San Francisco's Painted Lady - For Sale

One of San Francisco's iconic Painted Ladies is up for sale.

After 35 years of ownership and an original price tag of $65,000, owner Michael Shannon had decided to downsize from his 4600 sq.ft. home, across from Alamo Square, on Postcard Row.

The home boosts four bedrooms, three and a half baths, plus a garden au pair apartment. It stands 1,000 square feet larger than the other, 'six sisters', according to Shannon, who has researched the history. The home was constructed as the personal residence of builder Matthew Kavanaugh, who owned all the adjacent lots to the south. After Kavanaugh finished his own place, he built the three matching houses at the far end on spec. When they sold for around $8,000 a piece, Kavanaugh finished the strip, in 1896.

Shannon has set a price tag, just shy of $4 million, at $3,999,000 for his property. He claims it's based on square footage and neighborhood comparables-which is none.

Even though the home has gained notoriety over the decades through films, tv shows, books, and articles. It's still going to take a discerning buyer to want to become apart of this special attraction.

Released for Sale - Infinity Tower II Residences

Interested in buying in one of San Francisco's exclusive developments- the Infinity?

Well, after great success from the Infinity’s, first phase, Tower I. Developers decided to open the gates to buyers for the second phase, Tower II, April of last year, and are having the same sort of response. The tower features 285 new condominium residences designed by famed architect Bernardo Fort-Brescia. Competitive prices started in the mid $500,000’s, and San Francisco buyers have scooped them up. As of now only 9 units remain. Three-2 bedrooms/2 baths, and Six- 3 bedrooms/2 baths.

Rising 42 stories, Tower II offers unparalleled views of the San Francisco Bay and city. Tower II features modern one, two and three-bedroom homes — including four penthouses and six two-story homes. Located just one block from the Embarcadero waterfront in the vibrant SoMA neighborhood, the Infinity is in the heart of it all.

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]

Manic episode triggers $2600 fine from HomeOwners Association

If you've ever wanted to know anything about HOA rules and regulations - what's legal and what isn't - I highly recommend subscribing to Davis-Sterling's newsletter. They are a law firm that specialize in the often gray area of Condominium HomeOwners Associations in California. Their weekly newsletters are full of what amount to hilarious (but more often legitimate) questions and answers. I keep meaning to post about swim diapers and how the Center for Disease Control has strictly banned them as well as non toilet trained kiddies from public pools.

MANIC BEHAVIOR
QUESTION: When I was manic last year, I put trash in front of another homeowner's door and during the period of one hour, I walked back and forth to her door 13 times which was on the surveillance camera of the pool deck. The board fined me 13 x $200 = $2,600 saying it was justified even though it was one incident. Now they are threatening to file a lien on me if I don't pay it in 30 days. They refused internal dispute resolution and alternative dispute resolution. Can they refuse my request?
ANSWER: Your manic behavior probably scared the daylights out of everyone and earned you a well-deserved fine. The size of the fine may or may not be deemed reasonable by a judge. It will depend on whether the judge believes your actions constitute one incident or 13 incidents. You're lucky the owner didn't seek a restraining order. Regarding the threat of a lien, the board cannot lien your unit for unpaid fines. Civil Code 1367.1(e) As for ADR, the board is not required to accept your request for mediation or arbitration. However, the board should not refuse your request for "internal dispute resolution."

Reprinted from Davis-Stirling.com by Adams Kessler
Previous Newsletters and to sign up [Davis-Stirling.com]

New Ban on Permanently Installed Wooden Utility Ladders

Wooden fixed utility ladders are now illegal in San Francisco. These ladders were commonly added to buildings constructed in the City during the 1930's and earlier. They were never part of a building's fire escape system; but they often were installed as a 'convenience' to building owners who wanted roof access without bringing a portable ladder to the site.

These ladders are now prohibited on residential buildings and must be removed with a proper building permit (click here for ordinance text).

General Contractors Inspection Service [GCIS]

Ordinance Amending the SF Housing Code [SFGov.org]

Prices Over the Years: Appreciation & Depreciation in Selected San Francisco Neighborhoods

3 Bedroom Houses*

Click on Graph

* For St. Francis Woods, both 3 and 4 bedroom houses are included in the analysis to achieve a statistically meaningful number of sales.

