San Francisco Real Estate Blog. It's every bit as interesting as Curbed, the New York Real Estate blog.
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$70 Million Grand Hyatt San Francisco Renovation Targets Corporate Travel With Extensive Meeting Facilities Upgrades to the Luxury Union Square Hotel
Grand Hyatt San Francisco's multi-phased $70 million renovation continues with the completion of extensive $14 million upgrades to its meetings facilities, putting the property forth as the city's most flexible, tech-forward choice for group meetings, events and corporate travel, with more than 27,000 total square feet of renovated space. The re-envisioned meeting and conference facilities at the luxury San Francisco hotel include an expansive new Grand Foyer boasting 5,700 square-feet of flexible meeting space, as well as a refresh of the hotel's Theatre Level meeting rooms and Conference Theater, all reflecting a sense of place through custom local artwork and other design flourishes.
"Groups represent 30 percent of our business, and these upgrades will help us increase the amount of events we host on an annual basis," said David Nadelman, general manager, Grand Hyatt San Francisco. I'm actually surprised that conventions are only 30% of the GH's business. I would have expected more. That said, conventions/tourism remain SF's largest moneymaker and, frankly, cash cow.
Unwanted Dogs Stress San Francisco Pound - WSJ.com
A group called San Francisco Aid for Animals also began raising a fund last spring that the 100 members of the city's Veterinary Medicine Association can tap to help needy owners. Given the high cost of San Francisco real estate for vet clinics, a simple procedure like a teeth cleaning for a dog can cost $600.
Yeah. My dog's last cleaning was $400. While people burble on about the joys of high property valuations, they forget that they raise the price of just about everything for just about everybody.
So enjoy that half-million dollar studio condo, knowing that for you to be able to get that kind of price, several innocent dogs had to die.
Foreclosure crisis hits city budget hard, groups say | City Insider | an SFGate.com blog
Each foreclosure costs the city of San Francisco an average of $19,229 in increased safety inspections, police and fire calls, trash removal and maintenance, according to a new report from two nonprofits.
Malia Cohen
Cohen to Wall Street: "Bad banks!"
All told, the city has probably spent a total of $73.4 million on the homes that have gone under water and been foreclosed by banks, according to the report by Alliance of Californians for Community Empowerment and the California Reinvestment Coalition.
On top of that, they said, the city has lost$42 million in tax revenue as San Francisco homes have lost roughly $7 billion in their value since the real estate bubble burst.
The city’s politicians, as you might expect, didn’t hesitate to jump up and down on bad man Wall Street, who they said was responsible for fueling real estate speculation and then forcing residents out of their homes.
“Wall Streets actions wiped out the life savings and home equity of many families,” said Assessor-Recorder Phil Ting. “We need to ensure Wall Street’s predatory financial practices stop and San Francisco families get the assistance they deserve.”
The city’s Bayview District has been particularly hard hit by foreclosures, said Supervisor Malia Cohen, who represents the neighborhood and whose condo was foreclosed last year. The value of homes in the Bayview have dropped 30 to 50 percent since 2007, the report said. More than 300 homes have been foreclosed in the neighborhood. Yep. That's my neighborhood, and the damage has been horrible. My own home is down two thirds from its peak in early 2006, and I am deep underwater.
This is a common problem in my neighborhood - nor are home values helped by concentrating "affordable housing" and public housing in this area.
San Francisco's Herth Real Estate Continues to Expand | BlockShopper San Francisco
Herth Real Estate, located in San Francisco, continues to expand its family of realtors by hiring three experienced agents: Mark D. McHale, Colleen McFerrin and Matthew Gomez. Herth is confident that these agents will bring significant contributions and services to the company and its clients.
"We are extremely excited to bring Mark, Colleen and Matt on board. These are three unique agents whose talents and skill-sets allow them to stand out from the crowd. They embrace the professional and energetic spirit of Herth Real Estate,” said Larry Stebbins, broker and owner of Herth Real Estate. We continue to see agency expansions not just in the commercial space, but now in the residential space as well. Now, given that agents are basically independent contractors, with much less of the governmental financial albatrosses that are attached to normal employees, the risk is perhaps not as great for the agencies. That said, the trend has been decidedly in the other direction for years, so it's certainly encouraging to see it start to turn around like this.
Herth Real Estate Continues to Expand
SAN FRANCISCO, CA--(Marketwire - Aug 23, 2011) - Herth Real Estate, located in San Francisco, continues to expand with the hire of three experienced agents to its family of professional Realtors. Mark D. McHale, Colleen McFerrin and Matthew Gomez have joined the team! With their expertise in the industry, Herth is confident these Realtors will I've been seeing more and more announcements like this one. Three and four years ago, you never saw one. Just announcements of agent downsizing. Then, a bit less than two years ago, you started seeing a few announcements of single hires. Now, you're beginning to see quite a few announcements of multiple hires.
In other words, if the byword for real estate is location, location, location, at least in our location, things seem to be looking up pretty well.
Apartment Loan Quality Worsens as U.S. Price Gains Outpace Growth in Rents - Bloomberg
In New York, Washington and San Francisco, where property prices have rallied the most, apartment debt yields fell to 7.5 percent in the second quarter from 8.6 percent a year earlier.
Office buildings had a similar increase in prices and drop in yields. Their debt yields fell to 9.7 percent from 9.8 percent in the first quarter and 12.1 percent a year earlier, Chandan’s research shows. In New York, Washington and San Francisco, they dropped to 7.8 percent from 8.1 percent in the prior quarter and 10.3 percent a year earlier. This is kind of a perverse notion - that as the recovery proceeds, shooting commercial property values higher, (and there is an element of hot money flight to quality/safety in all of this) yields on financing will drop, making lending more difficult, but it is true.
In Silicon Valley, the Night Is Still Young |
LET the rest of the country worry about a double-dip recession. Tech land, stretching from San Jose to San Francisco, is in a time warp, and times here are still flush.
Even now, technology types in their 20s and 30s are dropping a million-plus each on modest ranch houses in Palo Alto in Silicon Valley and Victorian duplexes in San Francisco, and home prices in some parts have jumped nearly 50 percent in the last six months.
Jobs — good, six-figure jobs, with perks like free haircuts and lessons on how to create the next start-up company — are here for the taking, at least for software engineers. Probably true, but if so, it is a testament to just how heated an economy can become when ten percent of its members are out of work.
San Francisco Home Sales Dip Deeper Than Usual - TheStreet
SAN FRANCISCO (DQNews) -- After posting a strong month-to-month sales gain in June, the Bay Area housing market took a breather in July as potential buyers and sellers watched the strange political show in Washington D.C. and pondered a rising tide of dreary economic reports.
More from DQNews.com
California Home Sales Sink 11% in July vs June
Southern California Home Sales Sputter
Miami Home Sales Up in June
Sales fell more than usual from June - especially for homes above $500,000 - but edged higher than July last year, which was 2010's first month to lose the full force of homebuyer tax credits, a real estate information service reported. You know, sometimes it seems as if we're just taking one step forward and then two steps back. Our non-commercial real estate has been mired in the dumps for years now, even as our commercial scene surges. But now there are looming problems even in the commercial arena. What a mess.
As Facebook Moves in, Hopes That Progress Follows - NYTimes.com
It may not be that easy. Across the Bay Area, cities continue to hope that tech companies will provide the spark for a renaissance in low-income communities. Earlier this year, for example, San Francisco granted Twitter a six-year tax holiday to lure the company to the blighted mid-Market district.
But there is no conclusive evidence that the presence of a technology company can turn a neighborhood or a city around. Google’s hometown, Mountain View, still struggles to pay its bills and is threatening to lay off employees, despite the presence of several tech companies, including Google, with a combined value of well over $200 billion. Belle Haven’s hopeful uncertainty underscores the growing disconnect between a technology boom fueled by the explosive growth of social media companies and the continuing struggles of the communities in which those companies are located. Well, the mere existence of a tech community is not sufficient excuse to simply plunder it in the name of "community need." Not that this would slow down many communities from trying to do exactly that, but for the nature of tech companies: Unlike old-style industrial concerns, the necessities of production don't pin these companies to any particular location. In short, if a tech operation feels that its financials are threatened by local concerns and/or demands, it is much easier to simply pick up and move a cube farm than it is a steel mill.
Market turmoil has homebuyers on edge | Inman News
Real estate agents and brokers say turmoil in financial markets is planting doubts in the minds of some would-be homebuyers even as it signals opportunity for others.
Plunging stock prices initially sparked by Friday's downgrade of the U.S.'s long-term debt rating and reinforced by lingering fears of a European debt crisis don't necessarily signal that the U.S. is headed into a "double dip" recession.
So far, investor flight to the relative safety of bonds and mortgage-backed securities that fund most home loans has pushed the cost of borrowing down -- a boon for both homebuyers and homeowners looking to refinance. The blunt truth is that the housing market has never recovered nationwide, and has, in fact, pursued a trajectory straight down to where it languishes today. We are now rounding into a second recession, although it may well be that we have never left the first one. The Great Depression followed a similar pattern: quarters of actual recession followed by quarters of pallid growth, but overall never recovering to the startoff point of the fall in 1929. The stock market, for instance, did not exceed the 1929 peak until 1955 - a sixteenyear span. We are now four years into a failure to exceed the Dow peak in 2007, and it appears we are headed back down again.
Location matters. Once again, because of special circumstances, San Francisco will not be hit as hard by a double-dip recession. We will, however, not escape unscathed. Unemployment matters, and ours has remained stubbornly over ten percent.
Local company sells Twitter building for $70 million - SignOnSanDiego.com
Westcore Properties of San Diego has sold the 187,200-square-foot Folsom Building in San Francisco for $70 million to Cornerstone Real Estate Advisors.
The building houses the headquarters of Twitter and also has offices for SBC Services, HQ Global Workplaces and Rovi. It is 100 percent leased. The beat of the local commercial boom continues apace. Some major properties changing hands of late, folks.
Hines JV Sells Hawthorne Plaza Complex in San Fran - CoStar Group
A partnership between Hines and RREEF sold Hawthorne Plaza, a 446,765-square-foot office complex in downtown San Francisco, to Manulife Real Estate. The price was undisclosed.
The joint venture originally acquired the Class A commercial property in December 2007 for $186 million, or approximately $416 per square foot.
