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.

The West Portal/Inner Parkside Real Estate Third Quarter 2019 Market Update

The real estate market started off like a shot at the beginning of 2019, like it has done for the last several years, and then beginning in June, we feel what seems to be a less frenetic market.  Ultimately a perception, I think, as buyers start taking vacations and the number of offers starts to go down.  Here’s the third quarter history for West Portal/Inner Parkside:

  • At the end of the third quarter, there was one active, seven pending, eight sold and two failed to sell properties (one failed to sell came back on and is now pending); seven of the sold properties received multiple offers and all seven sold over asking.  The amount of overbids ranged from as little as $286,000 to as much as $680,000 (not typos).  Contrast this with third quarter 2018 with five active, no pending, 14 sold and no failed to sell properties; 12 had multiple offers and 13 sold over their asking price. Overbids ranging from $21,000 to $555,000 (again, no typos).   
  • There was one reported all cash (no loan) sales this quarter; buyers are getting financing, but they are not putting that in as a contingency in the most aggressive of offers.
  • The truly remarkable and notable properties are still in high demand; the ones that aren’t ‘perfect’ are not selling for as much as they once were.
  • We are seeing many more ‘off-market’ listings and those listed with ‘transparent pricing.’  Generally, that translates into higher prices than the market will bear, as some sellers won’t sell unless they get their certain price.
  • Comparing the number of sold properties at this time for the last several years, this year is definitely on the lower side of expectation for available inventory.  Given the reduced inventory and the size of the overbids, offers are getting more aggressive, including no contingencies with buyers taking a chance so that they can be done with the buying process.  The majority of buyers who have been at this a while are realizing that this is not a buyers market.
  • I am seeing a softening of the market for condominiums in larger buildings, which is not the inventory of West Portal/Inner Parkside.  In those instances, we are seeing some price reductions and withdrawl from the market.  Seeing those changes could be giving a false impression that the entire market is experiencing similar doldrums.
  • Property values stayed basically the same from the second quarter to the third.
  • Comparing the third quarter of 2018 and 2019, I saw a few interesting things.  Values did appear to be down year to year 10 to 15 percent on both typical two bed one baths, and those with rooms down.  Conversely, North of Ulloa saw an increase of 10 to 14 percent in the same quarters.  My current explanation is that North of Ulloa is catching up to the rest of West Portal, and soon, we won’t need to distinguish.  Numbers are tricky things, so take them with a grain of salt.  Value depends on what is in the marketplace at that particular moment: 1) what is the competition and 2) who are the buyers in the marketplace.
  • A recession is bound to happen in the next few years.  We’ve been on a steep up curve for a while and even tech incomes will have to feel a bit of a strain at some point.  Since we don’t know when, for how much and for how long, the best bet is buy something you can afford to carry and be happy when you find something you can call home.

Eric Castongia, Broker Associate at Zephyr Real Estate (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 2018 Annual State of the Neighborhood

The market took off like a shot at the beginning of 2018 and it calmed down just as quickly in July, coasting throughout the balance of the year.  2016 and 2017 saw similar cycles, so perhaps the historical ‘second bump’ after Labor Day is a thing of the past.  While West Portal/Inner Parkside remains in it’s own bubble of desirability; you will soon see that values year to year were lower than usual; perhaps as we reach the maximum of affordability.  Here are some interesting stats for the year:

