Haight Ashbury

Continuing through District 5 in our neighborhood series, we come to 5B, or Haight Ashbury. The Haight is a neighborhood that is internationally known for the hippy movement of the sixties. Musicians such as Jefferson Airplane, Janis Joplin, and the Greatful Dead all lived within blocks of the famous Haight/Ashbury intersection. There is actually a building currently on the market on Lyon between Page and Oak that advertises on the listing the fact that Janis Joplin's former residence was just two blocks away.

This neighborhood is bordered by the panhandle to the north and Golden Gate Park to the west, so greenery is all around you. It includes the area around UCSF (University of California Medical Center) and parts of Cole Valley. Buena Vista park and Divisadero are the south eastern borders.

You will definitely not be without things to do in this area. If you enjoy the outdoors, Golden Gate Park is a wonderful place to explore. Visit on a car free weekend afternoon where the main road in the park is closed to automobiles and allows you to bike, skate, or just walk through and enjoy the fresh air. You may also stop and visit one of the many attractions such as the Japanese Tea Garden, the Flower Conservatory, or the de Young Museum just to name a few. The children's playground was recently given a major face lift and is quite amazing.

If you're feeling more like shopping, eating, or drinking, the Haight has an unlimited supply of options as well. On and around Haight Street you will find restaurants, cafes, shops, bars, a movie theater, and even a few bed & breakfasts for the tourists. You can do everything on Haight street from selling your clothing to one of the exchange stores like Crossroads or Buffalo Exchange to filling an eyeglass prescription at City Optix. Among the tourist shops, tattoo shops, and smoke shops, you can also find boutique style clothing stores such as Ambiance or Behind the Post Office as well as upscale vintage clothing such as La Rosa.

How about housing you ask? The majority of the housing available in this area are condominiums or TICs (Tenancy in Common). There are single family homes, but only a handful at a time which range in price from one to three million. The average price for a condo is about $785,000. What does that get you? At the moment there is nothing available in that price range (what a surprise). You could get a one bedroom TIC on Carl Street for $529,000. This is a top floor unit with a remodeled kitchen and is located in the Cole Valley or southwestern corner of the Haight. This is a very popular and upscale neighborhood with eateries and wine and cheese shops lining Cole Street. You also benefit from the J Church Muni train which will take you downtown in minutes.

A step up in price will get you a three bedroom condominium on Oak Street at Shrader. It is a large top floor flat with high ceilings and a wonderful shared garden. It also overlooks the panhandle. It has a lot of original charm including two fireplaces. There is in unit laundry and extra storage in the basement, but no parking. It is listed at $899,000.

Jumping up once more in price, the newest listing in the same spot is this wonderful three bedroom condominium located on Belvedere at Frederick. It is also a top floor unit that has recently gone through the condo conversion process. It is completely remodeled and has plenty of storage and closet space. There is parking, however it is leased for $250 a month. The list price for this unit is $1,049,000.

For school options, there aren't any public schools directly in this neighborhood, but it is centrally located and surrounded by neighborhoods such as the Sunset and Richmond which have many great public school options. There are private school options, one of which is the French International school located on Ashbury. Lycee Francais La Perouse offers classes from two years prior to kindergarten all the way through twelfth grade. Another private school option is the Urban School of San Francisco located on Page St. This is a very well respected and high ranking private high school.

That ends our tour of the Haight Ashbury neighborhood. Please contact the VanFenton Team if you want more information on any of the properties listed above.

Weekly Sales Report

It has been another week of limited activity here in the San Francisco real estate market. Overall, statistics look very similar to last week's numbers. Half of the properties that received offers this week were multiple offer situations. The most offers received on a property was three.

All of the properties that sold this week were either at or under the asking price. This should be a message to sellers that pricing the home where you are willing to accept the offer is very important at the moment. The idea of pricing low to generate activity and drive the price up is not getting the results it once did. Sellers are then left with their property sitting on the market at a price lower than they want to accept.

