As if you needed more prompting, here are some recently released statistics by Realtor.com showing an upward trend in the San Francisco real estate market and beyond.

• In the 146 markets surveyed, listing prices for property for sale were up 1% year over year in 111 metropolitan statistical areas, and 5% or more in 70 cities.
• Nationwide, the median time on the market for real estate was 89 days in March, roughly a 19.8% decline from March 2011.
• In the California cities of Oakland, Fresno, Bakersfield, and San Francisco, the average days on the market for property for sale was less than 50.
• Nationwide, inventory levels of resale homes, which include single-family, condos, townhomes and co-ops, fell about 21.5% from 2011.

More indicators:

• The median price of sold property increased from a year earlier in 74 of 146 metropolitan areas measured, the National Association of Realtors reported.
• Real estate purchases increased 11.7% in the Midwest, 6.6% in the Northeast, 4.1%  in the South, and 1.4% in the West.
• More home building projects are scheduled in 2012 than at any other point in the last 3.5 years.
• Fannie Mae reported a first quarter net income of $2.7 billion, up from a $6.5 billion loss in the first quarter of 2011.

2935 Sacramento St closed on 04/04/2012. It was listed for $1,249,000 and sold for $1,327,000.

While national housing markets are still reporting an abundance of houses for sale and few willing buyers, the Bay Area market is experiencing just the opposite. In fact, home sales have increased 3.2% over the past year.

From the San Francisco Board of Realtors:

With potential home sellers feeling that the market is on the upswing and that housing prices  will soon appreciate, many of them have elected to hold off listing their homes, resulting in a citywide inventory shortage. At the same time, potential home buyers fearing higher prices are rushing to buy, particularly with the low-interest rate mortgages that are available today. These two forces are causing the already low for sale housing inventory in the city to be gobbled up  at a faster rate. And, without new homes for sale to replace those that have been sold, the city’s inventory remains low, while home sales are staying high.

Despite this positive news,  there is a shortage of homes for sale. Increasingly, properties are receiving multiple offers from eager buyers, and sellers have the option to wait for cash, large down payments, and pre-offer inspections. While these perks are advantageous for sellers, many have not thrown their houses in the ring.

Beside the few savvy sellers who are meeting the housing demand, what is keeping other potential sellers from listing their houses? Some point to not fully grasping the liquidity of the SF market. Ignore the national headlines and focus on just how lucrative real estate is in your own backyard!

Sellers may be trying to time the market for when Facebook staffers receive lucrative stock options. Employees will not be able to immediately cash in  options, so timing this is as predictable as timing the stock market.

The demand for houses is not unique to San Francisco; throughout the Bay Area, buyers are eagerly snapping up places for well over the asking price. In the Silicon Valley, for example, many homes are receiving multiple offers in double digits and overbids of 10-15%.

As in business, the law of supply and demand governs real estate, and right now the housing supply across the Bay Area  is not meeting the demand.

More from the San Francisco Board of Realtors regarding Single Family Homes:

 Although the city’s inventory has dropped by 25.5 percent compared to February 2011, inventory levels also have ticked slightly upwards since January of this year, by 7.7 percent. And, despite the low inventory, homes under contract showed improvement compared to the same time last year, rising by as much as 22.9 percent. Moreover, the number of homes sold has almost doubled, by 40.7 percent, with a tally of 173 properties.

For homes that were priced below $700,000, the months of supply inventory fell by 66.2 percent to 1.2 months. For higher priced homes between $700,000 and $1.2 million, the months of supply inventory fell by 30.4 percent to 1.6 months.

These short time frames continue to indicate a seller’s market, where sellers have more leveraging power over buyers who are competing against a limited group of properties.

One part of the city which experienced an above average increase in sale activity is the  Sunset district. Since February 2011, the number of homes under contract has risen by 11.4 percent, while the number of homes sold has jumped by 52.4 percent to a total of 32 properties. The Sunset district, a predominately residential area, rests on the central-west side of the city. With good schools and plenty of family-owned businesses, home buyers seeking a more conservative and small town approach to living would find the Sunset district ideal.