  • The total number of sales for 2018 was 47, down from 58 in 2017.  The mean number of sales has historically been around 50 annual sales.  Interestly, there were 46 in 2016; so why the spike in 2017?  Perhaps sellers attempting to get out of the market for top dollar before a market change.
  • In the last quarter of 2018, there were 10 sold properties, three of the 10 received multiple offers and seven of them sold over asking, with two of the seven pre-emptive offers with significant overbids.  Two of the sold properties had price reductions.  The amount of overbids ranged from $1,000 to $555,000.  The most under asking was $148,000.
  • 24 of the 47 sales for the year were multiple offers, and 32 of them (68%) were over asking.  In 2017, 48 of the 58 sales for the year were multiple offers, and 46 of them (79%) were over asking.
  • Four of the year’s transactions identify as ‘failed to sell’; fewer of these generally indicate how motivated a seller is to get their home sold; it also indicates buyers in the market that are active and 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.  The higher number could mean two things: sellers were holding out for more money in their sale and the start of the coming recession.
  • For sales reported as all cash; there were nine reported for the year (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%.
  • 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, seem to be level from quarter to quarter and up 4% year to year. 
  • Two story homes have always been a premium, and interestingly, a lot more of them sold in 4th quarter than usual – five of the ten sales.  I’m figuring the value from quarter to quarter remained even and up two percent from year to year.  That doesn’t sound like a lot, but the majority of those homes had prices above $2 million; one topped $3.5 million.  And, hence the upcoming question, did we see a market change?
  • While two story homes were more available, homes North of Ulloa were practically non-existent; absolutely unheard of for this portion of the neighborhood, which usually top the number of sales.  This quarter, one. Values quarter to quarter remained constant and 10% year to year. 
  • My opinion is that the annual increase North of Ulloa was higher, because prices tend to be lower than core West Portal, so there was more possibility for people to purchase.  Conversely, the values of two story homes, and two bed, one bath homes with rooms down, was lower because they became less affordable.
  • The beginning of 2018 ramped up quickly and slowed down just as quickly mid year.  Buyers got tired and more picky, with talk of a recession and higher interest rates (still at historic lows!) giving buyers pause to consider if they should wait.
  • Citywide, underpricing and generating over asking offers didn’t work as well either, generally because the overbids didn’t generate what the seller was hoping for. 
  • There has been disagreement within the real estate community as to whether there has been a slow down in the market.  I think yes, partially.  1) Less desirable properties are selling slower and for less; and 2) we are seeing a shift, perhaps in the way property is listed – meaning we may start seeing properties priced more transparently (for what a seller is willing to accept).  We might also start seeing more withdrawn listings and reduced asking prices as we figure out what those prices are.
  • February and March will give us a good temperature as to strategy and pricing, as new buyers come out into the marketplace ready to fulfill their New Years’ Resolution of home ownership.

Eric Castongia, Broker Associate at Zephyr Real Estate (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 Real Estate Third Quarter 2018 Market Update

While 2018 started off like a shot, it cooled down just as quickly around July.  Buyers burned out quicker and the ones who stayed in the market, got more selective.  Mid-term elections, interest rates moving up and rumblings of a recession in the next year or two are also contributing to some buyers sitting on the sidelines.  Here’s what happened in West Portal/Inner Parkside:

  • At the end of the third quarter, there were five active and 14 sold properties; 12 of those properties received multiple offers and 13 sold over asking (one of them was a ‘pre-emptive’ offer).  The amount of overbids ranged from as little as $21,000 to as much as $555,000.  Contrast this with third quarter 2017 with 11 sales; all 11 received multiple offers and ten of those were over asking with overbids ranging from $180,000 to $382,000.   
  • We are seeing more financing and contractor contingencies than in recent years, so buyers, while moving aggressively, are doing so on their own terms.
  • There were no reported as all cash (no loan) sales this quarter; there was one in the same quarter of 2017 and there were five in the Spring quarter.
  • The market seems to be in its pre-holiday doldrums overall, with activity tapering off over the summer.  Combine that with more and more sellers hanging on to their expectations of high sale prices, and you get a change in the market.  I am hearing more and more stories of sellers who won’t sell unless they get a certain amount over asking, despite receiving multiple, over asking offers-with the ones they receive they don’t perceive as enough.  If you’ve ever seen list prices going up on a property that’s been on the market for awhile, that’s what is going on.
  • Many, but not all, properties are still selling with multiple offers and over asking, however the heyday of 10 offers and more than seller expectation seems to be, for the short term, on hold. 
  • The truly remarkable and notable properties are still in high demand; the ones that aren’t ‘perfect’ are not selling for as much as they once were.
  • There were a few ‘apples’; properties that have sold and resold in a short period of time.  One example is a property selling for $1.21m in 2011, with a subsequent interior remodel, selling recently for $2.22m (a 107 percent appreciation).  Another, recently sold for $1.52m with an acquisition price of $1.35m in 2016 (a 13 percent appreciation).
  • We’ve seen changes in value this quarter both up and down in varying housing types and sub-neighborhoods both quarter to quarter and year to year.  It seems odd to me that that would happen-it’s usually consistent one way or the other.
  • For West Portal and Inner Parkside proper, for typical area homes with rooms down, prices reflected a change in price down from 5 – 8 percent, quarter to quarter and year to year.  For two story homes, it was down 12 percent year to year.  It doesn’t make sense if you think about the big overbids I keep reporting, however, if the list prices come down and the overbid prices stay the same, the prices are still lower. 
  • The quandary for me was between West Portal/Inner Parkside proper and North of Ulloa.  North of Ulloa has seen values increase both quarter to quarter and year to year from 3 to 6 percent.  So I did a bit of digging, thinking perhaps it was the list prices being lower in one area than another could explain it, but that wasn’t it-they were similar.  Perhaps it was perception of what the properties would sell for between the two areas; no concrete answer was apparent.
  • The interesting thing to see will be what happens in February and March of 2019.  In recent history, we have seen one immediate bump in activity and prices, which tapers off about four months later-like we are seeing now. 
  • There are rumblings about a possible recession in the next few years.  After 24 years in the real estate business, I have seen them last six months and up to four years, so the challenges have more to do with depth and duration, not the fact that it happens.  A six month recession may recover quickly, while a four year one, may take several years.  Either way, Bay Area real estate is a good bet; the key is that time is your friend.  Every recovery I have seen so far has brought even higher appreciation than the previous.

