The West Portal/Inner Parkside Annual State of the Neighborhood

Year-End Real Estate Market Update for 2019

By Eric Castongia, Zephyr Real Estate

West Portal/Inner Parkside remains highly desirable, but buyers are finding it harder and harder to break in.  Buyers on the edge are moving to other neighborhoods and are more willing to leave San Francisco.  We’ve had market fluctuations over the year, but the trend line remains up.  Here are our neighborhood stats for the year:

  • The market took off like a shot at the beginning of 2019 and it calmed down just as quickly in July, with the illusion of slowing throughout the balance of the year.  2016, 2017 and 2018 had similar patterns; the historical ‘second bump’ after Labor Day seems to be a thing of the past.  There was less buyer traffic in listings after July, but the serious buyers were still aggressive on the best properties.
  • The total number of sales in the neighborhood for 2019 was 34, way down from 47 in 2018. 
  • The average number of annual sales has historically been around 50.  The last time we had sales in the 30’s, was in 2007 and 2009.
  • Multiple listing data is showing the number of available listings shrinking.  Supply and demand strains are making housing more expensive.  As housing prices go up, even those that own homes have fewer options, so only those who have to sell, are.  Everyone else is staying put, remodeling, and making do. 
  • 26 of the 34 (76%) sales for the year were multiple offers and 28 (82%) of them were over asking.  In 2018, 24 of the 47 (51%) sales for the year were multiple offers, and 32 of them (68%) were over asking.  This is a clear comparison that as the inventory shrinks, activity generally goes up.
  • Four of the year’s transactions identify as ‘failed to sell’.  Fewer ‘failed to sell’ transactions generally indicate that both buyers and sellers are motivated.  Between 2012 and today, that number has ranged from one to seven annually.  From 2006 to 2011, it ranged from 10 to 19; with 19 being at the height of the market of the market cycle in 2006.  A higher number means sellers are holding out for more money in their sale.  In this case, it was also the start of the coming recession.
  • For sales reported as all cash; there were six reported for the year (18%). Last year there were 9, but adjusting for the number of sales, pretty close to the same percentage (19%).  The high point since I’ve been tracking cash sales were highs in 2014 and 2015 at 23-26%, with the low point in 2016 at 4%.
  • In the last quarter of 2019, there were eleven sold properties, nine of them received multiple offers and 10 of them sold over asking.  The amount of overbids ranged from as low as $105,000 to a high of $425,000.  Noting the loss of value from fall to winter quarter (and I’ve noted this for several years), this would be a great time for buyers to buy.
  • To determine property values from quarter to quarter and year to year, I look at various housing types (such as two-story homes, or typical two bed, one bath homes with rooms down) and neighborhood sub-districts (such as core West Portal/Inner Parkside vs. North of Ulloa); I find this method more accurate than median price.
  • For example, values of typical ‘two ones with rooms down’ in core West Portal/Inner Parkside, values are up year to year about four percent, while from fall to winter quarter, it’s down about five percent, indicating some fluctuation during the year.
  • North of Ulloa, there were no direct comparable properties from year to year; quarter to quarter, values remained even.
  • The age-old disagreement as to whether there has been a slowdown in the market continues.  I think yes, partially, but we have to think of the market as both seasonal and selective.  1) Less desirable properties are selling slower and for less than desirable counterparts; and 2) desirable properties are still in demand unless they are overpriced.
  • In the 2018 year-end article, we were starting to talk about transparent pricing, meaning the list price is what a seller would accept.  We’ve been trying it, but it isn’t working yet.  Active buyers who have lost in competition are still bidding over, while the buyers who haven’t been rung out to dry yet, are writing at asking and getting rejected.  In the end, listing traffic is still being generated with listings that are priced lower to get buyers in the door.
  • The market so far in 2020 is a reflection of the past few years.  Open houses are busy, over bids are occurring and inventory is still not high enough to satisfy buyer demand.

Eric Castongia, Broker Associate at Corcoran Global Living (BRE Lic. No. 01188380) provided this information. The content of this article is an interpretation of data from the San Francisco Multiple Listing Service, the County Tax Record, the internet 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.