Another area of the city which saw notably positive real estate activity is the central-eastern section. Compared to the same time last year, the number of homes under contract in the section increased by 4.8 percent, while the number of homes sold spiked by 157.1 percent, to a total of 18 properties. Although generally associated with the condominium markets of the South of Market (SOMA) and South Beach areas, the central-eastern section also includes neighborhoods such as Bernal Heights and Potrero Hill, which offer an assortment of cottages, bungalows, and single-family homes in a very friendly, community type setting. Home buyers who yearn to be close to the city, but who also desire amenities such as a small garden or yard, would find solace here.

Inspired? Call us – it’s time to sell.  415.987.Katy (5289)

A home is a hard asset, and it needs to be cared for or it will deteriorate, and subsequently depreciate, quickly. How an association funds the care and maintenance of their building can vary. The two ends of the spectrum are high monthly dues or expensive special assessments.

Buildings in San Francisco usually have a mix of dues and special assessments, and many are underfunded. This means the projected maintenance and expenses of the building are not covered by the reserves saved by the building and the regular dues set forth by the Home Owners Association (HOA).

Larger buildings, including a Co-op in Nob Hill like the Comstock, or highrises in South Beach, such as the Millennium, have dues well over $1000 a month. Not only do these buildings enjoy services such as doormen and fast-climbing elevators, they are also heavily funded for major repairs. Other luxury buildings, like The Infinity or The Marquee, where dues hover around $700 a month, also have large reserve funds.

The high-due philosophy is that, when a building needs care, the money is available and the homeowners are not bothered with the hassle of managing and financing the repairs. Usually these buildings have property management companies that make life in the buildings relatively easy. The downside of this monthly assessment funding strategy is that the money you pay into the project is left behind when you move.

Many HOAs decide to make any needed major repairs with special assessments rather than higher monthly dues. Smaller buildings such as a three unit Edwardian condominium building on Green, or an eight unit loft building on Lucerne, might have much lower dues. Home Owner Associations are required to maintain financial statements and a reserve study defined by Civil Code Section 1365. Many smaller associations do not comply with this code.

Buyers often prefer to purchase in buildings with lower dues, yet are not prepared for the inevitable special assessments if the building is not collecting enough reserves for the future. We strongly recommend you personally supplement your dues with a savings plan.

For example, the roof needs to be repaired at a cost of $120,000, and there isn’t enough money in the kitty. Of the six tenants, four have their $20,000 share on-hand; two owners do not. It takes another two years before those two tenants amass enough money, and by this time the roof has decayed beyond the original damage, costing far more than originally estimated.

Buildings need to be painted. Windows need to be replaced. In many cases, flashing should be added to doors, windows, skylights, and light wells. Roofs should be maintained. Maintenance schedules should be followed and putting money into these items will help retain the value of the property by keeping water and subsequent dry root and fungus which will eventually (quicker than you know) start eating away at your investment.

You can’t have low HOA dues and never have a special assessment. You have to participate in the care of your asset with financial contributions.

“The couple who lived here is breaking up. He cheated with his sister’s best friend’s cousin. And on the other side, well, Sheryl has a revolving door, if you know what I mean . . .The couple on the 12th floor, they eat conventionally grown vegetables. And then you know there’s . . .”

The Nosey Neighbor strikes again.

This barrage of information may change your mind about living in this dream pad, or at least give you pause–would you really want to live next to someone who will air all your dirty laundry to the public?

There is absolutely no good reason a neighbor, or anybody else for that matter, should discuss anything other than the possibility of a sale. If you are a ‘neighbor’ and you currently own your house, keep this in mind if you contemplate a future move.

