Coming Soon & the tale of 1 Cow Hollow block?

Is Cow Hollow hot enough that only a "coming soon" for-sale sign is enough to sell the home? The tale of a few similar homes on 1 Cow Hollow block.

In the below video I was just walking by and noticed a "Coming Soon" sign - and in my video was trying to remember past prices.... so a few quick facts to correct what I recalled on the fly in the video:

3055 Laguna - a single family home in Cow Hollow, was asking $829,000 and just sold on 11/22 for $929,000. Apparently with 5 offers.

I then refer to a home across the street that sold for "about a million". Well, in 2003 it sold for $850,000 but then in 2007 it sold for $1,389,000. Whoa! For some reason I thought it went for $1.1 or so.

Then to the home in question, 3020 Laguna with it's "Coming Soon" sign. The agent told me over the phone that he had it on his website, but I don't see it there (www.mariomarianirealtor.com). He said it was listed for $1.3 million or some really high number, but that everyone assumed it would probably sell somewhere in the $900,000's.

Well - in this video - I do a walk through - and yes, $900's is it's maximum value.

Finally, I refer to 3041 Laguna as a multi-unit building but it was just a much larger single family home with multiple levels. Check out the before and after photos here:

Sold for $1.1 million in Nov 2005 (915 SqFt on a 2173 SqFt lot)

A "private" sale (just outlawed by the San Francisco Association of Realtors). But just visit propertyshark or zillow and you'll find public tax record info. But suffice to say, when it was asking $3.75 million you know it sold for over $3 million.

So - what to do with the home in question? 3020 Laguna. Try to create a $3 million home ala 3041 Laguna, or some how pull off a $500,000 increase with next to now work? Ahh right, that's yesteryear's market. Stay tuned, and we'll report on what happens to "Coming Soon" which is STILL not on the San Francisco MLS.

Over promising & under delivering - a bad real estate recipe

Over promising and under delivering is a bad recipe in any facet of life, and one I wish we could ban in real estate here in San Francisco.

This TIC on Laguna Street in the Marina is currently listed with a photo of the Living room with windows facing Moscone Rec Park. I had seen all 4 TIC units in this building when it first came on the market so I knew the only two I liked at all were the front units with views of the Park.

In the view I state that I thought they all sold for around $700,000. Well, the other three sold in the mid to high $700's. Meanwhile, I guess that the one on the market is the front one BECAUSE of the MLS photo showing the front unit, and guess that today's value is around $550,000, or at least lower than it's new $599k asking price.

Then I show up on Tuesday's "Broker's Tour" and you can hear the annoyance in my voice that in fact the photo was misleading and #1 is the rear unit with views of the small yard and the neighboring building.

So my value guess now? Closer to $525k. A long drop from $699k.


Mayor's Office of Housing: down payment assistance

Get down payment assistance from San Francisco's Mayor's Office of Housing. This is for REO's and Short sales only, along with income restrictions, and quite a few other restrictions. But if you qualify, you can get help with up to $60,000 in down payment. Read up on "DALP" here.

There's also a long list of lenders who are "participating lenders" and I know two of them, Christine Rocca at BofA and Gordon Friedman at Guarantee Mortgage. So if you think you might qualify, give one of them a call for more details.


Interesting take on San Francisco's real estate market from my firm

My firm, Pacific Union, has a much more interesting take on San Francisco's real estate market that the two articles in my earlier post.

Discussing the "rate of demand" vs home supply for San Francisco single family homes.

Supply - or homes available for sale in San Francisco have only increased by 0.1% per year since 1998 from just shy of 63,000 homes to just above 63,000. "Rate of demand" is the percentage of all single family homes that sell in a given year. San Francisco's average rate of demand has been 4.7%. At that pace it would take 21.3 years for the entire inventory of homes to change hands.

When demand is above average prices tend to climb, when below, they tend to drop. More details and Pacific Union's take on the 2010 San Francisco market can be found here, and the chart is below:

Two bullish articles on Real Estate & the economy

Business Week and the New York Times each have very bullish articles on both housing and the economy.

From Business Week:
The author tries to make the case that interest rate is more important than purchase price - that each 1/4 point is worth roughly $12,000 so if rates go from today's 5% to, lets say 8% in a year or two, he claims that's worth nearly $144,000 in value. In other words, if prices decline due to interest rates going up, you've got that built in.

Meanwhile, from the NYT article:
They keep referring to the stock market rally from March lows as a "bull market" and how the "second phase" of the bull market might look.

Ahh, but the counter arguments are pretty obvious - no? And barely mentioned. Purchase price is paramount if you need to sell within 5 years. If you can hold for 30, then yes, lock in what will likely end up being the last time we ever see 5% interest rates. But the shorter your time line, the more advantageous it is to wait for even lower prices if you expect that to happen.

As for the NYT's "bull market". There are many economists who think the market must test the March lows before it can really become a bull market. And that could play out over the next 2 to 4 years, not the next 2 to 4 months. I'd be cautious messing around in the stock market since it's up so much higher than it's lows. Where can it really go now without earnings? And right now companies are not earning.


Tracking San Francisco foreclosures (REO's)

Tracking San Francisco foreclosures (REO's)

On February 22nd 2009 I reported foreclosures/REO's listed on the San Francisco MLS

Homes = 44 REO's of 570 total homes listed for-sale or 7.7%
Condos = 23 REO's of 949 condos/lofts/TIC's/coops (condo only number is a better metric which I have below - estimate at least 220 were TIC's of the total) so 5.2% of San Francisco condos were REO's

On July 18th 2009 San Francisco MLS listed foreclosures were:

Homes = 31 REO's of 578 total listed for-sale or 5.4%
Condos = 29 REO's of 668 condos (not including TIC's etc this time) or 4.3%

Today, November 25th 2009 San Francisco MLS listed foreclosures are:

Homes = 37 REO's of 484 total listed for-sale or 7.6%
Condos = 15 REO's of 606 condos or 2.5%

Interesting that Condo foreclosures are way down, but homes are up from July, and flat from February. Total foreclosures have trended down as a percentage of total properties for-sale in San Francisco, and as raw numbers. 67 in February, 60 in July, and 52 now. That contradicts other reporting I've read. One guess may be that Short Sales are up.... that's for another post.


Tracking San Francisco's SOMA & South Beach markets

Two recent listings to help track San Francisco's SOMA & South Beach markets

In May 2006 88 King St #1304, San Francisco sold for $1,260,000. Today it is on the MLS asking $995,000. If it sells there that's over a 20% price drop - or 100% equity loss if the owners put 20% down when they purchased.

In March 2008 555 4th St #814, San Francisco (the Palms) sold for $649,800. Today it is on the market for $550,000. A sale at the asking price would be a 15% drop. Unfortunately they've been asking $550,000 for 71 days, so it's more likely to also see a 20% drop.

To see these two listings on the MLS you can enter their addresses at www.SF-MLS-Search.com/welcome.html

$8,000 & $6,500 tax credits San Francisco buyers might be able to use

San Francisco home buyers have a much better chance of using the Home Buyer Tax Credits.

Income levels for the original $8,000 home buyer tax credit was $75,000 for a single person and $150,000 for joint filers. Those may be spectacular incomes in 90% of the country, but in places like San Francisco and New York City they barely make ends meet, let alone purchase a starter 1 bedroom condo in a neighborhood like Cow Hollow of Noe Valley.

But with both the House and Senate passing an extension of the tax credit that was to expire November 30th to April 30th 2010, they also increased the income limits to $125,000 (single) and $225,000 (joint). Of course the max home price is $800,000 which is only slightly above San Francisco's average home price. $800,000 buyers you a fantastic 1 bedroom Condo, or a small or "flawed" 2 bedroom condo (lack of parking for example) in neighborhoods like Pacific Heights, Cow Hollow, Russian Hill and even Noe Valley and Cole Valley. $800,000 however does get you a Single Family home in many other neighborhoods like the outer Richmond, the Sunset, even Glen Park or a "fixer" in Noe Valley.

San Francisco home buyers have until April 30, 2010 to enter into a contract to purchase via a 60 day extension.

The bill also provides a new existing homeowner credit - if you've lived in your current home for 5+ years you qualify for a $6,500 credit on a new purchase (there probably won't be a lot of San Francisco trade-ups to $800,000 since that's often a beginner condo/home in many San Francisco neighborhoods).