Christmas Tree Regulations in San Francisco

What to do with that Christmas tree when you are done with it

Natural Christmas trees are regulated in San Francisco in many types of buildings-most notably in residential condo and apartment buildings of over 2 units.  Note that natural trees are only allowed in buildings with approved fire sprinkler systems.  Many multi-unit buildings do not have automatic sprinkler systems.  This excerpt from the San Francisco Apartment Association on-line newsletter. Ginger Bread at night

Make sure to give your tenants notice and be careful!  Make sure to contact the Bureau of Fire Prevention for complete guidelines or the SF Fire Department at 415.558.3300

Safe use of Christmas trees in regulated occupancies from the SF Fire Dept.
The San Francisco Fire Department reminds property owners and managers that there are clear regulations that must be observed regarding the use of Christmas trees in public spaces, including high-rise buildings and the public areas of apartment and condo buildings:
  • Natural cut trees are permitted in the following occupancies only when they are protected by an approved automatic sprinkler system: public assemblies, schools, retail stores, high-rise buildings, and common areas of hotels, motels, apartment and condo buildings with more than two units.
Any questions regarding Christmas tree regulations may be directed to the Bureau of Fire Prevention of the San Francisco Fire Department at 415.558.3300.

Keep your neighborhood vibrant

I have found that most people, in selecting the location of their homes, pick neighborhoods that they feel they can enjoy and be a part of.  In San Francisco, the majority want to be near conveniences such as shopping, grocery stores and restaurants.  As in the axiom, ‘location, location, location,’ the desirability of an area is directly proportional to the variety and success of the businesses in the community.  With that in mind, I contend that in becoming part of a neighborhood, it is our responsibility to visit and shop in our local businesses.

It’s a pretty easy concept; keep your neighborhood vibrant by shopping there.  A consumer society, our economy depends on all of us spending money; it’s the velocity of money that keeps us all employed, pay house and car payments, groceries, gas, doctor’s visits, etc… What you buy supports the workers in the area where you buy it.  If you need a light bulb and buy it at Home Depot, you won’t help the neighborhood hardware store.  Going out for dinner in the Marina, won’t help your neighbors in West Portal.  Ordering a cable you need for your printer on Amazon doesn’t pay the college kids working at the Radio Shack in your neighborhood.

In walking down West Portal Avenue the other day, I noticed quite a few empty storefronts.  It is disappointing to see a vibrant street with missing teeth.  All of us have shown up at a business that we liked or wanted to try, only to find it had gone out of business.

The current economy has certainly hurt.  Everyone is tightening their belts, but at some point, there isn’t anymore tightening that can be done; some fixed expenses don’t change.  The ease of the internet has been a big contributor to businesses closing as well.  Looking for the cheapest, fastest and easiest way to get something you want or need is compelling.  I am as guilty of that as anyone else.  Yet, by getting the cheapest price outside our community, we are hurting ourselves.

So, here is my challenge.  If you are new to the neighborhood, please visit and shop in your local businesses; they depend on you.  If you have been here awhile, reintroduce yourself; there are new opportunities everyday. Please don’t rely on others to buy in the neighborhood while you shop elsewhere-it is all OUR responsibilities.  If you don’t see something you need, ask the store owner, perhaps they can order it for you.  If you can buy an item somewhere else cheaper, ask them about it; maybe you can get a discount and they can get a sale.

If we want your neighborhood businesses to stay open, we have no choice to but to buy their goods and services-and to spread the word.  It isn’t realistic that you would buy everything in your neighborhood, but you might be able to get more than you think.  Know the saying ‘Charity begins at home’?  Your success depends on you.

Vote NO on Prop G on Nov. 4th

 

no on g

This coming Tuesday, please vote. If you are going to vote on one thing, please vote NO on Proposition G.

You may not have even heard of it. It’s a very poorly written and thought out ordinance that would increase the transfer tax on the sales of property.