** With so few sales in these areas during this period, the median price is not statistically meaningful.

The Median Sales Price is that price at which half the properties sold for more and half for less. It may be affected by “unusual” events in any particular period or by changes in buying trends, such as a market shift to lower-end home sales (such as is happening today -- to a large degree due to the current difficulty in financing the purchase of more expensive homes, and for houses, due to the significant increase in foreclosure sales in some neighborhoods).

Changes in median price do not necessarily reflect changes in value for any particular property.

Different neighborhoods may feature larger or smaller 3-BR houses and 2-BR condos on a square footage basis, as well as radically different eras of construction. Some neighborhoods have a much greater quantity of sales or may be impacted by large new-development sales. The data herein is from the San Francisco Multiple Listing Service and subject to errors, omissions or revisions and not warranted.

Prices Over the Years: Appreciation & Depreciation in Selected San Francisco Neighborhoods

2 Bedroom Condominiums*

Click on the graph


* Sales of condos up to a sales price of $2,000,000. New-development condo sales unreported to MLS are not included.
** With so few sales in these areas during this period, the median price is not statistically meaningful.
*** South Beach and SOMA have been particularly impacted by the large inventory of new-development condos on the market at this time.

Average 2-bedroom condo sizes vary by neighborhood. For example, in 2007, Marina 2-bedroom condos averaged 1430 square feet; in Pacific Heights, they averaged 1398 square feet; in Russian Hill 1347 square feet; in Noe & Eureka Valleys 1267 square feet; and in South Beach 1254 square feet.

The Median Sales Price is that price at which half the properties sold for more and half for less. It may be affected by “unusual” events in any particular period or by changes in buying trends, such as a market shift to lower-end home sales (such as is happening today). Some neighborhoods have a much greater quantity of sales or may be impacted by large new-development sales. The data herein is from the San Francisco Multiple Listing Service and subject to errors, omissions or revisions and not warranted.

Revised: Peak Values vs. Current SF Prices - Condominiums

Below, median and average sales prices and average dollars per square foot are given for the last 6 months of sales, and then the percentage change is calculated as compared to the first half of 2007. Sometimes the results are simply abnormal due to unusual events that occurred within one of the comparison periods.

Peak values: Generally, the first half of 2007, before the subprime crisis started to break big time, is considered to be the home-value peak for the city – and that is the period used for comparison below. But some of areas of the city actually peaked in 2006, while others – generally the most affluent neighborhoods – peaked in the first half of 2008. For those areas that peaked earlier or later, the declines from peak values are higher than shown below.

Revised: Peak Values vs. Current SF Prices - Single Family Homes [SFHomeBlog]
Peak Value vs Current SF Value Feb 2009 [SFHomeBlog]

Revised: Peak Values vs Current SF prices - Single Family Homes

Below, median and average sales prices and average dollars per square foot are given for the last 6 months of sales, and then the percentage change is calculated as compared to the first half of 2007. To get a sense of changes in value, it’s often best to come at the subject from a variety of ways, and then compare. To make it more complicated, sometimes the analyses seem to point to different conclusions – which one must compare, juggle and balance as best one can. Sometimes the results are simply abnormal due to unusual events that occurred within one of the comparison periods.
In the charts below, current values are based upon sales occurring after 10/12/08, reported through 4/10/09.

Peak values: Generally, the first half of 2007, before the subprime crisis started to break big time, is considered to be the home-value peak for the city – and that is the period used for comparison below. But some of areas of the city actually peaked in 2006, while others – generally the most affluent neighborhoods – peaked in the first half of 2008. For those areas that peaked earlier or later, the declines from peak values are higher than shown below.

All House Sales of Every Size
Note: District sales statistics, in particular, are generalities since neighborhoods of differing values are averaged together.

4 Bedroom Houses

3 Bedroom Houses

2 Bedroom Houses

The above statistics probably understate the decline in values as of today, for three 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. Also, this analysis averages sales for the entire 6 month period – and it is generally accepted that the market has declined somewhat since mid-October.

2. The market has shifted to smaller, less expensive homes. 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. (This applies particularly to the analyses of homes “of all sizes.”)