The most important thing to do is think and talk positively about the property. Let go of your feelings and thoughts about the owner, their financial situation and their agent. The more someone rumors and destructively wonders aloud, the less likely the property is to sell for a great price. Wouldn’t it be a shame if a rumor (whether it be true or not) changed the mind of a potential buyer who was willing to pay top dollar to be your neighbor and thus, in turn affected the price of your home when you sell?

The best thing to do as a buyer or owner is stay positive, ensuring the best outcome for all parties.

So what are you allowed to say? According to the Seller’s Advisory from the California Association of Realtors:

1. INTRODUCTION: Selling property in California is a process that involves many steps. From start to finish, it could take anywhere from a few weeks to many months, depending upon the condition of your Property, local market conditions and other factors. You have already taken an important first step by listing your Property for sale with a licensed real estate broker. Your broker will help guide you through the process and may refer you to other professionals as needed. This advisory addresses many things you may need to think about and do as you market your Property. Some of these things are requirements imposed upon you, either by law or by the listing or sale contract. Others are simply practical matters that may arise during the process. Please read this document carefully and, if you have any questions, ask your broker or appropriate legal or tax advisor for help.
2. DISCLOSURES:
1. General Disclosure Duties: You must affirmatively disclose to the buyer, in writing, any and all known facts that materially affect the value or desirability of your Property. You must disclose these facts whether or not asked about such matters by the buyer, any broker, or anyone else. This duty to disclose applies even if the buyer agrees to purchase your Property in its present condition without requiring you to make any repairs. If you do not know what or how to disclose, you should consult a real estate attorney in California of your choosing. Broker cannot advise you on the legal sufficiency of any disclosures you make. If the Property you are selling is a residence with one to four units except for certain subdivisions, your broker also has a duty to conduct a reasonably competent and diligent visual inspection of the accessible areas and to disclose to a buyer all adverse material facts that the inspection reveals. If your broker discovers something that could indicate a problem, your broker must advise the buyer.
2. Statutory Duties: (For one-to-four Residential Units):
1. You must timely prepare and deliver to the buyer, among other things, a Real Estate Transfer Disclosure Statement (“TDS”), and a Natural Hazard Disclosure Statement (“NHD”). You have a legal obligation to honestly and completely fill out the TDS form in its entirety. (Many local entities or organizations have their own supplement to the TDS that you may also be asked to complete.) The NHD is a statement indicating whether your Property is in certain designated flood, fire or earthquake/seismic hazard zones. Third-party professional companies can help you with this task.
2. Depending upon the age and type of construction of your Property, you may also be required to provide and, in certain cases you can receive limited legal protection by providing, the buyer with booklets entitled “The Homeowner’s Guide to Earthquake Safety,” “The Commercial Property Owner’s Guide to Earthquake Safety,” “Protect Your Family From Lead in Your Home” and “Environmental Hazards: A Guide For Homeowners and Buyers.” Some of these booklets may be packaged together for your convenience. The earthquake guides ask you to answer specific questions about your Property’s structure and preparedness for an earthquake. If you are required to supply the booklet about lead, you will also be required to disclose to the buyer any known lead-based paint and lead-based paint hazards on a separate form. The environmental hazards guide informs the buyer of common environmental hazards that may be found in properties.
3. If you know that your property is: (i) located within one mile of a former military ordnance location; or (ii) in or affected by a zone or district allowing manufacturing, commercial or airport use, you must disclose this to the buyer. You are also required to make a good faith effort to obtain and deliver to the buyer a disclosure notice from the appropriate local agency(ies) about any special tax levied on your Property pursuant to the Mello-Roos Community Facilities Act, the Improvement Bond Act of 1915, and a notice concerning the contractual assessment provided by section 5898.24 of the Streets And Highways Code (collectively, “Special Tax Disclosures”).
4. If the TDS, NHD, or lead, military ordnance, commercial zone or Special Tax Disclosures are provided to a buyer after you accept that buyer’s offer, the buyer will have 3 days after delivery (or 5 days if mailed) to terminate the offer, which is why it is extremely important to complete these disclosures as soon as possible. There are certain exemptions from these statutory requirements; however, if you have actual knowledge of any of these items, you may still be required to make a disclosure as the items can be considered material facts.
3. Death and Other Disclosures: Many buyers consider death on real property to be a material fact in the purchase of property. In some situations, it is advisable to disclose that a death occurred or the manner of death; however, California Civil Code Section 1710.2 provides that you have no disclosure duty “where the death has occurred more than three years prior to the date the transferee offers to purchase, lease, or rent the real property, or [regardless of the date of occurrence] that an occupant of that property was afflicted with, or died from, Human T-Lymphotropic Virus Type III/Lymphadenopathy-Associated Virus.” This law does not “immunize an owner or his or her agent from making an intentional misrepresentation in response to a direct inquiry from a transferee or a prospective transferee of real property, concerning deaths on the real property.”
