West Portal Property Values Q2 2015

Property values up again in West Portal in the Second Quarter

WP street scene-2 There was a little burst of energy between the first and second quarters. The market is under constant change and evolution, so one has to nimble and active to stay on top of it. I can tell you there are a lot of conversations between real estate agents to keep tabs on the trends of the market!

Toward the end of the quarter, the number of offers seem to have gone down, but not necessarily the amount of the overbids. There have been some isolated instances of no offers being received on a property, but that is not common. We can very likely blame the market changes on the start of the Summer Season, with more people going on vacations, as well as educated (and weary) buyers opting out of competing if they feel they don’t have a chance of winning.

Is there a greater chance of winning with fewer offers? Doubtful, given the amount of the overbids below. One thing seems certain; buyers who embrace the market more quickly will pay less than if it takes longer to find a home.

  • At the close of the second quarter of 2015, we had one active, three pending and 12 sold. Of the 12 sold, 10 received multiple offers and sold over their asking price. The amount of the overbids range, from as little as $210,000 to as much as $550,000. Compare this over bid range with the first quarter at $66,000 to $375,000.
  • The amounts of the homes that sold below asking, ranged from $9,000 to $49,000.
  • There is no rhyme or reason to the amount of an overbid; it is dependent on the list price, the amount of interest in the property, what has sold most recently and the buyers in the marketplace that particular week offers are due. A gut reaction to this is that list prices are staying the same or being set lower (not going up with rising prices). That may be part of the fuel keeping prices going.
  • Comparing the same quarter of multiple years indicated that we are right on target for the expected number of sales. We have ranges from 12 to 14 sold properties over the same quarter in the last six years, with only one exception in 2010 when we had 21 sales.
  • You’ve heard me or other real estate agents moan about inventory and how there isn’t much on the market. Interestingly, I think these numbers indicate that West Portal/Inner Parkside is actually quite stable year in and year out; what is different is the number of buyers; not a reduction in listings.
  • Of the 12 sales, five (42%) were reported as all cash (meaning no loan on the property); compare that to the first quarter of 2015, where one (13%) of the eight sales reported all cash. This is contradictory to what I am seeing and hearing – more transactions with financing; I speculate that cash is saved for only the most in demand properties.
  • On average across the board by house type, appreciation for last quarter to the current quarter looks like it’s up three to five percent.
  • Year to year, appreciation looks to be up as much as 11 percent.

Eric Castongia, Residential Sales Specialist at Zephyr Real Estate (BRE Lic. No. 01188380) provided the information in this article. The content of this article is an interpretation of data from the San Francisco Multiple Listing Service and Eric’s observations in the marketplace; he can be reached by e-mail at Eric@SFHotBuy.com, or via mobile phone at (415)307-1700.

Property Values in West Portal and Inner Parkside

Eric Castongia-2655 16th Ave.Property Values in West Portal and Inner Parkside-Third Quarter 2014

The market is great, but maybe not as great as you hope.
This summer was a strange one; strange in that it was more normal. Over the last two years, the market plowed right through summer, overbids, multiple offers and all. This year we still had good market activity, but it slowed down-offer dates came and went, in some cases without offers. My observation is that buyers are tired and sellers are wanting to hit the market at the height. Call me conservative; I suggest cautious optimism in the sale of your home.
• At the end of the third quarter 2014, 13 homes had sold. Of the 13, 11 of them sold for more than asking, 10 of them with multiple offers. Compare that to the second quarter where 11 had sold; nine of them received multiple offers and all 11 sold over asking price. This highlights the importance of pricing. Both of the homes that sold below asking in the third quarter had started too high, not letting the market determine price.
• Of the 13, 38% of them reportedly sold for all cash, compared to 10% in the second quarter. If we look to the first quarter, 30% of the sales were reported as all cash. I am dragging the first quarter back into the comparison to shed some light on what may have happened in the second quarter. Did we see a lull? Buyers felt more emboldened to get financing, than to pay all cash; in the third quarter cash was back.
• The amount of the overbids in the second quarter ranged from a low of $51,000 to a high of $467,000 over asking (which in that case was nearly 28% over the asking price). Note that this home sold for 37% percent over its 2007 sale price. I should further note that the high was the exception, not the rule.
• At the end of the third quarter, all properties that were on the market sold, as opposed to the second quarter, where there were two properties that had not sold. Both had been tenant occupied and one of them was in the foreclosure process. This is significant in that even the overpriced properties sold, so there were outside influences in those two properties that made them less desirable, or salable. Note to sellers, get rid of those problems before you go on the market.
• I have seen several instances where sellers have a higher expectation for the value of their home than the market will bear. It’s an expensive lesson for a seller; those homes usually sell for less than they would have if priced correctly to start with.
• As for property values quarter to quarter, it looks like West Portal proper and Inner Parkside, have seen a 2-4% increase in values. This smaller increase could be a result of less on the market and fewer buyers in the market in the Summer.
• The area I call North of Ulloa (NoLoa), which is Inner Parkside North of Ulloa St., is where the majority of sales in the neighborhood occur. I figure we have seen as much as a 15% increase between the last two quarters. My theory is that market pressure is to thank. Prices in West Portal and Inner Parkside have priced many people out. Even the Sunset is seeing sales of a million dollars or more, so the market is squeezing NoLoa up in value. I expect that rate of appreciation will slow down and fall in line with West Portal and Inner Parkside.
• The marketplace is not seeing every property selling at the same level of frenzy as it once was. The best answer remains for sellers to do everything they can to minimize their homes quirks, get rid of problems if possible and price the home for the market, not for their desired outcome.

