Unpaid bills at The Beacon (250 & 260 King) made me think my prediction (read here) was far ahead of it's time, but instead the building has other problems. I'm not familiar with the issue until reading this post at SocketSite, a San Francisco real estate blog.
For what appears to be a pretty good explanation read the comment posted by "War" at on February 9 at 11:30 AM.
Apparently a new property management firm found an accounting error that showed that the Commercial Owners Association (COA) was paying less than it's intended share for common area expenses, with the Home Owners Association (HOA, or as the Beacon refers to it, the ROA) paying too much. Now the HOA or rather ROA wants this problem corrected and is only offering to pay the amount of things like the PG&E bill that they deem accurate.
Whatever the outcome, all I can say is "yeesh". A building that is seeing a nose dive in property values has yet another issue that could dramatically effect the building negatively. If the two Associations can't get this straightened out soon, and potential Buyers learn about it (which they should since it certainly seems to be a material disclosure) it will attract even fewer buyers and push prices down even further and faster.
The shine on this ugly penny? If you are a Buyer, and you like the location, it's bargain hunting time.
2/10/09
Keeping track of foreclosures and REO's in San Francisco
The San Francisco Chronicle's SFGate.com site has a very user friendly way of tracking how many foreclosures are happening throughout the Bay Area. You can drill down by zip code or map to get to San Francisco's numbers.
The San Francisco site is: http://www.sfgate.com/webdb/quarterlyforeclosures/?appSession=064672608671036
This is just a tracking tool, not a site that provides details on the properties being foreclosed upon. But if you are curious about foreclosure trends in San Francisco this site will answer your questions quickly and easily.
The San Francisco site is: http://www.sfgate.com/webdb/quarterlyforeclosures/?appSession=064672608671036
This is just a tracking tool, not a site that provides details on the properties being foreclosed upon. But if you are curious about foreclosure trends in San Francisco this site will answer your questions quickly and easily.
2/9/09
San Francisco in a better position than other major cities
After writing the below posts about an area of town, and a couple of buildings in particular, that I think will be far more susceptible to foreclosures, short sales and continuing price declines, it got me to wondering how San Francisco compares to other heavy condo cities. So I turned to Trulia's "market trend" pages and compared San Francisco to New York City and Miami. Unfortunately Trulia's numbers are for all residential properties, so this is not a condo comparison, but rather a very general market comparison, but it will suffice.
My suspicion is that both New York and Miami had run ups in real estate prices that far outstripped San Francisco. I moved to San Francisco in 1997 from New York City, and the year before moving here I had found a $120,000 1BR condo in NOHO (north of Houston rather that South of Houston SOHO in New York, but not quite the Village). As a brain washed New Yorker, I just assumed I was living in the most expensive City in the country. So when I arrived in San Francisco and ran into prices that were DOUBLE what I had seen in New York, I was utterly shocked.
Today, New York seems like it is twice as expensive as San Francisco, and if perception were right it would mean we doubled in price since 1997 while they quadrupled. Meanwhile, the stories I hear about Miami were all about fraud, massive speculation and general bubble hysteria driving prices straight up. New York is getting hit by the financial crisis more than any other city and is of course home to Bernie Madoff.
San Francisco has seemed tame in comparison. So I turned to Trulia to confirm my suspicions and discovered the following:
Since 2000 to today Miami's median price increased 108% from $113,000 to $235,000. New York skyrocketed an astounding 328% from $213,000 to $912,500. Meanwhile, San Francisco started out being almost twice as expensive as New York at $430,000 for a home in 2000, but is now about 30% cheaper at $630,000 which is a 47% run up in prices. Again, in sum, SF up 47%, Miami up 108%, NYC up 328%.
As the saying goes, the taller you are the harder you fall, and what goes up must come down, and in that regard New York and Miami are in far bigger trouble than San Francisco.
It occurred to me that San Francisco may have had a larger earlier run up given the dot com bubble that began collapsing in 2000. So I looked at 5 year ago numbers. Unfortunately Trulia didn't have New York numbers, but anecdotaly I know they were seeing massive runs up in the last couple of years. Meanwhile, Miami is still up 27% over 5 years ago, and San Francisco is up only 5%.
So how much further will San Francisco drop? Well I refer you to the below posts where I believe there are significant price drops still to be seen IN CERTAIN AREAS. But overall, since we did not rise nearly as far as other cities, don't expect us to fall as far. New York has only recently begun dropping, and they could be in for a long and painful fall, and no one is doubting that Miami is in a free fall with no end in sight.
In the better parts of town... expect San Francisco to remain resilient. San Francisco went from being twice as expensive as New York to 30% cheaper. What's more, HOA dues in San Francisco are often 1/2 to 1/4 the amount in New York, so your dollar goes a lot further here in SF. Finally, New York has the SOMA/South Beach/Mission Bay problem... there seems to be never ending sites for building straight up. But if you want to live in Noe Valley or Russian Hill, they won't let you build up, so for the most part the inventory will always remain the same, and well to do buyers will compete with each other for the best homes for an eternity. It's supply and demand supplemented with equally well off Sellers who refuse to sell low and can afford to be stubborn. So this "sorta" Buyer's market now isn't going to last forever, and San Francisco prices will not drop any where near the levels of New York, Miami or the rest of the Bay Area. And once the economy straightens out, and Buyers here still have jobs, and realize that Sellers aren't "blinking", prices will once again begin to climb... albeit slowly and steadily, not crazily.
