Archive for August 2012 | Monthly archive page

From our NorCal network : The Artisan Group

2600 Faretto Lane
Reno, NV, 89511
Offered at $3,995,000

For more information about this property or a referral to other areas of Northern California, please contact me.

Case-Shiller June Index Released Today

The June S&P Case-Shiller Index report released today continued to reflect the surge in Bay Area home values. Remember that Case-Shiller measures house values in a 5-county area and generally reflects the heat of the market 4-6 months ago. So far in 2012, the city of San Francisco itself is outperforming the 5-county area.

Our full report on Case-Shiller is online here: http://www.paragon-re.com/Case_Shiller_Index_Deciphered_for_SF

What Costs How Much Where in San Francisco

San Francisco Home Values
By Neighborhood, Property Type & Bedroom Count

MLS Sales February 1, 2012 – mid-August 2012

The charts below apply to non-distressed home sales with at least 1 car parking. Distressed home sales — bank-owned property and short sales — typically sell at a discount, but as the market recovers the number of such listings is rapidly declining.

If a price is followed by a “k” it references thousands of dollars; if followed by an “m”, it signifies millions; “N/A” means that there was not enough data to generate a reliable statistic. Where abnormal “outlier” sales were identified that significantly distorted the statistics, these were deleted from the calculations. Within each chart, the neighborhoods are sorted by median sales price, highest to lowest.

Very generally speaking and varying widely by city neighborhood, thus far in 2012, San Francisco home prices have increased by 5% to 15% over 2011 values.

Trends in Dollar per Square Foot Values for Non-Distressed Houses
in Selected San Francisco Neighborhoods

2012 Numbers reflect 2nd Quarter Sales Only


Trends in Median Sales Prices for Non-Distressed 2-Bedroom Condos
in Selected SF Neighborhoods

2012 Numbers reflect 2nd Quarter Sales Only

The MEDIAN SALES PRICE is that price at which half the properties sold for more and half for less. If there were 3 sales, at $1, $2 and $10, the median price would be $2. If there were 4 sales at $2, $2, $5 and $10, the median would be $3.50. Median sales price may be affected by seasonal trends, and by changes in inventory or buying trends, as well as by changes in value.

AVERAGE DOLLAR PER SQUARE FOOT is based upon the home’s interior living space and does not include garages, storage, unfinished attics and basements; rooms and apartments built without permit; decks, patios or yards. These figures are typically derived from appraisals or tax records, but can be unreliable, measured in different ways, or unreported altogether: thus consider square footage and $/sq.ft. figures to be very general approximations. Generally speaking, about 60-80% of listings report square footage, and dollar per square foot statistics are based solely on those listings. All things being equal, a house will have a higher dollar per square foot than a condo (because of land value), a condo will have a higher $/sq.ft. than a TIC (quality of title), and a TIC’s will be higher than a multi-unit building’s (quality of use). All things being equal, a smaller home will have a higher $/sq.ft. than a larger one. The highest dollar per square foot values in San Francisco are typically found in upper floor condos in prestige buildings with utterly spectacular views.

The AVERAGE SIZE of homes of the same bedroom count may vary widely by neighborhood: for example, the average size of a 4-bedroom house in Pacific Heights is much larger than one in Noe Valley; and the average of a Marina 2-bedroom condo is larger than one in South Beach. Besides the affluence factor, the era and style of construction often play large roles in these disparities.

Some neighborhoods are well known for having additional ROOMS BUILT WITHOUT PERMIT, such as the classic 1940′s Sunset house with “bedrooms” and baths built out behind the garage. These additions often add value, but being unpermitted are not reflected in $/sq.ft. figures.

Many aspects of value cannot be adequately reflected in general statistics: curb appeal, age, condition, views, amenities, outdoor space, “bonus” rooms, parking, quality of location within the neighborhood, and so forth. Thus, how these statistics apply to any particular home is unknown.

From our NorCal network : The Artisan Group

3036 Hansen Road
Livermore, CA, 94550
Offered at $1,174,900

For more information about this property or a referral to other areas of Northern California, please contact me.

From our NorCal network : The Artisan Group

1703 Octavia Street
San Francisco, CA 94109
Offered at $2,995,000

For more information about this property or a referral to other areas of Northern California, please contact me.

4326 Cesar Chavez Street


Represented Seller
(more…)

Home Sales by Price Segment

San Francisco Neighborhood Home Prices by Price Segment

These charts show the breakdown of San Francisco home sales as reported to the Multiple Listing Service in the first six months of 2012. The analyses are sorted by city district by the number of transactions in different price segments. The star on each map corresponds to the district being analyzed.

Whether you are considering a home purchase within a certain price range or contemplating the sale of your property in a certain neighborhood, this may give a sense of what sells for how much where in San Francisco.

From our NorCal network : The Artisan Group

970 3rd Green Court
Incline Village, 89451
Offered at $2,175,000

For more information about this property or a referral to other areas of Northern California, please contact me.

Three Recessions, Two Bubbles and a Baby (Recovery)

30 Years of Housing Market Cycles in San Francisco

Below is a look at the past 30 years of real estate boom and bust cycles. Financial-market cycles have been around for hundreds of years, all the way back to the Dutch tulip mania of the 1600′s. While future cycles will vary in their details, the causes, effects and trend lines are often quite similar.

In the first 2 charts below, tracking the Case-Shiller Home Price Index for the San Francisco 5-County Metro Statistical Area (MSA), the data points are for January of each year and refer to home values as a percentage of those in January 2000. January 2000 equals 100 on the trend line: 66 means prices were 66% of those in January 2000; 175 signifies prices 75% higher.