Eric Castongia, CRS, BRE No. 01188380, Residential Sales Specialist at Zephyr Real Estate provided the information in this article. The content of this article is an interpretation of data from the San Francisco Multiple Listing Service and Eric’s observations in the marketplace. Eric can be reached by e-mail at Eric@SFHotBuy.com, or via mobile phone at (415)307-1700.

West Portal Property Values Continue up in the 2nd Quarter

Homes in the West Portal Area continue to increase in value

The state of the real estate market is now everyday conversation. If you are an owner, you wonder how much some desperate buyer will pay for it; if you are a tenant, you wonder when your landlord is going to sell and how expensive it will be to find a new rental. Can we keep appreciating at the level we have been for the last few years? No, of course not; we’ve seen this before. The question is always, when? Eric Castongia

  • At the end of the second quarter 11 homes had sold. Of the 11, all of them sold for more than asking, nine of them with multiple offers. In the first quarter of 2014, 15 had sold;13 of them received multiple offers and 13 sold over asking price.
  • One of the 11 in the current quarter (10%) reportedly sold for cash, compared to five of the 15 (33%) in the previous quarter. While there weren’t as many all cash offers this time around, there were a significant number with large down payments, which made it impossible for many buyers to compete.
  • The amount of the overbids in the second quarter ranged from a low of $55,000 to a staggering $500,000 over asking (which in that case was nearly 30% over the asking price); note that this home sold for 35% percent over it’s 2011 sale price. Great timing, happy seller.
  • At the end of the current quarter, there were two failed to sell properties and in the first quarter, there were none. Let’s look at that a bit closer. All properties in the first quarter sold, even if they sold for at or below asking. In the second, they did not. This could be an indication that some sellers have a higher expectation for the value of their home than the market will bear. I have seen other incidents of this trend starting to happen and have even seen some properties list price get increased after their offer date came and went with no offers. I have also seen properties where multiple offers were expected and none were received. I think this could be an indication of a change brewing.
  • Note, that the biggest overbids are for desirable properties-those in great condition, remodeled and premium location, larger size and/or bedroom count, a nice floor plan with no quirks, outdoor space and parking.
  • Property values are getting harder and harder to figure out. The area I call North of Ulloa (how about NoLoa), which is Inner Parkside North of Ulloa St., is where the majority of sales in the neighborhood occur. The area has seen big gains in the last few years; I figure approx. 10-15% in the last year.
  • The area closer to West Portal Village is even harder to gauge, as there are less sales to compare quarter to quarter and year to year. As an educated guess, I would say desirable homes are up 20-25% in the last year. The premium is for location to the village.
  • Prepare your home well and price it appropriately. Stay nimble and listen to the market; it will tell you what your home is worth-just be ready to accept what it tells you.
  • As for when will the market slow down, I think we are already there for properties with quirks. Those are the properties that are not getting the larger overbids, or are missing out on the offers all together. For now, that is the distinction, because clearly, desirable properties are still in a frenzy.

Eric Castongia, BRE No. 01188380, Residential Sales Specialist at Zephyr Real Estate provided the information in this article. The content of this article is an interpretation of data from the San Francisco Multiple Listing Service and Eric’s observations in the marketplace. Eric can be reached by e-mail at Eric@SFHotBuy.com, or via mobile phone at (415)307-1700.