There is a single family home on the north slope of Potrero Hill, located on Rhode Island and Mariposa listed at $1,195,000. It is a large Victorian with three bedrooms, lots of light, and sits just a block away from the new Whole Foods. The sellers are in a hurry to sell and set an offer date just days into the marketing period. Due to the lack of inventory in Potrero Hill, it was a zoo at the open house that first weekend. I spoke to the listing agent on the offer date, and they only expected one offer. There are probably hundreds of buyers at this moment waiting for a single family home on the north slope of Potrero Hill. Granted, this one house wouldn't have been right for all of them, but only one party ready to pull the trigger really speaks volumes. It may very well only sell at asking; maybe even below.

Mortgage Minute

On the financial front, which along with the Presidential race is all we seem to hear about these days, the Fed announced another rate cut this morning of 0.5%. This will most directly affect those with HELOCs, or home equity lines of credit. Some adjustable rate mortgages will be affected as well, although not directly.

The key message to buyers is that rates are the best they have been in two and a half years. Get yourselves ready to go. Get preapproved and underwritten if possible. Being underwritten means that you have met the conditions that were outlined by the lender. There will be conditions specific to you, the borrower, and another set of conditions for the property. Buyer conditions will be your documentation such as pay stubs, W2s, landlord referral, credit report, etc. The property specific conditions will of course wait until you have entered into contract on a home. These are things like an appraisal and a satisfactory preliminary title report.

Because conditions are tighter at the moment, do as much work as possible on your pre-approval. That way you are really ready to go once you locate a property, and there will be fewer bumps along the road when you least need them.

Lastly, we are hearing that more loan programs are being pulled off the market daily. This limits your options when choosing or qualifying for a loan. Areas that are most affected are 95% loan to value ratios, which means that your down payment is 5%. Also stated loans are much more difficult at the moment; your credit score needs to be higher than it used to in order to qualify for a stated program. If you fall into one of these categories, have a conversation with a lender as soon as possible.

Weekly Sales Report

As so much of the news these days is concentrating on the economy, so was our office meeting. We went through the numbers quickly, and I say quickly because the number of sales was small. The surprising statistic for the week was that four out of five properties were in a multiple offer situation. It is a function of limited supply. On the other hand, of the closed escrows, all of them sold under the asking price.

The discussion quickly turned to what people are thinking, and more importantly hearing, about what is going on with the economy. What is the reality? Well, since our last posting, stock markets on an international level have suffered. Housing prices are down nationally, unemployment is higher than it has been in years, and people as well as businesses are starting to make cuts in their spending. This is a bad equation.

The question that nobody can answer with complete accuracy is what will happen going forward. I think I have quoted my father in the past saying, "Ask 6 economists and get 10 different predictions" or something to that effect. Some say if we do in fact enter a recession it will be fairly mild and only span two to three quarters. Others are much more pessimistic and think it will be severe lasting at least four quarters.

One of the major fears among chief economists is that housing prices will continue to fall, and perhaps accelerate. Again, these opinions vary, and are predicted on the national level. One of the major problems is saturation due to new developments. Developers in some areas are slashing prices up to 50% in order to offer incentives to buy. San Francisco is clearly not in this predicament due to our finite number of single family homes.

Another concern is that foreign investors will begin pulling their money out of the US economy. Stocks would continue to fall thus adding to the fear that will in turn cut spending. Lastly, banks may be unwilling, or unable, to make larger loans to businesses or individuals. Without borrowing, there will be no spending.

What is being done to help the situation?

Fed Cuts Rates 3/4 of a Percent

While many are saying this is "too little too late" this is at least a start, and we may see another rate cut next week. It was an emergency meeting called one week before their scheduled date, and the cut was the largest in over a quarter of a century. These rates will apply to adjustable rate mortgages, auto loans, and credit card interest rates.

Stimulus Plan

Again, they say it won't be enough, but it is action in the form of a tax rebate check. Individuals would receive $600, and working couples would receive $1200 plus $300 per child according to this agreement. The idea is that money in our pockets will be pumped right back into the economy. The checks would be given out between May and July, and the total cost will be about $100 billion. Also included in this plan is $50 billion in business tax cuts.

San Francisco home buyers will receive great benefit from a rise in limits on Federal Housing Administration (FHA) loans. This plan raises the limit to $725,000 in high cost areas. The cap is currently set at $417,000, excluding most San Francisco purchases. This is huge for San Francisco home buyers as the difference in rates from a jumbo to a conforming loan have been up to 1% since the credit crisis. This difference in rates was due to the fact that jumbo loans had no guaranteed buyers on the secondary market making them more of a risk to the lenders.