To start a home search in San Francisco try www.SF-MLS-Search.com/welcome.html and feel free to contact the SFisHOME team for help at info AT sfishome DOT come


What’s Happening in San Francisco, Marin, the Peninsula and South Bay

For Saturday Nov 7th and Sunday Nov 8th


For more SF listings please: click here

2nd Annual Fabulous Food Festival


Saturday, Nov 7 10:00a to 5:00p

Price: $10 general / $7 seniors

Phone: (415) 388-7208

Age Suitability: All Ages

at San Francisco Design Center: Concourse Exhibition Center, San Francisco, CA

What is the creation story behind the tasty marinade or flatbread? How did someone’s family pancake recipe turn into the family fortune? One hundred fifty exhibitors at the 2nd Annual Fabulous Food Festival ARE EXCITED TO INTRODUCE YOU TO THE NEXT BIG TASTE SENSATION! Pacific Expositions invites everyone to explore and discover what’s NEW, HOT, SPICY and COOL just in time for the home chef’s holiday entertaining and gift creations!

27th Annual San Francisco Jazz Festival presents Milton Nascimento --------------------------------------------------------------------------------

Saturday, Nov 7 7:00p

Price: $25/$40/$55/$75

Phone: (866) 920-5299

Age Suitability: All Ages

at Nob Hill Masonic Center: Nob Hill Masonic Auditorium, San Francisco, CA

Milton Nascimento is one of Brazil's most famous vocalists. For this performance, Nascimento focuses on the bossa nova standards that provided him with early inspiration, songs he explores on his 2008 album, Novas Bossas. It’s a rare opportunity to hear one of the world’s most beloved and influential musicians delve into the songs that shaped him.

3rd i's Seventh Annual San Francisco International South Asian Film Festival

Saturday, Nov 7 12:00p to 10:00p

Price: $10 general; discount passes available

Phone: (415) 835-4783

Age Suitability: Teens and up

at Castro Theatre, San Francisco, CA

From art-house classics to documentary films, from innovative and experimental visions to cutting-edge Bollywood, 3rd i is committed to promoting diverse images of South Asians through independent film. The 2009 festival includes offerings from India, Afghanistan, Bangladesh, Australia, Canada, Germany, UK and the USA. read more

African Dance and Drum Festival

Saturday, Nov 7 9:00p to 11:00p

Price: $25, Seniors & Students $20

Age Suitability: None Specified

at African American Art and Culture Complex, San Francisco, CA

The Sixth Annual San Francisco African Dance and Drum Festival runs from November 4,- November 8, 2009. The Festival has been enjoyed by over 1,000 attendees each year. The Saturday, November 7th, 9pm Gala African Dance and Drum Performance Features master drummers and dancers including Ndeye Gueye (Thiossanou African Dance Company), "Bontle featuring Neopolitan", Ousseynou Kouyate, Mohammed Kouyate, and many more - at the African American Art & Culture Complex, 762 Fulton,San Francisco.


Marin Art School 2009 Student Show

Saturday, Nov 7 9:00a to 9:00p

Price: Free

Phone: (415) 499-6014

Age Suitability: None Specified

at Marin Civic Center: Marin Veterans Memorial Auditorium, San Rafael, CA

Adult students of the Marin Art School in Novato are showcased in this exhibit at the Marin Veteran’s Memorial Auditorium in San Rafael. This exhibit in the Redwood Foyer is not open to the public daily. Those attending Marin Veteran’s Memorial Auditorium events are welcome to view the exhibit. The public IS invited to the public reception hosted by Marin Arts Council and Friends of Marin Center from 5 to 7 p. read more

Open Secret Bookstore & The Rainbow Body Cultural Center

Saturday, Nov 7 11:00a

Price: Varies

Phone: (415) 457-4191

Age Suitability: All Ages

at Open Secret Bookstore, San Rafael, CA

Open Secret Book, Music and World Art Gallery and the Rainbow Body Cultural Center celebrate our 20th year in San Rafael

Come enjoy a cup of homemade chai tea & nestle on a comfortable couch with a good book. Find healing in the bookstore's art-filled temple and enjoy the variety of daily events including, tarot, meditation, lectures and cultural performances.


20th Annual Dickens Faire at Bethel Church

Saturday, Nov 7 9:00a to 5:00p

Phone: (408) 246-6790

Age Suitability: None Specified

at Bethel Church of San Jose, San Jose, CA

The Women's Mininstries of Bethel Church will be sponsoring their 20th Annual Dickens Faire, November 6th, 10am-8pm, November 7th, 9am-5pm, and November 8 Noon-3pm. Over 50 vendors from all across the Bay Area. Stroll the aisles to find holiday, decorations, handmade arts and craft, antiques. Have lunch or dinner at the Holly and Ivy Cafe. read more

Pioneer High School Boutique

Saturday, Nov 7 9:00a to 4:00p

Phone: (408) 535-6310

Age Suitability: All Ages

at Pioneer High School, San Jose, CA

Holiday Boutique at Pioneer High School, November 7th from 9:00 am to 4:00 pm. this is a fundraiser for the school radio station. Vendor space still available. Located at 1290 Blossom Hill Rd, between Meridian and Almaden Expressway it's a great shopping location.

Kitten and Cat Adoption Fair

Saturday, Nov 7 11:00a to 3:00p

Price: free admission

Phone: (888) 538-9402

Age Suitability: All Ages

at Petco, Redwood City, CA
Come and join us for a spectacular adoption fair. We are adopting out many adorable kittens and cats!! We are Humanimal Connection... a non-profit, no-kill organization that is run entirely by volunteers.

11/6-11/8: Mel Cotton Sporting Goods' Resort Days 2009. Free Lift Ticket!

Saturday, Nov 7 10:00a to 9:00p

Price: FREE

Phone: (408) 287-5994

Age Suitability: All Ages

at Mel Cotton's Sporting Goods, San Jose, CA

Join Mel Cotton Sporting Goods for Resort Days 2009! Don’t miss Mel Cotton’s million-dollar kick-off sale, with all ski and snowboard gear at the best prices of the season including snow bibs at $24.99 and retired rental skis from $50. Spend $50 at the event and get a lift pass to Bear Valley or spend $100 and get a pass to Kirkwood while supplies last.


Case-Shiller home price index: San Francisco MSA

Results for Case-Shiller home price index: San Francisco MSA

I lifted a bit of research from a SocketSite commenter named "HappyRenter" and added a bit more analysis to see what's been happening with San Francisco "MSA" home prices (think Bay Area, not just the City of San Francisco, when looking at MSA numbers).

If the above is a bit hard to read check out the online PDF at http://homesofsf.googlepages.com/Case-Shillerresearch.PDF

Note that prices bottomed in both tiers in April 2009 (think March since contracts probably happened then, with Closes in April). This is in line with March Stock market bottom. Since the bottom prices are up 16.5% and 13.2% respectively in the Top and Bottom tiers. Those are pretty amazing jumps, and probably why Robert Shiller said we may be entering into another bubble.

Of course this hasn't happened in the City of San Francisco, but some believe we're tracking the larger MSA but on at a much delayed pace. So we've yet to bottom, and are not currently going up. Others believe we did bottom in March and have risen slightly. In my opinion the City is too large and diverse to draw any one conclusion. Every neighborhood, price range, and type of property is reacting differently. If you have questions on "your market", feel free to drop us a line and we'll do an analysis for you if you don't currently work with another Realtor.