My suspicion is that both New York and Miami had run ups in real estate prices that far outstripped San Francisco. I moved to San Francisco in 1997 from New York City, and the year before moving here I had found a $120,000 1BR condo in NOHO (north of Houston rather that South of Houston SOHO in New York, but not quite the Village). As a brain washed New Yorker, I just assumed I was living in the most expensive City in the country. So when I arrived in San Francisco and ran into prices that were DOUBLE what I had seen in New York, I was utterly shocked.
Today, New York seems like it is twice as expensive as San Francisco, and if perception were right it would mean we doubled in price since 1997 while they quadrupled. Meanwhile, the stories I hear about Miami were all about fraud, massive speculation and general bubble hysteria driving prices straight up. New York is getting hit by the financial crisis more than any other city and is of course home to Bernie Madoff.
San Francisco has seemed tame in comparison. So I turned to Trulia to confirm my suspicions and discovered the following:
Since 2000 to today Miami's median price increased 108% from $113,000 to $235,000. New York skyrocketed an astounding 328% from $213,000 to $912,500. Meanwhile, San Francisco started out being almost twice as expensive as New York at $430,000 for a home in 2000, but is now about 30% cheaper at $630,000 which is a 47% run up in prices. Again, in sum, SF up 47%, Miami up 108%, NYC up 328%.
As the saying goes, the taller you are the harder you fall, and what goes up must come down, and in that regard New York and Miami are in far bigger trouble than San Francisco.
It occurred to me that San Francisco may have had a larger earlier run up given the dot com bubble that began collapsing in 2000. So I looked at 5 year ago numbers. Unfortunately Trulia didn't have New York numbers, but anecdotaly I know they were seeing massive runs up in the last couple of years. Meanwhile, Miami is still up 27% over 5 years ago, and San Francisco is up only 5%.
So how much further will San Francisco drop? Well I refer you to the below posts where I believe there are significant price drops still to be seen IN CERTAIN AREAS. But overall, since we did not rise nearly as far as other cities, don't expect us to fall as far. New York has only recently begun dropping, and they could be in for a long and painful fall, and no one is doubting that Miami is in a free fall with no end in sight.
In the better parts of town... expect San Francisco to remain resilient. San Francisco went from being twice as expensive as New York to 30% cheaper. What's more, HOA dues in San Francisco are often 1/2 to 1/4 the amount in New York, so your dollar goes a lot further here in SF. Finally, New York has the SOMA/South Beach/Mission Bay problem... there seems to be never ending sites for building straight up. But if you want to live in Noe Valley or Russian Hill, they won't let you build up, so for the most part the inventory will always remain the same, and well to do buyers will compete with each other for the best homes for an eternity. It's supply and demand supplemented with equally well off Sellers who refuse to sell low and can afford to be stubborn. So this "sorta" Buyer's market now isn't going to last forever, and San Francisco prices will not drop any where near the levels of New York, Miami or the rest of the Bay Area. And once the economy straightens out, and Buyers here still have jobs, and realize that Sellers aren't "blinking", prices will once again begin to climb... albeit slowly and steadily, not crazily.
2/8/09
Some Condo buildings may suffer more than others
The below post was primarily about Condo foreclosures in San Francisco in which I described a couple of buildings that could suffer more than others due to a snow ball effect of increasing foreclosures and declining prices. What I hadn't even taken into consideration are the effects of defaulting homeowners not paying their HOA dues. This New York Times article speaks to some unique aspects of New York City real estate, but the general issue is the same here in San Francisco.
Banks get the first crack at equity when a homeowner goes through a foreclosure or Short Sale, and in the buildings where owners have no equity, the HOA gets nothing back. As foreclosures mount, the HOA begins to get in trouble, and in many condo buildings that spend most of what comes in, it doesn't take long for the building to get in trouble. To save, repairs, cleaning, amenities, and anything else that can be cut gets cut, thus causing the building to deteriorate in other ways.
Worse, the HOA may have to raise a special assessment on remaining owners in order to make up any budget short falls, and that is unwelcome pressure on any owner who is barely squeaking by and could cause further foreclosures.
Older buildings tend to have many more owners with equity, so even if they were to get foreclosed upon, the HOA will collect delinquent dues with left over equity. So this really is a new building issue. In many newer buildings every foreclosure can have a major impact since no owner who gets foreclosed upon is likely to have any equity.
Once again I point you to the two buildings I mention in the below post... they have already been hit by foreclosures, so their HOA's may already be under pressure. And if they have resetting loans, or owners suffer job losses, or just need to move and can't afford to hang onto the condo, it could become one of the worst downward spirals in San Francisco.
Banks get the first crack at equity when a homeowner goes through a foreclosure or Short Sale, and in the buildings where owners have no equity, the HOA gets nothing back. As foreclosures mount, the HOA begins to get in trouble, and in many condo buildings that spend most of what comes in, it doesn't take long for the building to get in trouble. To save, repairs, cleaning, amenities, and anything else that can be cut gets cut, thus causing the building to deteriorate in other ways.