The buzz in the office meeting was the same that we have been reporting. Buyers are out there and ready to buy. Many are looking but cautious, still "waiting to see what will happen". Most realize that 2008 will be a good year to buy. There is still typical San Francisco frenzy on some properties.This two bedroom house in Noe Valley was only on the market for 12 days before receiving 10 offers. It was cute, not spectacular. Simply the only thing around in its price range. Remember that, sellers!

Recession?

This is quite a subject, and trying to tackle it is almost scary. You hear it everywhere, but who knows what it really means? I just read an article based on a survey conducted by Forbes magazine, that I found rather interesting. According to the survey, 3 out of 4 people believe we are already in a recession or will be sometime in 2008. Does believing we are in a recession make it so? It can be a self fulfilling prophecy. After all, half of the people surveyed have cut back their spending compared to last year. That in itself can cause a recession.

What is a recession? According to Wikipedia, it is "a decline in any country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year."

What does that mean? The benchmarks are:

People buying less stuff
Decrease in factory production
Growing unemployment
Slump in personal income
An unhealthy stock market

In the United States, the word for when a recession begins and ends comes from a group called the National Bureau of Economic Research. This is a non-profit committee made up of 600 academic economists. Their definition for a recession is "a significant decline in economic activity spread across the economy, lasting more than a few months,".

Although some signs point in the direction of a recession, such as a rise in unemployment and a falling stock market, there has not yet been an announcement from NBER. The last recession in 2001 was not formally recognized as one until it was ending nine months later. According to NBER, the average recession lasts only ten months. The point is, of course, that by the time it is recognized we will be well on the way to recovery.

What really worries people is how their lives will be affected. The first thing to note is that even those economists who do predict a recession are suggesting that it will be a mild one. That may mean that the worst is over. Depending on your career, you may or may not be directly affected.

If the idea of a possible recession scares you, there are a few things you can do to ease your mind. The first is to stay away from the stock market temporarily. Instead of investing in stocks, you can build or add onto your savings. Make sure you have at least a six month reserve, which is a smart thing to do with or without a recession. Lastly, remember that cutting spending for fear of a recession could be the very thing that sparks one.

Keep in mind that, over the long run, real estate values have tended to hold their values, appreciating at a pace that at least matches inflation. Especially in stronger markets, such as in San Francisco, real estate represents a good investment, both in times of growth and in recession.

Equally important is to recognize your personal needs, both for investment and for personal housing. If you are “in the market” to buy a personal residence, the value of the property as an investment has to be balanced with the security and advantages of home ownership.

Weekly Sales Report

Sitting on the reception desk this morning as we entered the office meeting was one of those huge water jugs full of "Sweat Tart" candies. Halloween's over, and it's not quite Valentine's Day, so what's the story? There's a bowl next to the jug asking for your business card with your best guest of how many candies there are written on the back. Oh, that game...last played at my baby shower, but that was M&Ms in a baby bottle. Anyway, we went on with the meeting and discussed the past week's activities.

At the end of the meeting, a representative from Cornerstone Title Company walks up to the front and grabs the jug. He is ready to announce the actual total and the proud winner with the closest guess. He first predicted that the average guess, as he had tallied them all up, would be very close to the actual number. His point was that if we work as a team we can come up with the answer. He had eliminated the highest and lowest guess which gave him an average of 756. The actual number of Sweat Tart candies in the jug was 753. We are much better as a team, and we encourage you to use our resources.

Now for the week's activity. Two thirds of the homes that went into escrow this past week only received one offer. The other third received multiple offers; three was the maximum number on any property.

Very few escrows closed this week, which goes right along with the slower activity we saw mid December. Of those that did close, two thirds went under the asking price and the other third went over.

The tour of new properties for the week was very encouraging. It included a cute house in Miraloma Park, two single family homes in Noe Valley, a house in Potrero Hill, and a condo with wonderful views in the Twin Peaks area. For specific listings in any neighborhood, please contact us and request one of our Buyer's Questionnaires. After you have filled it out we will have a clear idea of what you are looking for, and we can get those listings to you as soon as they hit the market.

