The West Portal/Inner Parkside Quarterly State of the Neighborhood

First and Second Quarter Real Estate Market Update for 2020
By Eric Castongia, Corcoran Global Living

A lot has been going on since the beginning of the year.  As you can imagine, Covid-19, with the accompanying shelter in place (SIP) order has had a huge impact on the real estate market.  Since March 17th, we’ve been a steep learning curve on how to conduct business.

Shelter in place rules stipulate no public opens and brokers tours, which means it’s harder for buyers and agents to look at property; no more looky loos, curious neighbors looking at the house next door, or buyer’s agents previewing for their clients.  In addition, there are forms to sign, a restriction on the number of people who can view a property together, and cleaning between showings.  Real estate practitioners have had to look critically at generating comprehensive information for buyers, and to provide seller clients a vehicle to make sure their properties are being considered without being walked into.

Although you’ll hear differing opinions, I believe sale prices have been affected.  It has certainly had an effect on what price ranges and types of property people are looking for.  A snapshot of the West Portal/Inner Parkside market:

  • In the first quarter, we had five transactions; four closed and one withdrawn listing.  Three of the four, sold over asking.  In a normal market, we would have had nine-12 closings.  Figure 30% of normal.
  • All the closings were on properties that were in contract before the SIP order took place; only one closed after SIP took effect.
  • No new listings came on the market during the first quarter.
  • In the second quarter, we had six transactions; three were active, one pending, one closed and one withdrawn.  In a normal market, we would have had 12-16 closings.  That’s six percent of normal; most likely because there was nothing to carry over from the first quarter.
  • The listing that closed, had been on the market since the winter, had a price reduction, went back on the market after the SIP order and then sold again a little over asking.
  • The pending listing was very done and desirable; it went into contract quickly, showing that premium properties sell in any market.
  • The withdrawn listing was in a price range that is sensitive to question mark markets; it came off quickly and is now back on again at the beginning of the third quarter.
  • The first new listing in the second quarter, came on a month after SIP-showing some hesitance to come on not knowing what would happen.

In the past month or so, more listings have started coming onto the market citywide; most likely from sellers who had planned to be on earlier in the year, delayed by SIP.  Buyers are becoming more active; my own clients are getting cabin fever, wanting more space and outdoor area – lower interest rates are helping fuel the desire to move also.

I haven’t figured out a clear way to determine property value right now; closed prices prior to SIP are no longer comparable, so seat of your pants seem to be as valid as any method.  There are three distinct markers in determining value:

  • Closed before SIP (higher than current market)
  • In contract before SIP and closed after SIP (probably still higher than current market, unless there was negotiation during the process)
  • In contract and closed during SIP (probably the real value, but not much to look at and depends on when it went into contract; earlier in the pandemic is probably lower than now)

For my diagnostic, I’m using list prices and interest in active listings to gauge what may happen.  For properties with any question marks, I’m suggesting transparent pricing (the price the seller would take).  For bullet proof properties, value pricing and letting market dynamics determine value might work, but it is more challenging now, as you may only get one offer at list price.  The market is a moving target, buyers, sellers and agents are learning on the go, so be nimble and stay tuned.  And of course, call me with any questions.  I’ll do my best to answer.

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.

The West Portal/Inner Parkside Quarterly State of the Neighborhood

First and Second Quarter Real Estate Market Update for 2020

By Eric Castongia, Corcoran Global Living

A lot has been going on since the beginning of the year.  As you can imagine, Covid-19, with the accompanying shelter in place (SIP) order has had a huge impact on the real estate market.  Since March 17th, we’ve been a steep learning curve on how to conduct business.

Shelter in place rules stipulate no public opens and brokers tours, which means it’s harder for buyers and agents to look at property; no more looky loos, curious neighbors looking at the house next door, or buyer’s agents previewing for their clients.  In addition, there are forms to sign, a restriction on the number of people who can view a property together, and cleaning between showings.  Real estate practitioners have had to look critically at generating comprehensive information for buyers, and to provide seller clients a vehicle to make sure their properties are being considered without being walked into.

Although you’ll hear differing opinions, I believe sale prices have been affected.  It has certainly had an effect on what price ranges and types of property people are looking for.  A snapshot of the West Portal/Inner Parkside market:

  • In the first quarter, we had five transactions; four closed and one withdrawn listing.  Three of the four, sold over asking.  In a normal market, we would have had nine-12 closings.  Figure 30% of normal.
  • All the closings were on properties that were in contract before the SIP order took place; only one closed after SIP took effect.
  • No new listings came on the market during the first quarter.
  • In the second quarter, we had six transactions; three were active, one pending, one closed and one withdrawn.  In a normal market, we would have had 12-16 closings.  That’s six percent of normal; most likely because there was nothing to carry over from the first quarter.
  • The listing that closed, had been on the market since the winter, had a price reduction, went back on the market after the SIP order and then sold again a little over asking.
  • The pending listing was very done and desirable; it went into contract quickly, showing that premium properties sell in any market.
  • The withdrawn listing was in a price range that is sensitive to question mark markets; it came off quickly and is now back on again at the beginning of the third quarter.
  • The first new listing in the second quarter, came on a month after SIP-showing some hesitance to come on not knowing what would happen.

In the past month or so, more listings have started coming onto the market citywide; most likely from sellers who had planned to be on earlier in the year, delayed by SIP.  Buyers are becoming more active; my own clients are getting cabin fever, wanting more space and outdoor area – lower interest rates are helping fuel the desire to move also.

I haven’t figured out a clear way to determine property value right now; closed prices prior to SIP are no longer comparable, so seat of your pants seem to be as valid as any method.  There are three distinct markers in determining value:

  • Closed before SIP (higher than current market)
  • In contract before SIP and closed after SIP (probably still higher than current market, unless there was negotiation during the process)
  • In contract and closed during SIP (probably the real value, but not much to look at and depends on when it went into contract; earlier in the pandemic is probably lower than now)

For my diagnostic, I’m using list prices and interest in active listings to gauge what may happen.  For properties with any question marks, I’m suggesting transparent pricing (the price the seller would take).  For bullet proof properties, value pricing and letting market dynamics determine value might work, but it is more challenging now, as you may only get one offer at list price.  The market is a moving target, buyers, sellers and agents are learning on the go, so be nimble and stay tuned.  And of course, call me with any questions.  I’ll do my best to answer.

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.

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