Worse, the HOA may have to raise a special assessment on remaining owners in order to make up any budget short falls, and that is unwelcome pressure on any owner who is barely squeaking by and could cause further foreclosures.
Older buildings tend to have many more owners with equity, so even if they were to get foreclosed upon, the HOA will collect delinquent dues with left over equity. So this really is a new building issue. In many newer buildings every foreclosure can have a major impact since no owner who gets foreclosed upon is likely to have any equity.
Once again I point you to the two buildings I mention in the below post... they have already been hit by foreclosures, so their HOA's may already be under pressure. And if they have resetting loans, or owners suffer job losses, or just need to move and can't afford to hang onto the condo, it could become one of the worst downward spirals in San Francisco.
The coming Foreclosure Wave in San Francisco
San Francisco has largely been protected from the catastrophic price drops that other Bay Area counties have been suffering. The arguments for San Francisco not suffering a similar downturn is partly that we have very restrictive zoning laws that don't allow any new construction over existing building heights in the majority of neighborhoods. However, the SOMA, South Beach & Mission Bay neighborhoods have been approved for thousands of new condos in dozens of buildings in the recent past and in the near future. So the supply and demand differential is far different in the south eastern part of town vs the northern parts of San Francisco.
However, a large supply, with more slated to come on the market, is only one part of the problem. The other is that the prices that Buyers of new or newer building condos paid made no sense. I expect to take some heat on that comment, not because it isn't true, but because it is easy to make that comment in hind sight. But you'll just have to trust me on this. I walked into many buildings dating back to 2004 and saw prices that matched those of the best properties in Pacific Heights and Russian Hill. In fact, as I watched only a handful of the most special properties in the north end of town reach $1,000 per SqFt, I seemed to be finding far more places asking $1,000 per SqFt in SOMA including condos that were eye to eye with Bay Bridge on-ramps, complete with 24/7 traffic noise and the resulting dirty windows.
One of the buildings that I predict will have a steady stream of REO's and Short Sales is The Beacon (250 & 260 King). Back in 2005 a colleague of mine was selling condo after condo in The Beacon, and it stumped me. I mean I like the location, especially since I'm a huge baseball fan, and because it's got phenomenal access to commuting (Caltrains and the 280 on-ramp) and it's got great access to shopping (Safeway & Borders among others in the building) and bars/restaurants (District across the way - although that hot bar wasn't even a gleam in the owners eyes when the building went on sale). But the building was original built as rentals, it was situated on leased land, none of the parking spots were deeded, there is no air conditioning in the condos... overall, there was nothing special about the building, only the location.
Yet prices were $800 per SqFt, above most of the condos I was visiting at the same time in the Marina, Cow Hollow, Russian Hill, Pacific Heights and so on. So I asked my colleague what was going on at the building that I was missing. I'll have to do a poor job of paraphrasing because I dismissed her comments at the time, but she claimed it was a great opportunity, a great building, and that the coming neighborhood amenities would cause prices to keep going up. I dismissed that because prices already seemed ABOVE where I would have expected them to be AFTER the neighborhood became what she was predicting.
The more I visited SOMA, South Beach and Mission Bay, the more I came to believe in my "new car" theory. That the Condo developers were pricing the condos like a hot new car... Buyers were buying them because they had the new car smell... and as soon as they drove the car off the lot it depreciated by 10%. You can always buy last year's model for a significant discount to the new model, yet there always seem to be plenty of people who just have to have the new car (although even that is changing in America today).
In real time (back then) the moment The Beacon came onto the market, 140 South Van Ness was last year's model. Then The Palms (555 4th St) came on the market and no one wanted The Beacon any more. When One Rincon Hill came on it was all the rage even as softness in the market started to become evident. Once The Infinity came on no one seemed to care anymore about One Rincon, and now phase 2 of The Infinity has just hit the market, so phase 1 is "last year's model" and any re-sales will be at least 10% below what the original Buyer paid.
The prediction for a coming wave of foreclosures and short sales is easy to make because it's already happening. There are 2 for-sale REO's in The Beacon right now (see the below post) and 1 each at 140 South Van Ness and The Palms. And virtually anyone who has ever bought in any of the three buildings, except maybe those who have purchased in the last couple of months (and even some of those are already under water) will be so far under water, that they will have to come up with money in order to Sell for many years to come.
Again, the 2004 to 2007 prices paid were basically "tomorrow's prices" and by tomorrow I mean some future expectation of the neighborhoods and market. The original owners at 140 South Van Ness are more protected because they bought in 2003, but the '05 and '06 buyers are already well under water. But at The Palms and The Beacon, the condos depreciated the moment they were "driven off the lot", and since then the market has dropped from 10% to 20% or more.
I expect it will be close to 10 years before they get back to their levels they paid. If I am right, then EVERY sale in all three buildings will be some sort of "distress" sale. Either a Short Sale or an REO, and anyone who can afford not to sell will eventually become a stress sale, or will add to a growing number of rentals in these buildings which drive down rental rates, adding to the burden of those who always meant to use them as investments.
