Redfin.com won't "tour or write offers on short sales" in San Francisco. Redfin is in many more markets than just SF so I'm sure they've flagged short sales in all markets, but I found this tidbit when looking up a Palms condo (555 4th St, San Francisco). Here's a screen capture of the listing - not the highlighted box on the upper right hand side:
So while I normally don't do shameless plugs for business, the difference between us and Redfin is we know how to evaluate whether or not a Short Sale has a good chance of selling or not (50% don't succeed in San Francisco, but that's usually a problem with the Listing Agent's ability - or know how in the sense that the property never had a chance of succeeding as a Short Sale in the first place).
If you can identify legit short sale opportunities you can buy properties for roughly 5% to 10% below "fair market value" (more on this on some future post, or call or email for details).
Tenacity with a capital T.
These guys claim to have a better than 90% success rate in closing their short sales. That's definitely not the perception in San Francisco. SF agents largely dismiss Short sales, and in my one short sale experience I got a fantastic offer that the Lender refused only to foreclose on it and then sell it for $110,000 less 6 months later as an REO. In another video the above guys say first lien holders are making 28% to 36% less in an REO sale vs. a Short Sale.
So with 20% in this particular Arizona market being Short Sales, where these guys also say 70% of owners are under water and 60% of all sales are a "distress" sale, with their 90+% close rate (just from this team, not the entire market for sure), how does San Francisco stack up?
To cut to the conclusion - with details to follow - 5.8% of 2009 sales in San Francisco (MLS data) were Short Sales. 11.1% were REO's for 16.9% "distress" sales. Homes were about twice as likely to be "distress" vs. Condos/Lofts (I excluded TIC's and Coops). And in our market there is one failed Short Sale for every one that Closed in 2009.
Here are the details:
As of Jan 25 2010, per the San Francisco MLS, Condo & Loft Short Sale counts:
For Sale = 54
In-Contract ("Contingent" or "Pending") = 81
Sold during the past 12 months = 79
Expired/Withdrawn the past 12 months = 77 that never sold
With 6.8 seller on average per month the 54 For-Sale equals an 8 month supply. Hard to say about the 77 expired/withdrawn. Many are probably bank owned now, and others are probably re-listed and I haven't look to compare.
Single Family Home Short Sales in San Francisco
For Sale = 43
In Contract = 103
Sold past 12 months = 139
Expired/Withdrawn the past 12 months = 151 that never sold
11.6 selling on average per month so 43 for-sale equals less than 4 months supply.
Lastly, I found one agent in town with a better than 90% Close ratio, but I also found one who had 7 listings and none of them closed. Several agents had that many and were able to close slightly above 50%.
November 1998 #806 sold for $315,000
October 2003 sold for $403,750
July 2006 it sold for $630,000
December 2009 it sold for $500,000
So down 20.6% since 2006, but still up 24% since 2003 and nearly a 60% return since 1998. Judging from the 2009 photo of the kitchen, I'd guess that little, if anything, has been spent on upgrades since the 90's so this should be a true San Francisco "apple" to "apple" comparison.
8100 Oceanview Ter #104 was purchased for $575,000 with only 5% down in February 2005. The Listing said there were multiple offers. It re-sold in March 2009 for $300,000 apparently with an additional $21,000 going to the Jr Lender and $15,000 to the HOA which is the equivalent of 31 to 38 months of unpaid dues.
While I suppose there could be late fees in that HOA number, let's just assume the original buyer paid dues for just over 1 year and then stopped. And that just happens to coincide with a new $220,000 loan taken out in April 2006. This is a total guess, but it may have been a cash out re-fi of the $86,250 second loan - so at 100% financial an appraiser believed #104 to be worth $680,000 in April 2006.
That's just one story. Since Jan 2009 there have been 26 recorded MLS sales in 8100, 8200, 8300 and 8400 Oceanview Terrace. 9 2BR's, 1 3BR and 16 1BR's. The 1BR's ranged from $205,000 to $308,000, the 2BR's from $300,000 to $385,000 and the 3BR for $410,000. The highest price per SqFt was $478.79 with the average of all 26 at $397.40
In all of 2005 there were 27 recorded MLS sales among the 4 related buildings. 11 2BR's, 1 3BR and 15 1BR's. The 1BR's ranged from $389,000 to $521,000, the 2BR's from $497,000 to $575,000 and the 3BR for $637,000. The highest price per SqFt was $478.79 with the average of all 27 at $625.21
Comparing number over number we're looking at price drops of 33% to 47%. #104 was down 42.4%.
