse That With Increasing "Prices" [SocketSite]

Posted by socketadmin at 4:00 PM | Permalink | Comments (32) | (email story)

May 14, 2010

Have We Seen This Movie (Or Symphony) Before?

The latest campaign from the sales office at Symphony Towers: "Buy your own studio home with only $13,000 down payment.*" From the asterisk: "Down payment is based on a $369,000 purchase price, FHA approved financing, and seller paid closing cost."

Symphony Towers Moves To Sell Twenty-Six Leased Leftover Units [SocketSite]

Posted by socketadmin at 8:45 AM | Permalink | Comments (11) | (email story)

May 13, 2010

A Bad Beacon Comp At $454 Per Square (But A Good Financial Flip)

Two weeks ago the sale of 250 King Street #802 closed escrow with a reported contract price of $670,000 ($454 per square foot and $1,000 "over asking").

As plugged-in people know, it had originally sold for $906,666 ($614 per square foot) in April 2006 with two loans totaling $949,900 (105% LTV).

As plugged-in people also know, between those two transactions the two-bedroom Beacon condo was bought off the courthouse steps for $527,077 in cash this past November. Well done Courthouse Steps Ii LLC (not so much JPMorgan Chase).

A Beacon Of Distress (250 King #802) [SocketSite]
Bank-Owned Competition In Action At The Beacon (250 King) [SocketSite]

Posted by socketadmin at 9:15 AM | Permalink | Comments (25) | (email story)

May 12, 2010

A "Calculated" Default For The Cannery At Del Monte Square

Playing the strategic default card, in March Vornado Realty Trust stopped making payments on the $18 million mortgage which helped finance its purchase of San Francisco's landmark Cannery at Del Monte Square for $33.5 million in 2007.

"Vornado wants to keep the property, [a person familiar with the matter] said. But, like many owners of distressed property, the company has defaulted as a strategy to restructure the debt...“It was a calculated move,” the person said."

Cannery Loan Is in Default [WSJ]

Posted by socketadmin at 2:15 PM | Permalink | Comments (29) | (email story)

May 10, 2010

Fannie Follows Freddie And Takes Another Quarter In The Shorts

Last week Freddie Mac requested $10.6 billion in government assistance following an $8 billion loss in the first quarter of 2010, today Fannie Mae requested $8.4 billion having lost $11.5 billion in the first quarter driven by "continuing weakness in the housing market" and warning of "significant uncertainty" as to the entities long-term financial sustainability.

That being said, "Fannie said that 5.47% of its loans were 90 days or more past due at the end of March, down from 5.59% in February and the first monthly decline in nearly three years."

Fannie, Freddie and the Federal Housing Administration backed 96.5% of home mortgages originated in the first quarter of 2010.

Fannie Mae Needs $8.4 Billion More in Aid after First-Quarter Loss [WSJ]
Fannie Mae As The Largest Lender Landlord In All The Land? [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (11) | (email story)

May 6, 2010

QuickLinks: A Rough Day On A Skittish Street

U.S. Stocks Plunge Most in Year as ’Panic Selling’ Grips Market [Bloomberg]
2430 Scott Street: An Entirely Different Dow Theory In Action? [SocketSite]

Posted by socketadmin at 2:00 PM | Permalink | Comments (32) | (email story)

April 14, 2010

Guest Editorial: Redonkulous Rincon Hill Development Fees?

Official Rincon Hill Area

It’s a guest editorial from Rincon Hill resident Jamie Whitaker related to yesterday’s Board of Supervisors’ approval of $1,844,273 in grants from the SOMA Community Stabilization Fund (funded by way of fees for developing within the Rincon Hill Plan Area):

The SOMA Community Stabilization Fund has collected $6.6 million from developments within the 14-block portion of South of Market that falls within the Rincon Hill Plan Area – that amount is from the single development that actually got built, One Rincon Hill.
Nearly five years after the Rincon Hill Plan was written into Section 318 of the San Francisco Planning Code, the justification for the adding the $14 per square foot fee for the SOMA Community Stabilization Fund (on top of the anticipated development fees paid for affordable housing and infrastructure) seems ridiculous. The justification was that exceeding the former height limits and allowing high-density housing near our mass transit and jobs hub in the downtown would destabilize the residents and businesses in South of Market.
There was never a nexus study conducted by the Planning Department to affirm that only high-rise developments between Folsom and Bryant and Second and Steuart Streets have a destabilizing impact on the rest of SOMA. The fee was born in the Board of Supervisor chambers after Planning had already gone through the process of meeting with Rincon Hill residents and creating the Plan.
While many of us living in Rincon Hill appreciate the public benefits of services provided by the 19 non-profits awarded the nearly $2 million yesterday, the very existence and rationale without a nexus study of the fee leaves a bad taste in our mouths. It is hard to believe that high-rise buildings east of 2nd Street and between Folsom and the Bay Bridge cause any greater impact on SOMA residents and businesses than those high-rises constructed west of 2nd Street.
If there is an impact, why shouldn’t the fee be applicable to all developments that create the impact instead of discriminating against just the 14 blocks within the Rincon Hill Plan Area?
There are several high-rise buildings, some right around the corner from the alleys of residents supposedly impacted by such tall residential buildings. If there is no impact, as could be proven by a legitimate nexus study, why impede the redevelopment of the Rincon Hill area with this additional $14 per square foot fee?
It is a shame that these fees were collected to provide one-time payments to non-profits instead of possibly funding the first public green open spaces in Rincon Hill that can be enjoyed by many for years to come. Instead, the Rincon Hill Plan Area does not have a single park, only lots of land awaiting more infrastructure fees to pay for Guy Place Pocket Park’s development and possibly state grant money to pay for the Harrison Street Park at Fremont (fronting 333 Harrison as proposed).
Again, this isn’t frustration with the non-profits benefitting from the nearly $2 million, but a frustration with fees and taxes that have no justification and should not be allowed to continue to exist without such a basis.

Our angle, recognizing we’re in a radically different market as compared to 2005, might not incentives for developers to invest in San Francisco, add residences and residents to a neighborhood still in search of its critical mass, and increase recurring tax revenues from the Rincon Hill area pay greater dividends than any one-time fee?

Now extend that thinking beyond simply Rincon Hill.

SF BOS Resolution: SOMA Community Stabilization Fund Expenditures [www.sfbos.org]
Rincon Hill Plan [sf-planning.org]
Michael Kriozere (ORH) Responds: We're Planning To Pay, Damn It! [SocketSite]
Putting Some Green On Guy Place: A Rincon Mini Park In The Works [SocketSite]
Harrison Street Park [harrisonstreetpark.com]
A Plugged-In Reader's 12 Notes On The "PC" Approved 333 Harrison [SocketSite]

Posted by socketadmin at 3:00 PM | Permalink | Comments (17) | (email story)

April 8, 2010

SocketSite Gets Schooled By A Plugged-In Reader

A plugged-in reader correctly takes us to task for not previously covering the San Francisco School Board’s decision to enact a new school assignment system. So we’ll just co-opt her (slightly edited) tip:

This could have an impact on SF property values in two ways. First, since now living in a schools’ attendance area will actually give you preference in getting into that school, I suspect that areas surrounding some of the best schools will have their property values increase (note that many of city’s best schools are "alternative" and are designated for citywide enrollment, so living next them won’t matter).
Second, students from traditionally disadvantaged areas as measured by CTIP scores will now have enrollment priority over everyone else. Dark green areas are the ones where children will have the CTIP advantage in getting into a school of their choice, since they scored the worst on standardized tests. It’s best to look at this in conjunction with the official census tract map.
Potrero Hill caught my eye, it’s the only place in the city where dark purple (census tract where students perform best on standardized tests) meets dark green. Tract 227.01 is purple (North Slope, "highly desirable") and 227.03 is green (it contains the Potrero projects).
The boundary between the two runs along Arkansas St between 20th & 22nd. As an ex-resident of Potrero Hill, I would actually consider Arkansas & 20th to be a pretty nice area to live in – as well as Connecticut from 20th to its dead end – and both are parts of the ”dark green” census tract.
The most interesting part is that if you’re living on Arkansas, between 20th & 22nd – if you’re on the East side, you’ll have an advantage into getting the school of your choice over the neighbor who’s living across the street! I wonder if this will have any impact on the property values in the nicest parts of 227.03 census tract...

It's good food for thought. And on that note we're off to find some Tater Tots.

Recap: A new era for student assignment? [rachelnorton.com]
San Francisco Schools Attendance Area Map [sfusd.edu]
2000 Census Tract Outline [census.gov]

Posted by socketadmin at 7:30 AM | Permalink | Comments (131) | (email story)

April 7, 2010

435 Vermont: Into Our Apple Orange Crate It Goes

435 Vermont

As we wrote this past January:

Purchased for $1,075,000 in January 2007, the single-family 435 Vermont returned to the market last July seeking $1,165,000. In October the asking price was reduced to $1,095,000. And in December the listing was withdrawn from the MLS without a sale.
The remodeled Potrero home is back on the market today at $1,010,000 noting, "Refreshed, restaged & priced to sell!" Refreshing the list price on the million dollar home's namesake website might be a nice touch as well.

In early March the list price was was reduced to $998,000 (on both the MLS and namesake website). And yesterday the sale of the single-family Potrero home closed escrow with a reported contract price of $980,000 (9 percent under its 2007 value).

UPDATE:. Apparently we missed a bit of work between sales, so into our orange (and comp) crate this sale goes.

435 Vermont Now "Priced To Sell!" (Previously Priced To Sit?) [SocketSite]

Posted by socketadmin at 6:45 AM | Permalink | Comments (33) | (email story)

April 5, 2010

2430 Scott Street: An Entirely Different Dow Theory In Action?

Purchased for $2,360,000 in June of 1999, 2430 Scott was remodeled and its garage expanded in the year 2000.

Resold in June 2007 for $4,200,000, the Pacific Heights property returned to the market asking $4,695,000 in May 2009, was reduced to $4,495,000 in June 2009 (with a "look at me" bump to $4,498,000 in February 2010), and then withdrawn this past March.

The single-family home is now back on the MLS with an official two days on the market and an "original" list price of $4,295,000. The Dow is currently at 10,968, it closed at 13,424 on June 8, 2007 (the day this property last changed hands).

UPDATE (5/6): The list price for 2430 Scott Street has been reduced to $4,095,000. The Dow closed at 10,520 today.

∙ Listing: 2430 Scott Street (4/4.5) - $4,295,000 [MLS]

Posted by socketadmin at 1:15 PM | Permalink | Comments (28) | (email story)

March 30, 2010

And If Rates Jumped Two Points? They'd Still Be Historically Cheap.

"Fixed mortgage rates likely will rise less than a quarter of a percentage point in the next three months, the smallest increase for the second quarter since a drop in 2005, according to estimates by Fannie Mae and Freddie Mac. The gain would add about $30 to the monthly payment for a $250,000 mortgage."

Cheap Mortgages May Last as Investors Replace Fed [Bloomberg]

Posted by socketadmin at 2:40 PM | Permalink | Comments (28) | (email story)

March 25, 2010

TARP's Special Inspector General Takes Aim At HAMP

From Neil Barofsky, the special inspector general for the Troubled Asset Relief Program by way of Bloomberg:

"[HAMP] risks helping few, and for the rest, merely spreading out the foreclosure crisis over the course of several years" at significant expense for taxpayers and borrowers, Barofsky’s (sic) wrote. If too many participants re-default, the modification plan "will have done little to achieve the goal of assisting homeowners who would still find themselves losing their homes."

HAMP has resulted in 168,708 permanent loan modifications as of February 28 (1,473 of which have already re-defaulted). For perspective, "[a]bout 2.82 million U.S. homeowners lost their properties to foreclosure in 2009 and 4.5 million filings are expected in 2010."

UPDATE: The Treasury's response.

Treasury’s Allison Defends Obama Mortgage-Modification Program [Bloomberg]
Insight Into The Inevitable Once Again? [SocketSite]
Testimony of Herbert M. Allison, Assistant Secretary for Financial Stability [treas.gov]

Posted by socketadmin at 9:00 AM | Permalink | Comments (10) | (email story)

March 24, 2010

Bank Of America’s New Equity Principal Forgiveness Program

Call it anything but altruistic, but Bank of America has announced a new focus on principal forgiveness – versus interest rate reductions – for its portfolio of highest risk loans.

From the bank this morning:

"The centerpiece...is a program of earned principal forgiveness that addresses severely underwater mortgages with some of the highest rates of delinquency – specifically subprime loans, Pay-Option ARMs and prime two-year hybrid ARMs that are 60 days or more delinquent with a principal balance of 120 percent or more," said Barbara Desoer, president of Bank of America Home Loans.”
“With implementation...Bank of America will make principal reduction the initial consideration toward reaching the HAMP's target for an affordable payment equal to 31 percent of household income when modifying qualifying subprime, Pay-Option ARM and prime two-year hybrid ARM loans that are also eligible for NHRP. An interest rate reduction and other steps would then be considered, if additional savings are necessary to reach the targeted payment.”

The approach: "An interest-free forbearance of principal that the homeowner can turn into forgiven principal over five years resulting in a maximum 30 percent decrease in the loan principal balance to as low as [but not below] 100 percent LTV."

There's nothing quite like continuing to make payments on a property knowing that in five years you won't have accrued any equity. But hey, principal forgiveness sure sounds good.