4. Condominiums and Other Common Interest Subdivisions: If the Property is a condominium, townhouse, or other property in a common interest subdivision, you must provide to the buyer copies of the governing documents, the most recent financial statements distributed, and other documents required by law or contract. If you do not have a current version of these documents, you can request them from the management of your homeowner’s association. To avoid delays, you are encouraged to obtain these documents as soon as possible, even if you have not yet entered into a purchase agreement to sell your Property.
3. CONTRACT TERMS AND LEGAL REQUIREMENTS:
1. Contract Terms and Conditions: A buyer may request, as part of the contract for the sale of your Property, that you pay for repairs to the Property and other items. Your decision on whether or not to comply with a buyer’s requests may affect your ability to sell your Property at a specified price.
2. Withholding Taxes: Under federal and California tax laws, a buyer is required to withhold a portion of the purchase price from your sale proceeds for tax purposes unless you sign an affidavit of non-foreign status and California residency, or some other exemption applies and is documented.
3. Prohibition Against Discrimination: Discriminatory conduct in the sale of real property against individuals belonging to legally protected classes is a violation of the law.
4. Government Retrofit Standards: Unless exempt, you must comply with government retrofit standards, including, but not limited to, installing operable smoke detectors, bracing water heaters, and providing the buyer with corresponding written statements of compliance. Some city and county governments may impose additional retrofit standards, including, but not limited to, installing low-flow toilets and showerheads, gas shut-off valves, tempered glass, and barriers around swimming pools and spas. You should consult with the appropriate governmental agencies, inspectors, and other professionals to determine the retrofit standards for your Property, the extent to which your Property complies with such standards, and the costs, if any, of compliance.
5. EPA’s LEAD-BASED PAINT RENOVATION, REPAIR AND PAINTING RULE: The new rule requires that contractors and maintenance professionals working in pre-1978 housing, child care facilities, and schools with lead-based paint be certified; that their employees be trained; and that they follow protective work practice standards. The rule applies to renovation, repair, or painting activities affecting more than six square feet of lead-based paint in a room or more than 20 square feet of lead-based paint on the exterior. Enforcement of the rule begins October 1, 2010. See the EPA website at www.epa.gov/lead for more information.
6. Legal, Tax and Other Implications: Selling your Property may have legal, tax, insurance, title or other implications. You should consult an appropriate professional for advice on these matters.
4. MARKETING CONSIDERATIONS:
1. Pre-Sale Considerations: You should consider doing what you can to prepare your Property for sale, such as correcting any defects or other problems. Many people are not aware of defects in or problems with their own Property. One way to make yourself aware is to obtain professional home inspections prior to sale, both generally, and for wood destroying pests and organisms, such as termites. By doing this, you then have an opportunity to make repairs before your Property is offered for sale, which may enhance its marketability. Keep in mind, however, that any problems revealed by such inspection reports or repairs that have been made, whether or not disclosed in a report, should be disclosed to the buyer (see “Disclosures” in paragraph 2 above). This is true even if the buyer gets his/her own inspections covering the same area. Obtaining inspection reports may also assist you during contract negotiations with the buyer. For example, if a pest control report has both a primary and secondary recommendation for clearance, you may want to specify in the purchase agreement those recommendations, if any, for which you are going to pay.
2. Post-Sale Protections: It is often helpful to provide the buyer with, among other things, a home protection/warranty plan for the Property. These plans will generally cover problems, not deemed to be pre-existing, that occur after your sale is completed. In the event something does go wrong after the sale, and it is covered by the plan, the buyer may be able to resolve the concern by contacting the home protection company.
3. Safety Precautions: Advertising and marketing your Property for sale, including, but not limited to, holding open houses, placing a keysafe/lockbox, erecting FOR SALE signs, and disseminating photographs, video tapes, and virtual tours of the premises, may jeopardize your personal safety and that of your Property. You are strongly encouraged to maintain insurance, and to take any and all possible precautions and safeguards to protect yourself, other occupants, visitors, your Property, and your belongings, including cash, jewelry, drugs, firearms and other valuables located on the Property, against injury, theft, loss, vandalism, damage, and other harm.
4. Expenses: You are advised that you, not the Broker, are responsible for the fees and costs, if any, to comply with your duties and obligations to the buyer of your Property.