3. In a sellers’ market, virtually everything sells, but in a buyers’ market, typically just the best homes sell – best appearing, best condition, overall best value as perceived by a willing and able buyer. Thus statistics for the current period apply to “best-value homes” while those for 2007 apply to homes of a much wider range of quality. This also skews the apples-to-apples comparison.

Definitions:
Dollar per Square Foot is based upon the home’s interior living space and does not include garages, unfinished attics and basements, rooms built without permit, or exterior spaces (though all those can add value to a home). These figures are usually derived from appraisals or tax records, but are sometimes unreliable (especially for older homes) or unreported altogether. All things being equal a house will sell for a higher dollar per square foot than a condo, a condo higher than a TIC, and a TIC higher than a multi-unit building. All things being equal, a smaller home will sell for a higher $/sqft than a larger one. There are often surprisingly wide variations of value within neighborhoods and averages may be distorted by one or two sales substantially higher or lower than the norm. Location, condition, amenities, parking, views, lot size & outdoor space all affect $/sq.ft. In SF, the highest numbers—over $1500/sqft—are typically achieved by relatively small penthouse condos, with staggering views, in very prestigious buildings.

Median Sales Price is that price at which half the properties sold for more and half for less. It may be affected by unusual events or by changes in buying trends. Median prices do not necessarily reflect the value or changes in value for any particular home.

Average Sales Price is the total dollar volume of sales divided by the number of sales. Especially when sales quantities are small, averages can be easily distorted by one or two sales abnormally higher or lower than common for an area.

Peak Value Vs Current SF Value Feb 2009 [SFHomeBlog]

Last 2 Weeks of San Fransisco Real Estate

The last 2 weeks had the highest number of listings going contingent or pending since September 2008 indicating a significant pick up in the number of listings accepting offers.

New Listings: 370 – up from 315
Back-on-Market: 74 – up from 64
Price Reductions: 221 – up from 207 -- (65% of price reductions are for condos)
Went Contingent: 200-up from 171
Went Pending: 191 – up from 164
Sold: 153 – up from 104

Sold REO: 14 – up from 9
Expired/Withdrawn: 174 – up from 131



The number of active listings is staying stable, while the number accepting offers is rising. The median list price of homes accepting offers continues to be relatively stable, even rising a little for SFDs, TICs and 2-4 units. The average days on market for properties accepting offers is high, especially for TICs and condos. There continues to be a large difference between the median list price of all active listings and the median list price of those accepting offers, continued proof that the upper-end home market has been hit particularly hard since September 15th, 2008.

Scientists Study How Room Designs Affect your Work and Mood

While it's not exactly a scientific study of Feng Shui as the Chinese practice it, research is beginning to prove how room qualities such as ceiling height, views, and type of light affect peoples moods, ability to socialize, and critical thinking.   All of which lend more weight to what artists and stagers have long known...

Architects have long intuited that the places we inhabit can affect our thoughts, feelings and behaviors. But now, half a century after Salk’s inspiring excursion, behavioral scientists are giving these hunches an empirical basis. They are unearthing tantalizing clues about how to design spaces that promote creativity, keep students focused and alert, and lead to relaxation and social intimacy. Institutions such as the Academy of Neuroscience for Architecture in San Diego are encouraging interdisciplinary research into how a planned environment influences the mind, and some architecture schools are now offering classes in introductory neuroscience.

Such efforts are already informing design, leading to cutting-edge projects, such as residences for seniors with dementia in which the building itself is part of the treatment. Similarly, the Kingsdale School in London was redesigned, with the help of psychologists, to promote social cohesion; the new structure also includes elements that foster alertness and creativity. What is more, researchers are just getting started. “All this is in its infancy,” says architect David Allison, who heads the Architecture + Health program at Clemson University. “But the emerging neuroscience research might give us even better insights into how the built environment impacts our health and well-being, how we perform in environments and how we feel in environments.” 