Conforming Loan limits extended

Conforming loan limits for high-cost areas of the United States will remain at $729,750 through the end of 2010 following action in the House and Senate this week to extend the ability of Fannie Mae, Freddie Mac and the Federal Housing Administration to make and purchase those bigger loans.The higher limits were set to expire Dec. 31. The extension removes some year-end uncertainty for mortgage companies, which had already been preparing for lower limits. Without the new law, the high-cost loan limit would have fallen back to $625,500."Given the lack of a private secondary mortgage market, FHA, Fannie Mae and Freddie Mac are pretty much the only game in town," said Robert Story Jr., chairman of the Mortgage Bankers Association. "Extending the current loan limits through 2010 will allow more loans to qualify for these important programs and will help keep mortgage credit more accessible and affordable for qualified borrowers.""As we try to maintain the momentum of the housing recovery, providing affordable financing for qualified borrowers is critical. Extending the loan limits, along with other initiatives such as extending and expanding the home-buyer tax credit, will help restore stability to the housing and mortgage markets," he said.The jumbo mortgage market, loans that are above the Fannie/Freddie/FHA limits, virtually froze in the credit crunch of the last year, limiting the ability of borrowers and buyers in many cities to purchase or refinance homes. The higher limits, along with efforts by the Federal Reserve and Treasury to buy up mortgage securities, was meant to maintain liquidity in the mortgage markets.Fannie and Freddie, though, have there own problems. They are held in receivership by the government, and the debate over their future is a contentious one. Legislation to overhaul the mortgage agencies could come next year, but its shape is anything but certain.In the meantime, the FHA has become the lender of choice. As much as one-third of new mortgages today are being underwritten by the agency, which does not provide the loans but offers an insurance guarantee backed by the U.S. to lenders, with some lenders reporting 50% or more of their business is with the FHA.That has skeptics, who cite troubling default ratios in recent FHA loans, worried that the next big bailout will be of that agency.-- Steve Kerch, assistant managing editor/personal financeHOME-BUYER TAX CREDIT IS ADMINISTRATIVE NIGHTMARELast November, J. Russell George, the Treasury Inspector General for Tax Administration, warned the Internal Revenue Service that if they didn't ask for documentation from people filing for the first-time home-buyer credit, there would be fraud. The IRS ignored the advice. The result? The IRS doled out about $620 million to ineligible filers. Big deal, you might say. How does it affect me? Well, thanks to the problems, the IRS is now checking every return by hand.If you're among the millions of people who bought or plan to buy a first home in 2009, be prepared for long delays in getting your tax refund sent to you
sent from a BlackBerry

Short Sales on the rise but not REO's

Short Sales on the rise but not necessarily REO's

Word on the street is that while Notices of Default may be on the rise - that does not mean you should expect a rise in REO's.

The reasons:
1) Lenders are starting to finally figure out that Short Sales can save them time and money vs. REO's.

2) In areas outside of the City of San Francisco where an investor might buy REO's in bulk from a bank - the public may not see any evidence in a rise in REO's because they are turned around and placed on the market NOT as REO's because they aren't anymore.

Similar to yesterday's post - one of the conclusions is that there's more than meets the eye when trying to read the market.
sent from a BlackBerry


Could San Francisco home prices rise dramatically again?

Could San Francisco home prices rise dramatically again?

I thought I was reading an old article when I read Robert Shiller of Case-Shiller said "It is entirely possible that even with the bad news we are getting, home prices could start a major increase….what happens from here will depend on people's animal spirits and speculative impulses,"

Click here for the link to the article.

The article specifically references San Francisco:
"Home prices in certain areas like San Francisco, have risen by double-digits over four months, and if viewed on an annualized basis, they look like they are in 'bubble territory,' Shiller said."

When the Case-Shiller Index refers to "San Francisco" they are usually referring to the San Francisco "MSA" or what I'd refer to as the "Bay Area". There definitely have been pockets of strength in the City of San Francisco recently, but for big gains you can look outside of the City in low-cost areas where investors and first time home buyers are snapping up foreclosures. I predict gains to be realized in the next few reports for two reasons - the reports are old news, and Closed sales are actually reflect the month earlier action - you contract at a price, and don't get it reported until it Closes, often 30 days later.

Home prices fell off a cliff starting in late September 2008. We're probably a few weeks from seeing how this September did vs. last September, but the real news will be October over October and even November over November since again, a November sales price reflects a October contract - immediately after everyone was worried sick about the economy.

The month over month reports should be extremely interesting for a full year - and could - as Robert Shiller suggests - cause a new bubble mentality with reports of big increases leading to even bigger increases.

Foreclosure vs. Short Sale - which is best

Foreclosure vs. Short Sale - which is best?
Well neither is good. But there has been a lot of noise that Short Sales are so much better for owner/sellers than Foreclosures. From what I can tell some of the claimed advantages just aren't true. There are some advantages though.

Firstly, reviewing pages 3 thru 5 at eFanniemae.com's 2008 0816 announcement which describes underwriting rule changes in how Fannie Mae treats bankruptcies, foreclosures, short sales and other negatives transfers. If you go through a Short sale, they won't loan to you for 2 years. If you go through a foreclosure they won't loan to you for 3 to 5 years depending on whether you had "extenuating circumstances".

But the "noise" I am referring to about foreclosures supposedly being better than Short Sales is that from all indications your credit rating will get severely damaged in either scenario, and it's probably unlikely that your credit score will be high enough in 2 years time to qualify for any decent loan.

So is a Short Sale really better than a foreclosure? I think that's a case by case question.... and one you probably need to discuss with an attorney especially since one of the biggest questions is when and how a lender can go after you for a "deficiency judgement" on the amount owed.


SF Water ordinance update

San Francisco real estate Water Ordinance update:
It's official, Sellers must get a water inspection, fix any problems, and once you pass the inspection have it recorded. I hired Alex Mak Energy 415-533-3322) recently for $100 inspection and $75 recording fee. That was after a few calls and I figured I had found the best price until a colleague recommended Timothy Branham (415-269-9361) who charged $40 less.

The inspections took all of 10 minutes, so hopefully in time these might get even cheaper. Of the two inspections I needed for my listings, one passed, the other needed a new toilet - and Alex Mak got the toilet and installed it for $300.

For more on the Water Ordinance you can download the City's pamphlet at


3011 Jackson St #2 - new SFisHOME Group listing

New listing from the SFisHOME Group: 3011 Jackson St, #2, San Francisco, CA 94115

Click on "view detailed listing" link below to check out the video walk and larger photos, description, etc.


New listing: Luxury San Rafael Condo

Just Listed: 187 Professional Center Parkway, San Rafael

New on the Market. This exceptional property has been completely remodeled and has everything you need to enjoy your days off on the spacious back deck just soaking the sun or designing your own garden, because everthing else has been done for you. This home also features a media room/family room, home office/sleeping loft, balcony with views of Marin Hills, laundry room & 2 car garage parking with storage. Minutes to the 101 for an easy commute (15 Mins to GGB) and Terra Linda Farmer's Market, Shopping Mall, Mulberry's Pizza and Scotty's Market.


FHA loans in San Francisco

FHA loans in San Francisco - "spot approval" for your condo.

I just got off the phone with a lender I know at Bank of America who explained that it's very costly and time consuming for a building to get FHA approved, but very easy for a Buyer to get the particular condo unit they are interested in approved.

There are lots of criteria that must be met, but they are pretty basic and relatively easy info to track down. I'm quite sure the following list is not complete, so call your lender (or contact me and I'll provide my lender's contact info) for more details.

1. 7+ unit building - so condos in 2 to 6 unit buildings don't qualify
2. 51% owner occupied. That's a pretty low bar if you ask me
3. no "special assessments" in the past 12 months, and none planned
4. no current legal action against the building

The benefits of FHA loans are that as little as 3.5% downpayment is required, and your credit doesn't have to be as squeaky clean as a "normal" loan.

You might say "didn't low down with sub-par credit get us into the trouble we're in now?" To that I'd say 'yes', except I'm quite sure you have to prove your income to support your payments which is NOT what was happening in the crazy days that led us into this mess. In addition, San Francisco prices have already dropped, and the belief that real estate will only got up is now gone. Having SOME availability of decent loan products is important. Having a plethora of loan products for anyone who could breath (and some who couldn't when the con men got involved) was what really got us in trouble.

So if you earn a good income, but don't have a ton of money saved up, or your credit isn't what it could be, and you are interested in either a Single Family home, or a condo in a 7+ unit building, be sure to ask your lender how the FHA loan stacks up. For condos, ask the Listing Agent, the HOA Board or the Property Management firm the basic questions about assessments, litigation and owner-occupancy percentage. Your lender should also have a form that will need to be filled out.


San Francisco Water Conservation Ordinance

San Francisco Water Conservation Ordinance - amendment passed as of July 1, 2009

Low flow toilets, among other things, are now required when most homes or condos sell in San Francisco, or with major remodeling. While I'm re-printing the entire article I'll share a bit of good news in what appears to be costly news for Sellers:
The SFPUC provides free shower heads and faucet aerators to San Francisco residents and there is a rebate program to reduce the cost of water-efficient toilets.