Bank of America Introduces Earned Principal Forgiveness [bankofamerica.com]

Posted by socketadmin at 1:00 PM | Permalink | Comments (69) | (email story)

March 23, 2010

Existing U.S. Home Sales Struggling To Find A Second Wind

While a standard seasonality bump from January to February should be kicking up the pace of existing U.S. home sales, "purchases dropped 0.6 percent to a 5.02 million annual rate" while inventory increased 9.5 percent to 3.59 million listed homes for sale last month.

Once again, 5.16 million previously owned homes sold in 2009 (4.91 million in 2008).

U.S. Previously Owned Home Sales Sucking A Little More Wind [SocketSite]
Sales of Existing Homes Decrease, Supply Climbs [Bloomberg]

Posted by socketadmin at 11:00 AM | Permalink | Comments (23) | (email story)

March 18, 2010

Relaxing BMR Rules At Mission Walk To Compete With Bank-Owned

Mission Walk Walk (www.SocketSite.com)

Plugged-in people should have seen this coming (others simply scoffed at our noting reductions on BMR re-sales and comparisons of bank-owned and BMR price points).

From the Examiner today:

Purchasing rules that govern scores of San Francisco Redevelopment Agency condos are being relaxed to help sell the units in a battered real estate market.
“We’ve never had this much inventory on the market,” Redevelopment Agency Executive Director Fred Blackwell said.
Agency commissioners this week raised the income cap for buyers to qualify for some of the units at Mission Walk — a 131-unit, two-building project completed on Mission Bay’s Berry Street in July — from those earning 100 percent of The City’s median income to those earning 120 percent.
“The price points, when you look at foreclosures and look at our units, are pretty much the same,” he said. “What people are doing, it seems, is choosing to go with the foreclosures because the foreclosures don’t have the same kind of income restrictions or equity restrictions.”

Income restrictions have already been relaxed for the Bay Oaks development at 4800 Third Street and are expected to be relaxed for the 125-unit project at 5600 Third Street.

The Redevelopment Agency might also begin offering down-payment assistance for buyers in either of the two Third Street developments.

Reductions Reach Below Market Rate Units On Ora Way (And Others) [SocketSite]
Buy A BMR For $10K $25K More Than Bank-Owned At Candlestick Point [SocketSite]
Changing rules to spur homebuying [San Francisco Examiner]
Mission Walk (330/335 Berry) Phase 2 Inventory/Application Scoop [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (39) | (email story)

March 16, 2010

The Fed Pledges No Bump In Benchmark And No More (M)BS

"Federal Reserve officials repeated their pledge to keep the main interest rate near zero for an “extended period” and confirmed that emergency measures to prop up the housing market [by buying mortgage-backed securities] will end as planned this month."

Fed Pledges to Keep Rate Low for ‘Extended Period’ [Bloomberg]

Posted by socketadmin at 1:45 PM | Permalink | Comments (25) | (email story)

March 15, 2010

While The Fed Forgives, California Does Not (For Now)

"When the foreclosure crisis started, Congress passed the Mortgage Forgiveness Debt Relief Act of 2007 so foreclosed homeowners would not be liable for their canceled debt. It is in force through 2012. California had a similar law, but it expired at the end of 2008, leaving Californians who lost their homes in 2009 potentially liable for big state tax bills."

Short sale tax shortchanges ex-homeowners [SFGate]

Posted by socketadmin at 7:30 AM | Permalink | Comments (1) | (email story)

March 10, 2010

If Only We Hadn’t Already Used Our "Making Flippy Floppy" Headline

"Taking effect on April 5, the [government's new program] could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale....Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed."

Program Will Pay Homeowners to Sell at a Loss [New York Times]
Lenders (And The Market) About To Be HAMPstrung? [SocketSite]

Posted by socketadmin at 5:45 AM | Permalink | Comments (9) | (email story)

February 26, 2010

A One Time Fire Sale To Address An Ongoing Budgetary Problem

909 Tennessee

From Guardians of The City with respect to old Engine Company No. 16 at 909 Tennessee:

City Architect John Reid Jr. designed this two-story brick structure to replace the original 1887 home of 16 Engine that was a block away at 1009 Tennessee Street. A two-story brick firehouse with a cornice brightened with small colored tiles, terra cotta keystones accent the arched dormitory windows and plaques above the doors.
Off of Third Street, near the Pier 70 complex, in what is called the "Dogpatch" section of the Potrero District, Engine Company 16 was considered a waterfront company. From the 1880's through World War II the Potrero Point Pier 70 area was a very active shipbuilding and steel manufacturing district. It became the largest civilian shipyard on the west coast.
This firehouse is located on a bigger plot of land owned the City. To the rear of the firehouse on the corner of 3rd and 19th Streets are the former Potrero Police Station and the neighbor Public Health Emergency room.
Engine Company No.16 was disbanded on July 1, 1970, due to ordered City budget cuts to the Fire Department. From 1970 to 1976 the firehouse was used by Toy Program. From 1976 to 1992 the house was used as a Museum annex apparatus workshop and collection storage area. Since 1992 the firehouse is being used by the Department for storage.

According to a plugged-in tipster the San Francisco Fire Department will be selling 909 Tennessee in order to help balance its budget.

And our tipster’s (paraphrased) question: Does it make sense to address an ongoing budgetary problem with a one time sale of an asset in a down market?

UPDATE: The asking price is expected to be around $735,000.

Engine Company No. 16 (909 Tennessee Street) [guardiansofthecity.org]

Posted by socketadmin at 2:30 PM | Permalink | Comments (72) | (email story)

February 25, 2010

Lenders (And The Market) About To Be HAMPstrung?

"The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program."

Obama May Prohibit Home-Loan Foreclosures Without HAMP Review [Bloomberg]
Insight Into The Inevitable Once Again? [SocketSite]

Posted by socketadmin at 12:20 PM | Permalink | Comments (25) | (email story)

Into Our Apple Cart (And Back To 2005) 79 Woodland Goes

79 Woodland

The apples to apples sale of 79 Woodland closed escrow yesterday with a reported contact price of $1,335,000 ($6,000 over asking). Purchased for $1,300,000 in June of 2005, call it average annual appreciation of 0.6% over the past five years for the remodeled single-family Parnassus Heights home.

But we wouldn't call it a "push" in terms of whether or not it’s fallen from "peak" having appreciated (and then depreciated) since 2005.

We’ll also call the effective pre-tax benefited cost of ownership around $8,000 per month over the past 56 months and let you run your own numbers in terms of rent versus buy from an economic (versus emotional) standpoint.

Parnassus Heights Apples To Apples (And Neighborhood Economics) [SocketSite]
Another Market Metric And Food For Thought At The End Of The Year [SocketSite]
To Rent Or To Buy, That Is The Question (That Only You Can Answer) [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (66) | (email story)

Sound Familiar?

"Government stimulus programs including the homebuyer tax credit [which is set to expire at the end of April] and a Federal Reserve program to buy mortgage-backed bonds lifted the real estate market in the closing months of 2009.

A sustained recovery in housing faces hurdles that include mounting foreclosures and a weak labor market, said Thomas Lawler, a former economist with Fannie Mae who now is an independent housing consultant in Leesburg, Virginia."

Home Prices Decline 1.2%, Smallest Drop in Two Years [Bloomberg]
Senate Approves First-Time (And Move-Up) Homebuyer Tax Credits [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (2) | (email story)

February 23, 2010

Parnassus Heights Apples To Apples (And Neighborhood Economics)

79 Woodland

We missed the listing for 79 Woodland prior to its heading into contract, but seeing as how its sale still hasn’t closed we’ll feature this apple to be anyway.

Purchased for $1,300,000 in June 2005, the Parnassus Heights single-family home returned to the market three weeks ago asking $1,329,000 and is currently in escrow with contingencies having been waived.

A plugged-in tipster adds, "we are renting a bigger house on the same block for just under [$4,000 per month]."

∙ Listing: 79 Woodland Avenue (3/2) - $1,329,000 (In Contract) [MLS]

Posted by socketadmin at 9:00 AM | Permalink | Comments (60) | (email story)

February 19, 2010

Selling At A Loss In An Attempt To Make A Profit (Elsewhere)

303 Second Street

Purchased for $245 million in 2005, the 730,000-square-foot south financial district twin-tower building at 303 Second Street is returning to the market with expectations of a $220 million sale price for the 90 percent leased building.

The key quote from TMG Partners CEO Michael Covarrubias:

“It’s a matter of what their basis is and what their alternative capital opportunities are,” said Covarrubias. “These buildings (like 303 Second St.) are not going to appreciate rapidly and there may be an opportunity to redeploy it and buy other distressed assets.”

Think that thinking might be playing a role in the recent return of previously unsold new construction condo units as well? More on this next week.

S.F. building owners sell the best, keep the rest [Business Times]
303 Second Street [303second.com]
Artani (818 Van Ness) Scoop Redux: Unsuspending Sales [SocketSite]

Posted by socketadmin at 8:00 AM | Permalink | Comments (17) | (email story)

February 18, 2010

Overshadowing The S&P/Case-Shiller Home Price Index's Recent Rise

Balance of Delinquent Loans (Image Source: Standard & Poor's)

"In summer 2009, the seasonally adjusted S&P/Case-Shiller Home Price Index rose for the first time in virtually two years. Since May 2009, the index has risen by over 3%, suggesting that the necessary correction to U.S. residential home prices is nearing an end.

However, in Standard & Poor's Ratings Services' view, the mortgage crisis may be far from over. The overhang of homes heading toward liquidation suggests more delinquencies and lower home prices are to come."

The Shadow Inventory Of Troubled Mortgages Could Undo U.S. Housing Price Gains [S&P]
November Case-Shiller Index: Up For Bottom Tiers But Flat At The Top [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (36) | (email story)

February 16, 2010

Proposed Seawall Lot 337 Development Scrambling For Investors

Mission Rock - SWL 337/Pier 48 - Proposal (click to enlarge)

With its retail space having been cut in half last year, the San Francisco Business Times reports that the proposed development for the Port of San Francisco's Seawall Lot 337/Pier 48 (a.k.a. Mission Rock or Giant’s parking lot A) is now scrambling for equity investors:

The San Francisco Giants are rushing to assemble a new team to redevelop 16 acres across from AT&T Park after the economic downturn prompted key equity investors in the project to pull out or scale back their involvement.
While the shake-up in the team on the $2 billion development is still in flux, Kenwood Investments will likely drop out of the project, while hedge fund Farallon Capital Management could opt out or play a much smaller financial role than originally planned, according to development and port sources.

Once again, a 17-year development cycle that was expected to start in 2013 and yield "875 housing units, 1 million square feet of office space, 240,000 square feet of shops and restaurants, 180,200 square feet of exhibit/event space, 8.7 acres of public open space and 2,650 parking spaces."

Batters out in San Francisco Giants’ $2B project [San Francisco Business Times]
San Francisco SWL 337 Proposal: Downsized And Drawn Out [SocketSite]
SocketSite Weekend Special: One Proposal For San Francisco SWL 337 [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (6) | (email story)

February 11, 2010

2010 Index of Silicon Valley: Economy Stalled And At Risk

From Joint Venture: Silicon Valley Network with respect to the 2010 Index of Silicon Valley:

The economic recession has stalled Silicon Valley’s vibrant innovation economy and left its global competitive standing at risk as never before...

With respect to jobs:

Between November 2008 and November 2009, employment in Santa Clara and San Mateo Counties dropped 6.1 percent, compared to 3.8 percent nationally. Silicon Valley lost 90,000 jobs between the second quarter of 2008 and 2009, bringing total employment down to 2005 levels.

With respect to housing:

Residential foreclosure activity dropped by 39 percent in 2009 yet in some cities more than a third of sales are foreclosures. Housing affordability for first-time homebuyers is improving [i.e., values are falling]. New affordable housing units in the region doubled from 2008 to 2009. Average rents declined six percent from 2008, the first drop in rents since 2005.

And with respect to commercial real estate:

Office vacancy rates are at an all-time high since 1998. The continued decrease in demand for commercial real estate combined with the creation of 1.7 million square feet of new commercial space have driven commercial vacancies up 33 percent in 2009 over 2008.

On the plus side, growth in new Silicon Valley "green" businesses and jobs were up 18% and 24% respectively from 2004 to 2008 while median household income was up 5% over the same period. But the real blows to Valley employment didn't kick in until 2009 and per capita income fell 5% from 2007-2009.

2010 Index of Silicon Valley [jointventure.org]
Silicon Valley Faces Tough Climb Back From Recession [jointventure.org]

Posted by socketadmin at 6:00 AM | Permalink | Comments (27) | (email story)

February 4, 2010

Perhaps At Some Point The "Unexpected" Shouldn't Be Quite So

"Initial [U.S.] jobless applications increased to 480,000 in the week ended Jan. 30, the most in seven weeks, from 472,000 the prior week.... The number of people receiving unemployment insurance was little changed [at 4.6 million] and those receiving extended benefits increased [by about 242,000 to 5.86 million]."

Initial Jobless Claims in U.S. Unexpectedly Climbed [Bloomberg]

Posted by socketadmin at 8:15 AM | Permalink | Comments (0) | (email story)

January 27, 2010

Will Our Sprinter Get A Second Wind?

Our headline for November’s existing U.S. home sales gain of 7.4 percent: A Sprinter's Or Marathoner's Pace? In December the pace of U.S. existing home sales fell 17 percent.

According to the National Association of Realtors, the decline "was the biggest since records began in 1968."

At the same time, the pace of new home sales in the U.S. (a leading indicator) declined 7.6 percent in December. "[F]or all of 2009, sales dropped 23 percent to 374,000, the lowest level since records began in 1963."