“Ceiling height affects the way you process information,” Meyers-Levy says. “You’re focusing on the specific details in the lower-ceiling condition.”full story

How Room Designs Affect Your Work and Mood [Scientific American Mind]

Takin' It To The Streets

City officials decided to shave costs, given the city's huge budget deficit and Muni's fiscal problem, by cutting street sweeping in more than 20 neighborhoods, in August, but what they didn't anticipate was the loss of almost four times more money than it saved. City officials knew the change would lead to a loss in revenue from parking tickets but are they willing to keep with the trend? If so, the transit agency will be out more than $3.8 million per year in exchange for $1 million in savings for the Department of Public Works.

There has been concern from both city officials and residents of whether or not these cuts, in both cash and service, make any sense. But Muni officials claim that there has been a decline in parking tickets, in general, on all routes during the same time period therefore figuring the loss of revenue isn't that high. The agency, also, states that the $3 million, in lost revenue, is a little misleading considering on average only 80% of ticket fines are recouped which brings the annual lost revenue, on those routes, closer to $1.6 million. However, the amount of lost revenue still may potentially increase because some of the street-sweeping cuts didn't take effect until December.

All in all, transport agency spokesman Judson True made himself very clear by saying, "his transportation agency doesn't base its tickets on possible revenue and doesn't decide when streets need cleaning." In turn Public Works officials claim the changes are about efficiency, not just cost-savings.

Street-sweeper reductions costing Muni money [SFGate]

New Appraisal Rules Adopted by Fannie Mae & Freddic Mac

As of May 1st, the Federal Housing Finance Agency has mandated that loan officers CANNOT select or pay appraisers. The Home Value Code of Conduct (HVCC), as it's called, outlines appraisal-related practices to which lenders must adhere with respect to so-called "conventional" or "conforming" loans that they want to sell to Fannie Mae or Freddie Mac. It's intended to remove conflicts of interest some feel are inherent in the loan officer/appraiser relationship.

In the coming months these new rules from HVCC potentially mean appraisals and perhaps escrow periods may take longer. Instead of the current practice of a loan officer ordering directly from the appraiser , the HVCC model is that a bank has a stable of appraisers, a loan officer submits an appraisal order, and any appraiser in the stable will be randomly assigned to the order. Banks will either have internal appraisal divisions or be contracted with an appraisal management company, therefore, leaving the loan officer at the mercy of the process regarding turn around times considering the FHFA (using Fannie and Freddie) has to approve each bank's entire appraisal process.

Lag time may be inevitable, but proponents say the new rules will result in more-reliable appraisals, less fraud, lower costs and minimal disruption. As opposed to critics who expect less-accurate appraisals, delays in loan processing, higher costs and general misery for all concerned.

San Francisco Real Estate Activity Over the Past Two Weeks

Statistics for the Past Two Weeks, SF homes, condo's and TIC's

New Listings: 315 – slightly up from 306

Back-on-Market: 64 – slightly down from 67

Price Reductions: 207 – substantially down from 273

Went into Contract (Contingent): 171 – down from 185

Contingent REO (bank owned): 7 – down from 11

Went Pending: 164 – up from 151

Sold: 104 – down from 133

Sold REO (bank owned): 9 – down from 20

Expired/Withdrawn: 131 – substantially down from 199

The median list price for active houses is $913,000; the median list price for contingent/pending houses is $640,000; the median list price for contingent/pending REO houses is $419,000.

The median list price for active condos is $703,000; the median list price for contingent/pending condos is $640,000; the median list price for contingent/pending REO condos is $385,000.

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.

Signs of Real Estate Rebound in San Francisco

Before you scream it's real estate agent spin, take a look at the video report and note my favorite quote 'It's not some spin from Realtors'. All I have to say is it's too close to call a bottom but when there finally is one - we'll only know in retrospect. Meanwhile the open houses are busy and anything in the low end is moving, quickly and often over asking. It's a sign things are starting to creep, and this is a city that does not like to sit down long when it comes to property values.

For months, housing prices have plummeted in the Bay Area. But there are now signs of a serious real estate rebound in San Francisco. The real estate tracing firm Terradatum ran some numbers for CBS 5, which show that more San Francisco properties have gone into escrow in the last two weeks than at anytime in the last six months. One reason is prices are down 10 percent city-wide, which has unleashed pent up demand. Adding to this are low interest rates, with 30-year-fixed rates now hovering around 5 percent. Our video report has more.

