Looking for the best happy hours that San Francisco has to offer? Look no further! Check out these 5 new hot spots…
Looking for the best happy hours that San Francisco has to offer? Look no further! Check out these 5 new hot spots…
What’s Behind San Francisco’s Real Estate Market?
This chart is a simplified, smoothed-out and approximate look at the last few real estate cycles in San Francisco, illustrating estimated percentage changes in home prices from successive peaks and bottoms of the market. The years between these high/low points are simply depicted here as straight lines (which does not reflect reality). Different market segments have experienced varying appreciation and depreciation rates over the years and how this chart applies to any specific property is unknown without a tailored analysis.
Why is San Francisco’s housing market so hot, so competitive? It’s worthwhile to take a step back and consider some of the main factors at play, some of which reflect general macro-economic trends and some of which are specific to the city itself:
Huge demand + surging wealth + severely inadequate supply =
today’s San Francisco real estate market.
None of this implies justification for an ever-appreciating real estate market: Almost all these factors can stall or even go into reverse. Real estate and financial markets are prone to a wide variety of extremely complex and hard-to-predict economic and political factors – and they typically go in cycles: up, down, flat, up again (repeat). And economic and market fluctuations are not uncommon within cycle phases. Still, these are, we believe, the fundamental realities underpinning the city’s homes market now.
San Francisco’s real estate market is now about 2 ½ years into its latest recovery. In the last few cycles, recoveries have typically lasted 5 to 7 years before a significant market adjustment, but, of course, the past is no guarantee of the future.
There are still some in San Francisco who don’t know much about Bernal Heights, some who don’t even know where it is. Simply put, they need to get with the program. While Bernal has been around since the 1860s, three decades have passed since it was “discovered.” In that time it’s gone from being forgotten to being one of the city’s hottest neighborhoods, real estate-wise.
Some of that change you can trace back to the opening of a single grocery store. In 1991, the owners of the Good Life grocery store on Potrero Hill shrugged off Bernal’s then-iffy reputation, choosing Cortland Street for their second location. At the time, Cortland, which had been Bernal’s “Main Street” for well over 100 years, was full of shuttered stores and dodgy foot traffic. So far had Bernal fallen that the venerable Bank of America branch on Cortland had considered pulling out of the neighborhood just a few years prior.
But Good Life owner Lester Zeidman received a letter from a customer, begging him to open a branch in Bernal Heights. When he did, almost immediately other businesses turned toward Cortland Street and Bernal Heights. The Liberty Café followed three years later, opening up Cortland to destination restaurants.
Many would say that by then Bernal was already on an upward arc. The neighborhood, a working-class enclave for more than a century, had begun attracting artists and activists years before. Some spent years fighting with those who sought to compromise Bernal’s abundant open space in the name of growth. The Bernal Heights Neighborhood Center was borne out of this type of effort in the 1970s.
Whatever travails Bernal has endured during its 150-plus-years history, today it is squarely in the sites of homebuyers and, beginning with its location, it’s easy to see why. Bernal is accessible to downtown San Francisco by bus and train. Nearby on-ramps to both major freeways offer easy entrée to South San Francisco’s biotech hub and to Silicon Valley. The shops and restaurants of Mission Street, Noe Valley and Glen Park are all within walking distance, but thanks to the movement begun 20 years ago by The Good Life and The Liberty Café, Bernal residents can find all they need within their own neighborhood.
Bernal is a large district with numerous personalities. Its defining feature is Bernal Hill, 500 feet tall and unpopulated at its peak. Bernal’s parade of cottages and bungalows climbs about halfway up Bernal Hill on all sides (“north,” “south,” “east” and “west” slopes). Above that is a huge park, popular with dog walkers, joggers and those enraptured by panoramic San Francisco views, i.e. almost everyone. In Bernal’s early days, residents used the hilltop for cattle grazing. Back then, almost everyone in the neighborhood had their own cows.