A Sprinter's Or Marathoner's Pace? [SocketSite]
Sales of U.S. New Homes Unexpectedly Fell in December [Bloomberg]

Posted by socketadmin at 9:00 AM | Permalink | Comments (1) | (email story)

January 26, 2010

166-178 Townsend Landmarking For Tax Breaks Deal In Trouble

178 Townsend Design

Approved by the Planning Commission last September, an unpaid tax bill and added sixth floor has the City’s Budget Analyst recommending against the tax break for landmarking deal for Martin Building Company's development of 166-178 Townsend.

"The Budget analyst recommends disapproval of the requested Mills Act Historical Property contract to provide property tax reductions to the property owner because the property owner currently owes The City $105,126 in past-due delinquent property taxes for fiscal year 2005-06, FY 2008-09 and FY2009-10,” [Budget Analyst Harvey Rose] says in his report.
Not only that, but Rose said as the application [was] pending, the property owner increased the height of the project to add a sixth floor “such that The City’s estimated first year property tax losses from $170,961 to $185,599, an additional loss of $15,638, or 9. 1 percent,” the report says.

As proposed, the development will add 94 luxury rentals, 15,000 square feet of underground parking, and a ground floor restaurant space to the market.

178 Townsend Approved To Become Mixed-Use With 94 Rentals [SocketSite]
Overdue taxes jeopardize historic property deal [San Francisco Examiner]

Posted by socketadmin at 6:00 AM | Permalink | Comments (2) | (email story)

January 20, 2010

FHA To Tighten Its Belt, But With Its Fly Wide Open?

As a plugged-in reader notes, the Federal Housing Administration is expected to announce a few changes with respect to standards, fees and rules for FHA-insured loans today.

Expected changes: 1. Minimum credit score of 580 (none prior); 2. Initial insurance premium of 2.25 percent of the loan (up from 1.75 percent); and 3. Maximum seller credit of 3 percent of the value of the home for closing costs (versus the current 6).

As of December, the F.H.A. was insuring 5.8 million single-family residences that had a total loan balance of $750 billion. More than half a million of the loans were seriously delinquent and heading toward foreclosure.
Many of these troubled loans were made in 2007 and 2008 as the market was plunging. Last fall, the agency said its cash reserves had tumbled to 0.5 percent of its loans outstanding, far below the 2 percent mandated by Congress.

Two years ago FHA insured mortgages accounted for less than 0.5 percent of all Bay Area home sales. This past November that number was over 26 percent.

FHA Waives Prohibition To Aid Quick Foreclosure Flips [SocketSite]
F.H.A. to Raise Standards for Mortgage Insurance [New York Times]
OMG For The FHA [SocketSite]

Posted by socketadmin at 10:15 AM | Permalink | Comments (23) | (email story)

Making Lemonade (And History) With A Lemon of An Addition?

50 Carmelita Before (Image Source: MapJack.com)

We’ll have to call it hearsay, and we can’t confirm, but a plugged-in reader offers one explanation for the seemingly semi-restored façade of 50 Carmelita:

Supposedly the plan was to remove the incredibly ugly retrofit garage (aka the giant box that ruins the facade) and restore the original front staircase leading up to the front door. But the planning department would not allow it, saying that the ugly box was historically protected, having been in place for more than 30 years or whatever.

Of course that’s only one side of the story and we're willing to listen if you have the other (perhaps related to the economics of removing a two-car garage in San Francisco).

UPDATE: And here's an other:

In order to change the outside "envelope" of the building by removing the garage the project would have to undergo a neighborhood review. By keeping the garage, the contractor was able to get away with pulling very limited permits.

Or simply in the words of a plugged-in Planning Department employee with respect to the original hearsay explanation, "this is not true." Cheers.

Carmelita’s Way: A Renovated 50 Carmelita Returns [SocketSite]
Damn That Planning Department To Hell! Oh, Wait A Minute… [SocketSite]

Posted by socketadmin at 9:15 AM | Permalink | Comments (16) | (email story)

December 15, 2009

Buy A BMR For $10K $25K More Than Bank-Owned At Candlestick Point

As we wrote in October:

The Mayor’s Office of Housing is helping to promote the resale of Candlestick Point (101 Crescent Way) Below Market Rate unit #2213. It’s two bedrooms, two baths, 1,063 square feet and asking $399,945 with purchase and resale restrictions.
If interested, you might also want to take a look at the bank owned Candlestick Point #2305. It’s two bedrooms, two baths, 1,063 square feet and asking $389,900. And it's without any restrictions – other than the free market – of course.

Today, the list price for 101 Crescent Way #2305 was reduced from $389,900 to $374,900. The BMR remains available at $399,945.

∙ Listing: 101 Crescent Way #2213 (2/2) 1,063 sqft - $399,945 [MLS]
∙ Listing: 101 Crescent Way #2305 (2/2) 1,063 sqft - $374,900 [MLS]
Buy A BMR...For $10K More Than Bank-Owned At Candlestick Point [SocketSite]

Posted by socketadmin at 5:30 PM | Permalink | Comments (17) | (email story)

December 11, 2009

The Rapid Rise Of "Strategic" Defaults

Wall Street Journal Strategic Default Map

Defined as those who stop paying their mortgages but remain current on all their non-real-estate debts, Experian and Oliver Wyman estimate nearly a third of all defaults in California were "strategic" in 2008 (up from 2 percent in 2004).

As the stigma of abandoning a mortgage wanes, the Obama administration could face an uphill battle in its effort to keep people in their homes by pressuring banks to cut their mortgage payments. Some analysts argue that's not always the right approach, particularly if it prevents people from shedding onerous debts and starting afresh.
"The effect of these programs is often to lead homeowners to make decisions that are not in their economic best interests," says Brent White, a law professor at the University of Arizona who has studied mortgage defaults.

No word on whether or not any of the bank owned units at Watermark might have fit the strategic default bill (or if others are in the works).

American Dream 2: Default, Then Rent [Wall Street Journal]
Rewarding Forgiving Their Riskiest Borrowers [SocketSite]
Another Bank Owned Watermark Comp To Be: 501 Beale #6C [SocketSite]

Posted by socketadmin at 11:30 AM | Permalink | Comments (34) | (email story)

The House Picks Up Where The Senate Left Off

"...lawmakers defeated a mortgage “cram-down” amendment that would have given federal judges the power to lengthen mortgage terms, cut interest rates and reduce loan balances for homeowners in bankruptcy court."

Mortgage ‘Cram-Down’ Bankruptcy Amendment Fails in U.S. House [Bloomberg]
JustQuotes: SocketSite Says...The Senate Gets One Right (So Far) [SocketSite]

Posted by socketadmin at 10:45 AM | Permalink | Comments (2) | (email story)

December 4, 2009

The Story (And Faces) Behind The Rise And Fall Of The Lembis

The Lembis via San Francisco Magazine

San Francisco Magazine digs deep to tell the story of the Lembis.

Their business plan was simple: Exploit the difference between artificially low, rent-controlled rents and the sky’s-the-limit, market-rate rents they could charge when the old tenants were out and new ones took their place.
This has been the motive behind many a buyout and eviction, legal or illegal, in San Francisco and in every other city with rent control.
For the Lembis, however, it was also a strategy that made their holdings more attractive to all that practically free short-term money—hundreds of millions of dollars—flowing in from around the globe.

The full story. And our quick three link chronology.

War of values [San Francisco Magazine]
Cash Flows Catch Up To The Lembi Group [SocketSite]
The Chronicle Reports "Dozens," A Plugged-In Source Says Over 100 [SocketSite]
CitiApartments Is No More! Well, Sort Of… [SocketSite]

Posted by socketadmin at 1:00 PM | Permalink | Comments (70) | (email story)

December 3, 2009

It's The Principal Of The Underwater Mortgage Matter

"We’re looking now at whether we should provide some further loss sharing for principal write downs," [FDIC Chairman Sheila] Bair said. "Now you’re in a situation where even the good mortgages are going bad because people are losing their jobs. So you have other factors now driving mortgage distress."

FDIC’s Bair Weighs Mortgage Principal Cuts to Fight Foreclosure [Bloomberg]

Posted by socketadmin at 1:45 PM | Permalink | Comments (15) | (email story)

November 30, 2009

An Emotional Bricks And Mortar Asset Allocation For The Wealthy

"Real estate investment among wealthy individuals [with more than $800,000 to invest] is set to rise to 30 percent of the average portfolio for the next few years from 28 percent now, according to [a Barclays global] survey. That excludes properties used as a principal residence. Most rich people, other than the extremely wealthy, should have no more than 10 percent of their assets in property, said [Mike Dicks, the London-based head of research at Barclays Wealth]."

"I was surprised how big a share of their wealth property represents," [said Dicks]. "It’s not what I would tell grandma. None of our data suggests that would be a good allocation."

Wealthy Investors Plan to Buy More Real Estate, Barclays Says [Bloomberg]

Posted by socketadmin at 11:30 AM | Permalink | Comments (36) | (email story)

November 25, 2009

U.S. New Home Purchases Up, Median Price Falls

"Purchases of new homes in the U.S. rebounded more than anticipated in October [up 6.2 percent to an annual pace of 430,000] as buyers rushed to take advantage of a government tax credit before it expired...Home values may remain under pressure as builders are forced to compete with mounting foreclosures as unemployment climbs."

As we wrote on Monday, two things to consider: 1. the impact of home buyer tax credits that were originally slated to expire on November 20; and 2. the state of October 2008.

Sales of New Houses in U.S. Climb to Highest Level Since 2008 [Bloomberg]
One Of Thirty Underwater Properties New To The Market This Week [SocketSite]
Animating The Unemployment Wave And Wondering About Its Impact [SocketSite]
Pace Of U.S. Existing Home Purchases Up 23.5 Percent YOY [SocketSite]

Posted by socketadmin at 8:00 AM | Permalink | Comments (25) | (email story)

November 24, 2009

Animating The Unemployment Wave And Wondering About Its Impact

As the pace of existing home purchases in U.S. picks up and the latest Case-Shiller Index twenty-city composite ticks up, a plugged-in tipster points us in the direction of a rather sobering animation of the rising unemployment wave spreading across our country.

US%20Unemployment%202-07.jpg

US%20Unemployment%209-09.jpg

The questions: what’s really driving any real estate "rebound," is it sustainable, and what happens if it's not? Are we currently scooping up fish left floundering on the ocean floor by receding seas unaware of a wave that's soon to return?

Pace Of U.S. Existing Home Purchases Up 23.5 Percent YOY [SocketSite]
September Case-Shiller: Bottom Tiers Up But Flat At Top For SF MSA [SocketSite]
The Decline: The Geography of a Recession [americanobserver.net]
U.S. Unemployment At 10.2 Percent, Five Tenths Above San Francisco [SocketSite]
San Francisco County Unemployment Up To 9.9 Percent In October [SocketSite]

Posted by socketadmin at 10:45 AM | Permalink | Comments (39) | (email story)

November 20, 2009

San Francisco County Unemployment Up To 9.9 Percent In October

Preliminary October labor force data counts for San Francisco, Marin and San Mateo counties puts the unemployment rate at 9.9%, 8.1% and 9.1% respectively, up 0.2 percentage points in San Francisco and up 0.1 percentage points in Marin and San Mateo.

While the number of unemployed in San Francisco increased by 700 (from 43,400 to 44,100) in October, the number of employed fell by 1,600 (from 403,700 to 402,100) as the labor force contracted by 1,000 (from 447,100 to 446,100).

Overall California unemployment increased by 0.3 percentage points to 12.3%.

Monthly Labor Force Data for Counties: October 2009 (Preliminary) [EDD]
San Francisco County Unemployment At 9.7 Percent In September [SocketSite]

Posted by socketadmin at 7:30 AM | Permalink | Comments (15) | (email story)

November 19, 2009

US (But Not DA) Prime And FHA Mortgage Defaults Climbing

While subprime adjustable-rate foreclosures starts dropped in the third quarter of 2009 (from 5.52 percent to 4.92 percent), both the number and pace of FHA backed and prime fixed-rate mortgage defaults climbed.

One out of every six FHA mortgages was late by at least one payment and 3.32 percent were in foreclosure, the highest for both since at least 1979, the Mortgage Bankers Association said today. The delinquency rate for prime fixed-rate mortgages, considered home loans with the least risk, rose to 5.8 percent and the foreclosure inventory rose to 1.95 percent, the highest since at least 1972.
The percentage of loans on which foreclosure actions were started was a record 1.42 percent. New foreclosures on prime fixed-rate loans increased to 0.71 percent from 0.67 percent, while FHA foreclosure starts rose to 1.31 percent from 1.15 percent.

From DataQuick today:

Federally-insured FHA loans, a popular choice among first-time buyers, made up 25.9 percent of all Bay Area purchase loans [in October]. That was up from 24.9 percent in September, 19 percent a year ago and less than 1 percent two years ago.

And while default rates are climbing, keep in mind money remains historically cheap:

The 30-year rate dropped to 4.83 percent from 4.91 percent, the lowest since May, mortgage buyer Freddie Mac of McLean, Virginia, said today in a statement. The average 15-year rate fell to 4.32 percent, the lowest since records began in 1991.

FHA, Prime Mortgage Defaults at Records on Job Losses [Bloomberg]
OMG For The FHA [SocketSite]
U.S. Mortgage Rates Fall for Third Consecutive Week [Bloomberg]

Posted by socketadmin at 9:30 AM | Permalink | Comments (1) | (email story)

November 17, 2009

Plugged-In People Should Have Seen This One Coming A Year Away

"A report released Monday by the [San Francisco] controller's office shows that property tax revenues will likely be $35 million less than anticipated in the 2009-10 fiscal year that began July 1. Payroll tax revenues will probably be $24.8 million less than expected..."

