_77809_orig

662 Elizabeth Street

Seller Represented

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421726

233 Stanyan Street

Buyer Represented

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422859_01

1371 8th Avenue

Buyer Represented

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_77427_orig

320 Joost Avenue

Seller Represented
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423134

118 Galewood Circle

Buyer Represented

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From our NorCal network : The Artisan Group

4791959

172/174 Snug Harbor Road
Glenbrook, NV 89413
Offered at $4,150,000

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

Market Shifts in the San Francisco Homes Market

Where to Buy in San Francisco for under $1,000,000

Shifts in the San Francisco Luxury Home Market

The Biggest San Francisco Home Sales of the Year

The Paragon August 2014 Market Report

For your convenience, a map of San Francisco neighborhoods is included at the bottom of the newsletter. Adjusting your screen-view to zoom 125% or 150% will make the charts easier to read.

Buying a Home for under $1 Million

There has been a lot of chatter in the media recently about the median home price in San Francisco hitting $1,000,000. Here’s a look at the neighborhoods where one is most likely to find something under that price.

If one wishes to buy a house for less than a million dollars, choices are definitely shrinking with the recent, huge surge of appreciation – approximately 50% over the past 2.5 years. Neighborhoods like Bernal Heights, Miraloma Park and the Richmond district are quickly dropping off the list of options. The largest selection of affordable houses is now in the neighborhoods running along the western and southern borders of the city.

Houses_Under_1m

Looking for a condo or TIC under $1 million opens up a completely different and much wider array of neighborhood options in San Francisco. Needless to say, what one can buy at a particular price point may vary tremendously between neighborhoods.

Condo-TIC-sales-Under_1m

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Shifts in the San Francisco Luxury Home Market

20 years ago, “San Francisco luxury home” referred to real estate in the northern band of old-prestige neighborhoods running from Sea Cliff/ Lake Street/ Jordan Park through the Pacific Heights/ Marina district, to Russian, Nob & Telegraph Hills (plus a few smaller enclaves like St. Francis Wood and Ashbury Heights). Those neighborhoods are still known for large, beautiful, expensive homes and, indeed, still dominate the ultra high-end. But other districts have developed footprints in the luxury market due to changing tastes and demographics, to the high-tech boom creating new centers of gravity for wealth (and changing commuting patterns), and to the formation of entirely new SF neighborhoods.

The general Noe, Eureka and Cole Valleys district (much of which was originally blue-collar neighborhoods) is now one of the most sought after areas of the city, and its prices have blown through the roof – more houses over $2 million now sell here than in all the prestige northern neighborhoods combined. In the South Beach, Yerba Buena and Mission Bay area, some of the most expensive condo buildings in the country have risen from formerly B-class commercial-industrial wastelands. And most recently, new $1000+ per square foot condo buildings are beginning to pop up in places like the Mission, Hayes Valley and the Market Street corridor, catering to new, young, high-tech buyers.

These two charts show the shifts that have occurred just in the past 7 years.

Lux-Condo_Market-Shifts

Lux-House_Market-Shifts

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Sales Prices Over & Under List Price

Believe it or not, this next chart, which shows an incredible percentage of San Francisco home sales selling for more, and often much more, than asking price, actually indicates a small cooling from May’s market. In May, 7% of homes sold went through price reductions before sale; in July, price reductions went up to 11%. In May, the percentage of homes selling for 20% or more over list price was 29%; in July, that dropped to 24%. In May, 8% sold more than 1% under list price; in July, it was 12%. Most of July’s sales went into contract in June and if the market is cooling further, which is not unusual in mid-summer, it won’t show up in the statistics until later.

Over-Under-at-LP_July14

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Biggest Home Sales of 2014 YTD, by Neighborhood

These two charts of the most expensive house and condo sales so far this year are not comprehensive, but simply snapshots of highest home prices achieved in a selection of neighborhoods around the city. One can’t help loving the idea that the biggest SF home sale reported to MLS so far in 2014, at $11 million, was marketed as having “tremendous potential.”

Biggest_Condo-Sales

Biggest_House-Sales

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We recently wrote an article on the underlying conditions that, we believe, have given rise to our current real estate market, which can be found here: 10 Factors Behind the SF Market. Our mid-year report on the Bay Area apartment building market is here: Paragon Apartment Market Report. And our recent update on the S&P Case-Shiller Home Price Index is here: SF Metro Area Case-Shiller Report.

