Current SF Values off Peak Values - 4th Edition

Neighborhood or District	Property Type Price Range	Avg $/sq.ft. at Peak Value		5/1/09 – 10/30/09	Change from 4/1/09	Today
Bayview*	House $300k – 800k	$507/sq.ft.		$280/sq.ft.	- 5%	- 45%
Ingleside/ Hghts / Oceanview*	House $400k – 800k	$580		$444	- 1%	- 23%
Excelsior/Portola*	House $400k - 800k	$600		$450	- 1.5%	- 25%
Central/Outer Richmond **	House $700k – 1.4m	$569		$488	---	- 14%
Inner Mission**	Condo $500k - $800k	$621		$496	---	- 20%
Central/ Outer Sunset**	House $500k – 900k	$626		$501	- 6%	- 20%
Miraloma/ Sunnyside**	House $500k – 1m	$677		$550	- 8%	- 19%
Hayes Valley/Alamo/Nopa***	Condo $500k – 900k	$684		$559	- 7%	- 18%
SOMA**	Condo $500k – 900k	$689		$562	+ 2%	- 18%
Bernal Hghts***	House $500k – 1m	$651/sq.ft.		$567/sq.ft.	+ 2%	- 13%
St Francis Wd/W. Portal/Forest H **	House $800k – 2.5m	$687		$585	---	- 15%
Noe & Eureka Valley's***	Condo $500k – 1m	$751		$613	- 9%	- 18%
South Beach***	Condo $500k – 1m	$785		$640	- 6%	- 18%
Potrero Hill**	House $700k – 1.4m	$753		$648	---	- 14%
Russian/Nob/ Telegraph Hills***	Condo $600k – 1.2m	$798		$692	---	- 13%
Noe & Eureka Valley's***	House $800k – 1.5m	$891		$707	- 6%	- 21%
Pacific Hghts/ Marina (Dist 7)***	Condo $600k – 1.2m	$809		$733	- 4%	- 9%
Most Expensive North SF Areas***	House $1.5m - $4m	$975		$797	---	- 18%

Key to Estimated Peak-Value Period for the Chart Below:
*Peak values estimated to have been reached 1/1/06 – 6/30/06
**Peak values estimated to have been reached 1/1/07 – 6/30/07
***Peak values estimated to have been reached 1/1/08 – 6/30/08

Revised: Peak Values vs. Current SF Prices [SFHomeBlog]
Peak Value vs Current SF Value Feb 2009 [SFHomeBlog]

Stats for Sales of Homes in the $500,000 - $649,000 range

San Francisco HOUSE Sales $500,000 - $649,000

October 15, 2008 – August 1, 2009

Total Sales: 356 (23% of the city’s house sales)
Total REO (bank-owned) Sales: 74

Known Short Sales: 48

This is the most active segment by volume for houses, and unit sales were up 41% year over year. Once again, most of the sales, 63%, occurred in the city’s less affluent southern neighborhoods: Excelsior, Portola, Crocker Amazon, Ingleside & Oceanview. But there were also 53 sales in the Sunset/Parkside districts, 21 in Bernal Heights, 17 in Sunnyside/Miraloma, and 6 in Glen Park.

21% of sales in this price range were REO sales. (In San Francisco, the higher the price range, the fewer the foreclosures.) The neighborhoods with the most REO sales in this price range were again on the southern border, Ingleside/Oceanview across to Portola/Visitacion Valley, though there were also a few each in the Sunset, Glen Park, Bernal Heights and Sunnyside.
53% of these REO sales went pending sale within 30 days of going on market (i.e. very quickly) to close at an average 6% above list price.

Median room configurations and sales prices, and average square footage and dollar per square foot for house sales by neighborhood.

• Bayview: 4-bedroom, 2.5 bath, 1669 sq.ft., $512,500, $325/sq.ft.
• Excelsior/Portola/Visitacion Valley: 3 bedroom, 1.25 bath, 1351 sq.ft., $558,000, $442/sq.ft.
• Sunset/Parkside: 2-bedroom, 1 bath, 1103 sq.ft., $615,000, $564/sq.ft.
• Sunnyside: 2-bedroom, 1bath, 1005 sq.ft., $600,000, $591/sq.ft.
• Bernal Heights: 2-bedroom, 1 bath, 1140 sq.ft., $595,000, $541/sq.ft.

