San Francisco District Study

As mentioned in the yesterday's post, we will be getting back to our district series. Before we dive in neighborhood by neighborhood, we thought we would give you an overview. With all of the news stories lately regarding the plunging home sale prices, we thought we would pass along these statistics specific to each San Francisco District. This is a year over year study comparing the sales for single family homes from November 2006 to November 2007.

District 1 November 2006/ November 2007
Number of Sales 13/ 22
Median Selling Price 899,000/ 1,260,000
Days on Market 30/ 35

District 2 November 2006/ November 2007
Number of Sales 39/ 23
Median Selling Price 775,000/ 839,300
Days on Market 33/ 28

District 3 November 2006/ November 2007
Number of Sales 23/ 15
Median Selling Price 690,000/ 680,000
Days on Market 51/ 43

District 4 November 2006/ November 2007
Number of Sales 38/ 18
Median Selling Price 1,002,500/ 858,000
Days on Market 36/ 41

District 5 November 2006/ November 2007
Number of Sales 31/ 33
Median Selling Price 1,335,000/ 1,390,000
Days on Market 37/ 30

District 6 November 2006/ November 2007
Number of Sales 2/ 7
Median Selling Price 1,113,750/ 1,825,000
Days on Market 43/ 32

District 7 November 2006/ November 2007
Number of Sales 9/ 10
Median Selling Price 2,100,000/ 2,762,500
Days on Market 48/ 33

District 8 November 2006/ November 2007
Number of Sales 1/ 0
Median Selling Price 12,000,000/
Days on Market 178/

District 9 November 2006/ November 2007
Number of Sales 20/ 23
Median Selling Price 845,000/ 850,000
Days on Market 36/ 35

District 10 November 2006/ November 2007
Number of Sales 57/ 24
Median Selling Price 690,000/ 608,600
Days on Market 47/ 63

In some cases, the number of sales is too small to come to any conclusions, but overall you can see that San Francisco is holding steady. Feel free to contact us if you have more specific questions about any one of the districts or neighborhoods. Also, let us know if you are interested in taking a Grand Tour of the city and getting to know more neighborhoods before you choose where you want to live.

Surprising Statistics

Last night Anja and I had a meeting with a new buyer client. We like to sit down with our buyers before we start taking them on tour. This way we can get to know each other and get a clear understanding for what they are looking for. Also, we get a chance to walk them through the buying process. There is a lot of information to cover, especially for a first time buyer.

This family in particular will be searching primarily in Bernal Heights, Glen Park, and Potrero Hill. They have been out and about on their own quite a bit, so they have seen most of what is currently on the market.

When you are thinking of buying and have narrowed it down to a specific type of property in a few neighborhoods, it is a good idea to look at the sold properties in those areas. You can get a feel for what the trend is in that neighborhood. Many people these days are assuming that prices are dropping, or that properties are selling for under the asking price.

We prepared a comparative property analysis for each of the three neighborhoods, and used three bedroom two bathroom homes as the subject of the study. I have to say that we were all quite surprised by the result.

Glen Park: 39 single family homes sold in the past six months
10 of those were 3 bed/2 bath homes
Average list price = $950,090
Average sold price = $1,004,600.
On average, these properties sold 5% over the asking price

Bernal Heights: 84 single family homes sold in the past six months
26 of those were 3 bed/2 bath homes
Average list price = $938,615
Average sold price = $1,039,462
The average overbid for these properties is 10%

Potrero Hill: 27 single family homes sold in the past six months
3 of those were 3 bed/2 bath
Average list price = $1,004,333
Average sale price = $1,163,000
The average overbid for these properties was 14%

There are a few things to point out about these statistics. The first is obvious. In certain centrally located and desirable neighborhoods, properties are still selling above asking price, especially in those neighborhoods that have a very limited supply such as Potrero Hill.

Another thing is that the average value in Bernal Heights is higher than that in Glen Park. Glen Park has always been a step above Bernal Heights in price, but as far as this study is concerned, the opposite proved to be true.

The last detail that really stands out is the difference in number of houses sold. There is much more available at any given time in Bernal Heights. You would think that the average overbid would be lower in the neighborhood with the most options. This shows that the larger home, the 3 bed/2 bath, is a very popular item and people are willing to pay top dollar.

The Final Stretch

Your nice long and hopefully restful weekend has come to an end, and it is time to get back to work...work on finding your new home that is! The end of the year is finally here, and to be in by the holidays or enjoy the 2007 tax break, you really must act now. You need to find the right home in the next two weeks and have an offer accepted in order to leave enough time for escrow and close by the end of the year.

In our open house yesterday, which was surprisingly busy by the way, there were still many people saying that they were just trying to figure out what the market is doing. Why is that so hard for people to figure out? The first reason is, of course, that we cannot see into the future. The second reason is that people are listening to the media. We're not saying you shouldn't listen to it, just to take it with a grain of salt.

DataQuick is a research service which gathers data and statistics for the real estate market. They produce many different types of reports. One such report gives the number of properties sold, and another reports the average price of the properties. This past October was the slowest October in terms of number of sales in Dataquick's history which goes back to 1988. Before that, the slowest October was in 1990, and the busiest was in 2003.

On the flip side, also according to DataQuick, the average price for a home in San Francisco has gone up 3.9% from October 2006 to October 2007. In the Bay Area as a whole, it is up 2.4%.

To listen to the media, you would assume that prices have fallen, and they have in some spots, but not all, and certainly not in San Francisco as a whole. Consumers are being scared away from buying, thus the "We are trying to figure out what the market is doing". The best way to figure it out is to look at statistics; not turn on the six o'clock news. The news will never talk specifically about Noe Valley, Potrero Hill, Glen Park, Pacific Heights, or any other neighborhood you are thinking of purchasing in. Trulia is a great source for year to year neighborhood statistics. We are not saying the number will always be positive; just that you should have all of the correct data when making this kind of decision.

I received an email from a friend at a title company that chronicled real estate headlines over the years. Where would we be if we had listened? Here are a few examples:

“Financial planners agree that houses will continue to be a poor investment.”
– Kiplinger’s Personal Financial Magazine, 1993

“We’re starting to go back to the time when you bought a home not for its potential money-making abilities, but rather as a nesting spot.”
– Los Angeles Times, 1993 (Note: 1993 was the absolute low-point for real estate values in Los Angeles. Priced have sky-rocketed since.)

“Most economists agree...a home will become little more than a roof and a tax deduction, certainly mot the lucrative investment it was....”
– Money Magazine, 1986

“If you are looking to buy, be careful. Rising home values are not a sure thing anymore.”
– Miami Herald, 1985

“The era of easy profits in real estate may be drawing to a close.” (Average price at the time: $28,000)
– Money Magazine, 1981

Of course there are no guarantees in life and being cautious is absolutely commendable. If you buy real estate as a home first and an investment second there is no losing.