Hawthorne Plaza is in the south financial district. It includes a 20-story, 348,021-square-foot structure at 75 Hawthorne St. built in 1987 and the original five-story, 98,744-square-foot building at 95 Hawthorne St., which was constructed in 1910 and renovated in 1991. The complex is Energy Star rated and earned LEED-EB Gold certification in 2009. Man, the commercial market in The City is sure heating up. Not only is this going to buoy the local economy, it's going to put a lot more money into city government coffers, thanks to the real estate transfer tax - much of which The City will squander, of course, but that's a different story for a different time.
Housing woes point to further economic slowdown - San Francisco Business Times
I spent part of last week attending the InmanbizWatch Real Estate Connect conference in San Francisco. The annual gathering focuses on tech in the real estate business. But many speakers’ comments and observations signaled more economic trouble ahead.
A July 29 panel of economist-types on the outlook for residential real estate was sobering. The consensus was that we’re halfway through a decade of trouble for the housing market. Yes, that means we have five more years to go. Yes, I think this is probably true, although, as I have pointed out many times (and as recent history seems to be proving out) San Francisco is lucky enough to experience special circumstances that have permitted us - so far, at least - to weather the depression in real estate better than most parts of the nation.
A Tax Policy With San Francisco Roots - NYTimes.com
George proposed a simple taxation system in which land, but not the value of any buildings or improvements, would be taxed at a rate so high that it would satisfy all of government’s revenue needs. No complicated income tax code. No dog’s breakfast of special fees and gimmicks to balance government budgets. Just a confiscatory tax on land. “Georgism,” as its single-tax principle is known, would be devastating for real estate speculators and large landowners, but proponents say it would be painless for most everyone else.
Here in California, a state that has bled itself dry by radically reducing property taxes, it’s easy to forget that just a few decades ago Georgism had an avid following. None less than Willie L. Brown Jr., the former San Francisco mayor and State Assembly speaker, championed Georgist policies, sometimes with the support of John Burton, the longtime Democratic power broker. All I can say is that, for the sake of our business, thank heavens that Willie failed, and then apparently changed his mind.
Herth Real Estate of San Francisco Welcomes Three New Agents
Herth Real Estate, located in San Francisco, is introducing three new agents to its family of professional Realtors. Karen McCarthy, Mary Minor Huck, and Matt Duffy have joined the team! With their expertise and experience in this industry, Herth Real Estate is confident the new Realtors will bring wonderful contributions and service to the company and to its clients. Welcome aboard, folks!
I'm seeing more of this - agents being hired in local firms. It's certainly not a landslide, but it is a change from the wholesale layoffs we've seen for the past several years. Another indicator that things are finally beginning to look up a bit around here? Let's hope so.
Bryan Ellis Real Estate Letter - San Francisco Worth $163 Billion
While much of California is struggling when it comes to real estate, the city of San Francisco grew in real estate value by around $2 billion in the past fiscal year, bringing its total assessment value to $163 billion[1]. Phil Ting, the city’s assessor-recorder, called the city “very fortunate,” adding that “we still have the strongest real estate market in the state” and predicting a “continued resurgence” in coming years. Keep in mind that, even in these parlous times, formal assessments of real estate tend to be much lower than actual values, thanks to Prop. 13.
Parking in San Francisco typically $375 monthly
That's how much a parking space typically costs monthly in San Francisco, according to a report by real estate consulting firm Colliers International. Sound like a lot? Well, there are at least 26 places worldwide with higher rates, the study found. A whole 26 places in the entire world that are more expensive?
Well, all righty, then. I guess we're a-okay!
San Francisco sees huge jump in transfer tax revenue | San Francisco Business Times
The recent frenzy of commercial real estate transactions in downtown San Francisco pumped $135 million into the general fund in the last fiscal year, exceeding budget forecasts by $64 million, according to Assessor-Recorder Phil Ting. This is excellent news for the City's municipal coffers, but it's still not enough to close the yawning hole in the budget. It does, however, indicate that the local economy will heal much more quickly than the national one, on the back of a booming commercial real estate market.
Office rents rebound - S.F. jets to No. 1 in U.S.
Fueled by tech company growth, San Francisco office rents rose sharply in the second quarter and vacancies decreased, vaulting the city to the leading spot in an otherwise-tepid national office market, according to three separate research reports this week. Hey, we're number one, and this time it's a good thing!
5 cities where home prices will rise this year yet Amy Hoak's Home Economics - MarketWatch
CHICAGO (MarketWatch) — Despite recent price improvements nationally, only five markets in the country are expected to see home-price gains for the remainder of 2011: Washington, New York, Orlando, Dallas and San Francisco. Well, it looks as if The City is going to continue to remain among the Neat Elite.
I'll keep it in mind today as I fill out my official request for a property tax reassessment. I missed the informal one by being four hours late in turning it in. Now I have to go through the longer standard process.
Technology Leads a Rebound in U.S. Office Rents as Occupancies Increase - Bloomberg
Demand from technology companies helped drive asking rents in San Francisco up to $40.06 a square foot in the second quarter, a 19 percent increase from a year earlier and the biggest advance in four years, according to Jones Lang LaSalle Inc. (JLL) Net absorption totaled almost 1.3 million square feet in the 12 months ended June 30, making San Francisco the nation’s top-performing office market, the Chicago-based broker said. Technology is still the major driving force in modern life, and The City is in the catbird seat when it comes to taking advantage of it in terms of real estate (and everything else).
Forecast: Real estate recovery won't arrive till 2013 or beyond | Inman News
SAN FRANCISCO -- The real estate market will see improvement in the remainder of this year and in 2012, but is unlikely to recover until 2013 or beyond, said speakers at this week's Pacific Coast Builders Conference (PCBC). The conference is sponsored by the California Building Industry Association. Note the weasel word. I'd be thrilled to pieces to see my own home price recover enough by 2013 just to get me out from being underwater on my mortgage, let alone back to the peaks of 2006. I doubt very much that is likely to happen, though. And I suspect there are more than a few here in The City in a similar situation.
Mission Bay Prepares for a Makeover - WSJ.com
San Francisco's effort to transform an abandoned rail yard on its eastern shore in Mission Bay into an urban center is poised for a serious boost from plans by Salesforce.com Inc. to build a sprawling corporate campus in the area.
Urban-planning experts say the arrival of Salesforce will provide a vital stimulus for a once-neglected part of the city. But the bold design for the campus is just beginning a monthslong approval process, and Chief Executive Marc Benioff is leaving open the possibility that the company could simply pick a different location for its new headquarters. Some civic groups and architects, meanwhile, lament that the corporate-driven development isn't creating the same neighborhood feel as other sections of the city. I continue to be just flat amazed by the progress of Mission Bay, which has utterly transformed a once dead and rotting part of the city, and which has already added tens of billions of value to the area, and thousands of new homes and jobs, and will likely continue to do so for years to come. So of course there are naysayers who want Salesforce.com to either buy them off or submit to their own personal visions of what Salesforce should do. One of the biggest barriers to improving San Francisco is this sort of greedy nit-picking by "do-gooders."
San Francisco Home Sales Volley Like A Trolley - TheStreet
"Given the sluggish start to this spring's home-buying season, with sales 20 to 30% below average, it's no surprise we're logging sharper declines from 2010. Sales got a big shot in the arm a year ago, when people rushed to take advantage of expiring homebuyer tax credits. Today the market must stand on its own, and it's having a hard time doing that in the absence of stronger job growth and consumer confidence. So far, low mortgage rates and lower home prices aren't enough to overcome the concern some potential buyers have that prices could fall more. Other would-be buyers are unemployed or underemployed, or can't qualify for a loan. Scores of would-be move-up buyers owe more than their homes are worth; so they're stuck," said John Walsh, DataQuick president. Up, down. Down, up.
But the suckage level seems to remain consistent: Sucky.
Where the jobs are: Top U.S. cities hiring now : On The Block
1. Washington, DC-Arlington-Alexandria
Industries to Watch: Demand is strong in architecture/engineering, as well as in the related categories of construction/extraction and installation/repair and maintenance.
2. San Francisco-Oakland-Fremont
Industries to Watch: Private-sector hiring is robust, with especially positive trends in management, IT, business/financial and architecture/ engineering, among other industries. This is good news for the Bay Area. The brutal truth is that the higher the local unemployment rate, the lousier the outlook for real estate. I think that the outlook down the road is even better for us, thanks to the burgeoning Mission Bay campus of the University of California. Specializing in biotechnology studies, this campus will be the hub for a huge surge in local biotech companies.
If I had the means, I'd be buying in Dogpatch today.
Is high unemployment the 'new normal' even in a recovery? - KansasCity.com
Vitner thinks the full employment rate is now around 7.1 percent, a figure he describes as conservative, meaning it could be even higher. The reason for his grim view is the bursting of the housing bubble. The jobs that fed into the boom in real estate amounted to an employment bubble.
These jobs include the construction sector, which lost at least 2.1 million jobs. It also includes the finance sector - sometimes dubbed FIRE for finance, insurance and real estate.
Construction employment peaked in 2006 and 2007, each year exceeding 7.6 million jobs, collapsing to 5.5 million jobs in 2010, the lowest since 1995. Similarly, financial sector employment peaked in 2006 and 2007 at 8.3 million jobs each year, tumbling to 7.6 million last year, the lowest since 1998. What this means is that the less dependent on these sorts of jobs your region is, the better the employment numbers will be, and the better the general economy, and the housing market, will be.
San Francisco's prosperity is firmly built on two major sources of employment: Silicon Valley and other high-tech, and government.
Both are doing fine, and hence, the SF housing market has taken less of a beating than elsewhere.
U.S. Federal Reserve Beige Book: San Francisco District (Text) - Bloomberg
The following is the text of the Federal Reserve Board’s Twelfth District-- San Francisco
Twelfth District economic activity continued to expand at a moderate pace during the reporting period of late April through the end of May. Price increases for final goods and services remained limited, and upward pressures on wages were subdued on balance. Sales of retail items rose further, while demand for business and consumer services was mixed. District manufacturing activity also was mixed but appeared to expand overall. Agricultural producers reported strong sales, and extraction activity rose for providers of natural resources used for energy production. Activity in District housing markets remained lackluster, while demand for commercial real estate showed signs of improvement. Contacts from financial institutions reported further increases in loan demand. This is slightly better than the last Beige Book for our region, but still nothing to write home about.
