Posts Tagged ‘Nob Hill’

Gold Rush Real Estate: Then & Now

Portsmouth Square, 1851

Portsmouth Square, 1851

 

When writer Bayard Taylor arrived in San Francisco by ship in the summer of 1849 and began chronicling the Gold Rush economy in his dispatches for the New-York Daily Tribune, he feared nobody would believe him. The imbalance of supply and demand for basic essentials — food, tools, clothing, equipment — was riding high, driving prices to astronomical levels–

 

“There were reports of canteens charging a dollar for a slice of bread or two if it was buttered, the equivalent of $56. A dozen eggs might cost you $90 at today’s prices; a pick axe would be the equivalent of $1,500; a pound of coffee $1,200 and a pair of boots as much as $3,000…”Smithsonian

 

In today’s economy — booming not with gold but with technology — even San Francisco locals are in disbelief to learn the premiums being paid for another commodity in short supply: real estate. In sharp contrast with current times, mid-19th century SF was a largely rural setting with abundant raw land awaiting the development of businesses, homes and infrastructure. Now, there’s practically nowhere to build up — and when it comes to homes prices here in one of America’s richest cities, the sky is the limit.

Just for fun, let’s take a look at some Gold Rush era properties that have hit the market in recent years and their inflation adjusted prices. They’ll have you wishing you could travel back in time!

 

1032 Broadway Street, Nob Hill

Year Built: 1853

2015 List Price: $12,000,000

Inflation Adjusted 1853 Price: $434,813.47

1032 broadway

 

 

1948 Sutter Street, Lower Pacific Heights

Year Built: 1858

2006 Sales Price: $2,405,000

Inflation Adjusted 1858 Price: $115,151.52

1948 sutter

 

 

816 Grove Street, Alamo Square

Year Built: 1850

2004 Sales Price: $1,650,000

Inflation Adjusted 1850 Price: $75,370.45

816 grove

 

 

10 Napier Lane, Telegraph Hill

Year Built: 1855

2012 Sales Price: $810,000

Inflation Adjusted 1855 Price: $32,849.01

10 napier

 

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Meredith Martin is a Broker Associate at Paragon Real Estate Group and can be reached at Meredith@OpeningDoors.me

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Updated: New Condo Developments in San Francisco

 

 

 

 

For more information on any of the new condominium developments now selling or under construction, please contact me.

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Meredith Martin is a Broker Associate at Paragon Real Estate Group and can be reached at Meredith@OpeningDoors.me

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Just Passed: Build Rent-Controlled In-Law Units

 

The San Francisco Board of Supervisors just unanimously passed legislation allowing for the addition of new in-law units throughout Districts 3 & 8. This affects the following neighborhoods: Chinatown, Nob Hill, Russian Hill, North Beach, Fisherman’s Wharf, Polk Street, the Financial District, Union Square, Castro, Eureka Valley, Upper Market, Noe Valley, Duboce Triangle, Diamond Heights, Glen Park, College Hill, Corona Heights, Buena Vista, Twin Peaks, Mission-Dolores, and parts of the Inner Mission.

This comes in the wake of city-wide legislation passed earlier this year allowing unlimited density to be added to residential structures within a building’s existing footprint when ‘structural upgrades’ (such as seismic retrofitting) are also made. While the legislation passed today does not stipulate structural upgrades, new in-law units must be added within the existing envelope of the building.

“It’s great to know we can add housing without changing the exterior configuration of buildings, and of course the possibility to add rent-controlled housing in 2015 is exciting.” – Julie Christensen, Supervisor, District 3

 

SF_Districts_color_neighborhoods-2012

 

Meredith Martin is a Broker Associate at Paragon Real Estate Group and can be reached at Meredith@OpeningDoors.me

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To Buy or to Rent: That is the Question

I was recently introduced to an international all-cash home buyer who had come to San Francisco for one week on a mission to find housing for his two young adult children. Initially looking at rentals in the Infinity, Ritz Carlton and AVA Nob Hill in addition to some properties on Nob Hill and Russian Hill, it wasn’t long before I was asked the question: Does it make more sense to buy a place?

top-10-one-bedroom-rents-in-july-2015

Unless you are fortunate to live in a rent controlled building, you may have noticed your monthly rent rise dramatically in recent years. Since July 2014, the annual growth rate of rents has in fact outpaced that of home prices in San Francisco. Checking in at $3,500 per month, the median rent for a one-bedroom has been the highest in the country for four months following a 13.5% rise last year (and up as much as 29.2% in Noe Valley). For many renters, what they pay out every month could easily be a mortgage payment on a comparable place– the monthly Principal + Interest on a $1,000,000 home is $3819.32, assuming 20% down and a 30-year mortgage fixed at 4%. Now consider that nearly half the properties for sale right now are listed for under $1,000,000.

Plugging in local San Francisco data (June 2015 sales figures) to the New York Times’ Rent vs. Buy calculator reveals some compelling numbers. Buying a condominium at June 2015’s $1,100,000 median sale price or a single-family home at the $1,301,000 median is a better financial decision even if you could rent for free!

 

Screen Shot 2015-07-14 at 5.55.36 PM

Screen Shot 2015-07-14 at 5.56.21 PM

 

The assumptions I made in the above calculations are as follows:

  • Purchase price: $1,100,000 for condos, $1,301,000 for single-family homes
  • Length of time in home: 5 years
  • Mortgage Rate: 4%
  • Down payment: 20%
  • Length of Mortgage: 30 years
  • Home price growth rate: 14.3% for condos, 19.4% for single-family homes (12-month y-o-y average, the NYT calculator maxes out at 15%)
  • Rent growth rate: 13.5% (median one-bedroom increase in 2014)
  • Investment rate of return: 7% (approx. long-term average annual ROI of stocks)
  • Inflation Rate: 2%
  • Property tax rate: 1.19%
  • Marginal tax rate: 28%
  • Taxes filed on a Joint Return
  • Costs of buying a home: 3% (approx. closing costs)
  • Costs of selling a home: 8% (approx. closing costs + marketing + customary 5% commission to brokers)
  • Maintenance/renovation: 1%
  • Homeowner’s insurance: 0.1% (approx. $50-$100+ per month depending on property type)
  • Monthly utilities: $100
  • Monthly common fees: $600 for condos, $0 for single-family homes
  • Common fees deduction: 0%
  • Security Deposit: 1 month
  • Broker’s fee: 0%
  • Renter’s Insurance: 0.1%

Not a stranger to the costs involved in carrying a property (and the long-term wealth-building benefit of homeownership), my client weighed the trade-offs of buying in San Francisco vs. renting at a maximum $10,000 per month. And… drum roll, please… he found that buying was the better option for him!

San Francisco condominium median price growth, 2005 to present:

San Francisco single-family home median price growth, 2005 to present:

 

Meredith Martin is a Broker Associate at Paragon Real Estate Group and can be reached at Meredith@OpeningDoors.me

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