San Francisco Unified School District

If you have small children, and specifically one who is currently pre-school age, you have just gone through the difficult process of selecting your top seven public schools. For those of you who are not familiar with the San Francisco Public School system, here is an overview.

San Francisco uses a "school choice" system, which means that you can send your child to any public school in the city regardless of which district you are in. While it is nice to have options, especially for those living in less desirable neighborhoods, this freedom of choice does come with some disadvantages. The largest being that your child will not always get into your first school of choice.

There are approximately 80 schools in the San Francisco Public School District. From these 80, you will choose your favorite seven and list them in order of preference on your child's entrance application. If there is room at your first school of choice, then bingo, your child will get in! If there are more applicants than seats available, the "diversity index" lottery system kicks in.

This is not based on race, but rather the parent's education levels, family income, and English proficiency of the child. There is also preerence given if your family has an older sibling who is currently enrolled in the school. The district tries to keep your order of preference in mind, and they also take into consideration proximity to your home.

It sounds overwheling, and of course feels that way while you are in the process of choosing. The good news is that for the 2007-2008 school year, 87% of all applicants did receive one of the schools on their list. 67% received their first choice. The wonderful thing is that there are many great schools to choose from including the seventeen schools with language immersion programs.

There are school enrollment fairs and tours at each of the schools to help you get better acquainted with them. Also, if you have just turned in your child's kindergarten application or will be doing so in the next couple of years, have a look the The SF K Files, an informative and popular blog that follows a San Francisco mother of two through the trials and tribulations of choosing a school list. She has just done so and did post the outcome as the application date was January 11th. I have applied for my son as well.

Many young families and couples who are thinking of having children in the future are interested in the public school system when searching for their home. As mentioned earlier, neighborhood is not as important as it is in the suburbs where your child is simply assigned to the school down the block. You will, however, take location into consideration when choosing schools. It is important to know that you will have desirable options when that time comes. You can begin your research at the district's website where they have detailed profiles on all of the schools.

Recent Activity

The second weekend of the year is here. We had anticipated seeing listings by this time, and we are happy to report that the shipment has arrived! Since our Hotsheet report on January 7th, There have been:

55 Single Family Homes,
96 Condos/Coop/Loft/TICs, and
11 2-4 Unit Buildings released onto the market.

That should include something for everyone to look at as most neighborhoods and price ranges are covered in that list. One of the single family homes has already sold after only four days on the market. It is a three bedroom, three bath home, just over 1930 square feet, and it sits at the ocean's edge.
This tri level home was built in 1997 and is located on the Great Highway at Wawona. The list price was $899,000; we will keep you posted for the sales price.

Another listing that was snatched up after only one day on the market was this 2 unit building on 20th Avenue in Central Richmond. It was listed both as separate TIC interests and as an entire building. It had been on the market last year for 47 days and then withdrawn. It came back on at the same price just yesterday, and they have already accepted an offer. Somebody may have seen it last year and wasn't ready to move until now.

Noe Valley is in the lead with 8 new single family home listings. They range in price from $699,000 for a total fixer to $2,595,000 for a remodelled 5 bedroom 3.5bath home on 23rd & Castro.

SOMA is the leader with 15 new condo listings. These particular listings start at $449,000 for a studio condominium at the Palms on 4th Street at Brannan. Believe it or not, the high end listing is in the same building. It is a two level, two bedroom condominium with a private terrace listed at $1,089,000. The Palms features a concierge, gym, yoga studio, movie room, club room, and a business center. The nice thing is if you like the building, you are sure to find something there in your price range.

In the 2-4 Unit category, the neighborhood with the most activity is the Inner Mission. There are three new listings in the $900,000 range. They are all tenant occupied, which is why they are on the lower end of the price range for two unit buildings in the neighborhood. Stay tuned for information on our 2 Unit listing in the Inner Mission.

Weekly Sales Report

Welcome to the first Weekly Sales Report of the year! The consensus in the office reflects what we have been reporting, which is that the inventory is low and our buyers are waiting on the sidelines ready to pounce. Everybody was disappointed by the size of yesterday's Broker's Tour; they had hoped to see more of a spike in activity this first week of the year. Although there weren't as many new listings this week, there were a lot of announcements of things to come; listings that are being prepared for sale but won't be released until the end of the week. All you need in this market is a little bit of patience, and you will win in the end.