The cost of hiring a plumber, and/or ripping up the floor if necessary for a toilet replacement will be your biggest costs. Additionally, if you are trading up, while you must do it on your sale, at least your new place will have it put in by that Seller. In addition, this will put San Francisco on the cutting edge of water conservation.

Here's the reprint:


Amendments to Water Conservation Ordinance Become Effective

The San Francisco Board of Supervisors has passed and Mayor Gavin Newsom has signed into law amendments to the city’s Water Conservation Ordinance. The amendments took effect on July 1, 2009.

Amendments to Chapters 12 and 12A of the San Francisco Housing Code for the “the conservation of existing water supplies by reducing the overall demand for water in residential buildings.” Under the amendments passed by the Board, water conservation devices, including water-efficient shower heads, faucet aerators and ultra low-flow toilets, are required to be installed in all residential buildings, except for tourist hotels and motels, upon the occurrence of specific events such as when a building undergoes major improvements, when there is a meter conversion, when there is a condominium conversion, and when there is a transfer of title.

A summary of the amendments reprinted from the REALTOR® Association:


The amendments expand the scope of retrofit work required under the existing 1991 ordinance upon the occurrence of specific events, such as when there is a transfer of title. That ordinance required residential property owners to replace toilets if they had a flush volume of more than 3.5 gallons per flush, along with other water fixtures.

Under the amendments, the following water conservation measures are required for residential buildings:

“Water efficient shower heads having a maximum rated flow of not more than 2.0 gallons per minute at a flowing water pressure of 80 pounds per square inch and faucets and faucet aerators having a maximum flow rate of 1.5 gallons per minute at a flowing rate of 80 pounds per square inch. In addition, all toilets having a rated flush volume exceeding 1.6 gallons per flush must be replaced with models that are rated at a maximum flush volume consistent with the maximum flush volume established in the San Francisco Plumbing Code, Chapter 4, Section 402.2, as it may be amended [currently 1.6 gallons per flush].” In addition, sellers must locate and repair all water leaks.

The amendments refine but do not change the basic structure of the ordinance, which requires inspections by qualified inspectors using a form provided by the Department of Building Inspection (DBI), filing and recordation of that form at the time of sale when title to a residential property is transferred by the seller to the buyer. In particular, the ordinance with the amendments requires the following:

A valid water conservation inspection and subsequent compliance with required water conservation measures shall be required of any residential building concurrently with the energy conservation inspection and compliance requirements.

A standardized form provided by the DBI and certifying compliance must be signed by a qualified inspector, furnished to the building owner or the owner’s authorized representative, and filed with the DBI within 15 days from the date of completion of the inspection.

When all of the water conservation requirements have been met, a certificate of compliance must be signed, filed with the DBI and recorded with the San Francisco County Recorder’s Office. (In the event of a title transfer, the certificate may be recorded concurrent with the transfer of title.)

The imposition of “reasonable fees” but not exceeding the cost of implementing the ordinance.

The following water conservation measures are required for residential buildings:

Replace all shower heads that have a maximum flow rate that exceeds 2.5 gallons per minute. Showers shall have no more than one shower head per valve.

Replace all faucets and faucet aerators having a maximum rated flow exceeding 2.2 gallons per minute at a flowing water pressure of 60 pounds per square inch.

Replace all toilets that have a rated flush volume exceeding 1.6 gallons per flush with models not exceeding the flushing volume established in the San Francisco Plumbing Code as it may be amended. (A seller of a residential building may request an exemption from replacing the building’s toilet(s) if the replacement would impact the architectural integrity of the building. In such case, the seller is required to install a device within the toilet to reduce the flush volume such as a flow restrictor.

The seller must locate and repair all water leaks. For one- and two-unit residential buildings, water meter registration shall be use to confirm the existence of leaks. For three- or more unit residential buildings, seller may either comply by ensuring no meter movement for ten minutes while all household features are shut off, or by completing a visual inspection for leaks. In addition, in all residential buildings, all tank-type toilets shall be tested with leak detector tablets or dye to detect slow valve leaks, and all flushometer-type fixtures shall be visually checked for proper operation with respect to timing and leaks.

Any person with an interest in the property subject to a water conservation inspection who contests the determination of a qualified inspector required water conservation measures may appeal said decision to the Director of the DBI within 10 working days from the date the completed inspection form was filed with the DBI.

The seller or the seller’s authorized representative must furnish a copy of the completed inspection form showing compliance to the buyer prior to transfer of title.

Further, there continue to be exemptions from the ordinance. They include, without limitation:

Transfers pursuant to a court order;

Transfers to a mortgagee by a mortgagor in default;

Transfer by a fiduciary in the course of the administration of a trust;

Transfers from one co-owner to one or more co-owners;

Transfers made to a spouse or domestic partner or to a person or persons in the lineal line of consanguinity of one or more of the transferors;

Transfers between spouses or domestic partners resulting from a decree of dissolution of a marriage or a domestic partnership or a decree of legal separation or from a property settlement agreement incidental to such a decree;

Transfers resulting by operation of law; and

Transfers by which title to real property is reconvened pursuant to a deed of trust.

The seller, or the seller’s authorized representative may transfer responsibility for compliance with both the minimum energy conservation measures and the minimum water conservation measures to the buyer of the building, if at the time of transfer, certain conditions are met, including but not limited to withholding one percent of the purchase price in escrow to pay for the required conservation measures within 180 days after the recordation of title. Previously, the ordinance only permitted this transfer for the minimum energy conservation measures.

The seller, or the seller’s authorized representative involved in the sale or exchange of residential building shall give written notice of the requirements of the water/energy conservation ordinance to the buyers. An informational brochure specifying the energy and water conservation requirements shall be made available by the DBI. Delivery of this brochure to the buyer shall satisfy the notice requirements of this section.

The SFPUC provides free shower heads and faucet aerators to San Francisco residents and there is a rebate program to reduce the cost of water-efficient toilets.

To view a copy of the Residential Water Conservation Ordinance, click on the first link below. To view Frequently Asked Questions concerning the amendments, prepared by the San Francisco Public Utilities Commission, click on the second link below.



More detailed information also is available by calling the SFPUC Water Conservation at 415-551-4730 and on the web at www.sfwater.org.


Lease Option homes in San Francisco - is it an option?

Lease Option homes in San Francisco - is it an option?

With a slower real estate market in San Francisco, especially for Condos and Lofts in the SOMA, South Beach and Mission Bay neighborhoods, a lot of Buyers are wondering if they can Lease Option a home.

If you don't know, a Lease option means you rent the Condo, with an option to buy at a later date. The question is why would a Buyer enter into a lease option, and why would a Seller enter into one?

A Seller can't get their wish price, so they would consider it if a Buyer offered them that price - but at a later date. The Buyer would only exercise the option to buy if the market improves. If the Buyer isn't going to offer the Seller their price, why would the Seller bother? Well, they might bother if the Buyer offers to pay a rent that is above market-rate rents. A Seller who might choose to not sell and rent probably isn't going to cover their mortgage with a normal rent unless they've got very high equity and low mortgage on their property. A Buyer in a lease option might pay extra high rent IF a large portion of that rent would go towards the eventual purchase price when/if they exercise their option to purchase.

I write all this because time and again I hear from Buyers who want both a low purchase price, and a low rent, and I have to ask "what's in it for the Seller?" Why would the Seller accept that offer? The answer is they won't. There's nothing in it for them. If they were willing to accept a low offer, they'd accept it from someone who wanted to Buy right now. And if they were willing to accept a low rent, then they'd rent it at market-rate right now.

The one caveat that could make a lease-option work is when a Buyer will come into money later on, or can't qualify for a loan now, but should have no problem in a year or two (think new job or too short of a credit history right now). But again, the Seller would still need some consideration for going with a Lease Option vs. a normal sale, or a normal rent. Think about it - and please share your comments if you disagree, or know of other alternatives to making Lease Options in San Francisco work.

Banked Owned REO properties in San Francisco - update

Banked Owned REO properties in San Francisco - update:

Prices are down in San Francisco... but is the sky falling (yet)?

A quick search of San Francisco REO's in the MLS reviews only 29 Condos, and 31 Single Family Homes are banked owned. Meanwhile there are 578 homes for-sale in San Francisco, and 668 Condos for sale in San Francisco. So roughly 5% of San Francisco properties (excludes TIC's, Lofts, Coops and multi-unit buildings) are banked owned.