S.F. home value drop, jobless drain city budget [SocketSite]
SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]

Posted by socketadmin at 6:30 AM | Permalink | Comments (14) | (email story)

November 12, 2009

OMG For The FHA

"The Federal Housing Administration’s net capital ratio, or reserves after accounting for projected losses, fell to 0.53 percent in the year ended in September, from 3 percent in fiscal 2008 and 6.4 percent in 2007, according to an annual review sent today. While FHA said the fund “has good prospects,” it is changing its risk models to account for the possibility of the ratio falling below zero."

"[Housing and Urban Development Secretary Shaun Donovan] said the economy is worse than housing officials expected and projected claims against the insurance fund are higher than forecast. The fund is already below the 2 percent reserve threshold FHA is required to maintain by Congress."

FHA Reserve Ratio Falls to 0.53%, Lowest in History [Bloomberg]

Posted by socketadmin at 9:15 AM | Permalink | Comments (8) | (email story)

Average Tax Assessed Reduction Request Is 40% For 2009/10

Perhaps our reader’s 25.7% drop in assessed value for 2009/10 was actually low. From the Chronicle:

Owners of more than 4,000 homes and commercial buildings [in San Francisco] have appealed to the city to have the assessed value of their properties lowered to reduce their taxes. There were 1,200 appeals last year and 300 the year before that.
The total value of those 4,000-plus properties is about $25 billion…[and] the average of the requested reductions is 40 percent, but they have yet to be settled.

We believe there were actually 1,673 appeals last year (versus the Chronicle’s reported 1,200), 810 of which were granted with an average reduction of 11.5%. Unfortunately we don’t have the average for what was requested last year for an early apples to apples comparison.

A 25.7% Drop In Assessed Value For A Plugged-In Reader In 2009/10 [SocketSite]
San Francisco union workers facing layoffs [SFGate]
Average Granted Assessed Value Reduction In San Francisco: 11.5% [SocketSite]

Posted by socketadmin at 6:30 AM | Permalink | Comments (12) | (email story)

November 10, 2009

Coming Up Short On Apparent Appreciation In Bernal: 3661 Folsom

3661 Folsom

Purchased for $685,000 in 2005 (10% over asking at the time), it’s a plugged-in reader that notes the buyers of the single-family Bernal house put nothing down (there’s nothing like overbidding with other peoples’ money) and financed the investment with two variable rate loans.

Returning to the market eleven months ago with a newly remodeled interior and asking $875,000, the list price has since been reduced three times, most recently to $749,000 at the end of August as which point it became a hopeful short sale at $488 per square foot.

Which leads our reader to wonder, how could a home that’s listed for $64,000 (9%) over its purchase price possibly qualify as a short sale? And while we can’t say for certain in this case, the newly remodeled interior is probably a good guess. Negative amortization or a home ATM scenario could also be at play.

UPDATE: A plugged-in agent adds:

The seller was forced to put a substantial amount of money into the home because damage was done to its foundation by a major renovation of the house next door. I believe those expenses have helped make this a short sale.

∙ Listing: 3661 Folsom (3/2) - $749,000 [MLS]

Posted by socketadmin at 7:30 AM | Permalink | Comments (69) | (email story)

November 9, 2009

Speaking Of Million Dollar Foreclosures (And "Shadow Inventory")

773 Rhode Island

Purchased for $1,212,000 with ten percent down and two variable rate loans in November of 2005, 773 Rhode Island returned to the market in March of 2007 seeking $1,395,000. It was taken back by the bank in September of 2008.

It's now fourteen months later and the Potrero Hill view property has finally made it back onto the MLS as official inventory asking $909,900 (25% under its 2005 sale).

∙ Listing: 773 Rhode Island (3/2) - $909,900 [MLS]

Posted by socketadmin at 9:00 AM | Permalink | Comments (25) | (email story)

November 5, 2009

Fannie Mae As The Largest Lender Landlord In All The Land?

Having taken back 57,000 properties through foreclosure in the first half of 2009, "bringing its total real-estate owned inventory to 63,000 properties valued at $6 billion," Fannie Mae is rolling out a "Deed for Lease Program" in the hopes of generating some cash from the non-performing assets and mitigating the near-term impact of so-called "shadow inventory" on the market.

The Deed for Lease Program, which Fannie plans to roll out on Thursday, will offer borrowers who fail to complete or don't qualify for a loan modification or other workout to deed their property to the lender in exchange for a lease. Borrowers-turned-tenants will be able to sign leases of up to 12 months and will pay market rents, which in most cases are lower than the cost of mortgage payments.
Borrowers who haven't missed any mortgage payments aren't eligible for the program, and the borrower's mortgage servicer would have to show that a borrower isn't eligible for a loan modification before the homeowner could apply for the Deed for Lease program.

Of course collecting rents from those who have already lost their homes to foreclosure might be a challenge. And while the tipster that first pointed out the story notes, "Good news for RE investors like me, that's fo' shore!", we’d argue it's the opposite.

Fannie Mae to Rent Foreclosed Homes Back to Borrowers [WSJ]

Posted by socketadmin at 8:15 AM | Permalink | Comments (24) | (email story)

November 4, 2009

Senate Approves First-Time (And Move-Up) Homebuyer Tax Credits

The Senate has approved an extension of the $8,000 first-time homebuyers’ tax credit for homes under $800,000 through April 30; increased the income ceiling for eligibility to $125,000 for individuals and $225,000 for couples; and introduced a new $6,500 credit for existing homeowners that have lived in their current homes for at least five years and now want to "move up." It’s on to the House for a vote.

UPDATE (11/5): The House approved the legislation by a vote of 403-12. It's on to Obama to sign.

UPDATE (10/6): President Obama has signed.

Posted by socketadmin at 4:30 PM | Permalink | Comments (17) | (email story)

November 3, 2009

Medians Are Up, But Don’t Confuse That With Increasing "Prices"

SFGate recently ran a bit called "Is the bubble back?" highlighting a "creeping" median sales price from August to September in San Francisco as evidence of increasing prices and a real estate "comeback."

Ignoring the fact that the featured RE Report summary data for August doesn’t tie to their own District level data (288 "Home" and 207 "Condo" sales according to their summary versus 202 and 188 sales respectively when we sum their District data), perhaps a basic understanding of what’s driving the change in median sales price is in order.

Repeating the down and dirty analysis we outlined a year ago, if we rank order average District medians in August and September from low-cost to high-cost areas (considering condos and single-family homes as two distinct "Districts"), establish a median "District" or cutoff based on total transactions, and then compare the number of sales in Districts above and below said median we see a nominal 1% decrease in "low-cost" District sales versus a 10% increase in "high-cost" district sales.

Isolating single-family home and condo sales, we see a 23% decrease in "low-cost" district sales versus a 2% decrease in "high-cost" districts for single-family homes. And for condos it’s a 9% increase in "low-cost" districts versus a 22% increase in "high-cost" districts.

In other words, absent any change in underlying "prices," or even despite a decrease, the median sales price in San Francisco was bound to increase as the proportion (mix) of high-cost home sales increased.

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.

Is the bubble back? Median prices creeping up in San Francisco [SFGate]
SocketSite's San Francisco Listed Housing Inventory Update: 8/05/08 [SocketSite]

Posted by socketadmin at 3:15 PM | Permalink | Comments (33) | (email story)

October 30, 2009

One More Year! For Super Conforming Limits Assuming Obama Signs

As far as we know President Obama has yet to sign the bill, but congress has passed an extension of the $729,750 "super conforming" loan limit for high cost areas through the end of 2010. Considering the extension was attached to legislation without which most federal agencies will have to shut down by midnight tomorrow, we’re guessing it’s signed.

Congress Passes Stopgap Funding Plan, Higher Mortgage Limits [Bloomberg]
If Lowering Rates Isn’t Working, Perhaps Increasing Limits Will [SocketSite]

Posted by socketadmin at 3:00 PM | Permalink | Comments (16) | (email story)

October 26, 2009

Whether Or Not Credits Moved The SF Market, Phase Out Hits Home

A House Response To Rising Unemployment (And Lobbyists) [SocketSite]
Nelson Says Senate to Extend, Reduce Homebuyer Credit [Bloomberg]
U.S. Stocks Retreat on Concern Housing Tax Credit to Phase Out [Bloomberg]

Posted by socketadmin at 1:00 PM | Permalink | Comments (21) | (email story)

October 21, 2009

Take Two To Stimulate New-Home Purchases In California

"Last week, the California Senate passed a bill 35-1 that would provide $30 million in tax credits to about 4,000 additional new-home purchases [up to $10,000 a piece]. The bill now moves to the Assembly floor, which could take it up as early as Monday."

New-home buyers' tax credit may return, briefly [SFGate]

Posted by socketadmin at 2:30 PM | Permalink | Comments (4) | (email story)

October 16, 2009

Lending Standard Changes On The Way Or In The Works

The Mark Company provides a nice overview of lending standard changes in the works or on the way for Fannie Mae and FHA in general, and a few local lenders in specific, including a reminder that the "jumbo conforming" limit of $729,750 is once again set to expire at the end of this year (at which time it would return to $625,500).

TMC Lender Update – Q4 2009 (pdf) [themarkcompany.com]
If Lowering Rates Isn’t Working, Perhaps Increasing Limits Will [SocketSite]

Posted by socketadmin at 11:00 AM | Permalink | Comments (17) | (email story)

October 14, 2009

Party Like It’s 1999: Dow Crosses 10,000 For The First Time In A Year

While unemployment in San Francisco crossed the ten mark in August (10.1%), today the Dow crossed its ten mark (10,000) for the first time in a year. And which it first did in 1999.

San Francisco County Unemployment Up To 10.1 Percent In August [SocketSite]

Posted by socketadmin at 11:50 AM | Permalink | Comments (15) | (email story)

October 8, 2009

A House Response To Rising Unemployment (And Lobbyists)

“There’s under consideration whether we extend the first-time homeowners’ credit,” Pelosi, a California Democrat, told reporters today in Washington. “And the question is, would that be just first-time homeowners or would you open it up to other purchasers of homes?”

House to Consider Extending Home-Buyer Tax Credit [Bloomberg]
$15,000 Homebuyer Tax Credit Cut, Conforming Loan Limits Restored [SocketSite]

Posted by socketadmin at 12:00 PM | Permalink | Comments (23) | (email story)

October 2, 2009

We Have A 310 Townsend (#303) In Progress

310 Townsend #303

Originally asking $957,000 through the sales office in 2007, 310 Townsend #303 ended up selling for $850,000 in November of that year (a discount of 11.2%). Back on the market today after a two year hold and asking $785,000 (7.6% below it purchase price, 18% under the developer’s original list).

Let’s call it an effective rent of around $4,000 per month for the one-bedroom plus den condo over the past two years not accounting for transaction costs or any capital loss (assuming a sale at asking). Call it closer to $9,200 per month if you do.

∙ Listing: 310 Townsend #303 (1/1) 1,136 sqft - $785,000 [MLS]
310 Townsend: Available And Selling [SocketSite]

Posted by socketadmin at 7:00 AM | Permalink | Comments (12) | (email story)

September 28, 2009

Record High Ratio Of Unemployed To Openings

At the end of 2001 US unemployed workers outnumbered job openings by a little over two to one, a ratio that climbed to almost three to one in 2003 but then fell to under two to one in 2004.

According to the New York Times and Bureau of Labor Statistics the ratio is currently six to one and climbing.

And while we don't have the ratio for San Francisco (tipsters?), San Francisco unemployment has reached double digits (10.1%) and a twenty-five year high.

U.S. Job Seekers Exceed Openings by Record Ratio [NYT]
San Francisco County Unemployment Up To 10.1 Percent In August [SocketSite]

Posted by socketadmin at 6:10 AM | Permalink | Comments (5) | (email story)

September 25, 2009

U.S. New Home Sales Climb On Discounts And Foreclosures

“Sales of new U.S. homes climbed in August to the highest level in almost a year as builders cut prices at a record pace to compete with the foreclosures that are flooding the market for previously owned houses.”

New-Home Sales in U.S. Climb to Almost One-Year High [Bloomberg]

Posted by socketadmin at 8:15 AM | Permalink | Comments (10) | (email story)

September 21, 2009

San Francisco County Unemployment Up To 10.1 Percent In August

Preliminary August labor force data counts for San Francisco, Marin and San Mateo counties puts the unemployment rate at 10.1%, 8.3% and 9.2% respectively, up 0.2 percentage points in San Francisco and San Mateo and up 0.1 percentage points in Marin from June.

The 10.1% unemployment rate for San Francisco represents a new 25 year high.

The number of unemployed in San Francisco increased by 800 from 44,800 to 45,600 in August while the number of employed decreased by 3,000 (from 409,300 to 406,300) as the labor force decreased by 2,100 (from 454,100 to 452,000).

Overall California unemployment held steady at 12.1% percent in July.

Monthly Labor Force Data for Counties: August 2009 (Preliminary) [EDD]
San Francisco County Unemployment Up To 9.9 Percent In July [SocketSite]

Posted by socketadmin at 5:00 AM | Permalink | Comments (36) | (email story)

September 9, 2009

How A Mere Ten Percent Drop Becomes A Hundred Plus Percent Loss

From Bloomberg's story about a spike in "wealthy individuals’" bankruptcy filings related to real estate:

“Real estate is an incredible thing on the downside,” said Jason Green, a bankruptcy attorney based in Washington. “Equities can only go to zero. Property can go well below zero,” because of expenses such as property taxes, insurance and maintenance on primary residences, vacation homes and investment properties.