Prices have dropped so much, that now the "affordable" San Francisco Mayor's Office of Housing below-market rate condos like 8100 Oceanview Ter #122, a 3BR would probably barely be fetch it's $366,685 in 2003 price in today's market.
Three charts showing the massive year over year change in the San Francisco 2 BR Condo market. This is Terradatum data using SFAR MLS info.
Shocking truth #1
The number of listed Condos is down 18% year over year while sales are up 74%
And now for the caveats:
Of course the numbers are better. It could only get better from last year's armageddon. December Sales represent October and November contracts - the words "bailout" and "financial crisis" became the watch words of the day starting in late September 2008. Real Estate practically came to a standstill in San Francisco at that time.
With so few buying, demand built up. Buying only started slowly again with an uptick from March thru June and took off from August through December with November the peak for 2009 2 Bedroom Condos.
Now what? 2010 will no doubt be an interesting year. Right now demand feels strong, interest rates are still at record lows, and inventory still feels in short supply. In other words, expect similar charts for the next 3 to 6 months.
555 4th St #625 1BR for $405,000
Per tax records 555 4th St #625 (The Palms) was purchased for $598,000 in 2006. It was then taken back by the Bank for $510,698 this past October. Listed by an out of area agent (don't get me started at that topic) for $450,000 not even 3 weeks later (well, a fast bank turn around at least) it went into contract one month later. But yesterday, it came back onto the MLS for $405,000 representing a 33% loss from it's '06 purchase price. Pretty typical of what I'm seeing at The Palms and just about all of the newer buildings in the area.
6th floor is over the roof tops looking across 4th Street where this unit and this balcony face.
Video walk through.
I just heard from the Listing Agent that the Bank accepted an offer.
- Some fun facts about this listing:
- an out of area Agent based in the East Bay
- They enter this condo into the MLS as a Single Family home
- Only have 1 really bad photo of the exterior
- Listed as not having parking
- No mention of the Condo's best feature - a large balcony off the living room with pano views
It's a wonder anyone found this listing and that they got an offer.
Andy Sirkin, the well known San Francisco TIC attorney spoke at our Pacific Union office meeting this morning. One thing I've been curious about is his estimate on how long it would take for new TIC buildings of 3 to 6 units to win the lottery and complete conversion if you started today. "20 years" was his guess. In other words, if you're buying into a newly formed TIC - plan on selling it as a TIC.
Among the MANY other tidbits of info I gleamed from a very informative hour are:
- Sterling Bank is pretty much the only fractional lender left - other than when Builders have gotten previous commitments from other fractional lenders.
- the 2010 condo conversion lottery will happen in the next couple of weeks. Those who have been in for 7 years are in "Pool A" and he thinks they have a 90% chance of winning the right to convert. Those in "Pool B" may have a 1% to 2% chance of winning because there are so many tickets in that pool.
- almost all of the news for TIC's was bad - except for 2-unit buildings who qualify for lottery bypass - if you can bypass the lottery (and there are 2-unit buildings that can't due to eviction history or only one owner-occupier) the good news is that processing times are much faster - technically a 2-unit might be able to complete a conversion in as little as 15 months due to processing of as little as 3 months.
For $575,000O in San Francisco's Pacific Heights - you could buy a one bedroom at 1701 Jackson.
Or buy this 3bed 3bath 3Car on 1.38 acres in Bend Oregon
In wondering if REO's are up, down or flat in the City the most interesting finding is just how down total homes for sale are - not much pickings out there for Buyers.
Today's Jan 19th 2010 update:
Homes = 38 REO's of 368 total listed single family homes for-sale. So 10.3% of all current listings are REO's.
Condos = 19 REO's out of 422 condos listed for sale or 4.5%
Here's the chart with previous reports below it:
The last REO update on Nov 25, 2009:
Homes = 37 REO's of 484 total listed for-sale or 7.6%
Condos = 15 REO's of 606 condos or 2.5%
Homes = 31 REO's of 578 total listed for-sale or 5.4%
Condos = 29 REO's of 668 condos or 4.3%
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%
My February 2009 update included TIC's and lofts
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 - and I estimate at least 220 were TIC's of the total) so 5.2% of San Francisco condos were REO's
By the way, this video ends with a conversation about loan modification problems.