But it was almost not so; in the late 1960s, the City of San Francisco set its sights on Bernal Hill, imagining a Diamond Heights-style redevelopment project. Calling on their long history of activism (Bernal Heights residents played large roles in the San Francisco labor wars during the 1930s and earlier), Bernal locals worked to have the hill made into an official park, then created the Bernal Hilltop Restoration Project to restore it to its original state.
Barbara Pitschel, a long-time Bernal Heights resident who, with her husband Roland, spearheaded the effort, referred to Bernal as “a piece of country inside the city.” Though it’s grown and changed, it remains so today. What other San Francisco neighborhood still has dirt roads?
Bernal Heights is built on a section of the former Rancho Rincon de las Salinas y Potrero Viejo, granted to Jose Cornelio Bernal by the governor of Alta California in 1839. For several years, Bernal’s homestead, near the site of today’s St. Luke’s Hospital, was the only residence in the area, until the 1863 completion of the San Francisco to San Jose rail line made it feasible to come to Bernal Heights. Photos of Bernal from that era show open fields and farms, plus the faint outline of Holly Park and the fledgling campus of St. Mary’s College, located in today’s St. Mary’s Park neighborhood. The college moved to Oakland in 1889 and then to Moraga years later.
Bernal’s next population bump came after the 1906 San Francisco Earthquake and Fire. The flames stopped at 20th Street, leaving Bernal mostly unharmed. Refugees took shelter in 250 earthquake shacks set up in Precita Park. Many stayed. Some simply towed their shacks to nearby lots. Today, Bernal Heights has the city’s largest collection of extant shacks.
Bernal also has one of the city’s largest inventories of Victorian cottages, built by early Irish, Scandinavian, Italian and German settlers. In recent years, these homes have become very popular, especially on Bernal’s north slope. Here you can get not only Victorian charm but also unsurpassed views of the San Francisco skyline.
Views are common on Bernal Hill. Those on Bernal’s eastern slope – also a hot spot for Victorians – are treated to western-facing views of Twin Peaks; from the east the views are of San Francisco Bay and from the south Bernalites face San Bruno Mountain. These are the advantages of living on a hill.
Earlier this year, the real estate web site Redfin named Bernal Heights the “hottest neighborhood in the U.S.” based on buyer trends, which means that of all the neighborhoods in San Francisco – all red hot and getting hotter – Bernal stands above them. Wherever Bernal Heights stands on the pecking order of “hot” neighborhoods, though, its character remains unchanged; it is in many ways quintessentially San Franciscan, full of colorful homes and equally colorful characters.
Source : Parascopesf.com
San Francisco Luxury Home Sales & Prices
Continue to Climb Past Previous Peaks
July 2014 Update by Paragon Real Estate Group
With 7 Custom Charts & Tables
The luxury segment of San Francisco’s real estate market was the last to peak, in 2008, while most other housing segments started to lose steam in 2006-2007. After the financial markets crash in September 2008, the city’s high-end home market generally lost the least value on a percentage basis, 15-20%, as compared to the 20-60% drops seen elsewhere. Then it was the first to recover in late 2011/early 2012. Now, SF luxury home values have accelerated well past the previous peak values of 6 years ago. The factors include the increasing strength of the Bay Area economy; the huge, local surge in high-tech and affiliated wealth; an increase in well-heeled foreign buyers; and the fact that the highly affluent have, by far, profited most from the recent, tremendous appreciation in stocks and other financial assets.
The net result: There is an enormous amount of new and old money sloshing around the Bay Area looking for beautiful homes to buy, many of which are being purchased all-cash.
Luxury homes in San Francisco are typically defined as condos, co-ops and TICs selling for $1,500,000 and above, and houses selling for $2,000,000 or more. These are relatively arbitrary thresholds since $2,000,000 might buy a small-ish, fixer-upper house in Pacific Heights or a large, gracious home in another neighborhood. It is also true that the significant appreciation since 2011 has simply moved more sales into the “luxury” price category, which at current trends will soon require reassessment.
