Archive for March, 2009

Current Trends in San Francisco Real Estate – April Edition

At current market trends, over the next month:*

– 1400 active house & condo listings will be joined by 600 new listings.
– 1 in 7 or 8 of those listings will accept an offer to purchase.
– 1 in 8 will expire or be withdrawn from the market (didn’t sell).
– 1 in 4 will reduce its asking price.
– 75 active bank-owned (REO) homes will be joined by 45 new REO listings:
– 1 in 3 will accept offers.

Of the listings that do accept offers, 1 in 3 or 4 will come back on market because the purchase fell through — typically due to financing difficulties, property condition issues or buyer remorse.

Of the house and condo listings that SOLD in the first 2.5 months of 2009:**

– 1 in 4 accepted offers within about 15 days of going on market, i.e. almost immediately. Of these, the houses averaged a sales price of about 1% over asking price, while condos averaged about 4% below asking.
– Those accepting offers after 45 to 75 days on market sold at an average of 3% to 4% below last asking price and 7% to 10% below original list price.
– Those accepting offers after 105 days on market sold, on average, 4% to 5% below last asking price and 14% to 18% below original price.

No matter how long a home was for sale, it still sold, on average, within 3% to 5% of the last asking price, even as — with price reductions — the discount off the original price grew significantly larger as time passed. The vast majority of buyers and buyers’ agents will NOT make an offer until they perceive the property’s asking price to be within 5% of “market value” (i.e. what they’re willing to pay).

*All numbers are approximate; neither TIC sales nor non-MLS new-development sales are included.
** For SF house and condo sales reported to MLS by 3/17/09. City districts with high foreclosure rates, as well as confidential sales and ultra high-end sales were excluded to avoid distorting general market statistics.


Current Trends in SF Real Estate 3.2.09 [SFHomeBlog]

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Property Owners in Haight/Cole Valley/Inner Sunset Let Your Voice Be Heard

Property Owners in District 5 are encouraged to attend a community outreach meeting on Tuesday March 31st at 7pm at Park Branch Library, 1833 Page to help weigh-in on San Francisco’s housing element of the general plan which, updated every five years, guides overall San Francisco policy regarding housing.

The City is embarking upon a Citywide outreach campaign for the 2009 Housing Element update. The Planning Department and the Mayor’s Office of Housing have been working closely with a Community Advisory Body to develop initial ideas for that update. We’d like to hear about your needs related to housing, so that we can adequately incorporate policy ideas that address these needs. The Housing Element is the component of the City’s General Plan that provides a five year vision for housing. San Francisco, along with all the municipalities, is required by state law to update the Housing Element of the General Plan every five years. The State requires that a complete and approved draft be submitted by June 26th, 2009…[more]

Objectives (From the previous Housing Element of the General Plan adopted May 13th 2004)

This second part of the Housing Element sets forth objectives, policies, and implementing programs to address the critical housing needs identified in Part I. In the last decade, San Francisco’s population grew while new housing construction failed to keep pace. San Francisco households grew an average 2,400 annually, yet addition to the housing stock averaged just about 1,000 a year. Vacancy rates plummeted and even middle-income householders found themselves paying 50% or more of their income to rents.

The State Department of Housing and Community Development (HCD), with the Association of Bay Area Governments (ABAG), has estimated that San Francisco needs to build over 2,700 new units a year to meet its share of the region’s projected housing demand. As recent production fell short of this annual target, 3,200 new units a year must be built between 2001 and 2006 to meet regional housing goals. At least 40% of these new housing construction should be affordable to low and very low income households, and 32% affordable to households of moderate means.

Objectives and policies are general in nature and serve as the framework for decision making and priority-setting. They address specific needs and are followed by related implementation actions. For these implementation actions to succeed, three major prerequisites must be met:

  • An adequate supply of land must be identified; 
  • Regulatory and other impediments must be removed while incentives are identified and provided; and 
  • Adequate financing must be available for both private and non-profit housing development. [more]

If you’ve ever wanted a say in how the city uses it’s valuable resources, now is the time to speak up and let your voice be heard.  While this meeting is set up specifically for property owners in District 5, there are plenty of ways to get involved including if you can’t make this meeting.

Join the Mailing List

Take the Housing Survey

Host your own Community Conversation- Contact:Abigail.kiefer@sfgov.org or call 415.575.9065

Housing Element 2009 Update [SF Planning Dept]
General Plan SF Housing Element [SF Gov]
District 5 Map PDF [SFGov.org]
Housing Elements Community Calender [SFPlanning.org]
Park Branch Library 1833 Page [Google Maps]

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Bank Offers Home Loans Below 4%

A small bank in the Pacific Northwest is hoping to boost sales for builders who owe the bank millions by offering mortgages to new homebuyers at less than 4 percent interest. Banner Bank began offering the low rates through a subsidiary on March 7 in Portland, Ore., and surrounding markets, and plans to expand the program next month to Seattle and Spokane, Wash., and Boise, Idaho.

In announcing the “Great Northwest Home Rush” program, Banner subsidiary Community Financial Corp. said borrowers with good credit and 20 percent down payments could qualify for 30-year fixed-rate loans with a “note rate” of as low as 3.875 percent. That translates into a 3.973 percent annual percentage rate, or APR, when the best rate available from most lenders is closer to 5 percent. Even prospective homebuyers bringing no money to the table could obtain 4.875 percent fixed-rate loans, the bank said.