Finally, one distressed sale leads to another as the prices keep coming down until Buyers see them as deals. Current owners see the low sales prices and realize they are paying more on their loan then their condo is worth, and some will purposely short sell or allow themselves to be foreclosed upon to get out. If that happens, it becomes a snow ball effect of ever decreasing values. Devaluation happens when Buyers expect tomorrow's prices to be lower than today's, and if every buyer sits on the sidelines waiting, it will take enormous discounts to move any Condo. The lower the prices, the more likely home owners who paid higher prices will want to cut their losses. That is likely to eventually even impact the 2003 buyers at 140 South Van Ness.
At some point the prices will be so low that new buyers will snap up the condos, but that level is likely to be far lower than today's prices.
Could this be stopped? Well, there are possibilities. For one, all new construction is already coming to a halt thus limiting supply. The counter to this is that I estimate that there is probably about an 18 month supply of Condos in the area (what is on the MLS, what the new buildings are selling off the MLS, and those owners who are waiting for the Spring market hoping for a more robust market). So it will be a year and a half of downward price pressure which I think will keep the supply in the 18 month range until prices are so far down that investors and former renters jump in with both feet (ala Contra Costa and Solano counties today - prices down 40% while sales are up 100%).
The government could also step in with 4% 30 year fixed mortgages, or increase the new $15,000 tax credit to a far larger number, or force banks to do principal reduction in their loan modifications. But the government seems to be stuck as they always are. Of course the economy could do a dramtic turn around and the days of easy money could return... but don't hold your breath on any of the above.
One 2BR REO at 140 South Van Ness recently sold for $580,000, one at The Palms sold for $590,000. Expect these sales to just be the beginning, and if that ends up being true, the prices will be lower as time goes on.
However, a large supply, with more slated to come on the market, is only one part of the problem. The other is that the prices that Buyers of new or newer building condos paid made no sense. I expect to take some heat on that comment, not because it isn't true, but because it is easy to make that comment in hind sight. But you'll just have to trust me on this. I walked into many buildings dating back to 2004 and saw prices that matched those of the best properties in Pacific Heights and Russian Hill. In fact, as I watched only a handful of the most special properties in the north end of town reach $1,000 per SqFt, I seemed to be finding far more places asking $1,000 per SqFt in SOMA including condos that were eye to eye with Bay Bridge on-ramps, complete with 24/7 traffic noise and the resulting dirty windows.
One of the buildings that I predict will have a steady stream of REO's and Short Sales is The Beacon (250 & 260 King). Back in 2005 a colleague of mine was selling condo after condo in The Beacon, and it stumped me. I mean I like the location, especially since I'm a huge baseball fan, and because it's got phenomenal access to commuting (Caltrains and the 280 on-ramp) and it's got great access to shopping (Safeway & Borders among others in the building) and bars/restaurants (District across the way - although that hot bar wasn't even a gleam in the owners eyes when the building went on sale). But the building was original built as rentals, it was situated on leased land, none of the parking spots were deeded, there is no air conditioning in the condos... overall, there was nothing special about the building, only the location.
Yet prices were $800 per SqFt, above most of the condos I was visiting at the same time in the Marina, Cow Hollow, Russian Hill, Pacific Heights and so on. So I asked my colleague what was going on at the building that I was missing. I'll have to do a poor job of paraphrasing because I dismissed her comments at the time, but she claimed it was a great opportunity, a great building, and that the coming neighborhood amenities would cause prices to keep going up. I dismissed that because prices already seemed ABOVE where I would have expected them to be AFTER the neighborhood became what she was predicting.
The more I visited SOMA, South Beach and Mission Bay, the more I came to believe in my "new car" theory. That the Condo developers were pricing the condos like a hot new car... Buyers were buying them because they had the new car smell... and as soon as they drove the car off the lot it depreciated by 10%. You can always buy last year's model for a significant discount to the new model, yet there always seem to be plenty of people who just have to have the new car (although even that is changing in America today).
In real time (back then) the moment The Beacon came onto the market, 140 South Van Ness was last year's model. Then The Palms (555 4th St) came on the market and no one wanted The Beacon any more. When One Rincon Hill came on it was all the rage even as softness in the market started to become evident. Once The Infinity came on no one seemed to care anymore about One Rincon, and now phase 2 of The Infinity has just hit the market, so phase 1 is "last year's model" and any re-sales will be at least 10% below what the original Buyer paid.
The prediction for a coming wave of foreclosures and short sales is easy to make because it's already happening. There are 2 for-sale REO's in The Beacon right now (see the below post) and 1 each at 140 South Van Ness and The Palms. And virtually anyone who has ever bought in any of the three buildings, except maybe those who have purchased in the last couple of months (and even some of those are already under water) will be so far under water, that they will have to come up with money in order to Sell for many years to come.
Again, the 2004 to 2007 prices paid were basically "tomorrow's prices" and by tomorrow I mean some future expectation of the neighborhoods and market. The original owners at 140 South Van Ness are more protected because they bought in 2003, but the '05 and '06 buyers are already well under water. But at The Palms and The Beacon, the condos depreciated the moment they were "driven off the lot", and since then the market has dropped from 10% to 20% or more.