I lovingly refer to the transfer tax as a ‘get out of your house’ or ‘get out of San Francisco’ bill. It ranges from .5% to 2.5% of your sales price (sliding scale depending on the amount of your sale) and is one of your expenses of sale. This legislation among other things, would increase the cost of selling your house for your first five years of ownership. The most you would pay (at this point) is 24% of your sale price. That is not a typo. 24%.

For example, you’ve just bought an affected property (not all are) and you get transferred for a job offer within the first year. Let’s assume you paid $750,000 for your property. Your transfer tax would be $180,000. Again, not a typo. $180,000. I hope you’ve put down 30%, because we’ll need that to close your transaction. Without Proposition G, you would pay $5,100 in transfer tax.

This legislation does not affect all properties in San Francisco. Neither did rent control when it was enacted in 1978. My fear is that if this passes, all properties could become affected over the coming years.

Please vote NO on Proposition G. Someday, you’ll be glad you did.

Cutting waste in government

Here’s a heartening story.  Three Bay Area agencies are planning on buying a building together to save operating costs and energy.  I sure the like the sound of that.  The Metropolitan Transportation Commission, Bay Area Quality Management District and the Association of Bay Area Governments are teaming up to buy a building together.  Now all that has to happen, is the board of each needs to approve the purchase.  Formerly Pacific Postal Credit Union, the building is at 390 Main St. in San Francisco. As near as I can tell on Google street view, here is the building.  Very convenient to the future Transit Terminal.

New BART trains

The Bay Citizen gives a sneak peak of what the new (hopefully soon) BART trains will look like.

From ‘Bay Citizen’ Proposed new BART car

The exterior design is pretty nice looking, albiet MUNI like, but the interior has a bit to be desired.  I’m all for getting rid of the comfortable, but terribly dirty and unsanitary seats.  The problem seems to be in the amount (and comfort) of seating on the proposed trains.  The majority of BART passengers will be on the car for a longish period of time, so making sure there is ample seating should be a priority.

Then of course, there’s this whole budget mess, which is likely to slow down getting the new cars for a while.

Target at Masonic and Geary

According to Socketsite, the Target Store planned for the old Mervyn’s space at Geary and Masonic (and even older Sears Building) was unanimously approved by the San Francisco Planning Department. Politics aside, it seems like a great location and there is certainly the space for it.

City Center; rendering from Socketsite

Proposed new homes on Alamo Square

Finally, a rendering of the proposed ‘Painted Gentlemen’ that are to be built on Alamo Square, in the next block to the Painted Ladies.

Rendering via Socketsite

The white building to the right is 940 Grove; part of which will be torn down to accommodate the new homes.  It’s the non-historic part, so nothing lost there.

Seems the developer is getting the green light from the Planning Department, now it’s up the San Francisco Historic Preservation Commission.

I’m assuming the rendering shows massing only and does not give an indication of detail giving the homes scale and substance.  The proposed homes should really help clean up that block of Steiner.  Kudos to the developers.

Vacant houses in San Francisco

Via SFGate, I was forwarded to an article in the San Francisco Business Times that discussed how San Francisco has the highest number of vacant homes in the Bay Area.  At almost 8.3% vacancy, that seems like a lot-the article suggested one in 12 homes was vacant.  According to the article, California has a vacancy rate of just over 8%.  Surrounding Bay Area Counties range from 4.39-7.2%

Anyone home?

I can think of several reasons.

1. People in metropolitan areas are leaving for the burbs to get into decent schools and out of the nightmare that is the consolidated system.

2. People are leaving for jobs in other areas.

3. Rent control/fear of being a landlord.  I know of many landlords that have long tired of having no control over their buildings-particularly if they get a bad tenant.

4. It’s expensive to live in SF.  At some point, the value of the amenities (Symphony, Restaurants, ‘Walk to coffee’) becomes less important when looking at simplifying your life.

That’s the glass half empty.  Let’s look at the half full version.  Well, I guess that’s really the 91.7% full version.

To read the article and check out the charts From Blanca Torres, San Francisco Business Times