Financial institutions may report "further increases in loan demand," but left unsaid is how much they've actually increased their lending.
Just curous, but have you noticed any relaxation in the currently very tight qualifying standards for home loans?
Signs of a Turnaround in San Francisco's Luxury Real Estate Market
San Francisco's luxury home market is showing signs of a turnaround, according to prominent Bay Area Realtor Cece Doricko, who specializes in Forest Hill, Pacific Heights, Cow Hollow and St. Francis Wood, CA real estate. Citing figures from Coldwell Banker's latest San Francisco Luxury Market Report, Doricko reports a 13.6 percent increase in the number of home sales in the first quarter of 2011 as compared to that of the same period last year.
"Buyers of Pacific Heights luxury real estate and other luxury properties in San Francisco are starting to make their presence felt once again," says Doricko, "and it's not surprising why. Homes in these kinds of neighborhoods have always been sought-after and now there are quite a few that are priced lower than they have been for some time. It's no wonder, then, that buyers who have the means are not letting these opportunities pass them by."
On a year-over-year basis, the median sale price of San Francisco luxury real estate went down by 4.3 percent in the first quarter though it shows an increase of 3.9 percent when compared to the fourth quarter of 2010. "You won't be seeing any dramatic price dips in these neighborhoods," says leading Forest Hill, San Francisco Realtor Doricko. "Properties in areas like Forest Hill and Pacific Heights have always been at a premium, so whatever price declines you're seeing now are likely to be it, especially since luxury home sales are already trending upwards." It's not hard to understand why this is happening. In the United States today, the wealthiest twenty percent own 85% of the wealth of the nation. Marketing is already skewing hard in the direction of this upper twenty percent, because, as the famous bank robber Willie Sutton once said, when asked why he robbed banks, "Because that's where the money is." That trend is only accelerating, since, thanks to the recession/depression, the traditional driver of consumption, the middle class, is essentially bankrupt.
We saw the same phenomenon during the Great(er) Depression: The super rich used their purchasing power to snap up deflated assets at bargain prices. History may not repeat, but it rhymes.
Housing bust hit homes that cost less the hardest | The Asbury Park Press | APP.com
The housing bust has been kinder to higher-priced homes than to lower-priced ones.
Nationwide, top-tier homes have lost 38% of their value since prices peaked in 2006, while prices for bottom-tier homes have dropped 63% since peaking in 2007, says real estate website Zillow.com.
The disparity is consistent across larger cities, according to a study on the state of the U.S. housing market to be released today by the Joint Center for Housing Studies of Harvard University.
...But low-end Atlanta homes fell 50%, the study says. In San Francisco, the most-expensive homes dropped 24% from their peak vs. 54% for the least-expensive ones, says the study, which analyzed Standard & Poor's/Case-Shiller home price data. Sounds about right. Mine, of course, thanks to massive foreclosures among my comps, as well as affordable housing initiatives, dropped more than 75% from its 2005 peak.
Ugh.
Economy gains, yet housing spirals downward - The Boston Globe
SAN FRANCISCO — The desire to own your own home, long a bedrock of the American Dream, is fast becoming a casualty of the worst housing downturn since the Great Depression.
Even as the economy began to fitfully recover in the last year, the percentage of homeowners dropped sharply to 66.4 percent from a peak of 69.2 percent in 2004. The ownership rate is now back to the level of 1998, and some housing specialists say it could decline to the level of the 1980s or even earlier. The housing market never even came close to making a recovery, and now it is sinking to new lows.
There are several factors at work here. One is that despite all the phony "good news" about the economy we keep hearing every day, the economy has never even come close to recovering either. Most folks aren't aware that around 1990 the US government changed the way it calculated inflation and unemployment. Oddly, the changes made the numbers look better than they had under the old calculations. Fancy that!
And when government officials today talk about unemployment and inflation (taken together, they were called "The Misery Index" back in the bad old days of Jimmy Carter and the latter 1070s), they are comparing apples to oranges when numbers prior to 1990 enter the conversation.
The worst the Misery Index ever got under Carter was 21.98%. Would you like to know what it would be for today, using exactly the same methods used to calculate it in the 1970s?
EconomicPolicyJournal.com: Shadow Stat Misery Index Highest on Record
Shadow Stat Misery Index Highest on Record
John Williams, over at Shadow Stats, compiles economic data for inflation and unemployment the way it used to be calculated pre-1990. Based on that data, the CPI inflation rate is over 10%, and the unemployment rate is over 15% (see charts). The Misery Index is the sum of the current inflation rate and the unemployment rate. If it were to be calculated using the older methods, the Index would now be over 25, a record high. That's right. We are living with the worst Misery Index ever recorded. Right now!
And that is why not only is there not going to be a housing "recovery" any time soon, there isn't going to be an economic recovery, either. But there is going to be a gigantic political upheaval, which began last year, and will still be playing out next year.
Investors competing with first-time buyers : On The Block
With first-time buyers scared stiff of the market and many banks making lending harder than ever, who is it that's buying real estate right now? After all, in many parts of the country, prices are lower than ever, foreclosures and short sales abounding. But first-time buyers are leery of dealing with such complicated deals; even seasoned buyers are waiting to see where the dust settles. Who's taking advantage then of bargain prices across the U.S.? A survey just released by Move, Inc., shows that real estate investors will be more active in their local markets by a 3:1 margin compared to typical homebuyers in the next 24 months. We could expect this to be especially true in a city like San Francisco, where so many local residents are still priced out, and stricter lending laws have pushed out those who might have been inclined to stretch the truth about their incomes to qualify for loans. Ah, cool. Speculators.
LAND GRAB: Developers Ease Back Into Life Science Market As Supply Tightens - CoStar Group
In recent months, tech companies have scooped up land in the Bay Area that effectively eliminates millions of square feet previously earmarked for lab and biotech buildings in one of the nation's tightest land markets. In response, Alexandria and HCP have acted recently to lock up available properties and fill the demand at increasingly healthy return profiles on new development, including assets within the Mission Bay redevelopment in San Francisco's CBD, one of the most desirable biotech addresses in the country.
The Mission Bay development is the most vigorous and far reaching of any I've ever seen in The City. Kudos to Willie Brown for making it happen!
FR BK SF : Luxury Home Values Decline in First Quarter of 2011
Luxury home values dropped in Los Angeles, San Diego and San Francisco in the first quarter of 2011 compared to the fourth quarter of 2010, according to the First Republic Prestige Home Index? by First Republic Bank, a leading provider of private banking, private business banking and wealth management services.
In the quarter ended March 31, 2011, the Index indicated the following:
Los Angeles area values dipped 0.5% from the fourth quarter of 2010 and slid 0.9% from a year ago. The average luxury home in Los Angeles is now $1.96 million.
San Diego area values fell 4.6% from the fourth quarter and decreased 5.1% year-over-year. The average luxury home in San Diego is now $1.63 million.
San Francisco Bay Area values lost 4.3% from the fourth quarter and were 1.9% lower compared to a year ago. The average luxury home in San Francisco is now $2.49 million. What that means is that up until this first quarter, we were up - and now we're down YOY. More evidence that the double dip is taking hold even at the high end, and even in San Francisco.
Don’t Expect A Housing Market Recovery Until 2014 - Morgan Brennan - Closing Table - Forbes
Own a home? Brace yourself for an even longer recovery than anticipated. A new homeowners survey released jointly by Trulia.com and RealtyTrac suggests we won’t see a housing recovery until 2014 at the earliest now. It's that monstrous overhang of foreclosures, of course. “Absent those [government-backed] entities there is no mortgage market and there is no housing market,” warns Sharga. And this, of course. There is no private mortgage market. Banks are not writing mortgages, unless they know they can be immediately flipped to Fanny or Freddie. Oh, yeah, and the buyers themselves: Potential buyers also seem hesitant to take the home ownership plunge right now. More than two-thirds of the 704 renters polled for the survey expressed plans to wait two years or more before buying a place. If this reflects the larger American sentiment, coupled with the fact that borrowing money has a become painstakingly more difficult process, expect the lack of prospective buyers to drive prices down in the market as well. But for some unknown reason (at least to the writer of this article) apparently there is optimism: Even so, Trulia and RealtyTrac remain steadfast that home values for the U.S. housing market as a whole is close to hitting bottom, likely doing so this year or at some point within the next 18 months. Just expect the market to stay on that bottom for a long time to come.
Magic? Unicorn dust? New bursts of newsmaven propaganda coming out every month saying the housing markets are improving, when they're not?
Yeah, things will, and even are, improving in very narrowly constricted areas. But the overall market is in the dumps, and nobody really has any idea when it will finally emerge.
Want To Buy American? You Can't In San Francisco
As incredible as this may sound, the city of San Francisco, California, has just lost its final domestic car dealership.
San Francisco Ford Lincoln Mercury closed on April 30, 2011, which means that there are now no domestic new car dealerships within the city’s 47.6 square mile area. Want to buy a Ford product? The closest dealership is now in Serramonte, about 12 miles out of the city. If you want to buy a Chevy Volt, you have to drive to Colma, about 10 miles south of San Francisco.
Dennis Fitzpatrick, regional vice president of the California New Car Dealer’s Association, explained the situation to the San Francisco Chronicle as follows: “It’s a tough market. Imports have a much bigger share in San Francisco. When you can sell 100 imports a month as opposed to 25 domestic, and what with the rents and real estate, it’s tough to make a U.S. car dealership pencil. San Francisco is not loyal to anything domestic; it’s allegiance is to anything but domestic.” Oh, goody. Our sky-high real estate and our refined tastes mean you can't buy an American car in San Francisco. Well, there are a lot of folks who think San Francisco isn't a part of the United States any more, anyway.
MORTGAGES / Rate on 30-year fixed mortgage falls to 4.71%
Fixed mortgage rates dipped to the lowest level of the year this week. The third straight weekly decline comes at the start of the peak buying season.
Freddie Mac said Thursday the average rate on the 30-year loan fell to 4.71 percent from 4.78 percent the previous week. That matched this year's low reached in January. But it is above the 40-year low of 4.17 percent hit in November. Sounds great, doesn't it? Mortgage rates at historic lows. Unfortunately.... Low rates have done little to boost home sales, which are far below the level that economists consider healthy. Still, most sales occur between April and August.
No, these rates have done nothing to boost home sales. The housing market nationwide is in worse shape than it was at the bottom of the initial crash. We're into the double dip now.