I expect it will be close to 10 years before they get back to their levels they paid. If I am right, then EVERY sale in all three buildings will be some sort of "distress" sale. Either a Short Sale or an REO, and anyone who can afford not to sell will eventually become a stress sale, or will add to a growing number of rentals in these buildings which drive down rental rates, adding to the burden of those who always meant to use them as investments.
Finally, one distressed sale leads to another as the prices keep coming down until Buyers see them as deals. Current owners see the low sales prices and realize they are paying more on their loan then their condo is worth, and some will purposely short sell or allow themselves to be foreclosed upon to get out. If that happens, it becomes a snow ball effect of ever decreasing values. Devaluation happens when Buyers expect tomorrow's prices to be lower than today's, and if every buyer sits on the sidelines waiting, it will take enormous discounts to move any Condo. The lower the prices, the more likely home owners who paid higher prices will want to cut their losses. That is likely to eventually even impact the 2003 buyers at 140 South Van Ness.
At some point the prices will be so low that new buyers will snap up the condos, but that level is likely to be far lower than today's prices.
Could this be stopped? Well, there are possibilities. For one, all new construction is already coming to a halt thus limiting supply. The counter to this is that I estimate that there is probably about an 18 month supply of Condos in the area (what is on the MLS, what the new buildings are selling off the MLS, and those owners who are waiting for the Spring market hoping for a more robust market). So it will be a year and a half of downward price pressure which I think will keep the supply in the 18 month range until prices are so far down that investors and former renters jump in with both feet (ala Contra Costa and Solano counties today - prices down 40% while sales are up 100%).
The government could also step in with 4% 30 year fixed mortgages, or increase the new $15,000 tax credit to a far larger number, or force banks to do principal reduction in their loan modifications. But the government seems to be stuck as they always are. Of course the economy could do a dramtic turn around and the days of easy money could return... but don't hold your breath on any of the above.
One 2BR REO at 140 South Van Ness recently sold for $580,000, one at The Palms sold for $590,000. Expect these sales to just be the beginning, and if that ends up being true, the prices will be lower as time goes on.
REO's in San Francisco - Condos - Feb '09
Searching for REO's (Real Estate Owned by Banks) in San Francisco, make this your stop. The SFisHOME Real Estate Group team keeps track of all San Francisco REO's.
Click here for a list of all available Condos, TICs, Lofts and Coops that are listed as REO's in the San Francisco MLS as of February 8th 2009.
Please note the above link is good for 30 days. Please look for a more recent San Francisco REO post at the top of this blog, or contact the SFisHOME Real Estate Group at 1-415-366-8218 or info AT sfishome DOT com if you'd like the newest properties.
If you are wondering about other foreclosure opportunities, we can also access all MLS listed Short Sales in San Francisco, where the bank has to agree to take a loss to enable a Seller to sell when they owe more than the property is worth. Finally, there are auctions at City Hall at 400 Van Ness. I recommend PropertyShark for a free way to keep track of Notices of Default and upcoming auctions. Of course to get addresses they have a pay-for service.
Click here for a list of all available Condos, TICs, Lofts and Coops that are listed as REO's in the San Francisco MLS as of February 8th 2009.
Please note the above link is good for 30 days. Please look for a more recent San Francisco REO post at the top of this blog, or contact the SFisHOME Real Estate Group at 1-415-366-8218 or info AT sfishome DOT com if you'd like the newest properties.
If you are wondering about other foreclosure opportunities, we can also access all MLS listed Short Sales in San Francisco, where the bank has to agree to take a loss to enable a Seller to sell when they owe more than the property is worth. Finally, there are auctions at City Hall at 400 Van Ness. I recommend PropertyShark for a free way to keep track of Notices of Default and upcoming auctions. Of course to get addresses they have a pay-for service.
2/5/09
Converting TIC to Condo in San Francisco
The San Francisco Department of Public Works published a flow chart of how the a 2-unit Owner Occupied building gets converted to Condos here http://www.sfgov.org/site/uploadedfiles/sfdpw/bsm/FlowchartConversion2UnitBypass.pdf
For Buildings with 3 to 6 units, or a 2-unit building with only one owner occupier, if you want to convert to condos in San Francisco you must go through the lottery process. I found a surprisingly informed discussion about the lottery on SocketSite after they published a San Francisco Chronicle article about the Mayor's Office considering the idea of allowing lottery participants to buy the right to convert. That San Francisco Chronicle article can be found here.... but for those curious about how some of the TIC rules work, and for an interesting discussion of the pros and cons of TICs, rent control, and condo conversion in San Francisco, the SocketSite comments are smarter than your average joe (well, most of them :)
That discussion can be found here. The article was typical of mass media... bad. The final comment was perfect... someone saying a lottery is fairer than allowing someone to buy their way out of the lottery. Not well thought through because if you can't afford to buy your way out, wouldn't you hope and pray that EVERYONE else did? You'd then be the only remaining building in the lottery... so obviously you'd win. So the more the merrier right? Anyway... watch out for anything mass media says... including the Chronicle, when it comes to Real Estate. Blogs can be notoriously un-researched, but most people know that... whereas they think a paper like the Chronicle must always be accurate, thorough, researched, and fair... hardly.