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1983 through 1995

(After recession) Boom, Decline, Doldrums

In the above chart, the country is just coming out of the late seventies, early eighties recession – huge inflation, stagnant economy (“stagflation”) and incredibly high interest rates (hitting 18%). As the economy recovered, the housing market started to appreciate and this surge in values began to accelerate deeper into the decade. Over 6 years, the market appreciated almost 100%. Finally, the eighties version of irrational exuberance — junk bonds, stock market swindles, the Savings & Loan implosion, as well as the late 1989 earthquake here in the Bay Area — ended the party.

Recession arrived, home prices sank, sales activity plunged and the market stayed flat for 4 years. Still, even after the decline, home values were 70% higher than when the boom began in 1984.

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1996 through 2011

(After Recession) Boom, Bubble, Crash, Doldrums

This next cycle looks similar but elongated. In 1996, after years of recession, the market suddenly took off and became frenzied — similar to what we’re experiencing today. The dotcom bubble pop and September 2001 attacks created a market hiccup, but then the subprime and refinance insanity, CDOs and derivatives, Ponzi schemes, books titled “Dow 30,000″ and claims that real estate never declines, super-charged a housing bubble. From 1996 to 2006/2008, the market went through an astounding period of appreciation. (Different areas hit peak values at different times from 2006 to early 2008.) In September 2008 came the market crash.

Across the country, home values fell 15% to 60%, peak to bottom, depending on the area and how badly it was affected by foreclosures — most of San Francisco got off comparatively lightly with declines in the 15% to 25% range. The least affluent areas got hammered hardest by distressed sales and price declines; the most affluent were typically least affected. Then the market stayed flat for more than 3 years, albeit with a few short-term fluctuations.

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San Francisco in 2012

A Strong but Young Recovery

In 2011, San Francisco began to show signs of perking up. An improving economy and growing buyer demand coupled with a low inventory of listings began to put upward pressure on prices. In 2012, as in 1996, the market abruptly grew frenzied with competitive bidding. The city’s affluent neighborhoods led the recovery, and those considered particularly desirable by newly wealthy, high-tech workers showed the largest gains. However, virtually the entire city is now experiencing a high demand-low supply dynamic.

The SF median house sales price has increased dramatically in 2012, though varying widely by neighborhood. But it’s still a baby recovery — though seemingly a healthy one — and the economy remains susceptible to big financial/political crises. However, the greater Bay Area, the state and the country are ALL beginning to show signs of a housing recovery. New home construction is rising, distressed sales are declining, the rent vs. buy equation has turned favorable to buying, and values are ticking up again.

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The 1983 – 2012 Overview

Up, Down, Flat, Up, Down, Flat (Repeat?)

Smoothing out the bumps delivers this overview for the past 30 years. Whatever the phase of the cycle, up or down, while it’s going on people think it will last forever: Every time the market crashes, the consensus becomes that real estate won’t recover for decades. But the economy mends, the population grows, people start families, and repressed demand of those who want to own their own homes builds up. In the early eighties, mid-nineties and now in 2012, after 3-4 years of a recessionary housing market, this repressed demand jumps back in and prices start to rise again.

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Bay Area Price Declines by Price Range

This chart illustrates the huge differences in the degree of value declines suffered by different price segments of single-family housing in the Bay Area: The lower the price range, the greater the percentage of distressed sales and the larger the declines in values. San Francisco, with its expensive housing, suffered less than most places, though it still certainly suffered. Distressed sales never made up the huge percentage of sales they reached in other counties, and now, with the market rebound, distressed-home listings in SF are rapidly declining.

Very generally speaking, the more affluent areas of the city saw a peak-to-bottom decline in the 15% to 20% range; the city’s middle price range saw 15% to 25% declines; and its lowest price segment went down 25% to 40%. Some neighborhoods are now seeing a rapid reversal of those declines.

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Is San Francisco an Exceptional Market?

Comparing Rates of Appreciation & Decline with Other Market Areas

Every market is different, and San Francisco is very different from the rest of the state and country, even from counties across the bay: Demographically, economically, culturally, in its severe limitations on growth — we can’t expand like Las Vegas or Phoenix or most counties — and in its overall desirability as a place to live and work.

The above charts illustrate how that translates into home values. Comparing the city, Bay Area, California and United States over the past 20 years, San Francisco home values appreciated more, declined less after the crash, and now appear to be recovering more quickly.

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Note on Methods and Data Sets

Calculating home price percentage changes, such as increases to or declines from peak value, are notoriously variable. The most dramatic results — and most often quoted in the media — come from picking the absolute highest value or lowest value month as the point of comparison. But monthly data often fluctuates dramatically without great significance, and we typically prefer quarterly or annual statistics if available. However, if a market is changing quickly, then monthly data must be used to illuminate the incipient trend. Still, sustained longer-term trends are always the most meaningful.

The above charts use a variety of data sets: S&P Case-Shiller Indices, San Francisco MLS sales and median sales prices from state and national Realtor Associations. Each has its own specific market area, property types and time period tracked, and methodology. These analyses were performed in good faith to create what we believe are true, if only approximate, reflections of market trends over time.

Percentage increases and declines are not created equal: A price jump from $500,000 to $1,000,000 equals a 100% increase, but falling back from $1,000,000 to $500,000, the same dollar change equals only a 50% decline.

From our NorCal network : The Artisan Group

1703 Octavia Street
San Francisco, CA 94109
Offered at $2,995,000

For more information about this property or a referral to other areas of Northern California, please contact me.