And then there's that oft touted leverage. Oh, and if we’re not mistaken the image that accompanies Bloomberg’s story looks rather local and familiar.

Wealthy Families Face Bankruptcy on Real Estate Crash [Bloomberg]

Posted by socketadmin at 8:45 AM | Permalink | Comments (8) | (email story)

September 4, 2009

U.S. Unemployment At 9.7 Percent, Two Tenths Below San Francisco

"The pace of U.S. job losses slowed in August as signs emerged that the recession is ending, while the unemployment rate reached a 26-year high [9.7%]....A rising jobless rate, stagnant wages and falling home values signal a lack of consumer spending may curb an economic recovery."

U.S. Payroll Losses Slow, Unemployment Rises to 9.7% [Bloomberg]
San Francisco County Unemployment Up To 9.9 Percent In July [SocketSite]

Posted by socketadmin at 8:15 AM | Permalink | Comments (10) | (email story)

August 21, 2009

San Francisco County Unemployment Up To 9.9 Percent In July

Preliminary July labor force data counts for San Francisco, Marin and San Mateo counties puts the unemployment rate at 9.9%, 8.2% and 9.0% respectively, up 0.1 percentage points for San Francisco and San Mateo and up 0.2 percentage points in Marin from June.

The 9.9% unemployment rate for San Francisco represents a new 25 year high.

The number of unemployed in San Francisco increased by 700 from 44,100 to 44,800 in July while the number of employed increased by 3,500 (from 405,800 to 409,300) as the labor force increased by 4,200 (from 449,900 to 454,100).

According to the State of California versus the Labor Department, overall California unemployment has broken through the 12 percent mark (12.1% percent in July).

Monthly Labor Force Data for Counties: July 2009 (Preliminary) [EDD]
San Francisco County Unemployment Jumps To 9.8 Percent In June [SocketSite]
It’s Funny What Happens When People Are Forced To Sell, They Do [SocketSite]

Posted by socketadmin at 9:45 AM | Permalink | Comments (8) | (email story)

August 10, 2009

Will It Or Won't It, You Make The Call On A Commercial Backed Crisis

"Commercial property is “certainly going to be a significant drag” on growth, said Dean Maki, a former Fed researcher who is now chief U.S. economist in New York at Barclays Capital Inc., the investment-banking division of London-based Barclays Plc. “The bigger risk from it would be if it causes unexpected losses to financial firms that lead to another financial crisis.”"

Fed Focusing on Real-Estate Recession as Bernanke Convenes FOMC [Bloomberg]

Posted by socketadmin at 8:00 AM | Permalink | Comments (8) | (email story)

August 7, 2009

It's Not Often A 9.4 Percent Jobless Rate In The U.S. Is Bullish News

U.S. payrolls fell by 247,000 in July versus a 443,000 loss in June, and the jobless rate dropped from 9.5% to 9.4% as the labor force contracted. July labor force counts for San Francisco will be out in a week with June at 9.8% unemployed.

San Francisco County Unemployment Jumps To 9.8 Percent In June [SocketSite]

Posted by socketadmin at 8:30 AM | Permalink | Comments (15) | (email story)

August 4, 2009

U.S. Pending Home Resales Up, U.S. Personal Incomes Down

Pending sales of existing U.S. homes are up while personal incomes are down. As previously outlined, locally a lot will likely come down to (un)employment.

Pending Sales of Existing Homes in U.S. Surge 3.6% [Bloomberg]
U.S. Incomes Fall 1.3%, Biggest Drop in Four Years [Bloomberg]
San Francisco County Unemployment Jumps To 9.8 Percent In June [SocketSite]

Posted by socketadmin at 11:30 AM | Permalink | Comments (4) | (email story)

July 29, 2009

Beige Book Results: Real Estate and Construction Remain Weak

The Real Estate and Construction summary from the latest Federal Reserve regional business survey (a.k.a. The Beige Book) for the twelfth district ("San Francisco"):

Conditions in District housing markets remained very weak but showed further signs of improvement, while demand for commercial real estate continued to erode. Sales prices for new and existing homes fell further in most parts of the District, and home construction activity remained at very low levels. Combined with low mortgage rates, however, price declines have propelled a sustained pickup in the pace of home sales in many areas.

Demand for commercial real estate fell further, and with rising vacancy rates, tenants have successfully been requesting rent concessions and other new terms on existing leases. Construction activity for commercial properties also continued to fall, and contacts noted that a lack of available credit remained a constraint for construction activity and investment transactions in some areas.

To summarize the summary, residential sales volume is up on falling prices and commercial is getting squeezed. Nothing that should catch a plugged-in person by surprise.

Federal Reserve: Beige Book Twelfth District Summary (7/29/09) [federalreserve.gov]

Posted by socketadmin at 12:30 PM | Permalink | Comments (26) | (email story)

July 17, 2009

San Francisco County Unemployment Jumps To 9.8 Percent In June

Preliminary June labor force data counts for San Francisco, Marin and San Mateo counties puts the unemployment rate at 9.8%, 8.0% and 8.9% respectively, up 0.7 percentage points for San Francisco and up 0.5 percentage points Marin and San Mateo in May.

The 9.8% unemployment rate for San Francisco in June represents a new 25 year high.

The number of unemployed in San Francisco increased by 3,300 from 40,800 to 44,100 in June while the number of employed fell by 1,300 (from 407,100 to 405,800) as the labor force increased by 1,900 (from 448,000 to 449,900), a net loss of 5,100 over the past three months.

Monthly Labor Force Data for Counties: June 2009 (Preliminary) [EDD]
San Francisco County Unemployment Up To 9.1 Percent In May '09 [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (21) | (email story)

July 16, 2009

California $10,000 Tax Credit Pool For New Home Buyers Closed July 3

With $58,355,593 of tax credits already allocated, $101,638,616 in credits claimed, and 1,505 applications in a back-up position, the California Franchise Tax Board has stopped accepting applications for $10,000 tax credits for new home buyers in California.

California Tax Credit For New Home Buyers [ca.gov]

Posted by socketadmin at 11:30 AM | Permalink | Comments (2) | (email story)

San Francisco Real Estate Barometer: Three Negatives And A Neutral

San Francisco Economic Barometer - May 2009

According to San Francisco’s latest Economic Barometer, the average asking rent for one-bedrooms in the city fell 6.3% from April to May and is down 15.4% year-over-year while the commercial average asking lease rate has fallen 30.6% year-over-year.

The City’s five-year position for Median Home Sales Price (currently "neutral") and Commercial Average Asking Lease Rate (currently "negative"): "weak" on rising unemployment.

San Francisco Monthly Economic Barometer - May 2009 [SFGov]
San Francisco County Unemployment Up To 9.1 Percent In May '09 [SocketSite]

Posted by socketadmin at 10:00 AM | Permalink | Comments (13) | (email story)

July 14, 2009

When Arms Length Appraisals Are "Too Far" Away

"Major real estate groups are pushing for a moratorium on new appraisal standards that they say are scuttling sales, hampering refinancings and depressing prices at a time when the sector desperately needs a boost."

Bill would suspend new home appraisal standards [SFGate]
Loan Officers Forced To Play The Field Rather Than Pick Their Horse [SocketSite]
Fannie And Freddie Forced Aim To Help Fix Appraisal Fraud [SocketSite]

Posted by socketadmin at 7:45 AM | Permalink | Comments (42) | (email story)

July 10, 2009

Note to Short Sellers (And Their Agents): Read The Fine Print

From the San Francisco Business Times:

The rising tide of “short sales” by troubled home owners facing foreclosure is prompting lenders to become more aggressive in their attempts to pursue former homeowners for their loan losses in a short sale. In a short sale, a house is sold, with a lender’s approval, for an amount that won’t pay off the mortgages on the property.
Often, the troubled home owner assumes the loss will be eaten by the lender. But Bank of America and Chase have quietly added language in their short-sale agreements that require the borrower to sign a promissory notefor the shortfall.
A spokesman for the American Bankers Association said this week that he wasn’t aware of the practice, suggesting how little attention has been paid so far to collection of these notes from troubled borrowers.
BofA says its intention is to protect investors holding the mortgages.

Damn those greedy lenders.

Sellers owe balances after short sales [San Francisco Business Times]

Posted by socketadmin at 12:30 PM | Permalink | Comments (55) | (email story)

July 9, 2009

JustQuotes: Mortgage Rate Update

"The average 30-year rate dropped to 5.2 percent from 5.32 percent, mortgage buyer Freddie Mac of McLean, Virginia, said today....The 15-year rate averaged 4.69 percent."

U.S. Mortgage Rates Drop to 5.2%, Freddie Mac Says [Bloomberg]

Posted by socketadmin at 7:30 AM | Permalink | Comments (36) | (email story)

July 6, 2009

QuickLinks: Thank Goodness That Foreclosure Crisis Is Over…

New Evidence on the Foreclosure Crisis [WSJ]
Another wave of foreclosures is poised to strike [LA Times]
A New All-Time High (Or Rather Low) For U.S. Prime Delinquencies [SocketSite]

Posted by socketadmin at 11:00 AM | Permalink | Comments (6) | (email story)

July 3, 2009

Full Taxation On Your Location? (The Great Proposition 13 Debate)

"No taxation without representation" was the catchy and quite effective battle cry back then. While today’s "Close The Loophole" by San Francisco Assessor-Recorder Phil Ting simply doesn’t have the same ring.

We’ve been saving the topic for this long weekend which seems especially well suited for a Proposition 13 discussion and debate. Bonus points for a better slogan.

Phil Ting: Close The Loophole [philting.com]

Posted by socketadmin at 1:00 PM | Permalink | Comments (118) | (email story)

July 1, 2009

Fannie And Freddie Boost Their LTV Limits As The Waters Deepen

"Fannie Mae and Freddie Mac will begin refinancing mortgages with loan-to-value ratios of as much as 125 percent," up from the current 105 percent limit in a bid boost participation in anti-foreclosure programs.

But the basic question of whether or not a significant enough number of underwater borrowers will manage to qualify for said refinancing to slow the slide remains.

Fannie, Freddie to Refinance Larger Underwater Loans [Bloomberg]

Posted by socketadmin at 1:45 PM | Permalink | Comments (18) | (email story)

June 30, 2009

A New All-Time High (Or Rather Low) For U.S. Prime Delinquencies

The delinquency rate for prime mortgages over 60 days behind continued to climb from 2.4% in the fourth quarter of 2008 to 2.9% through March 31, 2009 (up from 1.1% at the same point in 2008) as "first-time foreclosure filings on [prime] loans rose 22 percent from the fourth quarter."

The delinquency rate for prime mortgages in the U.S. has hit a new all-time high (or perhaps low). And overall, "mortgages 60 days or more past due rose 88 percent from last year." You know, when it was simply a subprime problem.

U.S. Prime Delinquency Rate Doubles, Alt-A Approaches 10% [SocketSite]
Delinquencies Double on Least-Risky Loans, U.S. Says [Bloomberg]

Posted by socketadmin at 11:00 AM | Permalink | Comments (13) | (email story)

June 29, 2009

Past Performance Recoveries Are No Guarantee Of Future Results

"The residential real estate market improved ahead of the end of the past seven contractions, with home construction starts beginning to climb an average of seven months before gross domestic product picked up and sales gaining about four months in advance, according to data compiled by David Berson, chief economist of PMI Group, a mortgage insurer in Walnut Creek, California."

Housing in Peril as Obama Fails to Get Financing Breakthrough [Bloomberg]

Posted by socketadmin at 8:00 AM | Permalink | Comments (2) | (email story)

June 26, 2009

Will SWL 337 Or SWL 351 Meet The Same Fate As Transbay Block 8?

"With many developers predicting that highrise development of any sort won’t work economically [in San Francisco] for another five years, public agencies are struggling with a development model in which private builders pay for the right to develop valuable land and, in the process, bankroll public benefits like parks, roads and affordable housing."

Real estate slump threatens projects [San Francisco Business Times]
Transbay Block 8: No Deal Or Development In 2009 [SocketSite]
San Francisco SWL 337 Proposal: Downsized And Drawn Out [SockeSite]
Cosmic Development Karma For San Francisco's Seawall Lot 351? [SocketSite]

Posted by socketadmin at 5:45 AM | Permalink | Comments (3) | (email story)

June 23, 2009

QuickLinks: A Foreclosure Triptych

Home Resales in U.S. Rise 2.4% in May to 4.77M Rate Amid Foreclosures [Bloomberg]
U.S. Home Prices Drop 6.8 Percent in April as Foreclosures Rise [Bloomberg]
Housing Eludes Recovery as Job Losses, Foreclosures Climb [Bloomberg]

Posted by socketadmin at 7:30 AM | Permalink | Comments (3) | (email story)

June 19, 2009

San Francisco County Unemployment Up To 9.1 Percent In May '09

Preliminary May labor force data counts for San Francisco, Marin and San Mateo counties puts the unemployment rate at 9.1%, 7.5% and 8.4% respectively, up 0.3 percentage points from April across the board.

The 9.1% unemploment rate for San Francisco in May represents a new 25 year high.

Extending the observations of a plugged-in reader last month, the number of unemployed in San Francisco increased by 1,000 from 39,800 to 40,800 in May while the number of employed fell by 5,800 (from 412,900 to 407,100) as the labor force fell by 4,800 (from 452,800 to 448,000), a loss of 7,000 over the past two months.