Here are your San Francisco Banked Owned REO reports:
* 29 Banked Owned REO condos in San Francisco (report is available for 30 days from July 18th 2009

* 31 Banked Owned REO Single Family Homes in San Francisco (report good for 30 days from July 18, 2009


What makes San Francisco great - and not so great?

An interesting read over at TheFrontSteps real estate blog - a provocative post that poked fun at much of the rest of the country, it certainly did provoke... arguments for an against San Francisco ensued. I especially enjoyed "Sophie's" perspective on raising kids in San Francisco. Post and comments found here.

1335 Union St - price reduced

Funny what a "proper" price does for a property for-sale. 1335 Union St #10 is now $719,000 down from it's original $775,000. I've now gotten more calls and private showing requests in the past week than I probably did in the previous 3 months combined at the higher prices. Open again this Sunday, it's a fun place to check out even if you're not in the market.... top floor, corner unit, with Golden Gate Bridge Views. Use the "view detailed listing" link below or visit www.SF-MLS-Search.com and type in listing #355037 for more info:


FHA approved Condos

FHA loans can mean as little as 3.5% downpayment on a home or condo. Any home in good condition that is under $729,000 will do. FHA won't fund fixers. But condos need to be approved.

To find the approved San Francisco condos use the HUD link

I found 17, but not all of them are in San Francisco proper. Here's the list:


Price reduction: 1335 Union - 1BR with Golden Gate Bridge Views

www.1335UnionStreet.com is now only $729,000. Homes with views of the Golden Gate Bridge are much harder to come by than one might imagine. This very large 1 bedroom is perfectly situated half way up the block from Polk Street. Steep enough to provide views over the neighboring building, short enough to make for a great walking home. A 1/2 block to everything that Polk Street offers, and even walking distance to Fisherman's Wharf & Aquatic Park, as well as Union Street (Union Street fair is today) and Chestnut Street.

This location also provides for an easy downtown commute.

We are Open tomorrow/Sunday from 2-4pm. To preview, be sure to check out the 1335UnionStreet.com link because it has a video walk through of the flat. Then come check out the views, location and condition for yourself on Sunday. Or call/email for a private showing appointment any other time or day.


Direct Lender vs. Mortgage Broker

I wrote a post about whether it was best to go direct to the bank for a loan, or through a mortgage broker back in March. Here's that article.

Well, I got to see it first hand with a recent transaction where the Buyer went through a Mortgage Broker, who ended up going with one of my two favorite lenders, and sure enough it took weeks longer to get the loan done and approved then my direct experience at just about the same over lapping time when a client of mine went direct to that lender.

I have mad love for really, really good mortgage brokers, but right now they are all taking their loans to just a couple of banks, so why not go direct? If a Broker is reading this feel free to chime in with a rebuttal by using the "comments", but for now I'll do my best to convince my Buyer clients that going direct is in their best interest.

Keep in mind that any type of kick back is illegal - so there is nothing in it for me with whoever you go with - this really is a "peace of mind" and speed recommendation. Eventually, when liquidity in the mortgage market really eases up, I'm sure I'll go back to my favorite Brokers, but not just yet.

Buyer Testimonial

I don't often post testimonials on this site.... but I so often read the negative comments that the general public has about Real Estate Agents, and my rebuttal is that you just need to find the "right" agent to avoid that experience. Not too dissimilar from finding a great mechanic.

So I hope you'll pardon me for sharing this testimonial here:

Truly, a big thanks to you for working with us relentlessly! We have come across many Real Estate Agents and definitely knew that we chose the right one working with you; down to earth, straight to the point, no nonesense talk, knowledgeable and extremely reliable. We always had a good sense that you had our best interest at heart and we appreciate that you definitely put the work in. Another thing that stood out was was how responsive you guys are, always kept us updated and in the know, even with your little newborn, you were indeed very dedicated!
Also, I really was very touched by your gift, it was a lovely surprise and a very kind gesture, we'll definitely look forwards to going there and enjoy it.
For sure, we will come back to you whenever we decide to sell our current or future place and will further recommend you to people that we know.
Take care and enjoy your little family...until next time!
Rachel & Ajmere.

Wow. That made my week. Thank you Ajmere & Rachel.... you were even better to work with. By the way, when Rachel wrote "you guys" she's referring to my business partner at SFisHOME, Ciara Piron. If I couldn't make an appointment or see a property Ciara is always there.


REO offer rules - don't bug the Listing Agent

I lift this "comment" from "JimtheRealtor's" blog in San Diego. It apparently is verbatim instructions from a Listing Agent sent to all interested properties in his REO listings. It just goes to show how hot the low-end foreclosure market is in areas outside of San Francisco like San Diego.

"Thank you for your many emails, phone calls and dropped off and faxed offers. Thanks for your patience as you have filled up my email and phone services. The agents receiving your calls thank you for your courteous manners as well.

We have received 12 offers thus far. The majority are cash offers well over the 200’s. FYI- After working with this client for over 7 years, This client prefers cash and quick closes and large, non refundable earnest deposits, CLEAN OFFERS!!!. (This is a hint, I don’t make the rules).

EMAIL ALL OFFERS IN ONE EMAIL, RIGHT SIDE UP, (yes, I have gotted them side ways, upside down and the best, is 20+ emails one page for every email). If you are not learned on scanning please go to Kinkos).

ALL offers MUST include copy of the earnest deposit check, PROOF of funds, 8 page Purchase Contract and 2 page buyer advisory, Agency and WPA if seller paid termite work is being requested.

Please submit your buyers highest and best offer as the seller will not counter, only the 2 highest offers will be submitted (per seller instruction), one for acceptance and 2nd for a back up offer. CLEAN OFFERS ONLY. Bank owned are TDS and Statewide exempt. Submit only emailed offers (this email to all inquiries, this does not meant to suggest you did not email your offer). YOU MUST VISIT THE PROPERTY BEFORE SUBMITTING AN OFFER, REALLY!!!

SOLD AS IS- seller has no knowledge on ANYTHING, if you need to talk to me or have questions concerning this property, it is not the right property for your client. NO FHA OR VA OFFERS, because the MLS says so!!!!!

If I pissed you off, please feel to do what you must, I work for the seller and not you.

This email is intended to save me, agents and your clients from the frustration and time it takes to submit an offer on something they most likely will not be purchasing.

Thank You,"

Ahh - that is good stuff. Despite getting upset myself with an REO agent here in SF when I wanted to submit an offer and he wasn't cooperative, I now get it. We have so few REO's, but thanks to San Diego I now know what to do here in SF the next time a Buyer client of mine wants to submit an offer on an REO. Email it in sit tight. And don't send it faxed sideways one page at a time. Lesson learned :)


Infinity on the move - literally

The Infinity SF sent out a press release (here) about the "new" 2nd tower welcoming it's new residents. Apparently as many as 75 of them after "averaging 6 sales a week".

The verbiage is a tad unclear as it says 322 homes have sold in the 365-unit first phase "and more than 75 new homes sold at The Infinity in the past 90 days". Well, both phase 1 & 2 are called The Infinity, so are some on phase 1 with most in phase 2????

By the way, apparently "Blu" at 631 Folsom is now 20% sold out, nearly at their 25% goal for loan approval, and they are "set for May move ins" - all according to the sales agent I spoke to today.


Possible good news on Short Sales?

I'll believe it when it happens... but any news about the banks getting serious about allowing Short Sales to happen is welcome. I can't get excited after my one and only Short Sale experience in which I got 4 offers... all above the REO (bank owned) price it was listed at recently after the two Lenders on the condo refused to cooperate with each other.

As this article states, Realtors shy away from Short Sales if we think there is little chance of success, and that REO's sell for less than Short Sale properties (not always the case, but with mine is most definitely was).

In short the article is about Bank of America being willing to accept only 5% of a HELOC's value rather than 10% when the Short Sale is approved. This does NOT get me excited. In my one Short Sale the 1st bank offered the 2nd bank $1,000 to release their over $100,000 2nd loan. So this is like BofA saying "when we're in 2nd position via a HELOC, we'll now happily take $5,000 on a $100,000 loan" while the 1st lender is only offering $1,000. They are still worlds apart (even though $4,000 apart doesn't sound like much on a $600,000 condo, it is when you're dealing with over worked and out of touch banks).

But a baby step is a step in the right direction. I'd just like to see a few more before I'm willing to try to help another homeowner try a Short Sale here in San Francisco.