In honor of Mother's Day: SF homes with in-law units beware! : On The Block: SFGate
The danger of renting unwarranted units
No, they aren't a big deal until you rent them. Jeff Woo is a San Francisco lawyer specializing in property rights. He writes:
The issue of illegal units brings up a number of potential legal consequences assuming you are renting the illegal unit.
Firstly, if the unit is reported to the Dept of Building inspection, they will issue a Notice of Violation requiring you to either legalize it or remove it. They will fine you 9 x the permit cost. Most units cannot be legalized.
Second, you will have to evict your tenant(s) before you can either legalize or remove the unit. Under Prop H, you would owe relocation costs of approx $4800 per person plus the legal costs of the eviction. Et cetera....
But the brutal truth of San Francisco is that without the income from their illegal in-law units, several thousand homeownered would be out on the streets themselves, unable to pay their own mortgages.
Tech jobs near all-time highs, fuel office-space boom
In November, Lookout Mobile Security relocated into an office building near San Francisco's South Park, snagging a bigger space that could accommodate the company's swelling ranks.
Six months, millions of new users and a doubling of its staff later, the smart-phone security company is already on the hunt for additional real estate, with the hope of moving in the second half of the year. By the end of 2011, the company expects to double its staff again, to about 100 employees. This is only the beginning. Tech is about to explode. Again. And San Francisco is going to be ground zero for the detonation.
Bay Area Home Sales, Prices Remain Stable - Steady Market Bodes Well for Spring Homebuyers
Home sales in the nine-county San Francisco Bay Area continued at a steady pace in the first quarter of 2011 compared with the same period a year ago as homebuyers took advantage of favorable home prices and interest rates, according to an analysis of MLS data issued by the research division of Better Homes and Gardens Mason-McDuffie Real Estate.
In the nine-county Bay Area, 10,519 existing, single-family detached homes changed hands during the first quarter of 2011, a 1 percent decline from 10,617 homes sold during the same period in 2010. The first-quarter figure was down 11 percent on a non-seasonally adjusted basis from 10,753 homes sold in the fourth quarter. I'm sorry, but a one percent YOY decline is a decline, and an 11% QOQ decline is a horrible indicator going forward.
Face it: the economy and employment picture is not significantly improving, and therefore, the housing market is not improving either. Every recent indicator of consumer "temperature," including the right-track, wrong-track surveys, indicates that Americans are gloomier than ever.
We're a heck of a long way from being out of the woods, more than five years following the last peak in the housing market.
Multigenerational Housing Is a Real Estate Growth Niche - NYTimes.com
The company went back to the drawing board, and last month it gained approval for a drastically different plan: a town house project aimed at extended families, where children, parents and grandparents can all live comfortably under one roof.
Such multigenerational housing is specifically aimed at the booming immigrant population in the Bay Area, and is emerging as one of the few growth niches in a moribund housing market.
“If you’re selling in certain areas of the Bay Area, you have to be more extended-family-oriented,” said Cheryl O’Conner, government affairs consultant to the Building Industry Association of the Bay Area.
Asian buyers, in particular, “come with the whole family,” Ms. O’Conner said. “They come with their parents and grandparents, uncles, aunts and cousins.” I think this will be a growing trend, and not just because of "immigrant populations."
Fifty years ago, the standard household was a working dad, with mom staying home to raise the kids. Toward the end of the seventies, womans' liberation combined with growing income pressure on families pushed mom out into the work force. Today, with income pressures tougher than they'be been since the great depression, and with grown kids, unable to find work, returning to the nest, I expect to see the "family home" growing in popularity.
Zillow Grabs San Francisco-Based Postlets, an Online Real-Estate Listing Syndicator | Xconomy
Seattle-based online real estate website Zillow has acquired San Francisco-based Postlets, a startup that syndicates property listings across about a dozen sites. Terms of the deal were not disclosed, and Zillow wouldn’t comment on any possible layoffs as part of the acquisition.
Postlets says it has more than 500,000 registered users generating more than 350,000 sale and rental listings nationwide. It operates on a “freemium” model, providing basic services for no charge and collecting fees for pro-level accounts. This sort of merger and acquisition activity is generally considered a forward-looking good sign for the industry in which it occurs. Keep your fingers crossed.
Home values drop in S.F., other big metro areas - San Jose Mercury News
Real estate values in much of the Bay Area are continuing to fall, according to a report released Tuesday.
Home values in the San Francisco-Oakland-Fremont metro area -- which includes San Francisco, Alameda, Contra Costa, Marin and San Mateo counties -- dropped 1.9 percent in January from the month before and were down 1.7 percent year over year, according to the latest Standard & Poor's/Case-Shiller home price report.
San Francisco was one of 18 of 20 metro areas with year-over-year declines. The only areas with gains were San Diego, at 0.1 percent, and Washington, at 3.6 percent. Eight metro areas -- Atlanta, Chicago, Detroit, Minneapolis, Phoenix, Portland, Ore., Seattle and Tampa, Fla. -- had year-over-year drops of 6.7 percent or more. It seems as if I post one of these "market goes down - again" reports every week or so. It's not quite that bad - and San Francisco country has not sustained damage as bad as other counties in our statistical region, but the truth is, the real estate market is terrible, has been terrible for a good while, and will continue to be terrible for the foreseeable future.
Welcome to the new normal.
San Francisco becoming a child-free zone as youth population declines | Joshua Sabatini | Local | San Francisco Examiner
Despite efforts to stem the tide of family flight, the population of children in San Francisco continues to ebb.
Families that remain in The City are bucking the trend that has plagued San Francisco for years as the number of children — defined as people up to 17 years old — has dropped from 181,532 in 1960 to 107,524 today, according to the latest U.S. Census Bureau figures. The 2000 census counted 112,802 youths.
The decrease is disappointing news for city officials, who have attempted to counter the family-flight trend by creating more affordable housing, improving schools and cutting costs, such as a college savings account for kindergarten enrollees. Look, be honest now. Would you like to try to raise kids in The City? Now imagine trying to do so on a household income of under 100k.
Gary Shilling: House Prices Will Drop Another 20%
Furthermore, our forecast of another 20% fall in house prices may be conservative. Prices may well end up back on their long- term trendline (Chart 26), but fall below in the meanwhile. Just as they way overshot the trend on the way up, they may do so on the way down, as is often the case in cycles. Furthermore, another big house price decline will spike delinquencies and foreclosures leading to more REO sales by lenders,whichwillfurtherdepress prices. Our analysis indicates that a further 20% drop in prices will push the number of homeowners who are under water from 23% to 40%, resulting in more strategic defaults, more REO, etc. This is the sort of analysis that you don't get from watching the tube and, frankly, it does not bode well for our industry. I personally think we'll overshoot far to the downside (numbers rarely fall from these heights just to the former average and then stop cold). Look for national median prices well under $100k within five years - and consider what sort of an economy it will take to accomplish that.
It's not pretty.
Investors Lead San Francisco Home Sales - TheStreet
Just 243 newly built homes sold in the Bay Area in February, the least for any month in DataQuick's statistics. The previous low was 253 in January this year. One of the main problems builders face is that they can't compete with prices on resale homes, especially distressed properties.
Distressed sales - the combination of sales of foreclosed homes and "short sales" - accounted for just over half of the Bay Area's resale market last month.
...
Buyers who paid all cash - meaning no corresponding purchase loan was found in the public record - accounted for a record 30.9% of sales in February, the highest for any month since January 1988. Last month's cash level was up from 28.7% in January and 27.3% a year ago. Since 1988, the monthly average for cash buyers is 11.6%.
"Sales over the past two months certainly underscore the market's reliance on investor and cash purchases at a time many potential buyers hesitated to act. But it's not clear that the January-February figures say much, if anything, about where the market is headed. Historically, those two months have been weak indicators of what happens next," said John Walsh, DataQuick president.
"Over the next few months we'll begin to see how much of the pent-up demand will play out during the traditional spring-summer home-buying season. Our sense is that we could see sales jump significantly from today's subpar levels if the economic outlook improves, people start feeling more secure in their jobs and credit terms loosen. Short take: Housing continues to be awful, professional bottom fishers are dabbling, but if the economy improves, things might get better and real buyers might appear.
Well, duh.
"Economy improves." That's the key. Oh, and being able to meet the new lending requirements, of course.
Twitter seeks tax break for staying in S.F. - MarketWatch
A Twitter spokesman did not respond to a request for comment.
San Francisco levies a 1.5% tax on payroll expense, including employee-stock-option grants — a key form of compensation in the technology industry.
An economic-impact report by San Francisco’s Office of the Controller released Tuesday notes that San Francisco is the only city in California that levies a payroll tax and imposes a local tax on stock options.
The tax-exemption measure up for a vote next week would apply to new hires at businesses in the mid-Market and Tenderloin areas, which now house numerous residential hotels and empty storefronts. Businesses within the zone would continue to pay their base-year payroll tax.
“There is no other large private-sector company in the Central Market/Civic Center area, and certainly not one that is likely to add 2,000 jobs in the next several years,” as Twitter might, the Office of the Controller’s report noted.
Apple: What banks can learn from it
Columnist David Weidner explains the lessons for banks from the success of Apple's iPad.
“Moreover, because of Twitter’s importance in the rapidly growing field of social media, its growth is highly likely to generate a cluster of businesses in the same field,” the report said. What's interesting here is the implicit admission that city taxes blight business development. In other words, without the removal of the city's taxes, it would lose all the benefits of having a great and growing company like Twitter setting up in the heart of downtown.
Housing starts see biggest drop since 1984 | Reuters
(Reuters) - Housing starts posted their biggest decline in 27 years in February while building permits dropped to their lowest level on record, suggesting the beleaguered real estate sector has yet to rebound from its deepest slump in modern history. Okay, this is just ugly. Couple the continued collapse in housing, the segment that has traditionally led us out of hard times, and the rise in commodity and food prices, and you know what you've got?
Stagflation. Welcome to the 70s, boys and girls!
Skyrocketing gas prices are hitting $4 a gallon in California - San Jose Mercury News
Paul Supp is keeping his gas-guzzling Range Rover parked in his garage. Wesley Ting is taking the bus from Palo Alto to his freshman classes at San Jose State. And Kevin Stopper has asked his boss if he can work from his Hollister home one day a week.