Median Home Sales Price by Month

As is quite common, the overall median sales price dropped in July after the spring spike. Such short-term fluctuations don’t have much significance until substantiated over the longer term.

Median-Prices_Short-Term

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Mortgage Interest Rates

Interest rates, whose movements are famously difficult to predict, have for the time being remained very low – an important dynamic in the real estate market as people compare the costs of renting and buying.

Average_30-Year_Mortgage-Rates

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San Francisco Neighborhood Map

For your convenience, below is a map of the city’s neighborhoods.

San_Francisco_Neighborhood_Map

SAN FRANCISCO REALTOR DISTRICTS

District 1 (Northwest): Sea Cliff, Lake Street, Richmond (Inner, Central, Outer), Jordan Park/Laurel Heights, Lone Mountain

District 2 (West): Sunset & Parkside (Inner, Central, Outer), Golden Gate Heights

District 3 (Southwest): Lake Shore, Lakeside, Merced Manor, Merced Heights, Ingleside, Ingleside Heights, Oceanview

District 4 (Central SW): St. Francis Wood, Forest Hill, West Portal, Forest Knolls, Diamond Heights, Midtown Terrace, Miraloma Park, Sunnyside, Balboa Terrace, Ingleside Terrace, Mt. Davidson Manor, Sherwood Forest, Monterey Heights, Westwood Highlands

District 5 (Central): Noe Valley, Eureka Valley/Dolores Heights (Castro, Liberty Hill), Cole Valley, Glen Park, Corona Heights, Clarendon Heights, Ashbury Heights, Buena Vista Park, Haight Ashbury, Duboce Triangle, Twin Peaks, Mission Dolores, Parnassus Heights

District 6 (Central North): Hayes Valley, North of Panhandle (NOPA), Alamo Square, Western Addition, Anza Vista, Lower Pacific Heights

District 7 (North): Pacific Heights, Presidio Heights, Cow Hollow, Marina

District 8 (Northeast): Russian Hill, Nob Hill, Telegraph Hill, North Beach, Financial District, North Waterfront, Downtown, Van Ness/ Civic Center, Tenderloin

District 9 (East): SoMa, South Beach, Mission Bay, Potrero Hill, Dogpatch, Bernal Heights, Inner Mission, Yerba Buena

District 10 (Southeast): Bayview, Bayview Heights, Excelsior, Portola, Visitacion Valley, Silver Terrace, Mission Terrace, Crocker Amazon, Outer Mission

Some Realtor districts contain neighborhoods that are relatively homogeneous in general home values, such as districts 5 and 7, and others contain neighborhoods of wildly different values, such as district 8 which, for example, includes both Russian Hill and the Tenderloin.

_75068_orig

47 Octavia Street

Seller Represented
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Case-Shiller Home Price Index Update

The Case-Shiller Index report for May 2014 for the 5-county San Francisco Metro Statistical Area was released yesterday, showing another small bump in home prices from April to May. The aggregate or total index is now up approximately 55% since the market recovery began in early 2012. The 5 counties covered by the index are San Francisco, Marin, San Mateo, Alameda and Contra Costa.

Our full report can be found here: http://www.paragon-re.com/Case_Shiller_Reflects_Accelerating_Home_Prices.

However, Case-Shiller also breaks out home price changes by price tier – low, middle and high – and each tier has experienced dramatically different trend lines since 2000. The low price tier – homes found mostly in Alameda and Contra Costa counties (though also other Bay Area counties not in the SF MSA, such as Solano, Sonoma and Napa) experienced a crazy bubble much larger than the other price tiers and subsequently experienced a much bigger crash due to foreclosures and short sales. The middle and high price tiers, which predominate in San Francisco, Marin and San Mateo, experienced much smaller bubbles and crashes. This is dramatically illustrated in the first graph below.

In all the Case-Shiller Indices the numbers refer to a January 2000 home value of 100. Thus a reading of 195 signifies a value 95% above that of January 2000.

image001

All tiers have seen big recoveries since 2012 began, but only the high-price tier has now exceeded previous peak values attained in 2006-2007. Because of the absurd size of the low-price tier bubble, its home prices are still far below previous peak values and it’s probably unreasonable to expect them to be surpassed anytime soon.