West Portal Real Estate Market 2013

West Portal Real Estate Market goes up for another year

The West Portal/Inner Parkside 2013 Year-End Real Estate Market Update

By Eric Castongia, Zephyr Real Estate

Eric Castongia

This was an interesting year to look back on.  In looking at the analysis I did for 2011 and 2012, it’s amazing how far we’ve come!  In 2011, we had price reductions, withdrawn listings and properties sat on the market.  In February 2012, we roared back to life and we’ve been running ever since, although I felt a pause in the fall.   Even over the holidays this year, we saw properties come on right up to Christmas and then they sold right away.

  • The total number of sales for 2013 was 64, a huge increase from the normal of around 50; that’s a 28 percent jump. 2012 was 50.  Even in a down market, 2011 saw 51 sales because of our consistency and built-in demand.
  • At the close of the fourth quarter of 2013, we had two active, two pending (not yet closed) and 18 sold (closed) properties.  Of the 18 sold, 16 received multiple offers and 16 sold over their asking price.  The amount of over bids ranged from as little as $25,000 to as much as $251,000.
  • Technically, no properties sold under asking, but if you dig a bit deeper, two of the sold properties had been reduced, then sold for over asking.  Another property sold at asking.
  • For a little perspective, at the close of the fourth quarter of 2012, we had 17 sold (closed) properties.  Of the 17 sold, 12 received multiple offers and all 12 of them sold over their asking price.  The amount of over bids ranged from as little as $2,000 to as much as $262,000.
  • There was one short sale this year and it is still pending.  In 2012 there were six.  It seems that property value increases and previous sales have flushed out most of the short sales and foreclosures.
  • There were four ‘failed to sell’ listings for the year; one came back on and is still pending (the short sale mentioned above), so net affect is three; in 2012, we had seven.  Again an indication of an accelerated market.
  • Interestingly, a property that had sold on 17th Ave. in 2008 for $1.3m, sold in the fourth quarter for $1.4m.  That’s a pretty good return considering that three of those nearly five years where in an economic downturn.  The property would have gone down between 2008 and 2011, then recovered between 2011 and 2013.
  • As you may know, my scientific method for establishing value is spreading sold properties from different quarters across my dining room table.  In that way, I can compare apples and apples and avoid median price, which I think is not too useful.
  • By my interpolation, property values went up year over year, but down quarter to quarter.
  • From the third quarter to the fourth, it looks like prices went down as much as three percent; that’s the pause I felt.
  • Year over year, we gained approximately four to eight percent.  That seems like a big spread, but consider this.  The target moves every single quarter.  I compare properties between quarters and the properties I compare change, because I have to find similar properties between quarters.  Since each house and block is different, we have little control in coming up with firm numbers.
  • Interestingly, list prices didn’t seem to change; it was the overbids that did.  Being part of the dotcom mentality, we have to take into account that buyers expect to overbid.  Note that I mentioned above that the minimum overbid was $25,000 in the fourth quarter, in the third it was $2,000.  Price your property near where you think it will sell and you won’t get activity, or a buyer.
  • I expect the usual first quarter bump in prices; there isn’t much inventory, so if you go on the market right now, you’ll likely get a premium.
  • If you read the national news, they expect equilibrium in the real estate market this year; I do not agree for San Francisco.  Our real estate market has always reacted differently and I don’t think this year will be any different.  We are still likely to see short supply and buyers staying the course trying to buy before interest rates go up.

Eric Castongia, Residential Sales Specialist at Zephyr Real Estate provided the information in this article. The content of this article is an interpretation of data from the San Francisco Multiple Listing Service and Eric’s observations in the marketplace.  Eric can be reached by e-mail at Eric@SFHotBuy.com, or via mobile phone at (415)307-1700. DRE Lic. No. 01188380

Scared to buy your first home

Avoid paralysis in deciding whether buying real estate is for you

Eric Castongia  It’s normal to be nervous about buying your first home.  Buying real estate will likely be the biggest purchase you will make in your lifetime, so making a good decision is important.  Here are a few questions to help you determine if buying real estate is right for you:

Why do I want to buy a home?

Security?

No rent in retirement?

A home you can personalize?

 

 

 

What are my long term goals? 

Stay in the area?

Move out of the area?

Build a nest egg for retirement?

Am I prepared to buy a home?

Do I have the necessary down payment?  If not, what is my plan to?

Good credit?

What can I afford?

Is my job steady?

What do I want to buy?

Can I afford what I want to buy?

Where do I want to buy?

Will I compromise if necessary?

What is the real estate market like?

I have always felt that owning my own home was the right thing; I knew that long before I started selling real estate.  The bottom line is that owning real estate is not for everyone.  Don’t feel guilty if you don’t want to own property because of societal or peer pressure.  Be happy you made the decision that is right for you.   If you are not going to buy, make sure that you still have a financial plan in place to get ready for retirement.