Monthly Labor Force Data for Counties: May 2009 (Preliminary) [EDD]
San Francisco County Unemployment Dips To 8.8 Percent In April '09 [SocketSite]

Posted by socketadmin at 11:00 AM | Permalink | Comments (44) | (email story)

June 11, 2009

Mortgage Rates Continue To Climb (And It's All The Russians' Fault)

The average 30-year U.S. mortgage rate bumped up 30 basis points over the past week to 5.59 percent, a 68 basis point jump over the past two weeks. Of course we're kidding about it being all the Russians' fault, but they do come into play.

Mortgage Rates in U.S. Rise to Highest Since November [Bloomberg]
A Six Month High For Mortgage Rates (But Still Historically Cheap) [SocketSite]
BRICs Buy IMF Debt to Join Big Leagues, Goldman Says [Bloomberg]

Posted by socketadmin at 3:00 PM | Permalink | Comments (16) | (email story)

June 4, 2009

A Six Month High For Mortgage Rates (But Still Historically Cheap)

"Fixed U.S. mortgage rates jumped to the highest level this year, signaling the Federal Reserve’s plan to lower borrowing costs has stalled. The average 30-year rate rose to 5.29 from 4.91 percent a week earlier...The last time the rate was higher was Dec. 11, when it was 5.47 percent. The average 15-year rate rose to 4.79 percent from 4.53 percent."

U.S. Mortgage Rates Jump to Highest Since December [Bloomberg]
It's Like The Fed (And Taxpayers) Just Bought You A Couple Of Points [SocketSite]

Posted by socketadmin at 9:15 AM | Permalink | Comments (13) | (email story)

May 28, 2009

JustQuotes: While Buyers Don't Defaults Do (Move Up)

"The inventory of new and old [U.S. Mortgage] defaults rose to 3.85 percent, the MBA said today. Prime fixed-rate mortgages given to the most creditworthy borrowers accounted for the biggest share of new foreclosures at 29 percent, and prime adjustable-rate mortgages were 24 percent, [Jay Brinkmann, the MBA’s chief economist] said. It shows the mortgage problem has shifted from a subprime issue to a job-loss problem..."

Mortgage Delinquencies, Foreclosures, 30-Year Rates Increase [Bloomberg]
San Francisco County Unemployment Dips To 8.8 Percent In April '09 [SocketSite]
SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]

Posted by socketadmin at 8:15 AM | Permalink | Comments (24) | (email story)

May 22, 2009

San Francisco County Unemployment Dips To 8.8 Percent In April '09

Preliminary April labor force data counts for San Francisco, Marin and San Mateo counties puts the unemployment rate at 8.8%, 7.2% and 8.1% respectively, down 0.2 percentage points from March across the board.

The 9.0% unemploment rate for San Francisco in March represented a 25 year high.

UPDATE: A plugged-in reader adds:

There is an interesting detail on the SF numbers. The number of unemployed in SF fell by 1000 from 40,800 to 39,800. But the number of employed fell by 1300 from 414,200 to 412,900. And the number in the "labor force" fell by 2800, from 455,000 to 452,800.
Looks like a few thousand workers packed up and left SF last month. Re the housing market, easing unemployment would certainly be good, but a smaller workforce would not.

Monthly Labor Force Data for Counties: April 2009 (Preliminary) [EDD]
San Francisco County Unemployment Hits 9.0 Percent In March [SocketSite]

Posted by socketadmin at 12:00 PM | Permalink | Comments (15) | (email story)

May 15, 2009

QuickLinks: Signs Of Bay Area Economic Life (And Discounts)

Bay Area economy shows signs of life [Business Times]
Spike in San Francisco condo sales may signal comeback [Business Times]

Posted by socketadmin at 5:00 AM | Permalink | Comments (35) | (email story)

May 4, 2009

California Income Tax Revenue Drops 44% In April (Year-Over-Year)

"They just posted the [California Income Tax Tracker] results for April 30. For the full month of April, income tax receipts were $7.336B. For April 2008, the total was $12.995B. This is a 44% decline. The fiscal YTD is down 20%. I suspect that the April numbers reflect actual tax returns that show lower incomes and more refunds than April 2008. But it also must indicate that wages/incomes are dropping at an accelerating pace."

California Personal Income Tax Daily Revenue Tracker [ca.gov]

Posted by socketadmin at 4:10 PM | Permalink | Comments (32) | (email story)

April 30, 2009

JustQuotes: SocketSite Says...The Senate Gets One Right (So Far)

"The U.S. Senate rejected legislation letting U.S. bankruptcy judges cut mortgage terms to help borrowers avoid foreclosure, a victory for banks and credit unions that said the measure would lead to higher loan costs."

Senate Defeats Mortgage ‘Cram-Down’ as Democrats Balk [Bloomberg]

Posted by socketadmin at 2:00 PM | Permalink | Comments (47) | (email story)

April 17, 2009

San Francisco County Unemployment Hits 9.0 Percent In March 2009

San Francisco MSA Unemployment Rate Historical Trend: 2007-2009

The unemployment rate for San Francisco County has moved from 6.5% in December, to 8.0% in January, to 9.0% in March. The unemployment rate for the San Francisco MSA hit 8.5% in March (up from 7.5% in January) with Marin at 7.4% and San Mateo at 8.3%.

Monthly Labor Force Data for Counties: March 2009 - Preliminary [EDD]
Unemployment In The San Francisco MSA Ticks Up To 7.5% [SocketSite]

Posted by socketadmin at 10:30 AM | Permalink | Comments (88) | (email story)

April 8, 2009

Co-opting A Reader’s Comment: Our Commercial Market Decline

As a plugged-in reader commented and we’ve now co-opted, San Francisco’s commercial real estate market continues its decline. A few stats from Bloomberg:

San Francisco office rents dropped 24 percent in the first quarter from a year earlier, the biggest decline since the dot-com crash in 2001.
The office vacancy rate rose to 13.2 percent from 12.6 percent in the previous quarter and up from 10.2 percent a year earlier.
Almost half of the largest companies in the San Francisco Bay Area plan to cut staff in the next six months.

Not good. Unless, of course, you’re a renter looking to expand or renegotiate a lease.

San Francisco Office Rents Fall Most Since 2001 [Bloomberg]
Doesn't Everybody Want To Work Here? (Class A Rents Plunge) [SocketSite]

Posted by socketadmin at 1:30 PM | Permalink | Comments (6) | (email story)

Effective San Francisco MSA Residential Rents Lead U.S. Decline

Effective residential rents in large apartment buildings in the San Francisco MSA declined 2.8% in the first quarter of 2009, the sharpest recorded decline amongst the top 79 U.S. markets. New York recorded a 2.6% decline to take second place and San Jose a 2.5% drop to take third.

According to San Francisco Apartments Association Executive Director Janan New by way of the Examiner, "rents have dropped most in the Marina, Russian Hill and Telegraph Hill neighborhoods, and least in Mission and Inner Sunset."

As outlined in our 2009 residential real estate outlook in January, we expect to see rents in San Francisco continue to drop throughout 2009.

Landlords See a Jump in Vacancy Rates Even as Rents Drop [WSJ]
Bay Area rents fall more than any U.S. region [Examiner]
SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (60) | (email story)

A Non-Planning Related Shadow Study: Unaccounted For Foreclosures

Chronicle Chart: Bay Area Shadow Inventory (Image Source: sfgate.com)

Carolyn Said takes a stab a calculating the Bay Area's "shadow inventory" of foreclosure homes - propeties that have already been foreclosed upon but have not yet been registered in county records as having been resold.

For the 26 months from January 2007 through February 2009, banks repossessed 51,602 homes and condos in the nine-county Bay Area, according to DataQuick. Yet in the same period, only 30,823 foreclosures were resold, leaving about 20,000 bank repos unaccounted for.

The county with the highest percentage of unaccounted for foreclosures? According to the Chronicle that would be San Francisco with 50.2% unsold versus an average of 34.5% for the Bay Area as a whole.

UPDATE: As noted, according to the Chronicle’s analysis 50.2% of properties that have been foreclosed upon in San Francisco from January of 2007 through February of 2009 remain unsold and constitute "shadow inventory."

Based on our back of the envelope calculations, roughly 750 properties in San Francisco County became bank owned during that 26 month stretch. And as such, the Chronicle’s methodology would suggest around 375 bank owned units are unaccounted for.

At least 69 of those bank owned properties, however, are accounted for and currently listed for sale in San Francisco. And while 69 is not 375, it is a swing of roughly nine percentage points in terms of the percentage San Francisco foreclosure inventory that's out in the open versus possibly lurking behind. No update for the Bay Area as a whole.

Banks aren't reselling many foreclosed homes [SocketSite]

Posted by socketadmin at 7:30 AM | Permalink | Comments (39) | (email story)

April 1, 2009

A Plugged-In Perspective On The Local Economics Of Medicine

A plugged-in reader’s perspective on the local economics of medicine:

I wanted to comment on the economic decline and which groups are affected. Some sources talk about the medical field being unaffected, but this just isn't true. I'm finishing my specialty training in 2 months, and I can tell you that all of the specialty fellows, GI, Cardiology, Nephrology, Pulmonary, etc. are having trouble finding jobs.
The graduating residents are running into the same thing. The larger employers, like the University of California system and Kaiser, have implemented hiring freezes in a lot of their departments. This applies to support staff as well (nurses, resp therapists, etc), not just MD's. The smaller private groups seem to be doing the same, just not announced "official" freezes. A lot of the older docs are also not retiring to make up for all the money they've lost recently in their 401k's. This increased physician "supply" is also dampening the overall salaries as well.

The relevancy to local real estate? Earnings, wealth and perception. Okay, and a chance to get our Case-Shiller discussion back on track.

January S&P/Case-Shiller: San Francisco MSA Decline Accelerates [SocketSite]
JustQuotes: FIFO Not LIFO For The San Francisco Economy? [SocketSite]

Posted by socketadmin at 10:45 AM | Permalink | Comments (124) | (email story)

JustQuotes: FIFO Not LIFO For The San Francisco Economy?

"[San Francisco] continues to struggle through an economic recession that has gutted revenue from property taxes and other sources. [Mayor Gavin] Newsom said that property tax revenues, which had been climbing 11 percent every year, are now growing only about 1 percent year over year and economic forecasters said they don't anticipate that revenue will improve significantly any time soon. San Francisco was late to be hit by the recession, and may be late to recover from it, the report noted."

Report: S.F. deficit $750 million in 2011 [SFGate]

Posted by socketadmin at 7:30 AM | Permalink | Comments (36) | (email story)

March 27, 2009

The Dow Continues To Move (While 2170 Pacific Still Hasn’t)

2170 Pacifc

It’s at least the fourth time a listing for 2170 Pacific Avenue has touted "On Tour as New" and "1st OPEN!" Now asking $2,995,000 with an official one day on the market according to those industry stats.

Purchased on 5/27/2004 for $2,350,000. Once again, closing price for the Dow Jones Industrial Average on that day: 9,958. On October 10, 2008 when last listed at $3,250,000: 8,174. And currently: 7,787.

∙ Listing: 2170 Pacific Avenue (3/3.5) - $2,995,000 [MLS]
At Least Some Of The Photos Look To Be "New" As Well: 2170 Pacific [SocketSite]
It's Deja Vu (But Not DJIA) All Over Again: 2170 Pacific Avenue Edition [SocketSite]

Posted by socketadmin at 10:30 AM | Permalink | Comments (15) | (email story)

March 19, 2009

QuickLinks: The Fed Covers The B-52’s (Legal Tender)

‘Rambo Fed’ Will Buy Treasuries to Combat Crisis [Bloomberg]
Mortgage Rates May Fall to Lowest Since WWII on Fed Purchases [Bloomberg]
Dollar Rally Crumbles as Fed Ramps Up Printing Press [Bloomberg]

Posted by socketadmin at 8:00 AM | Permalink | Comments (31) | (email story)

March 18, 2009

From Coming Soon To On The Market To Up For Rent: 1391 Clayton

1391 Clayton on Craigslist

On the market last October asking $2,795,000 and then relisted in January for $100,000 less, 1391 Clayton has hit Craigslist as a rental asking $7,500 per month. We’ll let you run your own numbers, but be sure to show your work if you do.

∙ Listing: 1391 Clayton (4/4.5) - $2,695,000 [MLS]
$7500 / 4br - New Modern View Home [Craigslist]
From Coming Soon To On The Market And A Peek Inside: 1391 Clayton [SocketSite]
To Rent Or To Buy, That Is The Question (That Only You Can Answer) [SocketSite]

Posted by socketadmin at 9:00 AM | Permalink | Comments (12) | (email story)

March 6, 2009

U.S. Unemployment Joins San Francisco County In The 8% Club

While the preliminary unemployment rate in San Francisco County hit the 8.0% mark in January, in February it hit 8.1% nationally. From Bloomberg:

The U.S. unemployment rate jumped in February to 8.1 percent, the highest level in more than a quarter century, a surge likely to send more Americans into bankruptcy and force further cutbacks in consumer spending.
Employers eliminated 651,000 jobs last month, the Labor Department said today in Washington. Losses have now exceeded 600,000 for three straight months, the first time that’s happened since the data began in 1939.

Do not underestimate the impact of unemployment on real estate, the brunt of which we believe has yet to be seen.