However, all the price tiers show very similar overall appreciation rates since 2000, running from 93% to 97% over the 14 ½ years, which suggest an equilibrium is being achieved across the general market.

This chart below tracks home price appreciation for higher-priced homes since 2012. As with all statistics, monthly statistics are much less meaningful than longer term trends.

image003

San Francisco itself, whose median house price is now over $1.1 million, has performed significantly better than even the general high-price tier, as can be seen in the median price chart for the Noe & Eureka Valleys neighborhoods of the city.

This chart is just a sample of how some San Francisco neighborhoods – especially its most expensive ones – have far exceeded general Bay Area appreciation trends, as far a previous peak values are concerned. Many of San Mateo’s cities have experienced a similar dynamic, as they both share the dominant effect of the high-tech wealth effect on home prices.

image002

Bernal Heights: Part 2

bernal2

As hard as it might be to believe, in the 1980s you could buy property in Bernal Heights for next to nothing. A long period of decline and neglect had left the proud, working-class neighborhood in such a state that businesses and homeowners alike had fled, leaving boarded-up storefronts and empty Victorians in their wake. Even the Bank of America, which had kept a presence on Bernal’s Cortland Avenue for decades, considered moving out.

Today, such an exodus seems absurd, especially in a neighborhood recently called the country’s “hottest” by Redfin. Buyers now target Bernal Heights so often that neighborhood homes routinely sell for well over their asking price, sometimes after fierce bidding wars. Bernal Heights is well past its “low” point.

Despite the furor, part of Bernal’s allure remains its relatively affordable market. In a city whose median single-family home price recently soared past $1 million, Bernal is still a middle-class neighborhood offering plenty of options above and below that mark. A recent check of Bernal homes on the Multiple Listing Service (MLS) showed single-family homes available for as little as $525,000 ranging all the way to $2 million, with a median asking price of $995,000.

Buyers are drawn to Bernal for a number of reasons, and not all of them are economic. For example, there are few San Francisco districts offering so many historic homes, thanks to a pair of factors. Because of Bernal’s history of neighborhood activism, it’s been free of large-scale redevelopment. The first settlers came to Bernal Heights 150 years ago; many of the existing homes in the neighborhood are almost that old. The second reason is somewhat ironic: Bernal’s long period of decline meant many of its oldest homes escaped being snapped up by ambitious remodelers or flippers during San Francisco’s early renaissance periods, leaving them authentic and intact for 21st-century buyers.

They’re the type of historic homes – Victorians – that traditionally capture the imaginations of San Francisco buyers. In Bernal Heights, you can purchase a 19th-century farmhouse with a view, a garden and all of the period details you can handle, and you can do this in the middle of the second-most densely populated city in America. Some buyers find this opportunity – to restore a classic Victorian or Edwardian home to its former grandeur – irresistible.

This is not to say that there is only one kind of house for sale in Bernal Heights or even one kind of historic home in one type of condition; far from it. This is a large neighborhood with multiple personalities and multiple types of living. North slope homes feature a breathtaking downtown view; south slope domiciles boast walking access to Cortland Avenue. Homes on the east slope are often more rural than their neighbors to the west (and often have views of San Francisco Bay) and property in St. Mary’s Park, at Bernal’s southern border, are of the same vintage and style as the fully-detached pre-war “streetcar suburbia” homes you’d find in neighborhoods like West Portal.

Bernal homes can run from the challenging to the spectacular. Some of the city’s most impressive contemporary construction is on Bernal’s north slope (as well as some of its most creative; a few north slope lots are extremely steep and narrow), and don’t forget that Bernal has San Francisco’s largest collection of existing earthquake refugee shacks from 1906, adapted into permanent dwellings. Some stand alone or are connected in twos and are easily identified; others have been integrated into other construction and are harder to spot.

The district has classic “full five” and “junior five” homes from the 1930s, 40s and 50s and new condominium complexes (small ones; Bernal’s homegrown activists have successfully blocked major development from encroaching on their neighborhood). It’s large enough to offer very different micro-neighborhood experiences within its borders; life near Precita Park is very different from life near Holly Park, for example.

All of this is what makes Bernal so attractive and what is driving its present-day popularity. It is, in many ways, unlike any other San Francisco neighborhood. No other offers such housing diversity, so many options at so many price points and the opportunity to “live in the country” while living in the city.

Source : Parascopesf.com