Signs Of Real Estate Rebound In San Francisco [cbs5.com]
555 Edinburgh 42 offers (YES 42) sold $100k over asking [MLS]
160 Naglee listed at $525,000 went over $600,000 with no contingencies 10 offers [MLS]
Have We Hit Bottom? Answers Short and Long [The Wall Street Journal]

Foreclosures Hit Nationwide High in February [SF Business Times]

Current Trends in San Francisco Real Estate

The average days on market for active properties range from about a 100 days to over 130 days (and growing). Lots of days on market; incredible numbers of price reductions ; a small number selling-though many of those selling still sell relatively quickly AND yes we are still seeing multiple offers for a select few.

Here are just a few statistics:

- 563 active SFD listings will be joined by over 250 new SFD listings for a total of over 800: less than 1 out of 8 will go contingent sale (and most of them at the low end).
-674 active Condo listings will be joined by over 350 new condo listings for a total of over 1000:less than 1 out of 10 will go contingent.
-241 active TIC listings will be joined by over 150 new TIC listings for a total of about 400: about 1 in 16 will go contingent.
-234 2-4 Unit listings will be joined by over 80 new 2-4 Unit listings for a total of over 300: about 1 in 19 will go contingent.
-19% of all MLS sales are REO (bank owned) sales.
-Almost all sales are within 4% of the last sales price.

To sell, listed properties must clearly stand out as very good values.

The Stimulus Plan - How it impacts the Housing Market

Courtesy of Julian Hebron, a local mortgage banker (aka direct lender, which are handy guys to have on-call in this lending climate) and all around guy-in-the-know, here is an update on rates, and the direct impacts to the housing market from the newly signed 'Stimulus Plan'.

STIMULUS SUMMARY—THE WHOLE BILL

President Obama signed the $787 billion American Recovery & Reinvestment Act into law Tuesday, February 17. Funds will be allocated as follows, and consumers can track spending and time lines at http://www.recovery.gov/. The site is a pretty clever re-branding of the package that was branded as wasteful by a unified Republican minority in Congress. These categories aren’t fully defined on the site yet, and this doesn’t include a roughly $1 trillion bank rescue plan that’s forthcoming from Treasury. I cover the housing highlights in a separate section below.
Tax Relief: $288b. State and Local Fiscal Relief: $144b. Infrastructure and science: $111b. Protecting the Vulnerable: $81b. Health Care: $59b. Education and Training: $53b. Energy: $43b. Other: $8b.

STIMULUS SUMMARY—HOUSING PROVISIONS

Below are summaries of key housing provisions of the American Recovery & Reinvestment Act. Housing help that’s not in the Recovery Act explicitly but seems likely to fall in the “Protecting The Vulnerable” category** (unless it is part of the Treasury plan) is a $50b investment plan for borrowers who haven’t yet been late on mortgage payments but are struggling. This is great for individual homeowners and critical for housing overall to stop the foreclosure spiral and stabilize home prices—foreclosures are estimated to top two million this year.

$729,750 Loan Limit Returns: FHA and Conforming loan limits we saw last year for high-cost areas have been restored. But please note that this change will take a few weeks for lenders to implement and price. Remember: the spreads between $417k-cap and $729k-cap loans were a lot wider than the current $417k vs $625k spreads. Note also that reverse mortgage limits have been increased from $417,000 to $625,500.

First-time Home Buyer Tax Credit: The tax credit for first time home buyers was increased from $7500 to $8000 for homes purchased between January 1, 2009 and December 1, 2009. A tax credit is equivalent to money in your hand, whereas a tax deduction just reduces taxable income. The credit no longer needs to be paid back as long as you live in the home without selling it for 3 years. The $7500 version of the credit expired on July 1, 2009, and required home buyers to pay the funds back over a 15 year time frame. If you bought the home in 2008, the credit remains $7500, and it still needs to be paid back over a 15 year time frame beginning in 2011 when you file your 2010 returns.  The credit phases out for couples making over $150k or singles making over $75k. The credit remains refundable. This means that first-time home buyers who owe less than $8000 in taxes for the year are still eligible for the full $8000 credit when they file their tax returns. In that case, the IRS will write you a check for the difference between $8,000 and your actual tax bill. The credit can be claimed on your 2008 tax returns that you file by April 15, 2009, even if you buy the home in 2009.