U.S. Economy: Unemployment in U.S. Surged to 8.1% in February [Bloomberg]
Unemployment In The San Francisco MSA Ticks Up To 7.5% [Socketsite]
SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]

Posted by socketadmin at 9:45 AM | Permalink | Comments (5) | (email story)

March 5, 2009

Unemployment In The San Francisco MSA Ticks Up To 7.5%

From the Chronicle:

California officials say unemployment rates in the Bay Area jumped in January, reaching 9.4 percent in the San Jose area, 9.2 percent in the East Bay and 7.5 percent in San Francisco and vicinity.
The San Francisco metropolitan area, which includes Marin and San Mateo counties, experienced the mildest rise from December's 6.2 percent, and still has one of the lowest rates in the state.

And in related national news: Mortgage Delinquencies Rise to Record on Job Losses.

UPDATE: County level detail from a plugged-in reader:

Note that SF's unemployment rate is 8.0% (up from 6.5% in December) according to today's release. Marin and San Mateo counties' rates are lower, bring the MSA rate down. So we're "less bad" than the rest of the state, but that is a huge one-month leap.

Bay Area unemployment jumps higher [SFGate]
Mortgage Delinquencies Rise to Record on Job Losses [Bloomberg]

Posted by socketadmin at 12:45 PM | Permalink | Comments (22) | (email story)

March 4, 2009

Beige Book Results: Economic Conditions Continue To Deteriorate

From the latest Federal Reserve regional business survey (a.k.a. The Beige Book):

Reports from the twelve Federal Reserve Districts suggest that national economic conditions deteriorated further during the reporting period of January through late February. Ten of the twelve reports indicated weaker conditions or declines in economic activity; the exceptions were Philadelphia and Chicago, which reported that their regional economies "remained weak." The deterioration was broad based, with only a few sectors such as basic food production and pharmaceuticals appearing to be exceptions. Looking ahead, contacts from various Districts rate the prospects for near-term improvement in economic conditions as poor, with a significant pickup not expected before late 2009 or early 2010.

As we wrote in April of 2008 when the Twelfth District ("San Francisco") was showing weakness: what does economic activity have to do with real estate? We'll just pretend you didn't ask that question (if for some strange reason you did).

Federal Reserve Bank: Beige Book Summary (March 4, 2009) [federalreserve.gov]
Beige Book Results For The Twelfth District (San Francisco): Flat [SocketSite]

Posted by socketadmin at 12:00 PM | Permalink | Comments (8) | (email story)

March 3, 2009

Note To Daly (And Others): Let The Market Take Care Of Itself

From the City Insider:

Supervisor Chris Daly plans to introduce a series of new laws that's intended to help renters during these tough economic times -- a proposal that is likely to anger landlords.
The proposals include the suspension of any rent increases that would cause a tenant's rent to exceed one-third of their income; expansion of the rights of tenants who want to add roommates to help pay their rent; and limiting the amount of "banked" rent increases -- where annual rent increases allowed under city laws are saved up and then imposed at one time -- to 8 percent.

Our note to Daly (and others): stop introducing externalities and let the market take care of itself. If you let it, it will.

Help for SF renters could be on the way [SFGate]
San Francisco Rental Market Weakness: SocketSite Readers Report [SocketSite]

Posted by socketadmin at 3:15 PM | Permalink | Comments (57) | (email story)

U.S. Pending Home Resales Drop 7.7% In January, December Revised

The National Association of Realtors reports a 7.7% January drop in U.S. pending home resales and has revised their originally reported 6.3% gain in December down to 4.8%.

"There are just too many headwinds for homebuyers -- tight credit, mounting job losses and fears of further price declines," said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. "The housing market is showing no sign of a bottom. This could be the story for the first half of this year."

Sounds familiar. That being said, pending sales increased 2.4% in January for the West but driven by the sale of bank owned homes.

Pending U.S. Home Resales Slump More Than Forecast [Bloomberg]

Posted by socketadmin at 8:00 AM | Permalink | Comments (20) | (email story)

March 2, 2009

Buffet Calls Shenanigans Shambles (And The Dow Dips Below 7,000)

The Dow Jones Industrial Average has fallen below 7,000 for the first time since 1997 and Warren Buffet has eloquently predicted our economy will remain in "shambles" throughout 2009 (and "probably well beyond"). Now about our outlook...

Buffett Says Economy ‘In Shambles,’ Promises Best Days Ahead [Bloomberg]
SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]

Posted by socketadmin at 7:30 AM | Permalink | Comments (37) | (email story)

February 27, 2009

Downward Revisions: They're Not Just For NAR These Days

"[U.S. GDP] contracted at a 6.2 percent annual pace from October through December, more than economists anticipated and the most since 1982, according to revised figures from the Commerce Department today in Washington. Consumer spending, which comprises about 70 percent of the economy, declined at the fastest pace in almost three decades."

U.S. Economy Shrank 6.2% Last Quarter, Most Since ’82 [Bloomberg]
SocketSite’s Residential Real Estate Outlook For 2009 [SocketSite]

Posted by socketadmin at 5:45 AM | Permalink | Comments (13) | (email story)

February 26, 2009

The Bay Area "Jumbo Conforming" Foreclosure Bailout Amendment

"I've drafted an amendment [to President Obama's housing rescue plan] so that rather than being limited to whether the loan was conforming at time of origination, it will be based on (whether it's conforming at) the time of (modification), which will take the limit up to $729,750 in high-cost areas. This should make more people in the Bay Area eligible."

Speier plan would aid refinancing in Bay Area [SFGate]
The Bailouts Are Coming But Is The Bay Area Dying On The Vine? [SocketSite]

Posted by socketadmin at 5:40 AM | Permalink | Comments (59) | (email story)

February 18, 2009

The Bailouts Are Coming But Is The Bay Area Dying On The Vine?

The $787 billion Stimulus bill (including the restoration of higher conforming loan limits and the inclusion of a modified homebuyer tax credit) has been signed. The President is rolling out a $75 billion plan in an attempt to stem foreclosures. And GM is looking for another $16.6 billion to keep it afloat.

Through the eyes of one plugged-in Bay Area banker:

What I see as a banker really scares me. We are working with several exceptional technology companies (based in the valley of course) with excellent, cutting edge products that are very profitable. Many of them are running on fumes in terms of cash, and need money to invest in sales engineers, inventory, and development and test equipment (i.e. fund their growth). Us bankers are finding it nearly IMPOSSIBLE to find them even a small, conservative amount of financing they need to achieve their growth goals (including hiring [actual] employees at ~$100K/year). It is unprecedented. I'm talking about potential category leaders with a global market that runs into the billions who cannot get a few million dollars to fund some necessary investments. And yet there is somehow $800 billion dollars about to be pumped into propping up housing, backing bad debt, bailing out xyz, etc. Yet, the very engines that provided so much of the valley and American wealth are literally dying on the vine now.
It is a sad state of affairs and it has really [been] hitting home for me that the true engines of our economy are dying in front of us, yet all the media and politicians ever talk about is bailing out legacy auto companies that lost to Asia long ago and bad mortgages. Doesn't anyone remember how beneficial science, technology, innovation, and investment in advanced research and product development brought us so much wealth in the first place? Have we all given up on learning real skills and doing real work? (And before I get ripped for being a banker, I was an engineer and computer scientist who did primary research earlier in my career - paid my dues there.) This is a clear sign to me that both the Bay Area and the US in general is clearly in a great decline... How depressing.

Food for thought, ideas for debate, and if nothing else a framework to discuss the bailout dollars allocated to date.

$15,000 Homebuyer Tax Credit Cut, Conforming Loan Limits Restored [SocketSite]
Obama Sets $75 Billion Plan to Stem U.S. Foreclosures [Bloomberg]
GM Seeks as Much as $16.6 Billion in New U.S. Aid [Bloomberg]
SocketSite's San Francisco Listed Housing Update: 2/17/09 [SocketSite]

Posted by socketadmin at 8:00 AM | Permalink | Comments (38) | (email story)

February 17, 2009

SocketSite's San Francisco Listed Housing Update: 2/17/09

San Francisco Listed Inventory: 2/17/09 (www.SocketSite.com)

Inventory of Active listed single-family homes, condos, and TICs in San Francisco rose 13% over the past two weeks (versus an average of 1.7% for the same two weeks over the previous three years) and is now running 29.5% higher on a year-over-year basis (up 14.3% for single-family homes and 40.5% for condos/TICs).

Overall listed inventory is up 83% versus February of 2006 while listed sales have continued to trend down (a 49% drop in January versus 2006). Keep in mind that "listed" (or MLS based) inventory counts do not include the vast majority of units in new developments about town and neither do "listed" sales.

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: 2/02/09 [SocketSite]
Early January Listed Sales Results For San Francisco: Down 34% [SocketSite]

Posted by socketadmin at 10:30 AM | Permalink | Comments (81) | (email story)

February 11, 2009

Fannie Seeks To Stoke Demand By Increasing Limits For Investors

From Bloomberg:

Fannie Mae, the mortgage-finance company under U.S. government control, will no longer bar real- estate investors from qualifying for its loans if they already own four properties as it seeks to increase housing demand.
The company will expand its limit for investor and second- home loans to as many as 10 properties per borrower, according to a Feb. 6 notice to lenders on Washington-based Fannie’s Web site.

According to the new guidelines the borrower cannot have any history of bankruptcy or foreclosure within the past seven years, cannot have any delinquencies (30-day or greater) within the past 12 months on any mortgage loans, and must have a six month reserve (two months for some second homes).

Also nice to note, maximum loan to value ratios of 75% for one unit properties and 70% for multi-unit purchases.

Fannie to Expand Mortgage Rules for Realty Investors [Bloomberg]
Updates to Multiple Mortgages to the Same Borrower Policy (pdf) [Fannie Mae]

Posted by socketadmin at 1:45 PM | Permalink | Comments (16) | (email story)

February 6, 2009

Office Space For Sublease And Unemployment Up In San Francisco

From J.K. Dineen at the San Francisco Business Times with respect to office space:

San Francisco tenants unloaded another 250,000 square feet of unwanted office space onto the market in January, as employers slashed workers and pushed to generate sorely needed cash by subleasing floors in Class A downtown towers.
Companies adding to the avalanche of available sublease space include Charles Schwab, which said Jan. 30 that it would cut 500 to 600 jobs in the first quarter. Schwab is seeking a subtenant for 80,000 square feet at the 1 Montgomery Tower. Also in that building, Thomas Weisel Partners Group is looking to sublease 20,000 square feet on the 35th floor, billed as a “high-end build out with panoramic views.” Other chunks of sublease space coming available include 15,639 square feet of brand-new space at the just completed 555 Mission St. being subleased for $48 a square foot by law firm DLA Piper, and the entire 22nd floor of 345 California St., former UBS space that Cushman & Wakefield is looking to lease for five years at a rock-bottom $27 a square foot.

And with respect to San Francisco unemployment:

The number of unemployed San Francisco residents grew by 10,300 in the fourth quarter of 2008 to 29,500, according to Ted Egan, chief economist for the City of San Francisco. In spite of the fourth-quarter increase, Egan pointed out that the 10,000 jobs eliminated during the final three months of 2008 came in dribs and drabs rather than the sort of en masse layoffs announced in recent days by Charles Schwab and Macy’s, which announced 1,400 San Francisco layoffs on Feb. 1. A loss of 2 million square feet of occupied space equals about 10,000 workers.
“Now we are starting to see major layoffs from major employers,” said Egan. “This is the sign of the recession coming to San Francisco.”

Quarter-million square feet added to S.F. sublease glut [Business Times]
Jones Lang LaSalle Office Outlook For San Francisco And The Valley [SocketSite]
A Virtual Tour Of 555 Mission Street (And Downtown San Francisco) [SocketSite]

Posted by socketadmin at 7:15 AM | Permalink | Comments (1) | (email story)

The Good News: Stock Futures Rise. The Bad News: The Reason Why.

The good news, U.S. stock futures rose last night. The bad news, the reason why:

U.S. stock-index futures advanced on speculation a government report showing the highest unemployment rate since 1992 will force Congress to pass an economic stimulus package.

U.S. Stock Futures Rise on Optimism Jobs Data to Spur Stimulus [Bloomberg]
U.S. Jobless Rate Soars as Payrolls Plunge by 598,000 [Bloomberg]

Posted by socketadmin at 6:45 AM | Permalink | Comments (7) | (email story)

February 5, 2009

JustQuotes: A Safe Place To Discuss And Debate Mortgage Rates

"The average U.S. rate on a 30-year fixed mortgage rose this week, thwarting Federal Reserve efforts to cut borrowing costs, on investor concern the government will increase spending. The fixed rate increased to 5.25 percent from 5.10 percent last week...The 15-year fixed rate jumped to 4.92 percent from 4.8 percent."

Fixed Mortgage Rate Rises to 5.25%, Freddie Mac Says [Bloomberg]

Posted by socketadmin at 12:00 PM | Permalink | Comments (28) | (email story)

Proposed $15,000 Homebuyer Tax Credit Clears The U.S. Senate

A homebuyer tax credit of up to $15,000 has passed in the U.S. Senate. Unlike the current $7,500 tax credit for first-time buyers, as proposed this credit would be available to all buyers of primary residences and would not need to be repaid. Not unlike efforts to lower rates, if eventually signed into law it will be a nice bonus to buyers but we see it having little direct effect on boosting new demand (or prices) in San Francisco.

Posted by socketadmin at 8:30 AM | Permalink | Comments (23) | (email story)

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.

Posted by socketadmin at 7:30 AM | Permalink | Comments (91) | (email story)

November S&P/Case-Shiller: San Francisco MSA Down, Rate Levels

S&P/Case-Shiller Index Change: November 2008 (www.SocketSite.com)

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.

S&P/Case-Shiller Condo Price Changes: November 2008 (www.SocketSite.com)

And San Francisco MSA single-family home prices once again fell across all three price tiers.