San Francisco Luxury Home Sales by Quarter
The number of SF luxury home sales in the 2nd quarter of 2014 was more than twice the number sold in the 2nd quarters of 2007 or 2008 before the market crash. Luxury condo sales in particular are skyrocketing.
Average Dollar per Square Foot Values
for San Francisco Luxury Homes
Average dollar per square foot is a very general statistic, but this chart gives an idea of the extraordinary values now being achieved by San Francisco luxury properties in different neighborhoods of the city. These are just averages: Some homes are selling far beyond the values seen here, including a few over $2000 per square foot.
San Francisco High-End Home Sales by Neighborhood
Luxury house sales in San Francisco are dominated by the swath of established, prestige, northern neighborhoods running from Sea Cliff and Lake Street through Pacific & Presidio Heights and Cow Hollow; by the greater Noe-Eureka-Cole Valleys district (which has seen explosive growth in this market segment since the mid-nineties); and, to a lesser extent, the smaller neighborhoods around St. Francis Wood and Forest Hill.
High-end condo sales have now overtaken luxury house sales in the city because of all the new-condo construction which occurred over the past 10-15 years – and this building boom, which lapsed in the 4 years after the 2008 market crash, is accelerating once again. (Very few new houses are built in SF anymore, though those few are typically quite expensive.) Besides the older Pacific Heights-Marina and Russian & Nob Hills districts, and the greater Noe-Eureka Valleys district, the newer neighborhoods of South Beach, Yerba Buena and Mission Bay have a rapidly growing footprint in luxury condo sales. And just very recently, high-priced, high-tech, condo buildings are being constructed in areas such as the Mission, Hayes Valley, and the Market Street and Van Ness corridors that were not previously considered luxury-home locations.
Luxury Home Sales With & Without Price Reductions:
Sales Price to Original List Price Percentage & Average Days on Market
For the sake of simplicity, this chart looks at all SF home sales of $2,000,000 and above in the 2nd quarter of 2014. The 88% of these listings that sold without price reductions averaged a sales price 9% over asking price, with a very low average days-on-market of 26 days. These statistics are an indication of a very high-demand market. Still, not every home sold quickly: Listings that were price reduced averaged a sales price 12% below original price and spent 2.5 months longer on the market. And then a fair number of listings expired without selling, typically due to being perceived as overpriced: Even in a red hot market, one can overprice one’s home – and doing so will severely impact the market response.
House Values in San Francisco’s Prestige Northern Neighborhoods
This table includes neighborhoods of varying home values, but still gives a fair representation of high-end home-price trends over the past 20 years. Average sales prices and dollar per square foot values have blown past their previous peaks of 2007-2008.
As mentioned before, other neighborhoods besides the “Prestige Northern Neighborhoods” now feature significant luxury home markets. More details on those districts can be found in the Neighborhood Values section of our website.
San Francisco’s Most Expensive Condo Buildings
Here one can see the impact of newer, luxury high-rise buildings such as the 4 Seasons, the Millennium and the Infinity Towers, all located in the greater South Beach-Yerba Buena area. However, this list ranks only the largest condo buildings and since many of the condos in the older neighborhoods are in much smaller buildings, they won’t show up here even though they have extremely high values as well. Besides location, premium services and expensive amenities, probably the most common element of luxury condos in San Francisco is spectacular views, which can add hundreds of thousands or even millions of dollars to the sales price. (The city’s most expensive condo sale ever – a penthouse at the St. Regis – closed for $28m in 2011.)
Paragon is one of the top 4 brokerages in San Francisco for luxury home sales
and has the highest Closed-to-List ratio of any of the city’s major luxury property firms.
For your convenience, below is a map of San Francisco neighborhoods.
Looking for some fun activities in the Bay Area this holiday weekend and beyond?
Check out these “18 Things to Do in July”
Source : Parascopesf.com
Enjoy a beautiful San Francisco weekend at The Stern Grove Festival, celebrating its 77th season. This admission-free performing arts series, takes place in Sigmund Stern Grove, a beautiful outdoor amphitheater located at 19th Avenue and Sloat Boulevard in San Francisco.