Home Improvement Tax Credit: The tax credit for making energy efficient home improvements is now 30% of the cost of the improvements up to a maximum of $1500. Eligible improvements include energy efficient exterior doors and windows, insulation, heat pumps, furnaces, central air conditioners and water heaters. Generally, your home improvement contractor and/or the manufacturer selling the improvements issues a certification that clarifies whether the improvements meet the necessary standards for energy efficiency. Most modern windows, furnaces, and air conditioners meet these requirements.

RATE UPDATE

Zero-points rates on conforming loans up to $417k and super-conforming loans up to $625,500 have improved to start this week as stocks have sold off and mortgage bonds have rallied—when bond prices rise in a rally, yields (or rates) drop. With the government participating in mortgage bond markets, lenders are pricing more conservatively than market levels might suggest because it’s harder than ever to predict which way markets will move. So we continue to see favorable terms on points: one point gets .625% to .875% lower in rate, so borrowers break even on a one-point buy down in 12-18 months. Jumbos 30yr fixed loans for SFR loans from $729k to $5m are looking good at 6.625%.

Julian Hebron works for RPM Mortgage and can be reached directly at Julian@rpm-mtg.com

**Editors note -  Washington Mutual/Chase has just set up a brand new department dedicated to recasting loans solely for borrowers who have not defaulted on their loans.   I am told it is so new, many of the bank employees do not yet know of it. Being as I have many clients with Wamu loans, myself included, I'll let you know if it works.

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.

Remodeling Costs for San Francisco Real Estate Jobs

The 2007 Cost vs. Value Report establishes cost-to-construct benchmarks for a set of common remodeling projects, then estimates how much of that investment will be recouped at resale in the current market.  It's a must read for those needing more space, like many of my clients with growing families, but are weighing the risk/reward for selling and upgrading in this kind of market.

San Francisco Job Costs:

"What the Numbers Mean

When comparing cost estimates for actual projects, remember that averaging tends to have a leveling effect on "Job Cost" data from the 2007 Cost vs. Value Report. And as always, seemingly small differences in size, scope, or quality of finishes can dramatically affect final project cost.

It's also important to consider whether a remodeled space reduces the perceived number of rooms or available square footage. For example, carving a half-bath out of unused storage space under a stair case is an obvious gain in usable space. But converting an existing bedroom into a master bath, while a positive development in many respects, may reduce the total number of bedrooms below the minimum expectation of typical prospective buyers."

The full article can be found here on the Handley Wood Remodeling website, and is quite the interesting read. (The 2008/09 numbers are due out soon).

Discussion Tuesday on Proposed Divisadero Transit Changes

One of the transportation elements, and possibly the most controversial (due to the parking restrictions) of the very impressive Divisadero Streetscape Renewal is up for discussion this coming Tuesday. The city is inviting anyone with an interest to come hear the proposal and weigh in - or forever hold your peace.

Improving transit service along the street is one of the goals of this project. The 24 Divisadero bus line currently averages only 5.4 mph in this area due to traffic congestion, so part of the overall proposal includes a part time transit lane in the southbound direction from Fulton Street to Oak Street. To create space for this lane, which can also be used by taxis and right turning traffic, no parking would be allowed Monday to Friday on the west side of the street from Fulton to Hayes between 4 and 7pm. The existing tow-away lane from Hayes to Oak would be extended one hour.

The proposal is to install the transit lane this year to see how it works before the streetscape improvements occur in 2009. We will monitor how the change affects transit and traffic, and feedback w ill be solicited from people in the area so that the design can be modified and improved as necessary. We understand that there are tradeoffs involved with this proposal and want to work with you to determine the best design.

We invite you to a meeting to discuss the details of the proposal and to answer any questions you may have.

The meeting will take place at:
Club Waziema, 543 Divisadero Street
Tues June 10, 5pm to 6:30pm

SFMTA Notice [SFGov]
Divisadero DPW Great Streets project and MTA Traffic Study Update [SF DPW]
Divisadero Streetscaping to begin in Spring 2009 [SFHomeBlog]

Individual Tax Bills for Tenancies in Common One Step Closer

As we first reported back in September of last year (courtesy of the 'head's up' from Gordon over at Plan C), it looks as though Phil Ting from the San Francisco Real Estate Assessor office is looking to make good on his offer to help clarify the oft confusing, record keeping nightmare facing many Tenancy in Common owners come tax time.