For Buildings with 3 to 6 units, or a 2-unit building with only one owner occupier, if you want to convert to condos in San Francisco you must go through the lottery process. I found a surprisingly informed discussion about the lottery on SocketSite after they published a San Francisco Chronicle article about the Mayor's Office considering the idea of allowing lottery participants to buy the right to convert. That San Francisco Chronicle article can be found here.... but for those curious about how some of the TIC rules work, and for an interesting discussion of the pros and cons of TICs, rent control, and condo conversion in San Francisco, the SocketSite comments are smarter than your average joe (well, most of them :)
That discussion can be found here. The article was typical of mass media... bad. The final comment was perfect... someone saying a lottery is fairer than allowing someone to buy their way out of the lottery. Not well thought through because if you can't afford to buy your way out, wouldn't you hope and pray that EVERYONE else did? You'd then be the only remaining building in the lottery... so obviously you'd win. So the more the merrier right? Anyway... watch out for anything mass media says... including the Chronicle, when it comes to Real Estate. Blogs can be notoriously un-researched, but most people know that... whereas they think a paper like the Chronicle must always be accurate, thorough, researched, and fair... hardly.
1/31/09
How to Prepare Your Home for Sale: Video
10 Step Video on how to prepare your home for sale. Several aren't quite appropriate for San Francisco... but there are true gems in here:
Thinking of selling your San Francisco home or condo? Contact the SFisHOME Real Estate Group at INFO AT SFisHOME DOT COM or get your home value report at www.Evaluate-My-Home.com
Thinking of selling your San Francisco home or condo? Contact the SFisHOME Real Estate Group at INFO AT SFisHOME DOT COM or get your home value report at www.Evaluate-My-Home.com
1/23/09
Best deals & biggest price drops in San Francisco
The tough times are in the outer fringes of San Francisco and a home just caught my eye as what appears to be one of the best deals going... and it still won't sell. 279 Flournoy St, San Francisco is a single family home that's listed 3 bedrooms, 2 bathrooms and 1034 SqFt. It's a Bank owned REO from Countrywide that struck me as a major deal for two reasons. For one it was only asking $389,900. Now if you live in the Midwest and are contemplating a move to San Francisco this price will seem outrageously expensive, but in San Francisco you can't even by a studio condo in the north end of town for that price. 
The second thing that struck me as this being a major deal is that it last sold in 2003 for $440,000. That is striking because 2003 is BEFORE the market took off with crazy financing. Most major price drops are down to 2004 or maybe down to 2003... but not below 2003.
The third thing that struck me... this home was withdrawn from the MLS (the San Francisco MLS or multiple listing service) in mid-December without having sold (as far as I can tell). That means it's low asking price of $389,900 was too high.
Finally, when doing a 1/2 mile radius search around the house for all homes that are on the market for sale, in contract, Sold in the past 6 months, or expired or withdrawn off the MLS, it is the 4th cheapest property out of 51 in total. So by any measure it is REALLY CHEAP and still didn't sell. The three that are cheaper appear to be smaller homes, but these homes are active on the MLS and they aren't selling either. They are 262 Minerva St, 127 Broad St (looks like a shack that needs to be torn down) and 269 Montana St (a short sale with 3 offers submitted to the lender already - per the MLS). Check them out at www.SF-MLS-Search.com.
If you're interested in exploring properties for sale in San Francisco, whether for investment or a primary residence, please contact me for assistance at www.SFisHOME.com.
The second thing that struck me as this being a major deal is that it last sold in 2003 for $440,000. That is striking because 2003 is BEFORE the market took off with crazy financing. Most major price drops are down to 2004 or maybe down to 2003... but not below 2003.
The third thing that struck me... this home was withdrawn from the MLS (the San Francisco MLS or multiple listing service) in mid-December without having sold (as far as I can tell). That means it's low asking price of $389,900 was too high.
Finally, when doing a 1/2 mile radius search around the house for all homes that are on the market for sale, in contract, Sold in the past 6 months, or expired or withdrawn off the MLS, it is the 4th cheapest property out of 51 in total. So by any measure it is REALLY CHEAP and still didn't sell. The three that are cheaper appear to be smaller homes, but these homes are active on the MLS and they aren't selling either. They are 262 Minerva St, 127 Broad St (looks like a shack that needs to be torn down) and 269 Montana St (a short sale with 3 offers submitted to the lender already - per the MLS). Check them out at www.SF-MLS-Search.com.
If you're interested in exploring properties for sale in San Francisco, whether for investment or a primary residence, please contact me for assistance at www.SFisHOME.com.
Finding Rentals or rent prices in San Francisco
Time and again I ask what are rental prices are like in San Francisco, or in a particular neighborhood or size range. 
I almost always send them to Craigslist since it seems like that every rental listing shows up there. But wading through Craiglist isn't all that easy. With all the mashup technology someone, sooner or later, had to come up with a map based search... and sure enough someone did.