The catch is that the loans are available only for properties purchased from a list of several hundred homes and lots developed by about 75 builders who have millions in outstanding loans with Banner. The list includes homes and lots in Redmond and Vancouver, Wash., and several cities in Oregon including Beaverton, Bend and Portland. Read the full story [here]

Bank Offers Home Loans Below 4% [Inman News]
The Great Northwest Home Rush [Community Financial Corporation]
Home Rush Properties List [PDF]
4% Interest Rates for Everyone [SFHomeBlog] 

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How Not to Sell your House

In getting ready to head out for my work day, holding an open house is in the mix, I find myself still amused by this list one of my friends in the business compiled regarding what NOT to do when selling your home. 

I have to admit to having more than a few ‘stranger than fiction’ moments over the years myself.  Showing up to do a pre-arranged photo shoot in a very high-end condo only to be left with the aftermath of last nights escapades in the bedroom. The photographer began in the living room while I did triage in the bedroom, all the while appreciating a new-found respect for Las Vegas housekeepers. Or the time I innocently opened a top drawer in a kitchen looking for a pen only to find my very conservative clients were into bondage – or they had a really good supply of gag gifts – I never found out which. 

So without further ado feel free to enjoy, add to, and even more so heed the advice contained herein if you are planning on or currently selling your home.

1. Don’t think we can’t smell your pets.  I’ve walked into homes where the first thing I thought was, “Cat.” Then I go into the bathroom and think, “Oh man! So Cat!” And then, in the tub behind the shower curtain, (always) is the kitty litter box. Pet odor is also a substantial liability: I’ve heard that buyers sue over cat pee more than anything else.

2. Don’t cook a big Indian meal right before your open house. Or eggs and bacon. Or something with lots of garlic.

3. Don’t think people won’t open your drawers. I was at an open house once where I opened a drawer in a television cabinet and found it loaded with porn videos. I was terribly embarrassed, and walked around the rest of the time with my arms plastered to my sides.

4. Don’t leave your furniture arranged as it is so people can see how much you can fit into a room. When I’m in a hurry touring property on a Tuesday, I don’t want to run an obstacle course around your stuff. When our Sellers need to remain in the home during the marketing period, we usually recommend putting half their furniture and accessories in storage.

5. Don’t leave all your very favorite art up on the walls. I showed a home once where the entire living room wall was covered with snapshots of male body parts. It was highly entertaining, but a day later I couldn’t remember anything else about the house.

4. Don’t leave a joint and roach clip on your bedside table. This is another house where I remember hardly anything except that the guy’s bed had a great sunset view of Twin Peaks.

6. Don’t play your favorite Madonna music on a boom box in the kitchen. Some people might think this gives their house a cool aesthetic, but I’d go for something a little more neutral, like classical. Boring, I know, but very safe.

7. Don’t make sure everyone knows your cultural and political preferences.  You may love your Obama poster.  I may love your Obama poster.  But we’re trying to appeal to the masses here, and you don’t want your place to be remembered by a Republican as the ‘Obama Poster House.’

How Not to Sell your House [SF Real Estate Buzz]

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Regarding Statistics – There are three kinds of lies

“There are three kinds of lies: lies, damned lies and statistics.”

One hears California home prices have dropped 40% or reads that SF “Metro Area” prices have declined 30%. One recent article insisted some SF districts had experienced double-digit appreciation in 2008. (Sorry, no.) The media loves dramatic (i.e. usually bad) news; some agents deliver only the rosiest view. These analyses might quote median or average prices, dollars per square foot, or values based upon secret algorithms — each of which may generate different conclusions. They can encompass sales of houses, condos, TICs, resale homes or new construction — each of which can be dissimilar markets. If the calculation is based on too short a time period, the number of sales is too small to be statistically reliable; if the period is too long, it may mix data from both before and after major market shifts, muddying the current reality.

With statistics, the devil’s always in the details.

Averages are easily skewed by one or two sales higher or lower than usual. The median price, most often quoted, is that price at which half the homes sell for more and half sell for less, and can be dramatically affected by changes in buying trends as well as changes in values. If the market makes a shift to lower-end homes, such as has happened recently (financing difficulties for more expensive homes and increasing foreclosure sales in less affluent areas), the drop in median price is larger than the decline in values. The median sales price for houses in SF has been hammered by the numerous foreclosure sales in Bayview-Excelsior. Which doesn’t mean that Noe Valley or Presidio Heights values have fallen 30% to 40% in the past year. Location, location: the Bay Area is full of financial microclimates — for example, depending on location, foreclosure sales range from less than 1% to more than 60% of total sales. The statistics for California don’t apply to the Bay Area; Bay Area stats don’t apply to SF; city stats don’t apply to specific SF neighborhoods. There are city neighborhoods, generally in the SE quadrant, where values have dropped 20% to 30% from their peak. Most areas of SF have probably seen declines in the 10% to 15% range. In some neighborhoods, there have been too few sales since September 15th to make a meaningful calculation.Statistics are generalities and the market is changing rapidly. Ultimately, market value is defined as that price a qualified buyer is willing to pay when the property has been well exposed.

So beautifully written by the in-house stat guy at my office for the March Newsletter it was impossible to not quote it directly.

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