S&P/Case-Shiller Index San Francisco Price Tiers: November 2008 (www.SocketSite.com)

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).

Home Price Declines Continue/Home Prices Indices Set New Record Annual Declines [S&P]
October S&P/Case-Shiller: San Francisco MSA Down Across The Board [SocketSite]

Posted by socketadmin at 7:00 AM | Permalink | Comments (84) | (email story)

January 26, 2009

123 Laidley: Same Sales Flair Now Available For Rent (And Analysis)

123 Laidley: View

As a plugged-in reader points out, the Jeremy Kotas re-designed 123 Laidley has gone the rental route. Now asking a "PRICE REDUCED" $5,550 per month.

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).

$5550 / 4br - PRICE REDUCED Stunning One-of-a-Kind Home in Noe Valley [Craigslist]
123 Laidley (To Which Jeremy Kotas Added A Bit Of Height And Flair) [SocketSite]

Posted by socketadmin at 6:45 PM | Permalink | Comments (25) | (email story)

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]

Posted by socketadmin at 6:30 PM | Permalink | Comments (6) | (email story)

January 22, 2009

It's Bigger Than Google But Not A Bad Starting Point (And Relevant)

The biotech discussion was too far along to parse it from the rest of the Palms discussion, but we will redirect a reader's no comment comment about Google:

No comments about Google today? Weird. It seems that for every company on the ropes there is at least one that is doing ok. How did they do it? Can they continue?

Also appears that a lot of companies in the valley, like Google, are taking steps to actually retain employees instead of shed them (option repricing). Although that usually resets the vesting period it can still do a lot for morale. Thoughts?

A SoMa/Palms Wake Up Call (And Apple): 555 4th Street #401 [SocketSite]
Google Profit Tops Estimates as Web-Ad Sales Rise [Bloomberg]
The Google Chart Of The Day (And A Bit More Foreshadowing) [SocketSite]

Posted by socketadmin at 2:40 PM | Permalink | Comments (52) | (email story)

January 20, 2009

JustQuotes: While Treasury Rates Drop, Risk Premiums Rose

"Thirty-year, fixed-rate mortgages averaged 4.96 percent last week, according to McLean, Virginia-based mortgage finance company Freddie Mac, or 2.64 percentage points more than 10-year Treasuries. Before the credit markets began to seize up in the second half of 2007, the difference averaged about 1.78 percentage points since the start of the decade."

Treasury Yields Flattened as Fed Fights to Cut Mortgage Rates [Bloomberg]
That TED Sure Is A Funny Fellow (And Worth Keeping An Eye On) [SocketSite]

Posted by socketadmin at 8:15 AM | Permalink | Comments (51) | (email story)

January 14, 2009

One Rincon Hill (425 First Street): Rental Market Stumbling As Well?

425 1st Street #1802

Following in the footsteps of its “massive price reduction!!!” in December (originally asking $1,399,000, currently asking $999,900), the asking rent for 425 1st Street #1802 has been reduced to $4,200 per month as well (once asking $5,250).

Don’t forget to update those assumptions on your valuation/rent versus buy worksheets.

One Rincon Hill (425 First Street): Secondary Market Stumbles [SocketSite]
∙ Listing: 425 1st Street #1802 (2/2) - $999,900 [MLS]
$4200 / 2br - PRIME VIEW AT ONE RINCON HILL - RENT REDUCED [Craigslist]
Four Floors Lower, But Asking One Hundred And Fifty Thousand Less [SocketSite]

Posted by socketadmin at 8:45 AM | Permalink | Comments (104) | (email story)

January 13, 2009

That TED Sure Is A Funny Fellow (And Worth Keeping An Eye On)

"The difference between the London interbank offered rate, or Libor, that banks say they charge each other for three-month loans in dollars and the yield on the three-month Treasury bill, fell 12 basis points to 98 basis points today. The so-called TED spread last closed below 100 basis points Aug. 15. Dollar Libor dropped to 1.09 percent today, the lowest level since June 2003."

"The three-month dollar Libor is still 84 basis points above the Federal Reserve’s target, compared with an average of 12 basis points in the year before the crisis began. The spread was 332 basis points on Oct. 10, less than a month after the collapse of Lehman Brothers Holdings Inc."

TED Spread Narrows to Least in Five Months as Credit Eases [Bloomberg]

Posted by socketadmin at 7:15 AM | Permalink | Comments (2) | (email story)

January 6, 2009

But Hey, What's The Bay Area Economy Have To Do With Real Estate?

"For all of 2008, just six venture-backed companies made their public debut, the worst showing since 1977 when there were also just six VC-backed companies that went public. Preliminary figures show just 260 M&A transactions last year, the first year since 2003 that were less than 300 venture-backed acquisitions.

Venture capitalists unable to cash in on their investments spells big trouble for the entire venture community and the broader Bay Area economy. The venture business is an engine of growth in the Bay Area, which traditionally gets about a third of all venture dollars invested."

Venture-backed IPOs last year hit 30-year low [San Francisco Business Times]
Sequoia’s Take On The New New (And Quite Local) Economy [SocketSite]
From Underwater To Unemployed (And Sorry, But It’s Just Starting) [SocketSite]

Posted by socketadmin at 6:45 AM | Permalink | Comments (110) | (email story)

JustQuotes: Can You Say Risk/Default Premium?

"Federal Reserve officials are focused on driving down the spreads between U.S. Treasury yields and consumer and corporate loans, after cutting the main interest rate to almost zero failed to revive lending.

Credit costs for households and businesses haven’t followed yields on government debt lower. Fifteen-year fixed-rate mortgages were at 5.06 percent last week, 2.59 percentage points above 10-year Treasury yields; the spread averaged 0.88 point in 2003, when the Fed slashed rates to 1 percent."

Fed Focuses on Consumer, Corporate Rate Spreads Over Treasuries [Bloomberg]

Posted by socketadmin at 5:00 AM | Permalink | Comments (7) | (email story)

January 5, 2009

Mortgage Rate And Driver(s) Update: January 5, 2009

A quick mortgage rate update from Julian Hebron at RPM mortgage:

Rates open the first full week of the year about the same as they were leading into the holidays. A good 30yr fixed rate target for loans up to $417k is 5% or below, and the target for loans up to $625k is around 5.25%. For loans up to $417k and $625k, we’re close to those targets. Rates for loans from $625k to $1m are mid-6% range.
The Fed announced just before New Year’s that they’ve hired outside money managers to run their $500 billion mortgage bond purchase program and that it will start in January. We’ll likely see another update on timing this week. When that purchasing starts, it will drive bond prices up and rates down. [Editor's Note: They've started.]
The biggest news this week is Friday’s jobs report for December, which calls for 475,00 lost jobs and unemployment going from 6.7% to 7%. And this doesn’t even include post-holiday retail worker layoffs that won’t be captured until next month. It would mark 12 straight months of job losses and about 2.5m jobs lost for 2008. This news can cause rates to drop as investors dump stocks and buy bonds.

UPDATE (1/6): "Longer-term Treasuries fell for a fourth day, pushing yields on 10-year notes to the highest in three weeks, as concern the U.S. will sell record amounts of debt drove investors from the safety of government securities."

All Your Home Loans Are Belong To Us (To Boost Liquidity) [SocketSite]
Treasuries Drop Amid Concern U.S. to Sell Record Amount of Debt [Bloomberg]

Posted by socketadmin at 11:45 AM | Permalink | Comments (13) | (email story)

All Your Home Loans Are Belong To Us (To Boost Liquidity)

"The Federal Reserve Bank of New York started buying mortgage-backed securities today as part of a $500 billion program to support the U.S. housing market."

New York Fed Begins Purchases of Agency Mortgage Debt [Bloomberg]

Posted by socketadmin at 6:15 AM | Permalink | Comments (2) | (email story)

December 23, 2008

JustQuotes: Forget The Hopes, It's Time For Prayer

"Sales of single-family houses in the U.S. dropped in November by the most in two decades and resale prices collapsed at a pace reminiscent of the Great Depression, dashing hopes that the market was close to a bottom."

U.S. Economy: Housing Prices Collapse at Near-Depression Pace [Bloomberg]

Posted by socketadmin at 10:15 AM | Permalink | Comments (69) | (email story)

December 17, 2008

QuickLinks: Lower Rates Will Save San Francisco! Oh, Wait A Minute…

Key Rates: 12/17/08

The FOMC Speaks (And Not In Tongues): It Ain't Pretty Out There [SocketSite]
U.S. Stocks Fall on Concern Fed Is Running Out of Ammunition [Bloomberg]
Banks Show No Signs of Easing in Step With Fed’s Cuts [Bloomberg]
Mortgage Rates Left in Dust by Treasuries, Failures [Bloomberg]

Posted by socketadmin at 8:15 AM | Permalink | Comments (16) | (email story)

December 16, 2008

The FOMC Speaks (And Not In Tongues): It Ain't Pretty Out There

"The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.

Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.

Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters."

Federal Open Market Committee Statement: December 16, 2008 [federalreserve.gov]
The Fed Cuts Rates To One Percent To Avert "Prolonged" Recession [SocketSite]

Posted by socketadmin at 11:25 AM | Permalink | Comments (35) | (email story)

December 12, 2008

San Francisco Firms Continue To Shed And Sublease Office Space

"Cost-cutting tenants have dumped 1.2 million square feet of unwanted office space on the sublease market since July 1, the latest sign that San Francisco’s economy is slowing amid a national recession and credit crisis.

The trend has accelerated over the last 60 days as some 170 companies sought to unload 685,000 square feet of space, according to a report from Colliers International. A total of 2 million square feet of sublease space is available in the greater downtown — enough to accommodate about 8,000 workers. About 35 percent of the available sublease space is already vacant."

"With new top-notch sublease options coming on the market weekly, the spread between the price of view space and non-view space has narrowed. At the height of the rent bubble, view space was attracting $25 a square foot more than non-view space; now that has dropped to about $8 a square foot, with water view blocks going for $55 a square foot and city view suites leasing at closer to $35."

Space glut drives down San Francisco office rates [San Francisco Business Times]

Posted by socketadmin at 8:00 AM | Permalink | Comments (10) | (email story)

December 9, 2008

The Economic (And Employment) State Of San Francisco: Not Good

From the Examiner with regard to the economic state of San Francisco:

The City is facing a fiscal “crisis,” with one of the largest deficits in San Francisco history expected in the next year, Mayor Gavin Newsom said Monday, adding that hundreds of layoffs could be announced as soon as Tuesday.

And with respect to employment (or lack thereof):

Unemployment in The City hit the 6 percent mark for the first time since June 2004, according to the [Controller’s Office October economic barometer report], which stated that “most indicators continue to show accelerating weakness in San Francisco’s economy.”

Stating the obvious as some like to say (but yet somehow seem to be missing), the economy, employment and real estate prices tend to be correlated. And it's not looking good.

Mayor: City's budget situation 'legitimately a crisis' [San Francisco Examiner]
From Underwater To Unemployed (And Sorry, But It’s Just Starting) [SocketSite]

Posted by socketadmin at 4:30 AM | Permalink | Comments (119) | (email story)

December 8, 2008

JustQuotes: Why Simply Reducing Rates Won't Cure The Market's Ills

"Almost 53 percent of borrowers whose loans were modified in the first quarter of this year re-defaulted by being more than 30 days overdue..."

Majority of Modified Loans Fail Again, Regulator Says [Bloomberg]

Posted by socketadmin at 9:45 AM | Permalink | Comments (46) | (email story)

December 5, 2008

Once Again, We'll Posit It's Just Starting (Not To Mention Matters)

"Skittish employers slashed 533,000 jobs in November, the most in 34 years, catapulting the unemployment rate to 6.7 percent, dramatic proof the country is careening deeper into recession."

"The unemployment rate would have moved even higher if not for the exodus of 422,000 people from the work force. Economists said many of those people probably abandoned their job searches out of sheer frustration. In November 2007, the jobless rate was at 4.7 percent."

Employers cut 533K jobs in Nov., most in 34 years [SFGate]

Posted by socketadmin at 7:45 AM | Permalink | Comments (41) | (email story)

December 4, 2008

Bernanke Goes From Bad To Worse And Wants Your Dollars To Follow

"Federal Reserve Chairman Ben S. Bernanke urged using more taxpayer funds for new efforts to prevent home foreclosures, saying the private sector is incapable of coping with the crisis on its own.

The Fed chief outlined four possible options, including buying delinquent mortgages and providing bigger incentives for refinancing loans."

Bernanke Says U.S. Must Step Up Foreclosure Efforts [Bloomberg]

Posted by socketadmin at 9:00 AM | Permalink | Comments (17) | (email story)

December 3, 2008

JustQuotes: And Housing? Uhh...No.

“What we’ve seen since mid to late September is that business activity has shut down, along with the consumer,” Stephen Gallagher, chief economist at Societe Generale in New York, said in an interview with Bloomberg Television. “There is no reason for an immediate turnaround; financial markets have not stabilized; consumers have not stabilized.”

U.S. Economy: Service Companies Shrink at Record Pace [Bloomberg]

Posted by socketadmin at 9:45 AM | Permalink | Comments (20) | (email story)

December 1, 2008

QuickLinks: While The Cost Of Capital Drops, Availability Does As Well

Consumber Liquidity Squeeze (Image Source: Bloomberg)

Treasury Yields Drop to Record Lows as Bernanke Cites Buybacks [Bloomberg]
U.S. Consumers Seen Facing ‘Liquidity Squeeze’ [Bloomberg]

Posted by socketadmin at 4:00 PM | Permalink | Comments (22) | (