A new internet must is Mullinslab2.ucsf.edu/SFrentstats
Click on "2BR" or whatever segment you're interested in, and the map pops up, and from there you can drill down into neighborhoods. Or you can click on "Neighborhood Data" and see rents and total rentals by neighborhood. Or look at trends over time under "Overall Stats/Notes" for "Graphs of rent over time".
To me the best part, especially if you are looking for San Francisco rental properties, or if you are looking to buy a Condo or house to then turn around and rent, you can see the Craiglist rentals in a much easier to digest way.
I almost always send them to Craigslist since it seems like that every rental listing shows up there. But wading through Craiglist isn't all that easy. With all the mashup technology someone, sooner or later, had to come up with a map based search... and sure enough someone did. A new internet must is Mullinslab2.ucsf.edu/SFrentstats
Click on "2BR" or whatever segment you're interested in, and the map pops up, and from there you can drill down into neighborhoods. Or you can click on "Neighborhood Data" and see rents and total rentals by neighborhood. Or look at trends over time under "Overall Stats/Notes" for "Graphs of rent over time".
To me the best part, especially if you are looking for San Francisco rental properties, or if you are looking to buy a Condo or house to then turn around and rent, you can see the Craiglist rentals in a much easier to digest way.
Another interesting REO property
530 Ashbury looks like it might have been a victim of fraud... in August 2006 someone paid $825,000 for it and got 100% financing with two loans from the same company... Fremont Investment & Loan. It looks like these guys closed down or sold their residential mortgage business... and no wonder if they were doing 100% financing for buyers who clearly over paid. 
Fast forward to February 2008 a mere 18 months later and the property goes back to Fremont Investment & Loan... and in July 2008 CapitalSource Bank buys up Fremont.
Fast forward again to today... and 530 Ashbury is listed for sale as an REO (Real Estate Owned by a bank) in the San Francisco MLS for $599,900... but it's got a tenant in the property, and it says "bank has no record of any paid rents". My, my, how interesting. So the buyer probably collected the rents and never paid a bill and made off with the rental income as long as she could. You really have to wonder if the loan officer at Fremont was in cahoots here, because even at $4000 per month in rent for 18 months, it doesn't seem worth the blow to your credit report, or being criminally prosecuted.
By the way, now the owner of record is a company called Liquidation Properties, Inc... how appropriate! And per the tax records they got it from Fremont in a Quit Claim deed for $493,500. So if any unrepresented buyers are out there and like 530 Ashbury, drop me a line and lets see how low we can negotiate this down towards that number. To see the property on the MLS, visit www.SF-MLS-Search.com and enter listing# 351360 into the listing number search.
Fast forward to February 2008 a mere 18 months later and the property goes back to Fremont Investment & Loan... and in July 2008 CapitalSource Bank buys up Fremont.
Fast forward again to today... and 530 Ashbury is listed for sale as an REO (Real Estate Owned by a bank) in the San Francisco MLS for $599,900... but it's got a tenant in the property, and it says "bank has no record of any paid rents". My, my, how interesting. So the buyer probably collected the rents and never paid a bill and made off with the rental income as long as she could. You really have to wonder if the loan officer at Fremont was in cahoots here, because even at $4000 per month in rent for 18 months, it doesn't seem worth the blow to your credit report, or being criminally prosecuted.
By the way, now the owner of record is a company called Liquidation Properties, Inc... how appropriate! And per the tax records they got it from Fremont in a Quit Claim deed for $493,500. So if any unrepresented buyers are out there and like 530 Ashbury, drop me a line and lets see how low we can negotiate this down towards that number. To see the property on the MLS, visit www.SF-MLS-Search.com and enter listing# 351360 into the listing number search.
1/22/09
REO's make for interesting stories
San Francisco is finally seeing some Bank Owned "REO" properties... some had attempted Short Sales first... and I don't think I'm going out on a limb by guessing there were offers but the banks couldn't or wouldn't get their act together to accept it. So not too far down the road the same property hits the market again.
88 King St #101 is one of those properties. I saw it when it was a short sale, and last week it came back on the market priced lowered than the short sales price at $779,000. This is an unusual condo... it's across from AT&T Park where the San Francisco Giants play, and it's literally on the street. With a wall of glass, you'd be staring a lot of Giants fans in the eyes during their 81 home games. In the photo, note the street level glass door leading to the Condo's patio which then leads to a door that puts you in the unit's living room. There's also an interior entry way.
But at $779,000 for nearly 1500 SqFt, 2 bedrooms and 2.5 baths on two levels, it looks like a pretty good deal. I'd even suggest trying to pick it up for a little less. If you're interested in the property, check it out at www.SF-MLS-Search.com or email or call me and I'll send you the info.
1/21/09
Infinity SF & Blu SF updates
Tower one or phase one of the Infinity, 318 Spear St San Francisco, still isn't sold out. Tower two or phase two of the Infinity, 338 Spear St, which many claim is the superior tower since it's closer to the water and has more unobstructed view homes... and is rumored to have better finishes... isn't yet complete, nor is it for sale as of today. Speculation at sites like Socketsite, a San Francisco real estate blog with active commenters, has been that the Infinity's tower two would begin selling soon after the first of the year.