The reason? Skyrocketing gas prices are nearing, and in some cases passing, $4 a gallon, up nearly 50 cents in the past month and nearly a dollar over the past year.
While waiting Monday for cheaper gas at a Costco in a line long enough to spill into traffic, real estate agent Joe Garcia summed it up this way: "You're stuck." Prices at my neighborhood Chevron blew through four bucks late last week. This is not, technically, a real estate issue, but if prices go much higher, the tender green shoots of a housing sales recovery may well get stomped into the mud.
U.S. Federal Reserve Beige Book: San Francisco District (Text) - Bloomberg
Activity in District housing markets remained very subdued, and demand for commercial real estate stayed weak overall. The Beige Book is pretty boring. Again. Still.
Home Prices Still Low But San Francisco Real Estate Market On Road to Recovery
Notwithstanding the rise in foreclosures and the dip in median home values, the San Francisco real estate market is doing quite well, according to seasoned Realtor Debi DiCello. A specialist in Presidio Heights real estate and properties in the city's most sought-after neighborhoods, Debi DiCello has long been monitoring market trends throughout San Francisco and remains confident that the housing market here will bounce back more quickly than that of other areas.
"Foreclosures in San Francisco went up in 2010 and the median sales price of homes here remains low," she says, "but we still have one of California's lowest foreclosure rates and the number of home sales has been rising recently. December 2010 saw a 4.4 percent increase in sales activity and there were more home sales in 2010 than 2009. All this indicates that homebuyers are regaining confidence and that the market is on its way to recovery." Well, regulars here know I've been saying that the RE market in San Francisco would hold up better than any other market in the Bay Area, and so far, it has done just that.
If the single maxim of real estate is location, location, location, we are lucking to live in the location that we do.
San Francisco Real Estate Agent Predicts 2011 Will Be A Great Year in Real Estate
San Francisco real estate agent Tim Gullicksen of Zephyr Realty predicts that 2011 will be a great year for the real estate market and for first time home buyers in San Francisco. Gullicksen, a veteran of San Francisco real estate, explains that recent economic activity has indicated both optimistic long term and short term effects on the real estate market.
"2011 is set to become a great year for first time homebuyers to get into San Francisco real estate," said Gullicksen, "The perception among prospective buyers seems to be that our economy has hit bottom and is now on a slow crawl upward. They did not want to buy if there was going to be further downward movement in the economy and home prices." Well, I hope he's right, but the proof will be in this year's pudding. Let's see if the traditional spring rush happens before we start the happy dance, though.
Office rents in San Francisco expected to soar this year | Kamala Kelkar | Local | San Francisco Examiner
Strong demand for the hip offices favored by tech firms and creative types will reward The City and the Peninsula with the country’s largest growth in office rents this year, according to a new report.
A report by the global real estate broker CB Richard Ellis said the cost of local office space could increase by up to 7 percent by year’s end.
Senior Vice President Meade Boutwell said after two years of declining rents colored by The City’s high unemployment and office-vacancy rate, more tech firms are starting up or relocating here. This has to be good news for the residential market as well. If more businesses are locating and hiring here, that means more employees will be looking for homes here as well. If these new businesses are mostly of the tech variety, look for a boom in SOMA condo unit sales.
10 reasons to be bullish on housing Outside the Box - MarketWatch
Despite headwinds such as looming shadow inventory, a lackluster job market and geopolitical instability, there are plenty of reasons why rose-colored glasses may be the real-estate eyewear of choice.
And while it may finally be time to be bullish on housing, there is one huge caveat.
The local bottom that the broad housing market experienced in April 2009 may yet be surpassed to the downside. If it is, housing bears will pound their chests, stubborn pessimism vindicated. They will be mistaking the trees for the forest. This recovery, which in many areas remains in full force, has been, and will continue to be, highly local in nature.
More home buyers paying cash
Increasingly, home buyers are selling investments to raise cash to pay for real estate, sensing a bottom in the housing market.
Fundamentally strong markets have thrived, while weak ones have languished. National, state, and even city-level indicators have been masking trends that are ongoing on a neighborhood level. This will continue, and those that ignore it will miss out on countless opportunities. Read Minyanville’s “Searching for a Real Estate Recovery.”
So without further ado, 10 reasons to be bullish on housing: These reasons all seem sensible. Read the whole thing. And let's hope they're right.
Is the January Bump Back in the San Francisco Real Estate Market?
In years past, when the market was stronger, there was a "January Bump" in the San Francisco real estate market. The surge in activity occurred as droves of buyers came back to the market after the holiday season, while sellers lagged behind.
This meant there were more buyers than property listings, and competition ensued. Last year the San Francisco real estate market didn't experience a January bump, but there are early signs that one is happening right now.
"I wrote an offer on a $399,000 single family home with some buyers in the Excelsior District, and within hours of receiving our over-asking-price offer, they received two other over-asking-price offers," said REALTOR® Tim Gullicksen of Zephyr Realty on California Street in San Francisco. "And this was the first day the home was on the market!" The "signs" of the local market have been all over the map, although they have generally been better than the greater Bay Area markets ex-The City.
This is another leading indicator. Let's keep our fingers crossed that it is really happening.
UCLA experts track commercial real estate comeback | Business | PE.com | Southern California News | News for Inland Southern California
Some parts of California will see demand for offices and distribution centers pick up sooner. One bright spot is Silicon Valley, because the economic recovery is being helped along by the manufacture of high-tech equipment for export.
But that interest hasn't moved across the San Francisco Bay, because the East Bay vacancy rates are still high. Another problem area could be Orange County's office market, which took a huge hit in 2007 and 2008 when companies that sold subprime mortgages collapsed. Experts believe it could take seven years for that market to come back. Yes. San Francisco's commercial market is closely tied to the fortunes of Silicon Valley, because there is a great deal of two way commuting between the Valley and, say, SOMA, in terms of tech establishments: The worker bees may be toiling away in cube farms in Cupertino, but their HQs and flash properties dot the City's landscape. Of course, as I've been pointing out for a good while, San Francisco has inbuilt and structural conditions that will tend to support both its commercial and residential real estate markets.
Silicon Valley startups lease offices close to the action despite high rents | VentureBeat
Finding office space may not be the sexiest aspect of starting or running a company, but choosing space where you’re close to the people and firms you want to collaborate with and where you can find the kind of talent you want to hire is critical.
That’s why we’re seeing so many tech startups focus in on two of the Bay Area’s hottest commercial real-estate markets — San Francisco’s South of Market (SoMa) District and Silicon Valley’s Palo Alto. The prices might be high, but many tech startups are willing to pay the premium to be close to the action.
Palo Alto and SoMa landlords couldn’t be happier with this tech boom. Vacancy has plummeted in these two markets. Palo Alto, which is more supply constrained than its northern counterpart, has 5% vacancy, and landlords collect as much as $70 a square foot per year ($6 per square foot per month). The South of Market district is growing faster than any other market in San Francisco, demanding rates that surpass rates in some Class A buildings in the Financial District at $40 per square foot per year on the high end. We've reported on this already, but it's worth repeating, especially as the possibility of a "third leg down" in real estate markets looms: SOMA is one of the hottest commercial (and residential) real estate markets in the country. The economy may be stumbling, but tech is once again hot, hot, hot, and SOMA is close to the beating heart of the high tech world.
Fresh & Easy planning Mission District store in San Francisco | San Francisco Business Times
The British company Tesco plc, the world's third largest retailer, created Fresh & Easy for the American market. It is a smaller format store than typical U.S. grocery stores like Safeway, and it features fresh prepared meals in addition to more traditional produce and packaged goods. Part of Fresh & Easy's strategy is to go into lower-income areas that lack grocery stores, such as San Francisco's Bayview neighborhood, where Fresh & Easy has a lease. Fresh & Easy also has a store under way in the Outer Richmond district.
It takes about one year for a store to open after a lease is signed, and the licensing and permitting process can take even longer in San Francisco. Wonnacott said Fresh & Easy announces store opening dates a month or two before the store opens. This sort of growth may be a good harbinger for the local real estate market. Penetrating into lower income areas will help with property values in those neighborhoods as well.
Owning home better deal in 72% of big U.S. cities
That's how many of the 50 largest U.S. cities offer a better deal on buying a home than renting. Renting is clearly more attractive in only four major metro areas - San Francisco, New York, Seattle and Kansas City, Mo., according to real estate data provider Which is probably why the majority of San Franciscans rent. Which, as Burbed points out, is no walk in the park:
More fun stats about San Francisco – median household income, median sales price, average rent | Burbed.com
Woot… even more good news for San Francisco. Wow… check out that rent/income spread! The average rent is 46% of the median household income! Sigh. No wonder much of the rest of the country marvels at the way we live here.
San Francisco Home Sales End 2010 Flat - TheStreet
SAN FRANCISCO (DQNews) -- Bay Area home sales ended 2010 with little sense of direction as prices appeared flat to down a bit and sales were slow. Overall trends continue to be dominated by distress sales and bargain hunting, with lots of discretionary and move-up buying on hold, a real estate information service reported.
A total of 7,178 new and resale houses and condos were sold in the nine-county Bay Area last month. That was up 17.5% from 6,111 in November and down 8.3% from 7,828 in December 2009, according to MDA DataQuick. Short take: The Bay Area sales continue to bounce around, but we are still falling year over year - down almost ten percent in December over December of last year.
I don't want to sound extraordinarily gloomy, but frankly, I think most of those claiming the bottom is in are drinking some rather strange Kool-Aid. Let's wait until we start to see steady (and that is the key word) gains on an annual basis before we start the celebrations.
San Francisco Bay Area Home Prices Fall as More Foreclosed Properties Sold - Bloomberg
San Francisco Bay Area home prices fell 1.3 percent in December as foreclosure sales made up a larger share of purchases, MDA DataQuick said.
The median paid for new and resale houses and condominiums in the nine-county region was $375,000, down from $380,000 for both November and a year earlier, the San Diego-based real estate data firm said today in a statement.
Foreclosure sales increased for the fifth straight month to 31 percent of all purchases, the largest proportion since March. California as a whole had the most foreclosures of any U.S. state last year, with 546,669 filings, Irvine, California-based data seller RealtyTrac Inc. said last week. Keep in mind that this is for the metro region as a whole, parts of which have been slammed with foreclosures.