As it stands, there is one stunning tax bill sent out to all Tenancies in Common, regardless of how many individual units exist within the TIC, or how long the TIC has been in existence. That tax bill, in it's simplest form, is split by the individual owners based on their percentage of ownership of the Tenancy in Common. The trick begins once an owner sells, or remodels - thereby triggering a reassessment (aka increase) in property taxes - the increased portion of the tax bill then becomes the responsibility of the offending owner whether they are the new kid on the block or someone looking to update.

Now, take a six unit TIC that's been around for oh, I dunno, say 10 years, which has seen several resales, a few remodels, and voila! - Dante's Hell of accounting.

To stave off any confusion, Ting plans to send out notices in July to all known Tenancies in Common, along with the yearly notice of assessed value, clarifying the city's policy on separate assessments for TICs and how to request one. It's important to note that simply getting a separate tax bill does not exclude every owner of the TIC partnership from being liable for both their share as well as the whole, in the event one owner falls behind. Thus reiterating the importance of a great TIC agreement and reserve account.

S.F. may clarify TIC units' tax liabilities [SFGate]
Calling ALL Tenancy in Common Owners [SFHomeBlog]
Mapping San Francisco's TICs [SFHomeBlog]

S.F. OKs plan for 6,000 housing units

From today's SFGate,

The San Francisco Board of Supervisors approved two plans Tuesday that would add high-rises and thousands of residents to the upper Market Street area.

The first plan is a sweeping rezoning of the so-called Market-Octavia area, which stretches up both sides of Market Street from Ninth Street to Noe Street. The effort is nearly eight years in the making and was inspired by the demolition of the Central Freeway and its ramps extending north and west from Market Street following the 1989 Loma Prieta earthquake.

The city Planning Department sought to remake the area with an emphasis on walking and public transportation by concentrating new housing close to major transit stops. The zoning allows developers to construct buildings that pack more residential units into a project, including boosting tower heights from 20 stories to 40 stories on some parcels near the intersection of Van Ness Avenue and Market Street.

Officials estimate the plan could mean an additional 6,000 housing units in the Market-Octavia area. [more...]

S.F. OKs plan for 6,000 housing units [SFGate]
Progress on Octavia Boulevard housing? [SFHomeBlog]
RFPs issued for Octavia Boulevard housing parcels [SFHomeBlog]
Market-Octavia plan mired in red tape [SFHomeBlog]

Sex in the City - San Francisco Real Estate Condo Rules

This question came from the current Davis-Sterling newsletter (titled 'Renter Headaches'), a legal update written for homeowners associations.  For some reason (I can't think why), it caught my eye.  More importantly, it reminded me that I haven't yet clued those of you who own, rent, or invest in California condominiums into this valuable resource yet.

QUESTION: We have an owner who has been observed engaging in sex with a female guest at the pool. Can we immediately suspend his pool privileges, or do we have to schedule a hearing prior to the suspension?

ANSWER: You cannot suspend privileges without a hearing.

There are a myriad of reasons to stay informed, and while most associations endeavor to be reasonable it is important to know both what your Associations rules are, and what is and is not legal in enforcing them.

Many people don’t realize that homeowners associations can, and sometimes do, initiate and foreclose on a property for non-payment of HOA dues. Rules an association adopts can impact not only the pets you can have, but the length of time you can sign a lease as well as if you can even lease your condo at all (some associations have a maximum of 75% owner to renter ratios). Is it legal to ban smoking in individual condominium units, not just in the common areas? It is, and the entire city of Belmont recently did so. Here in San Francisco, at the Bridgeview in South Beach (400 Beale Street), the homeowners narrowly defeated a proposal to ban smoking on private patios.

The newsletter also features some great real estate humor...

To sign up for the newsletter or simply to access their previous newsletter articles, some of which are amusing, all of which are highly informative go to http://davis-stirling.com/newsletter.html.