Well, per the Sales office, you can now see tower two via private appointment, but with scarce appointments available. But in early February they will be ready for drop-in appointments. As always start at the Sales office, and it's still best to book an appointment. In addition, Sales will commence around the time that drop-in appointments begin. HOWEVER, tower two is still not ready for occupancy and may not be until June or so.
The prices quoted at Tower one are still amazingly high. One of the only (or was it the only???) 1 bedrooms remaining that has water views is asking $895,000 for just over 800 SqFt. At over $1,000 per SqFt it amazes me that anyone would pay that (well, they haven't since this particular one is still for sale - and they proactively tell you that they will entertain lower offers), but with the credit freeze, stock market drop, and over-supply of homes in and around SOMA/South Beach including their own Tower two... it seems to me a 1 bedroom condo ought to be asking $700,000, not $895,000.
Regarding Blu, or 631 Folsom St San Francisco,
they will begin showing finished models next week, and occupancy will begin at the end of March or beginning of April. Thus far only 10% of Blu is in contract whereas Infinity tower one claims to only have about 10% remaining... but of course 0% sold in tower two.
Of the three hottest new buildings in the area... the ultra luxury Millennium SF at 301 Mission is the most expensive (despite an announced 15% drop in prices), Infinity is a pretty luxurious building, at least in terms of amenities, and is cheaper, but is more expensive than Blu. But in addition to amenities, Blu has few private patio/balconies (only 2nd floor and penthouse) whereas Infinity has the most.
It will be a very interesting year in real estate throughout San Francisco, but the SOMA/South Beach/Mission Bay market, and in particular these three developments all opening this Spring, will be very interesting to watch.
If you would like to be updated on all MLS activity at these three buildings you can enter your specific search at Automated-HomeFinder.com, or try out SF-MLS-Search.com or register at CleanOffer.com or email me at info @ SFisHOME.com for direct service.
Well, per the Sales office, you can now see tower two via private appointment, but with scarce appointments available. But in early February they will be ready for drop-in appointments. As always start at the Sales office, and it's still best to book an appointment. In addition, Sales will commence around the time that drop-in appointments begin. HOWEVER, tower two is still not ready for occupancy and may not be until June or so.
The prices quoted at Tower one are still amazingly high. One of the only (or was it the only???) 1 bedrooms remaining that has water views is asking $895,000 for just over 800 SqFt. At over $1,000 per SqFt it amazes me that anyone would pay that (well, they haven't since this particular one is still for sale - and they proactively tell you that they will entertain lower offers), but with the credit freeze, stock market drop, and over-supply of homes in and around SOMA/South Beach including their own Tower two... it seems to me a 1 bedroom condo ought to be asking $700,000, not $895,000.
Regarding Blu, or 631 Folsom St San Francisco,
they will begin showing finished models next week, and occupancy will begin at the end of March or beginning of April. Thus far only 10% of Blu is in contract whereas Infinity tower one claims to only have about 10% remaining... but of course 0% sold in tower two.Of the three hottest new buildings in the area... the ultra luxury Millennium SF at 301 Mission is the most expensive (despite an announced 15% drop in prices), Infinity is a pretty luxurious building, at least in terms of amenities, and is cheaper, but is more expensive than Blu. But in addition to amenities, Blu has few private patio/balconies (only 2nd floor and penthouse) whereas Infinity has the most.
It will be a very interesting year in real estate throughout San Francisco, but the SOMA/South Beach/Mission Bay market, and in particular these three developments all opening this Spring, will be very interesting to watch.
If you would like to be updated on all MLS activity at these three buildings you can enter your specific search at Automated-HomeFinder.com, or try out SF-MLS-Search.com or register at CleanOffer.com or email me at info @ SFisHOME.com for direct service.
1/6/09
REO's in San Francisco - Condos
Bank Owned "REO" properties in San Francisco still remain at far lower levels than other parts of the Bay Area, State and Country. Currently there are 21 Condos that are REO's in San Francisco. Click here for a PDF list of these REO's as of today, January 6, 2009.
Note from the list that within San Francisco the REO's are concentrated in certain parts of the city. The report lists the names of the neighborhoods, and if youclick here you can see a Map Report of the 21 San Francisco REO's.
Note that there are no REO's north of Geary Street (the map is lopped off to only show where the REO's are located) and that there is a concentration of REO's in the Bayview/Hunters Point (south eastern San Francisco) and in SOMA/Mission Bay (where all of the new and newer construction is located).
If you're interested in getting REO listings emailed to you the day they come on the market, visit www.Automated-HomeFinder.com and use the comments section to ask for REO's only.
Note from the list that within San Francisco the REO's are concentrated in certain parts of the city. The report lists the names of the neighborhoods, and if youclick here you can see a Map Report of the 21 San Francisco REO's.
Note that there are no REO's north of Geary Street (the map is lopped off to only show where the REO's are located) and that there is a concentration of REO's in the Bayview/Hunters Point (south eastern San Francisco) and in SOMA/Mission Bay (where all of the new and newer construction is located).
If you're interested in getting REO listings emailed to you the day they come on the market, visit www.Automated-HomeFinder.com and use the comments section to ask for REO's only.
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