The months-supply-of-inventory is a very low 2 months. High demand, low supply.

Peak Values Vs Current SF Values

How Much Have San Francisco Home Values Declined Since their Peak?

Below is an analysis of San Francisco neighborhoods comparing dollar per square foot ($/sq.ft.) at what is estimated to be the most recent peak value, to what the $/sq.ft. was for sales occurring Oct 15th, 2008 – January 30th 2009. (Sales occurring after 10/15/08 reflect the impact of the 9/15/08 financial meltdown on the SF market.) Only neighborhoods with enough sales to generate what appear to be reliable statistical results were analyzed as many areas of the city did not have sufficient sales.

Also important to note is the fact that different areas reached peak values at different times – in 2006, 2007 or 2008 – and the asterisked notes denote the estimated peak value period that pertains. The price ranges of the sales were chosen because we felt them to be in a standard range of value for the area and property type specified – thus attempting to eliminate both the ultra high and the ultra low end, which often distort averages.

Key to Estimated Peak-Value Period for the Chart Below:
* Peak values estimated to have been reached 1/1/06 – 6/30/06
** Peak values estimated to have been reached 1/1/07 – 6/30/07
*** Peak values estimated to have been reached 1/1/08 – 6/30/08

In the SFH (single family homes) analysis, only homes with parking were included. Also Price per square foot ($/sq.ft) was chosen because it is more trustworthy than median prices. Median prices have dropped significantly more than $/sq.ft. because less expensive homes now make up a much larger proportion of sales than they did previously for a variety of reasons (most of them obvious in today’s current economic and financing climate).

Final but important note: the changes delineated probably understate the actual decline in values for 3 reasons:

1. In a declining market, sales data – which typically shows up 30 to 45 days after acceptance of offers – will always be a step behind current activity, i.e. offers being accepted right now.
2. The market has definitely shifted to smaller, less expensive homes (less expensive as to total sales price). All things being equal, a smaller home will have a higher dollar per square foot value than a larger one, therefore skewing current values higher than they ought to be in an apples-to-apples comparison.
3. In a sellers’ market, virtually everything sells, but in a buyers’ market, typically just the best homes sell – best appearing, best condition and/or best value. So the $/sq.ft. for the recent period applies to the “best homes” while the $/sq.ft. for the peak period applies to homes of a much wider range of quality.

The Front Steps Price Per Square Foot Debate revisited

I remember seeing a comment on the Front Steps - (great real estate blog too I must say), regarding a listing at 23 Belmont in which one commenter stated, per the tax records, that listing was a ridiculous price per square foot for the location.

Well, apparently the market did not think so because it recently closed (sale price is at the bottom fyi) for $300,000 over its ‘insane’ list price in 12 days on the market with 3 offers.

For what it’s worth I loved the unit and thought it was well priced. My only question was how much were my clients going to have to bid over to win it, and would it be well priced if they did win? These are questions that keep good agents up at night. (As it turns out my clients had to bid zero as they were out of town while the entire process started and finished).

Here’s my trouble with price per square foot totals – and to some extent people who rely solely on numbers to try to determine market value – it is only worth a third of what actual market values are, at least for residential, commercial is a different animal. In residential, where people are going to actually live, the emotional quotient is huge.

Alan Greenspan stated on his interview with Jon Stewart that forecasting hasn’t improved in the past 50 years…if he could figure a way to predict consumer confidence then he would have been way ahead of the curve.

That to me was brilliant because it’s what I’ve been watching for the past 14 years in real estate. If the market responded solely based on facts and numbers prices would never have increased – at least the way they did the past 7 years.

Not that a price per square foot totals should be ignored, simply that they should only be relied upon as part of a bigger picture that takes location, location within the building (if it's a condo) and rarity of whatever type of property you are bidding on (or selling) into account.