For concert schedules, event details, and more, visit: http://www.sterngrove.org/home
With all the buzz surrounding the recent growth and changes in Dogpatch, it’s important to keep one important detail in mind; the greatest changes are yet to come.
In the 1990s, when real estate developers discovered Dogpatch, they changed the neighborhood’s demographics. In to what had been a blue-collar area came a wave of young professionals who snapped up small condominiums and live/work loft spaces. They were drawn by modest prices and the Dogpatch’s easy access to downtown and Mission Bay, thanks to the new T-Third Street light rail line. In their wake came new restaurants, shops and a sudden realization of Dogpatch as a neighborhood with a high ceiling for development – one that remains vital, two decades later.
In fact, the drive to build in Dogpatch is greater now than it has ever been. As of this writing there are six separate residential developments (plus two parks) either proposed or underway in Dogpatch. If they all make it to completion they will add almost 1,000 new residential units (plus new retail and commercial space) to the neighborhood. On their heels comes the long-gestating Pier 70 project, which could add another 1,000 units. Dogpatch was booming. Dogpatch is booming.
What does that leave for buyers looking to get in ahead of the next wave? Plenty. For one, the neighborhood’s original condo and loft buildings are now established and well into the resale stage. Condos in Dogpatch aren’t large – most have one or two bedrooms – but many they sell for well below San Francisco’s million-dollar-plus median. Even units at the splashy former Esprit Factory, which was converted into high design living spaces in 2009, can be had in the $700,000 – $800,000 range. Note however that newer and larger units, like the ones at the newly completed Millwheel North building at 1275 Indiana Street, can fetch seven figures. As Dogpatch evolves, it evolves upward, like all of San Francisco.
Beside these newer buildings (note, too, that besides Millwheel North there will soon also be new apartments at The Gantry, almost complete and adjacent to Pier 70 at 2121 Third Street) Dogpatch offers a smattering of Edwardian and Victorian units and the rarely available original Eastlake Victorian single-family cottage. Beware the desirability of the latter breed, however; a completely gutted Dogpatch Victorian, one of the neighborhood’s original 19th-century Eastlake cottages, went on the market in late 2013 for $799,000. Two weeks later it was gone, sold for $1.152 million.
So what is in store for Dogpatch, a neighborhood that frankly right now doesn’t yield too many ownership opportunities? (only 27 homes closed escrow in Dogpatch between January and May, 2014)
Plenty of opportunity.
The next wave of Dogpatch housing will be mid-rise, limited to five or six stories mostly, though there is preliminary talk of waiving the city’s height limit for the building at Pier 70. Many of the new complexes will emphasize urban, eco-friendly lifestyles, with almost an equal number of auto and bicycle parking spots, pedestrian plazas and groundfloor retail space. 650 Indiana, which hopes to bring 111 new units to the district and will be adjacent to the proposed 8,000 square-foot Dog Patch Arts Plaza, will include a 1,700 square-foot “arts café” and a bike shop. Nearby 800 Indiana, which promises 338 residences and three public plazas, hopes to integrate a new dog park and a “dog washing station” to its proposal.
Dogpatch is not just getting bigger; it’s evolving to meet the needs of modern living as its profile rises. As more people realize its advantages – interesting, diverse architecture, buzz-worthy new restaurants and shops and easy access to Mission Bay, downtown and highways leading south, Dogpatch finds itself on the verge of becoming a much larger player in San Francisco real estate.
Source : Parascopesf.com
The new S&P Case-Shiller Home Price Index for April 2014 came out today and it showed another bump in home prices for the 5-county San Francisco Metro Statistical Area. For homes in the upper tier of home values – as most of San Francisco’s are – prices are up approximately 17% in the past 12 months and up 41% since the recovery began in early 2012.
Based upon what we are seeing on the ground in the market, we expect another bump in the May Index, which will come out at the end of July.
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