San Francisco mortgage fraud story

OK, I had to google it after writing the below post. And I got all of one story found here.

A Tennessee man who conned an elderly woman into taking out a fake reverse mortgage in which he pocketed $140,000. Terrible story, yes. On the scale of the scams I've found in Southern California and Utah, not so much.

Are San Francisco's values "safe" if we didn't have the kind of mortgage fraud these other areas have had? I'm not saying that, but it is VERY obvious when homes were falsely assumed to be worth $1 million more than they actually were, and people bought more homes based on those comps, the decline in valuations is going to be catastrophic. When hundreds of homes in one community are "bought" for $300,000 when they were only worth $150,000, that's a 50% drop just when the fraud is removed, never mind the craze southern California experienced. So if we avoided large scale scams, we're in a much more normal cycle.... if you can call the near-great-depression-two "normal".

Mortgage Fraud week at SFisHomeBlog

I seem to have developed a morbid fascination with mortgage fraud. Type in "mortgage fraud" into google and one of the States or Cities you know saw extra high bubble valuations, and you get outrageous results.

In part my fascination is to support the "san francisco is different" argument that our prices aren't quite the "bubble" of other areas. It's not hard to believe when you read a story like this one from Utah.

This one quote pretty much says it all:

"Clarke admitted to falsifying property sale values, in some cases by more than $1 million per transaction over the actual sale price on the Wasatch Front Multiple Listing Service, in order to create false comparables in the Riverbottoms area to help him sell neighboring homes at higher prices."

I've now read about a gang leader in Pasadena, a "Bay Area" con artist who pulled a similar scam in San Diego, and I know that Miami is chock full of scams. Atlanta, Las Vegas, Phoenix will no doubt be easy marks for my morbid googling side show to San Francisco real estate.

The question... is San Francisco different? I'm convinced there was some funny business, but I just don't see how we could have anything on the scale of these few scams I've found in 5 minutes on Google here in good old SF.

By the way, if you yourself didn't get scammed... it's not all roses. Also from the above article:

"In addition to the mortgage lenders' losses, several hundred residents in the area also suffered collateral damage in the aftermath of the scam. About 180 residents appealed their property tax valuations in 2007 after the mortgage scam sent property valuations of some 550 homes in the Riverbottoms area up between 50 percent and 100 percent in just one year, according to the Utah County Assessor."

So when we see very high San Francisco prices.... we want to know that it's because very real people, with very real money, drove the prices up. Not large scale fraud.

The ugly side of real estate - a Pasadena, CA story

An agent and Seller asking for "money out of escrow" to accept a Short Sale offer

A "short sale" is when the loan on the home exceeds the proceeds from the sale.... and the Seller doesn't have the money to make up what is "short" so the lender takes the loss. In this "work around" the Seller is trying to con the lender.

I'm sure we had some questionable deals in recent years here in San Francisco, but from the stories I'm finding out fraud in other markets, I just can't imagine we had any where near the level of problems in the worst bubble areas.

Oh, and what a beautiful day it was today in San Francisco... it felt like a 100 degrees.


GMAC hiring - a different view of the jobs market

I always find it interesting when people assume Realtors are all make a killing when the market is hot, and that we're going broke when the market slows down. In truth, both present their own challenges. Similarly, right now everyone assumes that anyone who was a mortgage broker or lender is out of work or in huge financial trouble. But this article points out that GMAC is hiring 1,000 new employees.

The article sites refinancing, and increase Jumbo loan business, for the big uptick in GMAC's business. My guess is that re-fi's account for 90+% of the hiring. One of my listings is in contract and the Buyer's mortgage broker called me to see if I knew any Appraisers who could make it to the home earlier than his "go-to" guy could. Sure enough I have a friend I'd been out of touch with for a while who got his Appraisal licence around the time we lost touch, so I took the opportunity to catch up and see if I couldn't throw him a little business... just assuming he would be struggling right now. The truth is he is slammed and couldn't fit in the appraisal for days after the mortgage broker's guy. Re-fi's have him slammed.

It was sort of a "doh" moment... when interest rates at an all time low, of course everyone in the entire world is trying to refinance.

So it would appear that the acts of the Fed to lower interest rates is helping in quite a few ways. GMAC and other lenders, as well as Appraisers are hiring, and making money. Many homeowners are getting rates that are likely to keep many of them in their homes... fewer sales = less inventory, and fewer in-trouble owners = fewer foreclosures.

As for my business.... my partner Ciara and I are very busy too... but not too busy for your phone call. The "downturn" if you can call this relative blip in the San Francisco market has meant a lot of "wanna be" agents have left the business, and that makes our job easier. Hiring a quality agent is more important than ever, and whether you are Buying or Selling we recommend you interview several agents... just so long as we're one of them :)

More San Diego real estate & mortgage fraud

I've seen what appears to me to be some evidence of fraud in San Francisco, but a condo or home here and there.... vs. hundreds of homes by a San Diego street gang, and in the video a couple of post down, 81 condos in one identity con. This two part story - a street gang running a con in conjunction with a real estate agent and other conspirators really takes the cake.

Here's the gang member side of the story:

And the real estate agent side:

More San Diego fraud(?) in the two videos below.


Jim the Realtor - "Obvious fraud?" video

Jim the Realtor is my new hero. He cracks me up, and exposes San Diego's dirty real estate world. Check out this video for a taste

Mortgage Fraud's impact on San Diego Real Estate

Pretty shocking video... two things of note... the scam artist is from the "Bay Area". And the scam prices were new "comps" most likely causing other buyers/sellers to assume ever higher prices. When a market has this type of activity, expect their prices to drop much further than most.


1335 Union St

The SFisHOME Real Estate Group's newest listing. Top Floor Golden Gate Bridge View corner unit. 1,000 SqFt 1 bed 1 bath with parking, in-unit laundry, extra storage & more. Watch the YouTube video walk thru here. Watch the photo slide show below or use the "view detailed listings" link below for showings & info. Open Sunday 2-4pm.


Sunday Open House feedback on 514 Elizabeth Street

As a Real Estate agent I pride myself in pinpointing the "fair market value" of homes I'm assisting Sellers to sell, and Buyers to buy. I spend countless hours evaluating all comparable sales and current property on the market. Sometimes it happens quickly, sometimes I feel the need to keep researching, but eventually I come to a certain conclusion of what Buyers will think a home is worth.

It's always interesting to then see my research get tested by real buyers, in this case by feedback at this past Sunday's Open House for 514 Elizabeth Street.

We've priced the property at $895,000 for a 2 bedroom (can be used as a 3 bedroom) 1 bath. There are plenty of "comparables" that sold for far less, some very close in price. But then you need to add in some seriously valuable features that 514 Elizabeth has, that most comparables don't.

For one, the location is simply as good as it gets in Noe Valley. Elizabeth is just 1 block to the extremely popular 24th Street shopping corridor in Noe Valley. Yet Elizabeth is a quiet and quait street. In addition, 514 Elizabeth is just in from Noe Street which means it's basically a flat walk to get to 24th. Just 1 block over towards Castro Street and you have to deal with a hill. Elizabeth & Noe Streets is also 3 blocks to Church Street and the J-Church MUNI line and several bus lines. In other words, it's got it all location-wise.

Secondly, and this is from serious feedback from the Open House, the kitchen/family room/dining area is amazing. The sun shines everywhere with 2 skylights and windows in nearly every direction. Plus you look at green immediately outside nearly every window. One buyer who started at the front where the formal living room and bedrooms are located then entered the kitchen/family room area and her eyes went wide and she exclaimed "oh my, I love this".

Thirdly, I'll group a bunch of mini-features, that when added up, really do set this Condo apart from it's competition. And again, this is Open house feedback. 1) It's remodeled, yet it retains significant old world charm. 2) top floor is more desirable since no one stomps on your ceiling. 3) everyone remarked how special the shared garden is. 4) large walk-in laundry room with storage/closets. 5) large pantry and tons of kitchen cabinets.

Fourth, it comes with the attic deeded, and that kind of additional storage is definitely valuable to a number of buyers.

Frankly, 514 Elizabeth is close to a $1 million dollar property with one exception. The downstairs owner owns the garage. They are going to lease a side-by-side spot to the new owner of 514 Elizabeth for $200 per month. But having it "deeded" adds value. So when other Agents came by on Tuesday at the "Broker's Tour" and they immediately saw what appeared to be an under-priced property. But the non-deeded spot made the price seem about right to most.