Prices fell in all nine Bay Area counties, led by a 13 percent decline in Napa to a median $310,000. Santa Clara had the smallest decrease, dropping 3.2 percent to $460,000. San Francisco was down 5.1 percent to $617,000. We are still holding up, on average, better than any other county in the region.
New Tower Will Transform Market Street - The Bay Citizen
Soon a 22-story apartment building will rise near San Francisco's Civic Center.
It will replace the defunct yellow low-rise hotel across from the Orpheum Theater. And it’s the next piece in the ambitious 1,900-unit development called Trinity Place by storied San Francisco real estate mogul Angelo Sangiacomo. Maybe it's just me, but it seems odd to read the phrase "San Francisco real estate mogul" without the name "Shorenstein" also being in the sentence somewhere.
Salesforce spurs Mission Bay housing site sales | San Francisco Business Times
Farallon Capital Management has sold off two of its Mission Bay housing sites in the last few weeks, deals that suggest that the appetite for the burgeoning district is strengthening after Salesforce.com shelled out $278 million for 14 acres there.
United Dominion Realty Trust bought a 2-acre parcel in Mission Bay for $23.6 million, and it plans to start construction on 315 apartments in the third quarter of 2011, the company said this week. Mission Bay is the gift that keeps on giving for the local real estate market. In a few short years, the entire area has gone from a tangled, rusting wastelands of rusty railroad tracks to a huge, bustling university with a burgeoning population of students and university employees. From Dogpatch all the way up Third to AT&T park, the neighborhood is throbbing with energy - and money. I either bike or drive through the area on a daily basis, and have done so for years. The transformation is truly remarkable. The entire southern tier of downtown is being redefined and remade. It is truly amazing - and much of it happened during the worst of the housing/financial crash.
Housing Inventory Declines - Developments - WSJ
In December, inventories fell in every market tracked by ZipRealty except for Orlando. The largest month-over-month declines came in Boston (-14.4%), San Francisco (-12.8%) and Washington, D.C. (-8.5%). This is being billed as an average decline, but it feels a bit high to me.
Millbrae Real Estate Agent Wayne Says the Spring Selling Season Starts in February
As the spring selling season begins, home buyers become more aggressive in acquiring new real estate and prices tend to rise. While many think of Easter as the kick off of spring, in the real estate market the spring selling season actually begins in the middle of February. If an individual is selling a home, an apartment building, commercial real estate, or an investment property, the real estate agent should be an expert in capitalizing on this aggressive market. While this may be true, there are a lot of indications that the market as a whole has begun to slide down again, at least as far as sales go.
This makes next month a good litmus test: if there isn't much of a pickup in sales, then all of 2011 may turn out to be quite gloomy. (As if the past several years have not been....)
Why Is It a Secret Who's Buying California's Government Buildings? - San Francisco News - The Snitch
The Bay Citizen this past weekend followed up on our series of scoops begun in February about Gov. Arnold Schwarzenegger's rotten deal to sell prize California government buildings for an upfront payment, and then lease them back at exorbitant cost. The new news -- coming out of a lawsuit filed by fired officials whose job it was to oversee the buildings' finances -- is that it's actually big secret who, exactly, is paying to own 11 state office complexes in San Francisco, Los Angeles, and elsewhere. Private attorneys working for Schwarzenegger are proceeding with unusual haste to get the deal closed before the governor leaves office Jan. 3. However, there seems to exist no procedural deadline that would require the deal to close by that date.
And...
Former Cabinet Member Disavows Ties to Group Poised to Buy State Buildings - The Bay Citizen
Henry Cisneros, the former U.S. Secretary of Housing and Urban Development and current chairman of the commercial real estate firm CityView, on Monday disavowed his association with a mysterious consortium of investors who are poised to snap up 11 premier state office complexes, including San Francisco’s massive Civic Center. I suspect this will generate far more controversy before the entire issue is finally resolved.
What do year end median prices say about 2011 : On The Block - Real Estate
The graph, which correlates to single family homes only no condo data shows a general downward trend since 2009. We can't be shocked, since the same trend is mirrored throughout the U.S. and a good portion of the rest of the world. However, what many people still find amazing is the how high, even after coming down steadily for over a year, San Francisco median prices still are.
No surprise here. Even when I was one of the lonely voices predicting a catastrophic housing crash back in 2005 (Oh, don't be silly, Bill, housing isn't a large enough segment of the economy to do what you say it will. Really? What about those Mortgage Backed Securities and the Exploding Liar's Loans?), I also said that San Francisco would ride it out better than most. Even then, it was a rich city for the rich, and the rich always ride out these things better than anybody else.
Best American cities to invest your real estate dollars in 2011
But, wait! We know San Francisco, real estate value-wise, has done fairly well, compared not only to a large portion of the Bay Area, but also to a large portion of California and the nation. However, the city is budget crunched, raising the cost of living, and dealing with historic high unemployment. Where does Trulia come up with such a sunny outlook? When asked, Trulia's experts responded with these points, some of them very solid, and others perhaps debatable (and debate you will, in the comment section):
San Francisco Home Sales Flat in November - TheStreet
The median price paid for all new and resale houses and condos in the Bay Area was $380,000 in November, down 0.8% from $383,000 in October and down 1.8% from $387,000 in November 2009. The peak of the current cycle, $665,000, was reached in June/July 2007, while the median hit a low of $290,000 in March 2009. Around half of the peak-to-trough drop was the result of a decline in home values, while the other half was a shift in sales mix to lower-cost homes. That's an interesting stat of which I wasn't really aware.
Peaked at $665K, dropped to $290K in early 2009, and now, almost two years later, rebounded to $383K, approximately a 30% increase.
Reasoning between median and average pricing, as well as total numbers of homes sold, can be a little tricky. But on the whole, that looks like some fairly good news.
PR-USA.net - Price-Reduced Listings Continue to Soar Over Last Year, Despite Sharp Drop in Inventory, According t
The number of price-reduced homes on the market this November increased dramatically compared to the same time last year, rising 24.1 percent according to ZipRealty's Price Reduction Index, a monthly review of MLS-listed properties in 26 markets surveyed by the real estate brokerage (www.ziprealty.com; NASDAQ: ZIPR).
San Diego, Calif. shows the most dramatic change in price-reduced inventory, doubling from 2009 (5,396 listings) to 2010 (10,794 listings) with a 108.4 percent change. Three other California districts have also seen a huge year- over-year increase in the amount of reduced inventory, including San Francisco (100 percent), Orange County (91 percent), and Los Angeles (79 percent). Because so many folks bought at grossly inflated prices, there has been a natural reluctance to take a haircut, and therefore many would-be sellers have kept their properties on the market at unrealistically high prices for months or even years. But reality has a way of setting in, and it has done so with a vengeance over the past year, as sellers finally come to the realization that the good old days are not returning any time soon.
This is, on the whole, a good thing. We need to clear this inventory before the market can find a true bottom and finally begin to rebuild. San Francisco had some of the most inflated prices in the nation. Some of that must be corrected, and, as always, it will be. Eventually.
Boston bodes well in CMBS analysis ... although the numbers are scary | Boston Business Journal
The report, which provided 2011 outlooks for a variety of structured finance products, highlighted the city on the hill as one of five markets with the economic vitality and tenant demand to remain a viable option for investors in real estate debt. Other strong-performing markets mentioned in the report included Washington, D.C., New York, Seattle and San Francisco. Among the worst performing areas highlighted by Fitch were “most Florida cities,” Las Vegas, Phoenix, Detroit, “several Rust Belt markets” and several regions in California.
Fitch said the outlook for the country’s office market remains negative, as expiring leases will pose significant problems for landlords who borrowed heavily during the market’s peak between 2005 and 2007. The ratings firm said net operating income will likely fall in 2011, due largely to falling lease rates and aggressive marketing be new property owners. Yes, yes, San Francisco remains a "viable option" in several areas of the real estate galaxy. But we are a small island in a vast sea of devastation. The question for us, Boston, NYC, and the other few outposts of "not-quite-horrible" real estate status is whether they can continue to maintain their viability as the overall picture continues to be dismal.
Foreclosures poised to hit three million this year - kwch.com
SAN FRANCISCO (AP)RealtyTrac says the U.S. is still on pace to see more than 3 million households receive some sort of foreclosure notice this year. That would set yet another record from last year's all-time high of 2.8 million.
Spokesman Rick Sharga says unemployment remains stubbornly high and there's likely to be one new foreclosure action for every 6 to 10 jobs that are lost. This is a huge cliff of empty homes the market must climb to recover, but until this inventory is cleared one way or another, real estate will continue to lie in ruins. On a personal note, while the market in San Francisco proper has, as I expected, held up better in general than the Bay Area as a whole, foreclosures have devastated pockets of it. Seven foreclosures in my own condo complex of 100 units have absolutely destroyed comps and values, and dropped the value of my own home to less than half of what I paid for it in 2003. Talk about being underwater....
HomeownershipSF.org Helps the Moran Family Find Affordable Housing in San Francisco | Benzinga.com
The Moran Family realized their dream last summer by becoming homeowners in San Francisco thanks to assistance from SF Urban Community Housing Corporation (CHC). The Moran's found information about SF Urban on HomeownershipSF.org, a web portal for San Francisco affordable housing education and opportunities.
Self-employed renters with two children in the Mission, the Moran family saw many of their friends, especially those with children, move out of San Francisco. “Our kids are in school, we wanted to stay in the same area, and we didn't want to leave San Francisco,” said Jeremy Moran.
While they felt strongly about raising their children in San Francisco, they imagined that they could only afford a short sale, fixer-upper in the outskirts of the city. Instead, they are now ecstatic owners of a new three-bedroom, two-bathroom condominium in the Mission, within walking distance from their son Flynn's elementary school.
“For us to be able to buy here is like a dream come true,” said Amanda Moran. With parking, the condominium cost $305,000 and carries a monthly mortgage payment of $1,497 – less than the Moran's last monthly rent payment of $2,000. This is a nice story. Of course, if this is the standard "affordable housing" deal, the "ecstatic" owners will find that they have made approximately zero on their investment when they try to sell some years down the road. The other oddity: If they were handling a $2000/month rent payment, why couldn't they get some lender to finance that place?
Actually, I know the answer - getting first-time homeowners financing has become insanely difficult. And the system simply isn't now set up to handle the SF situation, where the affordability index still hovers in the 40% range, even after one of the biggest price crashes in local history.