On the other hand, if it is the right thing, get a good real estate professional to assist you, be knowledgeable about the market and make the best decision you can.  And enjoy the process!  It will probably be a heck of a story.

Property taxes too high?

Deadline coming up March 29, 2013 for informal review of property tax value

 

Although we have seen property values go up in the last year, there may be some people out there with valuations on their property taxes that are higher than what the property would currently be worth on the open market.  If you find yourself in this position, it may be possible to appeal your property tax valuation.

When values are going up, it is possible for your property value to increase much faster than your property tax value.  The flip side, is that if you bought at the height of the market, it’s possible, with the annual increases, to find yourself in the position of paying more in property taxes than you need to.

The amount of your property is based on the value of which you acquire the property, plus direct assessments such as Mello Roos or bond issues, plus allowable annual increases of two percent.  California Proposition 13 set this up system in 1978 to limit how much property taxes could increase.  Property values were rapidly rising at that time and there was fear that people would not be able to afford to stay in their homes as a result of increased property taxes.

There are two processes through the assessor’s office that would allow you to go through either an informal appeal process with a staff appraiser, or go through an assessment appeal with the Assessment Appeal Board.  The processes favor those people who had purchased property after 2003, since most properties acquired prior to that time would more than likely be properly assessed.

The deadline for going through the informal appeal is coming up (March 29, 2013), so you need to get cracking.  The appeal for the March deadline would be for the 2013-2014 tax year.  In this scenario, you would fill out an application and provide comparable sales (your real estate agent can help you with this) and/or an appraisal by a licensed real estate appraiser (I can give you some referrals-but an appraiser will probably cost you about $600).  Decisions for the informal review are supposed to be reached by the end of July.

It is possible to go through a dual appeal-doing both informal and formal processes.  The dates to appeal through the formal process through the appeals board  is July 2 to September 15th, 2013.  It’s important to realize that it the successful appeal is not a permanent reduction, so you will need to go through this process every year until the property value surpasses the value of your basis plus allowable increases.

To get the informal appeal process going, contact:

Assessor-Recorder, Attn: Informal Review, 1 Dr. Carlton B. Goodlett Pl., City Hall, Room 190, SF, CA 94102 .  phone number (415)554-5596; fax number (415)554-7915; email- InformalReviewRP@sfgov.org.

For the full Appeal Review Board, contact:

Assessment Appeals Board-Clerk of the Board, 1 Dr. Carlton B. Goodlett Pl., City Hall, Room 405, SF, CA 94102.  Phone number (415)554-6778, website www.sfgov.org/AAB Note there is a $60 filing fee.

The form the informal review I found on line was outdated.  I was able to get an updated form; here 2013-2014 Informal review

 

Side bar:

I realize that some people may not like or appreciate proposition 13, which limits the property tax valuation on California real estate.   This article is intended to give help to those who are paying MORE in tax than the value of their home, not to undervalue the home given it’s current value.

I know that an article, even those intended to give advise or direction, can be interpreted in a different way, or hit a sore spot if one has a contrary belief.  Please feel free to contact me  if you find yourself in this position; I am open to healthy discussion about a topic that you may find objectionable.

Is the SF Real Estate Market improving?

Is the SF Real Estate Market improving? It depends.  Unclear answer, but there it is.  The article below spells out pretty well the conversion I’m having with both buyers and sellers.

Overall, I’d have to say that any current improvement is very slow.  Whether it’s summer, a retreat in consumer confidence, the Federal Tax  Credit expiration, or a combination, the market has slowed in the last month.

All that being said, multiple offers are still occurring (not nearly as frequently as in the Spring) and it’s hard to explain to buyers and sellers why with two similar properties, one sold (or is expected to sell) with multiple offers, over asking and another is languishing on the market with multiple price reductions.

A lot of it boils down to luck.  The buyers in the market place that week, the improvements you’ve taken on to best prepare a home for sale, the side of the street the home is on, or whether the likely buyer of your home went away for the weekend and didn’t look at your house.  In general, homes that are well-prepared and well-priced get looked at first.

My observation is that the current, motivated buyers have seen the home in the first two weeks-hence, an offer in the current market in the first two weeks is really important.  If it’s gone beyond that, we’re likely to get new buyers in the market, not ready to make a decision for 30 days or more-and folks, time is not your friend right now.  Time = price reduction.

About all that can be done is to keep communication open between you and your agent, and keep your ears to the tracks to see what the word is on the street about the property.  Remember, the more you see, both good and bad, the more you’ll know when to leap.

SF Real Estate Market-SFGate