1. Your Platinum Amex is literally weighing you down: You have a closet full of Fluevlogs or Choos and credit score of 540. If your finances are stretched too thin, you are not ready to own. Just because FHA-insured loans allow for a much smaller down payment, it doesn’t mean buying is a smart decision. Simple as that.
   

   Summer 2012 $750

2. You have wanderlust: While moving into a new flat is pricey, moving out is often more so. When you purchase a home, you do not pay a fee to the realtor. However, when you sell a home you are obligated to pay the agent’s full fee, which can be up to 6%, plus closing costs, final repairs [lime green walls were a good idea at one point, right?] and moving costs. These expenses can add up, and quickly eat into your investment return–if you stuck around long enough to gain one! So if you are thinking an Eat. Pray. Love. journey in the near future, don’t buy.

3. Your calculations are incorrect: There are several wonderful tools available online to help you assess your home buying viability. Check out our Renting Vs. Owning page, with a link to a calculator, to see if you measure up. http://863katy.com/renting_vs_owning.php

4. You still need your landlord to hold your hand:  Let’s face it- leaky roofs, broken dishwashers, and dripping faucets are not only annoyances, but harsh realities of home ownership, and amount to out-of-pocket expenses that you would not incur as a renter. If just the thought of a broken water heater causes heart palpitations, rest easier by leaving the upkeep to someone else. There is nothing wrong with that approach, and there is no rule that says you must own, even if you have the money. Whatever gives you peace of mind is the right choice.

Just Rented: Waller Street Townhome

Effective March 1, 2012 through February 28, 2013, the allowable annual increase amount is 1.9 percent. In accordance with Rules and Regulations Section 1.12, this amount is based on 60 percent of the percentage increase in the Consumer Price Index (CPI) for All Urban Consumers in the San Francisco-Oakland-San Jose region for the 12-month period ending October 31, which was 3.2% as posted in November 2011 by the Bureau of Labor Statistics.
To calculate the dollar amount of the 1.9 percent annual rent increase, multiply the tenant’s base rent by .019. For example, if the tenant’s base rent is $1,250.00, the annual increase would be calculated as follows: $1,250.00 x .019 = $23.75. The tenant’s new base rent would be $1,273.75 ($1,250.00 + $23.75 = $1,273.75).
The Rent Board also has announced the interest rate payable on security deposits for the 3/1/12 – 2/29/13 period—0.4%.

In 2010 and 2011, Single Family Home (SFH) prices closed at their highest point for the year in June and July, respectively. Condo prices in 2010 and 2011 closed at their highest point for the year in April* and May, respectively. This flurry of activity at the beginning of every year brings more offers, and in turn, faster sales at higher prices. A typical time from listing to receiving an acceptable offer is about 45 to 75 days. Therefore, putting your property on the market in January, February, or March, will typically lead to a faster closing, at the highest price in the yearly cycle.