U.S. Federal Reserve Beige Book: San Francisco District (Text) - Bloomberg
Real Estate and Construction
Activity in residential and nonresidential real estate markets generally remained unchanged at very low levels. The pace of home sales was mixed across areas of the District but appeared stable to down slightly on balance, despite improved affordability arising from low mortgage rates and past price declines. New home construction remained at exceptionally low levels, as sluggish sales and continued high rates of foreclosure caused the availability of new and existing homes to remain elevated. Demand remained weak overall in commercial real estate markets, and tenants in some areas continued to receive rent reductions and other concessions. However, further increases in leasing activity were noted for some major markets in the District, such as for technology companies in San Francisco, along with rising market values and improved availability of financing for investment transactions. Basically, the regional SF economy, real-estate wise, can still be summed up as a whole lotta nothing. The brightest spot seems to be tech companies bottom-fishing for prized leasing and property deals.
We still have a long way to go.
How Long Will It Take For The Housing Market To Return To Normal?
At the recent Urban Land Institute (ULI) annual fall conference in Washington, D.C., the question on everyone’s mind was: “When will the real estate market see some normalcy?”
Now that I’m back at the daily grind in San Francisco, I find myself reflecting on the discussions and unique perspectives shared by colleagues from around the world.
A key point continually reiterated was that the real estate markets would not see any type of norm until 2013 or 2014. The good news was that we’re at the bottom, but we may have five years of excess supply, particularly tied to pending and upcoming foreclosures . The average foreclosure takes nine months to a year, creating a hidden and looming supply of properties for the market. I've been hearing "We're at the bottom" for at least two years. I'll believe it when I see it - and I don't expect to see it until I'm looking at a rear-view mirror about two years after the fact.
Storm clouds swirl over California real estate market | abc7news.com
SAN FRANCISCO (KGO) -- With the slump in Bay Area home prices, it could take a few more years to regain its value. That's the projection coming out of a highly regarded U.C. symposium that took place Monday and unemployment is getting most of the blame. Frankly, this bit of reporting reminds me of somebody walking out into a hurricane and noting, "Hm. It seems to be raining." On the point of interest rates, Rosen says it's not a question of whether interest rates need to be raised, but when. Near-zero interest rates, he says, are starving retirees of income and forcing them to postpone retirement. They are also not helping home buyers to qualify for mortgages since credit remains tight. Rosen suggests that interest rates should be around 2 percent without damaging the economy. This is a much under-reported aspect of the current national zero-interest rate policy: Seniors and other savers are taking horrific punishment. What with the sudden surge in food and fuel prices, along with shrinking benefits, this is a whole segment of the economy that is essentially divorced from the real estate markets. Sure, seniors aren't the biggest players there, but they do downsize, selling larger homes and buying smaller ones. The condo market in particular takes a hit out of this particular equation.
Citybizlist Washington DC - ULI/PWC Report: Property Market Consequences - Entering the Era of Less
Even after steep drops in housing prices, many Americans just can't afford to buy homes - they don't have the savings for down payments or credit scores to satisfy necessarily more circumspect lenders. Instead of living large in sprawling suburban dwellings, stuffed with shopping center purchases, more folks will turn to renting apartments or smaller houses, preferably closer to where they work. Balancing checkbooks requires paring utility bills and especially transportation costs for car loans, fuel, auto insurance as well as auto maintenance and repairs.
Anybody aware at all of what has been going on in America over the past several years would have to agree with this gloomy assessment.
Yet last night, here in San Francisco, I went out to one of my favorite SOMA eateries, the Thai hotspot Suriya, and was unable to order desert because the restaurant was so jammed - on a Sunday night - that the chef was too busy to prepare his signature handmade sweet specialities. And you still can't find street parking anywhere downtown in the evenings.
Moody's Downgrades San Francisco's Credit Rating - The Bay Citizen
We currently have a deficit of nearly a third of a billion dollars on the City budget, which must be balanced by law. Our Mayor was just elected Lt. Governor, and will be leaving office a year early in January. The Board of Supervisors is in complete control of who will be selected to fill in until the next election. It is a foregone conclusion that it will appoint a rubber stamp to the office, which means that, in effect, the Board will be running the City without any formal opposition for the next year.
Now the ratings agencies have just made it that much harder for us to borrow money. You can bet that the Supervisors will be looking hard at new fees and sub rosa taxes on the real estate industry here in the City in order to help close this looming gap.
The latest SF Market Focus Report:
San Francisco Real Estate Market Continues in Positive Direction
Although Some Postpone Purchase Decisions
SAN FRANCISCO, CA, November 15, 2010 - Stabilized home pricing across most price segments, healthy pending sales activity, and rising confidence among sellers signals a continuation of the positive, though slow, shift in San Francisco’s housing market, according to the latest Market Focus report published by the Rosen Consulting Group and the San Francisco Association of REALTORS®. Despite the positive outlook, the report cautions that headwinds from slow job growth and lingering, troubled mortgages could delay a stronger market recovery for the city.
But John Lee, president of the San Francisco Association of REALTORS®, believes that higher housing affordability and the low-interest rate environment still make this an ideal time for financially-stable households, with a long-term perspective on the market, to purchase a home.
"In th eMailbag" »
The Realities of Real EstateAn interesting look at home ownership rates. Nationally, we have returned to the mean of about 2/3 of US population owns its own home, down from 70% at the peak of the bubble.
San Francisco apartment rents expected to rise
If you've been holding off on renting an apartment in San Francisco in the hope that prices might drop, you might want to act fast.
After falling precipitously from their peak two years ago, the city's rents - which historically have been among the highest in the nation - are showing signs of soon climbing back to 2008 levels.
Data from real estate research firm RealFacts show that San Francisco County's average asking rent for buildings of 50 or more units was $2,282 in the third quarter of 2010, only about $120 lower than the same quarter in 2008.
"Going forward, San Francisco rents will be appreciating for a while," said Sarah Bridge, co-founder of the Novato data collector. "More people are ready to rent. We'll be back to 2008 rents by the end of 2011."
Bridge's explanation for the upward trend echoes other recent real estate forecasts. Renters are a growing segment of the population as foreclosures and an uncertain job market have driven people away from single-family homes and toward apartments. In a way, this doesn't make a heckuva lot of sense. Let's take family A: They just lost their home to foreclosure. It's because they couldn't make their mortgage payments. Now, why would they have the money to make rent payments of $2282, on average? Add in the most usual reason they couldn't make their mortgage payments: a lost job. Unemployed people don't generally rush out to commit to rental payments in the neighborhood of 150% of the top unemployment award.
So what is driving rental prices back up here? The same thing that kept our local housing market in much better condition than that of the rest of the SF Bay Area: Rich people want to live here in The City, for whatever reason.
“Long, Bleak Winter” Ahead as More U.S. Homeowners Go Underwater – Real Sonoma - The Press Democrat - Santa Rosa, CA - Archive
The bad news is that more U.S. homeowners went underwater in the third quarter.
The slightly better news is that the San Francisco market, and presumably Sonoma County, bucked that trend.
Zillow.com reports last quarter 23.2 percent of all home mortgage holders owed their lenders more than their homes were worth. That compares with 22.5 percent in the second quarter and 21.7 percent a year ago.
‘In San Francisco, the number of underwater homes has dropped from 24.9% to 20.2%, mainly due to stabilizing home values that are pulling more people out of negative equity, says Stan Humphries, Zillow’s chief economist. The median sales price of existing single-family homes in the San Francisco metropolitan area is up about 25% since last year, according to the National Association of Realtors.’
Local real estate agents have said the experience for the Bay Area, including Sonoma County, has been similar to that of San Francisco.
For a number of reasons, the City was insulated from the worst of the housing crash and, as a consequence, is bouncing back faster and more strongly than the rest of the country - and even the Bay Area itself.
San Francisco Bay Area Market Report: Median Home Price Rises Slightly Despite Post-Tax Credit Sales Slowdown | RISMedia
Good news:
RISMEDIA, November 10, 2010—Slower home sales following the expiration of federal tax incentives for home buyers, a tighter inventory of bank-owned and entry-level properties, and increased activity in several higher-priced markets fueled a slight increase in the median price of a home sold across the greater San Francisco Bay Area during the third quarter, according to an analysis of MLS data issued by the research division of Better Homes and Gardens Mason-McDuffie Real Estate, a member of RISMedia’s Real Estate Information Network� (RREIN).
For the nine-county Bay Area, the median price of an existing, single-family detached home rose 1% from $543,629 in the second quarter to $549,680 in the third quarter. The most recent figure was up 14% from a year ago, when the median sales price was $482,353.
Not so good news: According to RREIN Member Better Homes and Gardens Mason-McDuffie Real Estate, overall, Bay Area home sales fell 15% between the second and third quarters and 19% compared with the third quarter of 2009. Breaking down the decline, home sales dropped in eight of nine counties on both a quarter-to-quarter and year-over-year basis. Napa County was the lone exception: Its sales increased by 5% from the second quarter and 6% on an annualized basis. In other words, we're selling homes for a little bit more, but we're selling a heck of a lot less of them.
New San Francisco Bay Area real estate market following trends
Last month mostly investors purchased 18.8 percent of all San Francisco Bay Area real estate market homes sold, compared with 16.7 percent a year ago and a decade-long average of 13.2 percent. All cash buyers accounted for 25.5 percent of sales in September, up from 24.0 percent a year ago and a decade-long average of 11.7 percent.
This factoid jumped off the page of the report when I read it.
Bay Area home sales continue slump; San Francisco prices decline | Money & Company | Los Angeles Times
Bay Area home sales extended their slump for a fourth straight month in September and prices were mixed in the nine-county region.
The median home price for the region was $395,000, a 2.6% increase from $385,000 in August and up 8.2% from $365,000 in September 2009.
Prices of previously owned homes declined in Napa, San Francisco and San Mateo counties on a year-over-year basis last month. San Francisco County’s overall median home price was down 4.6%, hitting $620,000.
Up, down, sideways. This seems like something of a rarity, though: SF prices going down, while the region as a whole is going up.