The report, in terms of number of offers on each property, remains pretty steady from the last few in December. Over 80% of the properties that had offers accepted this week were single offer situations. The other 20% brought in multiple offers. There were three or four offers on each of those. It is tough for those buyers who do find themselves in a competitive situation in this market. They feel as if they are being cheated..."Isn't the market slow right now?" or "I thought prices were soft!" Both of those statements are true some of the time, but certainly not all of the time.

You may have seen this before..."Location, Location, Location"! Many times, just being in the right spot is enough for a house to attract major activity. One of the homes that did receive multiple offers this week was this "tear down" in Noe Valley.I don't think the truck is included. This property is a 576 square foot cottage located at 26th Street and Sanchez in Noe Valley which is a nice block. It is also zoned RH2 which means that you can build two residential units. The lot is longer than average, which many Noe Valley lots are. An average San Francisco lot is 25ft by 100ft. This one in particular is 25ft by 114ft. The house (or I should say the lot) was listed at $950,000! Take a moment and think about that...$950,000! It was on the market for just under two weeks when they received three offers. It undoubtedly will sell for over the asking price; we will keep you posted.

As for the properties that have sold, or closed this week, the list was quite long. It is definitely a good start for the year. Thirty percent of the sales closed under asking price, 50% closed at the asking price, and the remaining 20% did go over the asking price. The largest overbid was only 4%, and again it was a contractor's special. (Is that the same truck?) This was in Bernal Heights; it was also a short sale. A short sale is when the owner owes more on the property than it is worth. It usually involves negotiations with the lenders to get them to agree to a settled amount on the loans.

Hotsheet

One of the great features available to Realtors through the San Francisco Multiple Listing Service is the 24 Hour Market Watch. This gives us a quick overview of what has happened in the last twenty four hours; it is a glimpse into current trends. We will share this with you from time to time as once you have seen a number of them you can start to draw your own conclusions. The categories we will report on today are:

New Listings

9 Single Family Homes. The neighborhoods represented in this group are Outer Richmond, Lone Mountain, Outer Parkside (spelled "Outer barkside" in the listing; choose your agent carefully!) , Oceanview, Westwood Park, Bernal Heights, and Visitacion Valley.

13 Condo/Coop/TIC/Lofts. One of these just came out as I am writing. It is a two bedroom, two bath condominium on Castro at 20th Street listed at $965,000.

1 Two Unit Building. This building was on the market previously but withdrawn and relisted with a different agent as a new listing this year.

Back on Market

1 Single Family Home. This category represents homes that were in escrow but have fallen out and were re released for sale. They can fall out of escrow for any number of reasons ranging from problems with the buyer's financing to something uncovered during the buyer's inspection period. This particular home is a four bedroom, two bath, tenant occupied home in Visitacion Valley listed for $598,000.

4 Tenancy in Commons. Three of the four are in one three unit building; two have been remodelled and the cottage in the back needs some work. TICs have an additional set of hurdles to get over during escrow. If it is a group loan, the partners need to approve of each other and each other's finances before proceeding. This particular three unit building that has come back on the market is on 29th Street in Noe Valley. The individual units are listed for $849,000, $799,000, and $399,000 for the cottage.

Price Increase

1 Condo. This shows as a price increase but was actually only a typo. Technically there were no price increases. Generally, the reason somebody increases the price on a property is because they began with a low asking price hoping to create a frenzy. For whatever reason a frenzy was not created. The likelihood of the seller receiving more than their asking price decreases as time goes on. They may, at some point, decide to raise their asking price to a number they are willing to accept.

Price Reductions

2 Single Family Homes. One is a short sale in the Outer Sunset; the other is a bank owned property in the Bayview.

2 Condos. One of these is a loft that is being reduced in price for the second time.

1 Two Unit Building. This is a fixer probate sale in Visitacion Valley listed at $695,000.

Glen Park

It is time to dive back into our neighborhood series. Glen Park, otherwise known in the real estate world as District 5A, is a small community just south of Noe Valley. It is a very family oriented neighborhood with a village feel. It is possibly best known for the BART station, a huge draw for home buyers with a downtown or east bay commute. The station is located right in neighborhood's center, at Bosworth and Diamond. Glen Park is also served by the Muni bus lines 23, 26, 35, 44 and 52 plus the J Church Muni Metro line.