Of course I'm convinced because I spent so much time researching the market, and Buyers and Agents alike seemed to agree with 6 sets of Buyers spending a very long time at the Open and asking a ton of questions. Of course you must judge for yourself. If you're in the market for a Top Floor 2 to 3 bedroom condo in Noe Valley come by this Sunday's Open House from 2-4pm. Or call us for a private showing. Or first check out the video walk through at www.514Elizabeth.com

TIC lottery conversions taking longer than ever

San Francisco requires all multi-unit buildings with 3 to 6 units that wish to convert to Condos to enter their lottery to try to win an application ticket. Only 200 units are allowed to convert a year, and that was just fine when only 200 units entered. Today there are so many units vying for a lottery ticket that according to G3MH.com "The City estimates that most properties entering the 2009 conversion lottery for the first time will not win conversion eligibility before 2030."

In other words, don't plan on buying a TIC in a 3+ unit building (or a 2-unit with only 1 owner occupier) unless you plan to also sell it as a TIC.

There's been a push to try to get the City to allow current lottery entrants to buy an application to convert to generate revenue for the City. But San Francisco's Board of Supervisors are unlikely to agree to that no matter how dire the City finances might become.

When considering buying a TIC, be sure to hire a Buyer's agent who knows TIC's so you know what you're getting into. I personally think TIC's are excellent investments, and the "risks" are over blown by unknowledgeable people. But since the promise of a conversion to a condo is so remote for all except 2-unit buildings with 2 owner occupiers, you need to know you are likely to be selling a TIC whenever you plan to move on.


Getting the best loan: Direct lender or Mortgage Broker?

Thinking of buying a San Francisco condo or home? First things first, you need to know if you qualify for a loan, what kind & how much. In the past my recommendation was to speak to two Mortgage Brokers and one direct lender, compare rates and fees and then get "pre-approval" with whoever was the best.

Today things have changed. The contracting credit market has limited the number of banks a Broker can shop. More over, it seems there are only a handful of banks who have competitive rates, and reasonable qualifying criteria. I won't name names on the "bad" lenders, but I've experienced, and heard other stories, of a number of pre-approved loans that did not go through when the lender found some minor item that disqualified the borrower or property from getting the "pre-approved" loan. And these are often at the 11th hour when Buyer and Seller thought the deal was done. Needless to say, after hearing more than one story about one well known lender, I'm done sending anyone there. Plus, a buyer of mine recently shopped that lender, and they couldn't compete on rates and terms with my two favorite direct lenders. So they charge more, have harder qualifying standards, and then change things on you at the 11th hour.

So today, I refer my Buyer clients to only 2 banks, with a 3rd and a 4th as back ups in the very rare case #1 and #2 can't get the job done. One of my two "go-to" banks is Bank of America.

The impetus for this blog post was an article today in Inman news about BofA getting aggressive with their Jumbo loans. Currently the "low end" of the San Francisco market (if you can call $600k's and lower "low end") is smoking hot. Two recent listings of mine, one asking $649k and another $625k, both got multiple offers soon after hitting the market. I also have several buyers with top ranges of $600k and have included condos just above $600k hoping they could get them at $600k, and yet everything they like is getting snapped up by other Buyers very quickly and above my Buyers' purchase price range. So, so much for a falling market, at least on the "low end" of the San Francisco market.

The reason for this hot market is 3 fold. First, the Spring (March thru June) is the seasonally the hottest market in San Francisco every year with buyers and sellers coming out of the wood works, and that's true this year too. I had over 100 people through an Open House yesterday. Second, interest rates for "conforming" loans (those at $629k or less) are at record lows at 5% and even less. So buyers can afford a lot more (10% more in comparison to when rates were 6% for example). Third, the "low end" of the market are largely first time home buyers who have been priced out of the market for so long, and they seem to be viewing this market as their first chance in years to get into the San Francisco market. I had one first-time home Buyer at my open house yesterday tell me his Accountant recommended he find a write off, and said a real estate loan was the best way. So there are a few reasons first time home buyers are jumping in.

So if the "low end" is hot because of low interest rates, the BofA news could spark the high end market too. We saw this happen in 2006. I had thought we were in for a soft and slow year in early 2006 but then the market took off again. In hind sight that was apparently sparked by the availability of alt-A loans which qualified a lot more buyers. More demand spurred price appreciation.

Could we see a resurgence in the $1million+ market in San Francisco? Only time will tell. But for those in that market, BofA was already one of my top two lenders, so they need to be one of your first calls. Feel free to contact me for a referral to the lender in BofA I use.... who incidentally worked for a Brokerage a few months ago and made the change to a direct lender for the very reasons I cite above. There were far fewer places to shop, so his services weren't needed as much. Today, he's got a lot on his plate with re-fi's and lots of new applications, especially on the "low end". I suspect after BofA's jumbo loan announcement he'll only get busier.


Video tour of 514 Elizabeth St

Top floor 2BR remodeled Condo in the heart of Noe Valley

Condo is located just 1 block to 24th Street's shops, and 3 blocks to MUNI and Church Street. Open Sunday 1-5pm and Tuesday Noon-2pm

Contact us for showings at INFO at SFisHOME dot COM or 415-652-3780

Noe Valley Condo - new Listing

Top Floor Remodeled 2 Bedroom Condo in the Heart of Noe Valley. Just 1 block to 24th Street, and 3 to MUNI & Church Street. This is a very light and bright condo with an amazing kitchen, dining, and family room area great for entertaining. Full details and photos at:



Excelsior District update - a closer look at the CBS report

The CBS TV news report started off with a story about a home in the Excelsior getting 40 offers. I find it instructive to compare what's happening now, to what's happened this same time last year.

Running a search using the San Francisco MLS, for all Single Family homes that are For-Sale now, or in Escrow ("active contingent" or "pending") or have Sold in the past 2 months (1/10/09 - 3/11/09) we find the following:

For Sale = 21
In contract = 22
Sold past 2 months = 11
(report details here)

Same time frame in 2008 = 12 sold (report found here)

Looking ahead in 2008, over the next month only 5 more sold in the next 30 days, and 11 more in the 30 day period after that. So assuming the 22 that are in contract now end up closing within 30 days sales would be up 400% year over year. If they close in 60 days they are up by 37%. The truth is probably somewhere in the middle, but either way, the CBS report certainly seems accurate for this one neighborhood (I'm not convinced of that for all of San Francisco even though I have seen a significant uptick in my own business too).

If you then compare Sales prices, the 11 that sold these past 2 months averaged $532,400 (median $530,000). The 12 sales from that period last year averaged $642,000 (median $644k) so prices are down 17%. But if you take a closer look, in part it is that Buyers are buying smaller places this year. The price per SqFt is only down about 3% from $467.38 to $452.28.

One final point about the statistics. Looking at the current report, you'll note the 21 homes for sale. With 11 selling in the past 2 months, or 5.5 per month, it's only a 4 month supply of homes. That supply was probably a lot larger just a few weeks ago since 22 recently went into contract. It looks to me that in the past month, an entire 4 months of inventory was purchased. Talk about "pent up demand". Wow.

Single Family home Short Sales in San Francisco

Single Family Homes continue to far outpace Condos in the Short Sale category according to the San Francisco MLS. As I just wrote there were 46 apartments short sales, but this report shows 86 Home short sales.

The 86 is up from 54 on Sept 1st 2008. Once again, there are a smattering in prime locations, at least in terms of sections of the city like the 2 in Cow Hollow. However, upon closer look 2243 Greenwich is next door to a fire station and is pretty hideous, and 2621 Lombard is "highway 101" just as it turns towards the Golden Gate Bridge on ramp.

56 of the 86 are in "District 10" or the southern most part of the City that has been hardest hit by price drops. This district include the Excelsior where yesterday's CBS TV news reported on a home that received 40 offers. So the low prices appear to be attracting a ton of interest, potentially marking a bottom in the local market.

"Known Short Sales" in San Francisco

Keep track of Short Sale listings in the San Francisco MLS, today, March 12th brings us 47 Condo/Loft/Coop/TIC listings with the "Known Short Sale" box checked in the MLS. The list of the 47 can be found by clicking here (only available for 30 days).

For more info on any of these listings you can enter the address in the quick search section in the left column of this blog.