First there was SFRentStats at http://mullinslab2.ucsf.edu/SFrentstats/ but it is only in San Francisco. Now there's PadMapper.com. It's got an "embed" feature so I'm embeded the San Francisco search below. Have at it:
View Larger Map
Interesting concept from a new San Francisco based company called Zippgo. Use re-usable plastic boxes for your move, therefore keeping from using one-time cardboard boxes.
I have some questions on how "green" this concept really is including:
1. are the boxes themselves made from recycled plastic - I'd hate to see them eventually go into landfill - and while they say they can be used 400 times vs. cardboard's once or twice - which is better if it isn't recycled plastic? (update: "the boxes are made from 100% recycled plastic" per the owner)
2. these boxes must be cleaned between uses. What is the environmental impact of cleaning them 400 times before they can't be used any more vs. discarding cardboard boxes? Fact - taking your car to a car wash is much more environmentally friendly then washing your own car. Why? They re-use their water and are economical in how much water and soap they use per car vs. an individual. So, how much water/soap for "green" boxes vs. impact of discarding cardboard?
3. they drop off and pick up - that's gas and emissions from a truck. I'll probably assume this is a non- issue since you would need to pick up cardboard boxes too, and then they get picked up and sent to landfill. (update - "we deliver the boxes using trucks powered by biodiesel made from waste vegetable oil" per owner)
I like the concept - but what's the true environmental impact?
(update - so far so good on the answers to our questions)
Feb '09 was also artificially low with all that was going on in the economy and stock market at that time. So my guess is that Feb 2010 will be closer to '08 than '09. So if you've been house hunting in San Francisco, and think the homes for sale inventory has been disappointing, fasten your seat belt. Post Super Bowl (let's go Jets :) expect a flood of new listings.
250 King St Unit #636 appears to be one of those listings. The former Short Sale listing said "Lender has BPO of $565,000 and will not pay for back HOA dues."
Originally listed in April 2008 for $599,000 there were no takers for 3 months. 6 months later the same Listing firm re-listed it in January 2009, but this time as a Short Sale asking $525,000. It bounced around in price and in and out of contract over the next 6+ months it finally was removed from the MLS in August at $498,000.
A "BPO" is a Broker's Price Opinion. Usually banks get more than one opinion, and often they are not local agents. Regardless, the $565,000 BPO and the failure to sell at $498,000 isn't even the most shocking part of the story. It's that when it was re-listed as an REO in November at $413,325 it has now gone through TWO PRICE drops to $392,660 after 28 days, and now down to $373,027 just a couple of days ago.
More history - per tax records #636 was purchased for $575,000 in March 2006 representing a 35% drop in value at it's current asking price. The buyer appears to have put 10% down based on two loans adding up to $517,500.
Click here to view 250 King St Unit #636.
13 total for-rent apartments within 3 blocks of each other.
4 photos of 3 rental signs on the same block as 1456 Chestnut:
In addition to the 3 above, I found what appears to be 9 more in the video below. 13 in total within 3 blocks of each other. A sign (no pun intended) of things to come? Or a coincidence?
I got out of my car and took a closer look at the building and snapped this photo of the front steps. While I still haven't been inside, this apparent foundation damage may partly explain the $709,000 price tag.
The last time a Single Family Home with at least 2 bedrooms (yes, there are 1 bedroom homes in San Francisco) sold that low or lower was 1999 according to the San Francisco MLS. In 2002 one sold in nearby Cow Hollow for $749,000. Otherwise, the homes on Laguna Street in Cow Hollow (click here for 3020 Laguna video & post) have been the cheapest of late in the low and mid $900's. It's only day #1 on the MLS, and it's got a listed offer date of January 15th. If you're not working with a Realtor and are interested in this home, you can reach us at www.SFisHOME.com
UPDATE: 3020 Laguna is now on the SFAR MLS asking $950,000.
If you'd like to be informed immediately when the home comes onto the market be sure to create an account at www.SF-MLS-Search.com
Or check back regularly for all For-Sale properties in Cow Hollow at Cow Hollow Homes for sale.
Tough times at the Watermark.
For all For-Sale listings at the Watermark click here 501 Beale St Listings
Or search all San Francisco listings at www.SF-MLS-Search.com