Just across the way from the BART station, there is a newer mixed use development consisting of the Glen Park Market Place, a branch of the San Francisco Public Library, and condominiums. The residents of the community take their "village" seriously as they had to fight to keep big chain businesses out of their center. Close by you will also find a very popular taqueria, a pizza parlor, a wonderful breakfast spot, a cheese shop, and many other small businesses. There are also two public elementary schools in Glen Park, one of which has an English-Spanish immersion program.

So what does it cost to live here? As mentioned earlier, Glen Park lies just south of Noe Valley. It is also just west of Bernal Heights. It just so happens that it is between those two neighborhoods in price as well. It is generally thought of as being a step up in price from Bernal Heights, and a step down in price from Noe Valley.

One problem about Glen Park for those of you who are interested in living there is that there usually is very little available. Again, that speaks to how dedicated the residents are. It is mainly a single family home neighborhood with the mixed use development and a few other small condo developments sprinkled throughout.

In the past six months, thirty two single family homes were sold in Glen Park. At the lower end, there were a couple of "contractor's specials" in the $600,000 range. The highest sale in the past six months was a "beautifully refurbished" three bedroom home with panoramic views of the city which sold for $1,650,000.The average price is just under $1,025,000. There are currently only five homes available in the Glen Park neighborhood, and all of them have been on the market for a minimum of 50 days. This is not to say that homes aren't selling. In Glen Park they actually sell quite well. These five homes are what is left after the plate has been picked through. One is on a busy street, another is a tiny cottage, another is overpriced...you get the idea. We are waiting; our clients are waiting, for new inventory.

Anyway, the closest example to a home that is currently available in Glen Park close to the average price would be 62 Lippard Ave listed at $1,295,000.We know, that is well above the average, but it is also way overpriced. It is a nice house in a great location and they have done some extensive remodelling, but it is small with a tiny garden.

A great example of a home that just recently sold at almost exactly the average price is 326 Surrey Street. This is a two bedroom, two bath, 1100 square foot remodelled Victorian farmhouse. It was listed at $949,000 and sold for $1,025,000 on December 14, 2007. They accepted an offer after being on the market for only one week.

Those of you hoping to become part of this village just need to be patient. There will be more available in the coming months.

The Year of the Serious Homebuyer

2008 has arrived and it is time to hit the ground running. All signs are pointing towards a recovering market as even the hardest hit sections of the country have shown signs of improvement. We should, however, pay much closer attention to the San Francisco market. Laurence Yun, chief economist for the National Association of Realtors, likens national real estate reports to a national weather report. What an excellent visual.

How many times have you seen that map of the United States with thunder showers over the northeast and sunshine over good old California. What is happening across the country will not help you decide if you should wear an extra sweater or throw on a scarf. You need the local report for that. The weather even varies in the Bay Area; San Francisco may be foggy while the South Bay is sunny and warm. Even in San Francisco we have micro climates. You can sit outside a cafe in sunny Potrero Hill and watch the fog roll in over Twin Peaks. Real estate is no different. If you want to know what is happening in the area you wish to buy, look at the data from that area.

Along with his brilliant analogy, Yun also made some predictions. He sees appreciation getting back to a normal pattern in 2009. This gives serious homeowners a window; an opportunity to get in while prices stay level and interest rates stay low. He attributes much of the problem with the sub prime market to greed. Greed on the part of the lenders to make the deal and get a higher return. Greed on the part of homeowners to buy more than they could afford, and greed of real estate professionals who let it happen in the interest of making a deal. This year, greed will pass and the serious home buyers will step in taking full advantage of the situation.

If all of the San Francisco real estate agents are like us, they have a long list of clients who were waiting for the new year to kick their search into high gear. The new year has arrived. Our schedule is already filling up with property tours; now we are just waiting for the properties to hit the market.

We are excited to see what the year brings. In the meantime, we promise to continue our reports and keep you informed on our local climate.