$545,000 Price..... er, reduction

$545,000 isn't the price of this home, it's the price reduction.

28 Presidio Terrace, San Francisco, came onto the market in January at $5,395,000. As of yesterday it was reduced to $4,850,000 for a $545,000 price drop.

A private priced sale in March 2007, extrapolating from tax records it looks like a purchase price of approximately $4.96 million. So it will be interesting to compare a "peak year" purchase to today when this sells. We'll see a $545,000 price reduction does it or not.

Luxury Market stats in "D7" - north end of SF

Pacific Heights, Cow Hollow, the Marina, Presidio Heights $2M to $3M market.
A quick look at the past 6 months as compared to the same time period in each of the prior 6 years. This is the $2 million to $3 million Single Family home market in Pacific Heights, Presidio Heights, the Marina & Cow Hollow. With all sales btwn $2M and $3M most of the average and medians for these time periods were right around $2.5 million so I'll focus on price per SqFt, and the size of home you can get for that price, and number of sales:

'03-'04 - 25 sales, $713 per SqFt, 3,586 Avg SqFt
'04-'05 - 25 sales, $793 per SqFt, 3,140 Avg SqFt
'05-'06 - 14 sales, $1,026 per SqFt, 2,634 Avg SqFt
'06-'07 - 20 sales, $847 per SqFt, 2,937 Avg SqFt
'07-'08 - 9 sales, $918 per SqFt, 2,793 Avg SqFt
'08-'09 - 8 sales, $901 per SqFt, 2,806 Avg SqFt
'09-present - 14 sales, $802 SqFt, 3,290 Avg SqFt

Oh so many caveats here. For one I had to take out the Bourn Mansion sale - 2550 Webster was an extreme fixer that had 9762 SqFt for "only" $2.79M. Of course that buyer is going to put in MILLIONS of dollars to restore it and it seriously skewed the price per SqFt and the average SqFt.

Secondly, this price range and area is notorious for private non-MLS Sales (and this is all San Francisco MLS data) and for "undisclosed" prices.

Still, the above is general guidance. Prices are back to the late '04 early '05 levels with Sellers becoming more realistic and total sales improving over the past 2 years' results. But sales are up, and the anecdotal evidence from agents in my office is that there is a LOT of off-MLS sales happening right now. Sellers and Buyers are cutting deals. This is one of those times I think it's a good time to be a Buyer or a Seller. Well, Sellers might not think that because prices are way down from peak, but if you want to sell, there is definitely demand right now. And if you want to buy, you should find it easier to negotiate a deal rather than finding nothing but unrealistic and totally inflexible sellers.

Well, maybe they still aren't
<------ this flexible.

ABC report: "Triple whammy" for real estate market

Listening to this Channel 7 ABC report they list 4 reasons home prices may drop - clearly not good with math since it's a "triple whammy" headline.


1. Shadow Inventory - California 80,000 homes, and 5 million nationally over the next 2 years according to two studies released yesterday. Both from currently banked owned that haven't hit the market, and those delayed in becoming foreclosures because the owners are trying to get loan modifications right now.

2. Rising interest rates when the government stops buying mortgage backed securities

3. Home buyer tax credit expiring

4. Jobs - I guess this wasn't a "whammy" in this report, but as one interviewee says, it could be the only item that really matters.

The caveat here - right now there is a lack of inventory and high demand. We're hearing a LOT of multiple offer stories, and the above ABC report quotes offers going 5% to 10% over the asking price on the Peninsula. I have several very frustrated buyers here in the City because they can't find what they're looking for. So... Sellers... IF you believe the above report, now is the time to sell.

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

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.