I ran a similar search on Sept 1st 2008 and found only 13 Short Sales. Of course this could have as much to do with the fact that SFAR (San Francisco Association of Realtors) only recently introduced the "Known Short Sale" check box back then. But just as interesting are that Pacific Heights has 2 Short Sales and Nob Hill has one.

Interestingly these also make a case for the "location, location, location" mantra. All 3 are within 2 1/2 blocks of each other along the 3 busiest thoroughfares in the area.... Van Ness, Franklin and Gough.

Not a surprise to me are the increasing number of short sales at The Beacon with 6 at the 250-260 King St complex. Also not a surprise, 19 of the 47 Short Sales are in SOMA/South Beach/Mission Bay, with virtually every major building that has been open at least a year having one. That includes One Rincon Hill, The Metropolitan, The Palms, Watermark and Bridgeview. In early February I wrote about "The Coming Foreclosure Wave" in this part of town due to an over supply and off the charts prices buyers have been paying for the "new car" smell of new condos in the area. Well, here they come.


Sales spike since March 1st

I was about to write a post this morning pointing out a spike in sales, particularly in Noe Valley where virtually nothing was selling for over $1 million, but in the past 10 days 3 homes priced at $1.799 million or above just went into contract.

And for all disrespect I give general media, not only was I beaten to the punch on a similar story line by CBS TV news, their story is full of facts and data. Check out the video here:

On the other hand, something doesn't add up in the report. It cites TerraDatum as showing "more homes sales in San Francisco than in the previous 6 months". But they must be referring to any other 2 week period. But even then, per the MLS it appears we're about average. Hmmm... it's too late tonight to get to the bottom of this, but let me tell you, I am incredibly busy right now.

The one item I'll share is a report I ran via the San Francisco MLS, which doesn't include many of the new-construction sales like those at the Infinity, and found 82 residential properties (homes & condos) that have gone into contract since March 1st.

You'll see "D/S" which stands for "District/Subdistrict" and then note that "5C" stands for Noe Valley

4338 Cesar Chavez asking $1,799,000, 1470 Noe St asking $1,850,000 and 731 Douglass St asking $2,150,000 all went into contract in the past 10 days. In the prior 6 months only 6 properties priced above $1.7 million Sold, or 1 per month vs. the 3 in only 10 days.

Has the bottom come and gone? I'm not so sure just yet, but it speaks volumes about how many well off buyers there are in San Francisco competing for the very limited Supply no matter how tight the credit markets.


New York City to try auctioning off new condos

What struck me most about this New York Times article about new condo developments in Manhattan turning to auction companies to sell off slow moving inventory was the very last sentence "The average sales price of a two-bedroom Upper East Side condo was just above $1 million in 2002. It rose to $1.5 million in 2004, and to $2.2 million at its peak in 2008."

What is so shocking is that not only did the Upper East Side 2BR's significantly outpace San Francisco in percentage appreciation, but look at the following chart and the real dollar difference between the two cities. From 2002 through 2008 Upper East Side 2BR condos increased $1.2 million, or the entirety of Pacific Heights 2008 average price.

Pacific Heights has basically caught up with the Upper East Side's 2002 price. Now I'm from New York City and realize that the Upper East Side and Pacific Heights are two vastly different areas. Maybe I should throw in Russian Hill to pull in some of the expensive Coop buildings like 999 Green. But either way, New York City has gone through the roof while San Francisco experienced a much more even pace of appreciation.

Meanwhile, New York is getting crushed right now by the financial crisis after having been the biggest beneficiary of the out sized Wall Street bonuses. Sprinkle in a little Ponzi scheme from Madoff, and then compare to San Francisco.

The bottom line, New York has to fall in half to be "as cheap as San Francisco" is today, which it might. But will San Francisco's better neighborhoods like Pacific Heights fall like you'd expect New York to fall? When I left in 1997 to move here, New York was cheaper than San Francisco. So you can draw your own conclusions.


TIC sales update

The failure of yesterday's TIC auction at 3731 Fillmore Street leads one to ask many questions of its' meaning. Does it mean the highest bid was the true market value of the unit? Does it mean the auction was botched? Does it mean that TIC's are not well suited for auctions? Does it mean that the market is crashing all around us since even the lowest estimates of value prior to the auction were around $450,000, or 10% higher than the highest bid.

I've got my opinions, but I thought it would be constructive to get an update on how TIC's have been trending. In May of 2008 I ran the numbers for all TIC sales per year since 2002, but didn't include 2008.

So here's the update on total TIC sales per year (per the San Francisco MLS)

'02 = 154 sales of any sized TIC
'03 = 269 up 75% year over year
'04 = 395 up 47% y-o-y
'05 = 539 up 37%
'06 = 652 up 21%
'07 = 722 up 11%
'08 = 434 down 40%

Now before we jump to conclusions, condo sales are down 20% from 2069 in 2007 to 1665 in 2008.

Condo sales (per the San Francisco MLS)
'02 = 2119
'03 = 2313 up 9.2%
'04 = 2557 up 10.5%
'05 = 2442 down -4.5%
'06 = 2150 down -12.0%
'07 = 2069 down -3.8%
'08 = 1665 down -19.5%

You can also see by comparing the two charts that TIC sales absolutely exploded, so a bigger drop was probably due. TIC sales are still above the number sold in 2004, whereas condo sales haven't EVER been this slow (well, I'm using the MLS for my reporting and that has three flaws, one it is only Realtor represented sales, two, the current MLS only goes back so far. 1996 reported lower sales, but I'm not convinced that is accurate data. And three, it doesn't include FSBO or sales center sales at new construction buildings).

Single Family homes are down 8% from 2007 to 2008.

'02 = 3100
'03 = 3392 up 9.4%
'04 = 3321 down -2.1%
'05 = 3093 down -6.9%
'06 = 2718 down -12.1%
'07 = 2322 down -14.6%
'08 = 2136 down -8.0%

There may be other reasons that TIC sales have dropped further too. Buildings that have to enter the lottery to convert to condos have bloated that lottery. Only 200 conversions are granted per year. Compare that to the TIC chart above. 200 was great in 2002 and 2003, then half as good in 2004 and in 2007, TIC's sold not only had to compete with 522 more units than could qualify, but all the overage from the prior years. Thus the allure of TIC's an an investment that should increase in value with conversion has greatly decreased.

Winning the lottery probably became less important with the proliferation of fractional lenders and loans in 2007. But now the TIC lender market is contracting, and loans are at least 1% more expensive than comparable Condo loans.

Overall, the meaning of the failure of the auction at 3731 Fillmore to generate a much higher offer probably had more to do with TIC's suitability to auctions, and the confusion that occured leading up to and during the auction. Buyers don't buy when they are confused and ill informed.


Auction part 2 - the painfully slow bidding

This is the middle of 3 videos (How it Started is here, The anti climatic end is here). This one you hear their pitch for why anything up to $710,000 is a great buy since unit #1, the window immediately above the crowd, sold for $710k in October. That really won the crowd over as you can hear.

There were quite a few anecdotes indicating these guys really didn't know the San Francisco TIC market. One of the "dudes" (the auctioneers - there were about 4 of them with assorted other characters who seemed like groupies) was telling a Buyer how 6 unit TIC's were great because you could convert them to Condos... he said it like it was a piece of cake. Someone nearby jumped in and explained the lottery, and the "dude" seemed to back down.

At the end of the auction another "dude" said the City of San Francisco would have no choice but to green light all current TIC buildings to Condos conversion to generate revenue. Between the two comments, you had to wonder what else they were telling uneducated Buyers that they might believe. Is that what they told the Buyer of unit #1? (update/correction - the auctioneers only got involved recently AFTER the sale of #1 was long over, so they obviously didn't influence that sale) I sure hope not, but something has to explain why they'd pay $710,000 when the "free market", eg a rag tag group of bidders and spectators, says these units are only worth $410,000. (update, #1 sold with a parking spot, and they had Buyer representation by an agent with a South San Francisco address and a San Mateo web site - knowledge is power, local knowledge especially, and they didn't hire a local, and doubtful the agent had any TIC experience which is critical).

The other item they admitted to getting wrong was telling Buyers, in the days leading up to the auction, that Bank of Marin would do 10% down loans. The truth.... which they glossed over... is that they require 25% down unless you have a credit score of 740 or greater in which case you can get away with 20% down.