(*April 2010 was actually the second highest point ($682,500) for the year, as there was another slightly higher peak in November at $685,000).

These considerations are all reinforced by the data over the last two years:

Median Price:

• In 2010, SFH prices rose 21.25% from $760,000 in January, to $921,500 in June and in 2011, SFH prices rose 23.4% from $710,000 in January, to $876,000 in July.
• In 2010, Condo prices rose 9.2% from $625,000 in January, to $682,500 in April and in 2011, Condo prices rose 5.1% from $665,000 in January, to $699,000 in May.

Units Under Contract:

• In 2010, the number of SFH going into contract rose 132.6%, from 86 in January to 200 in April. In 2011, the number of SFH going into contract rose 88.8%, from 98 in January to 185 in May.
• In 2010, the number of Condos going into contract rose 104.4%, from 138 in January to 282 in April. In 2011, the number of Condos going into contract rose 53.4%, from 163 in January to 250 in March.

Days-on-the-Market:

• In 2010, the DOM for SFH fell 30.9% from 68 in January to 47 in March, and in 2011, the DOM fell 32% from 75 in January, to 51 in May.
• In 2010, the DOM for Condos fell 25.6% from 90 in January to 67 in April, and in 2011, the DOM fell 20.5% from 88 in January, to 70 in May.

We have recently seen an increase in the number of buyers in the market, and expect that this will continue into 2012. We also expect to see the traditional “real estate ramp-up” at the beginning of the coming year, so contact us right away if you are considering buying or selling.

 November 22, 2011

Which San Francisco neighborhoods have the most sales? To determine where the most turnover was and how the market has changed since the peak, we took a look at the sales of single unit properties (single family homes and individual condominiums) in select San Francisco real estate districts, including Districts 4,5,7,8,9 (see this map for reference:  http://www.sfrealtors.com/dw_sfarmls_map.html)

• District 4:  Twin Peaks West (St. Francis Wood & surroundings, including Miraloma Park & Forest Hill)
• District 5:  Central (Noe Valley, Castro, Inner Mission)
• District 7:  North (Pacific Heights, Cow Hollow, Marina)
• District 8:  North East (Russian Hill)
• District 9:  Central East (SOMA including Potrero Hill, Bernal Heights, & South Beach)

Please contact us at our email address below to discuss your interest in in other parts of San Francisco.

As shown by the above graph, we can see that the number of properties sold overall bottomed out in 2009, and recovered a little in 2010.  If the 2011 year-to-date figures hold steady, volume will remain flat.  Overall, we can estimate that the volume of transactions will remain 18% lower than five years ago.  What can we learn from this?

San Francisco is more fortunate than Southern California and the rest of the country in that there are far fewer distressed properties for sale.  How are people holding out?  It seems that we are in a cash- and equity-rich environment, especially given the challenges in the mortgage financing arena.  Also, many current owners are choosing to remodel and/or simply hold instead of trading up their property.  We can tell this by looking at the number of withdrawn & expired listings for the same neighborhoods over the same time period, which has overall remained steady over the past three years.  We can infer that the most desirable properties are being snapped up by cash buyers, but the rest are not receiving offers which current owners are willing to accept.  Given how much prices rose, those owners in the middle of the market are choosing the hold and/or remodeling path instead rather than take a loss.

Most of the sales activity has taken place in District 5 and District 9.  They are no longer alternative to neighborhoods to the north of market San Francisco.  They are destinations demanding often demanding a higher price per square foot.  District 5 appears to be more transitional in that the demographics are changing as people move out to follow jobs and schools.  District 9 has become the focus of many first time buyers, second homes and also a great location for “empy-nesters” coming back to the city.

To learn more about trends in the SF real estate market, email us at Team@KatyDinner.com, or call our office at 415.863.5289.