Beige Bk Text: San Francisco - Further Modest Economic Growth | iMarketNews.com
Summary
Economic activity in the Twelfth District appeared to post further modest growth during the reporting period of September through early October, although conditions in many sectors remained weak. Price increases for final goods and services were quite limited, and upward pressures on wages were virtually nonexistent. Demand for retail items and services continued to strengthen somewhat, but sales remained lackluster overall. Manufacturing activity in the District firmed a bit further on balance. Sales were robust for agricultural products, while demand was largely stable for energy resources. Activity in District housing markets remained sluggish, and demand for commercial real estate stayed weak. Contacts from financial institutions reported largely stable lending activity. Slow, sluggish, modest, lackluster. No wonder they call it the Beige Book!
This may be the "New Normal" here in the City for the foreseeable future. This sort of thing means that whoever is running San Francisco after the election, when about a third of a billion dollar budget gap needs to be closed, is going to have their work cut out for them. It probably also means new fees and hikes in current fees, and some of this will doubtless fall on the real estate community. After all, what other handy cash cows are available to the City Parents for milking?
San Francisco, CA real estate overview - Trulia.com
This is the Trulia snapshot of the current real estate scene in San Francisco proper. Check out the gap between offer and median sale. That said, there are an awful lot of towns that would love to have had their own RE market hold up as well as that of The City. Some years back, I did predict this would happen, that even in the SF Bay Area, SF's market would be hurt less than any of our neighbors.
You know what it boils down to? Wealthy people want to live here.
San Francisco Distressed Properties | CA San Francisco Fixer Uppers Homes
Elsewhere here, "Maui Real Estate" wonders about distressed properties in San Francisco. The above link cites 91 foreclosures currently on offer in The City proper. The general feeling is that these are starting to clear a bit, particularly the high end jingle mail version that were noticeable back in the middle part of the year.
Concerns Regarding the Economy Continue to Weigh on San Francisco’s Real Estate Market | Business Wire
The median single-family sale price in September 2010 increased by 2.1 percent from September 2009 to $730,000. Despite the monthly decline in closed sales, year-to-date sale activity continued to outpace sales during the same nine-month period in 2009, with 1,688 homes sold – a 10 percent increase from the previous year.
Approximately 48 percent of all completed sales in September 2010 were single-family homes priced less than $700,000; in September 2007, homes in this price segment represented less than 28 percent of all completed sales. While completed sales activity trended downward during the month, pending sales activity rose by 19.1 percent from September 2009, with 231 single-family homes going into contract. First-time home buyers remain a major driver of sale activity, particularly at the low-end of the market. The sharp reduction in home equity levels during the recent downturn in the economy has left many potential move-up buyers immobile. On the whole, I have to say that this report is, if not great, at least moderately good, news.
Real estate agent lists South of Market condo for $1.65M | BlockShopper San Francisco
Jeff Handwerger has listed for sale a two-bedroom, two-bath condo at 188 S. Park Ave. in South of Market for $1.65 million.
Handwerger paid $455,000 for the property in Oct. 2002. Unit #7 is 1,513 square feet in size.
Admitted, the high end residential market in SF has probably taken less of a hit than any other segment in the downturn, but this sort of offer has to be taken as an encouraging sign.
And actually, that's not bad.
ULI - Emerging Trends-Americas
San Francisco: Despite its formidable barrier to entry attributes, this 24-hour gateway will take investors on a ride of volatile pricing, occupancies, and rents. An expanding regional tech industry, fed by nearby Silicon Valley, should help. The report ranks this city one of the top buys for apartments, warehouse, office and hotels. San Jose is also in the top ten.
Too bad about our "formidable barrier to entry attributes." We coulda been numbah one!
Moving a Landmark: How the Famed Hamilton Building Is Making a Comeback
So what does this say about the San Francisco market? Shortly after the downturn in late 2008 there seemed to be a standstill in sales of moderately priced condos (in the under $300,000 range). Sellers could not afford to take a loss and buyers faced increasingly challenging financing options. Happily, all that has changed. In the past two months six Hamilton units have sold, and Herth Real Estate agent Tom Cacciotti was involved in each of those transactions, even representing both the buyer and seller in four of them. "The recent level of activity of sales in the Hamilton confirms that a Realtor with Tom's experience and passion makes things happen. In addition, the sale of entry-level condos is a clear indication that recovery of the San Francisco real estate market is well underway. It also demonstrates that lenders are once again open for business," states Larry Stebbins, owner and Principal Broker of Herth Real Estate.
It's telling that five years ago, the bottom tier of "low end condos" were selling in the half-million dollar range. San Francisco's "Affordability Index" is still quite high, compared to other urban regions (excepting, of course , Manhattan), but that is to some extent offset by the attractiveness of living here.
Prop. N would raise San Francisco transfer tax
Prop. N, he said, would cover high-end properties and have a limited impact on the private sector.
But John M. Lee, president of the San Francisco Association of Realtors, disagreed. "I think it's just going to hurt business in San Francisco," he said.
Companies looking to relocate here may decide to stay put or move elsewhere after assessing San Francisco's tax structure, Lee said. Although it is the seller - not the buyer - who pays the transfer tax, the price may be raised to account for the bigger tax bite. There is a saying to the effect that if you want less of something, either tax it, or raise the taxes on it.
San Francisco puts an onerous tax burden on many different things. It will be interesting to see if our natural advantages of climate, scenery, and culture can overcome these latest burdens.
Google grabs space for hiring boost - San Francisco Business Times
The deal comes as San Francisco’s commercial real estate market logged its first quarter of positive absorption in two years, a trend driven almost entirely by technology companies gobbling up space in South of Market. The completion of the biggest of these tech deals, a 270,000-square-foot lease by the social gaming company Zynga, was announced in late September by San Francisco Mayor Gavin Newsom. Twitter, Dolby and Salesforce.com are all out in the market looking for major expansions.
Potential demand from technology companies increased 6 percent from the second quarter and is 60 percent higher than in the fourth quarter of 2009, according to CB Richard Ellis. Over 84 tech tenants, totaling 1.7 million square feet of demand, are currently looking for space. A study from Colliers International found that tech tenants in the market could result in 745,000 square feet of growth. One of the biggest adavantages the San Francisco real estate market, both private and commercial, has over the rest of the nation is that it is ground zero for the continuing tech explosion.
Foreign buyers see big opportunity in housing bust
Miami is hardly the only hot spot for buyers from outside the United States. Real estate brokers say they've seen a surge in Washington, New York, Las Vegas, Los Angeles and San Francisco. In Seattle, Asians are buying property sight unseen, says Joe Brazen of Brazen Sotheby's International. In New York, 25 percent of buyers at the Armani-designed 20 Pine building, near the World Trade Center site, are from overseas. I suspect this is a significant factor in the local commercial market, as well as the residential. It's a bit frightening, though, isn't it? American investors used to scour the depressed economies of the developing world, looking for bargains. Now it's happening to us.
S.F. Real Estate Examiner - San Francisco Real Estate Market Update - Examiner.com
Lastly, the "know-it-alls" are those that might live in the area, aren't actively tracking the market, read a lot of publications and media, and just happen to "know the market is not good" based largely on what they're reading, but not experiencing. A common question from these types might be, "Is this a foreclosure sale?" What!? You must be kidding. Not only is this upsetting, but it is just plain bad. The media has created such a perception of our market that the sideline "know-it-all" thinks most homes on the market these days are foreclosures. We have news for you, most homes for sale in San Francisco are not foreclosure sales!
Although the majority of what is being reported is still, and always will be, bad news, the real news is that San Francisco is still doing just fine, and in our opinion remains a solid long term choice for real estate. The nominal declines in value we have seen should be music to many buyers ears, and will likely be short-lived. Information provided by sfnewsletter. This is an example of the sort of thinking I'm referring to in my post below. This gent is practicing the sort of determined cheeriness that gives real estate (and used car) sales people a lousy name. Somebody who might "live in the the area...read a lot of publications and media..." is a "know it all." Welcome to the internet age, Alex, where agents no longer have a monopoly on market data and knowledge.
And let me tell you, pal, if you had seen foreclosures destroy property values in a San Francisco neighborhood as they have in mine, you wouldn't be whistling past these pocket graveyards so happily. And we have a word for those who constantly advise others to bet the farm (or their new 30 year fixed mortgage) on the proposition that SF will always be "doing just fine" - and that word is "Pollyanna." You might look it up. Even if it does make you a know it all to do so.
SignOnSanDiego.com > News > State -- San Francisco voters endorse huge redevelopment project
SAN FRANCISCO – The city's largest redevelopment project since World War II got a major boost after voters overwhelmingly endorsed plans to build new homes, office space and possibly a football stadium in a long-neglected corner of San Francisco.
Sixty-one percent of city voters approved Measure G, which endorses developer Lennar Corp.'s plans for a $1.2 billion development project on 770 acres at the Hunters Point Shipyard and Candlestick Point in the southeastern part of San Francisco. Since I live directly across the street from the Shipyard (and, in fact, over a thousand new homes are in the preliminary building stages there right now) my sadly battered home's value (down more than 45% from its early 2007 peak) and my own financial picture would welcome this development. However, given the snail's pace at which the current development has proceeded, and the questionable expectation of Lennar being able to peddle 10,000 new homes any time in the next decade, I wonder if it can actually get done.
There is a lot of magical thinking going on in SF biz and real estate circles to the effect that the San Francisco housing market can never go down. Like much of conventional wisdom about real estate, I wouldn't be much surprised to see it eventually revealed as rank stupidity.
Home Prices Plunge Across California: Financial News - Yahoo! Finance
LOS ANGELES (AP) -- Median home prices plunged in many of California's most populous counties in February, with Southern California leading the slide with an overall drop of 17.9 percent compared to a year earlier, according to new housing data released Thursday.
The drops reflect a deepening housing crisis in the state, which saw home values soar during the housing boom then decline sharply in most areas.
Median home prices fell this year in 15 major counties, DataQuick Information Systems said.
...In the nine counties of the San Francisco Bay Area, the median price fell 11.6 percent to $548,000 compared to a year earlier and 17.6 percent from the region's peak median price of $665,000 last summer. Bay Area prices were essentially flat from January.
... The nine San Francisco area counties saw a similar slowdown, as sales dropped 36.7 percent last month from February 2007. Some 3,989 homes were sold in San Francisco, Marin, San Mateo, Napa, Alameda, Sonoma, Contra Costa, Santa Clara and Solano counties. That was up 11.2 percent from January. I wouldn't get all hot and huffy over that month-to-month increase in sales, either. Go look up the term "dead cat bounce."
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