Eric Castongia, Broker Associate at Zephyr Real Estate (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 Real Estate Second Quarter 2018 Market Update

2018 started off like a shot and while prices are strong, the number of offers are down.  Buyers got educated quickly and are ‘selectively aggressive’-electing not to pursue properties that they think they won’t have a chance at.  Interestingly, this has caused a few properties to not get offers on offer day.   Note: buyers need to be encouraged and sellers need to not expect more than the market will bear.

For West Portal/Inner Parkside we saw:

  • In the second quarter of 2018, there were 16 sold properties, with 13 receiving multiple offers; 15 of the offers sold over asking.  The amount of over bids ranged from as little as $251,000 to as much as $725,000.  Compare that to the second quarter of 2017, where the amount of over bids ranged from as little as $101,000 to as much as $630,000.  I think the difference in overbids between 2017 and 2018 has a lot to do with list prices coming down to generate interest.
  • Also of note, everything that was listed, sold.
  • The one property that sold below asking this quarter, sold $98,000 under it’s reduced list price.  This property is a good example of how overpricing will affect your sales price.  It was smart for the seller to do their price reduction quickly, or it would have gone even lower.  Smart buyers won’t pay more than the market will bear.
  • Last year, I noted that less than perfect properties were continuing to get snapped up at the same pace as more done properties.  We are starting to see this shift in the marketplace.  Buyers are getting more critical since they are spending so much more on a property than they originally intended.  I’m seeing this more citywide than at the West Portal/Inner Parkside Neighborhood level at this point.
  • 5 of the 16 sales were reported as all cash (31%), up from the second quarter of 2017 at 10%. 
  • Pre-emptive offers (offers taken early before the offer date) and all cash offers are a way of getting buyers a better chance for desirable properties.  Two of the over asking offers this quarter took advantage of that opportunity. 
  • I like to watch for ‘apples’, or properties that have sold recently and are now being resold.  There were several.  The most notable were two that sold in 2010, at roughly the bottom of the market during the last correction.  Both enjoyed 100% appreciation over the eight year period.  This is the best example I can point to as to why you should buy in a down market.
  • Interest rates have come up almost a whole percentage point in the last year.  Buyers are starting to gravitate toward adjustable interest rates, instead of fixed.
  • Quarter to quarter and year-to-year, for a typical 2/1 and 2/1s with rooms down, values stayed even.  For two story homes in prime West Portal that wasn’t the case, having appreciation of as much as 30% year to year and for homes North of Ulloa, appreciation was between 13 and 19% for the year.  I’ll make a guess as to why appreciation isn’t across the board.  Two story homes are more expensive generally and a different buyer pool; there is a financial ceiling for many buyers in the marketplace and I think it’s reflected here.  As for North of Ulloa, I can speculate that this area is ‘getting found.’  Given the choice, buyers would stay closer to neighborhood and transportation hubs; as housing gets more expensive, they expand their horizons to areas they wouldn’t have considered before.  The prices North of Ulloa are getting closer to West Portal and Inner Parkside prices; historically they were not.
  • The jury is still out on whether the market is slowing.  It feels like it, but data doesn’t show it.  There is pressure from both a lack of affordability and supply and demand.  The most price sensitive buyers either give up or move away and that’s what we are seeing.  There are, at this point, enough buyers to fill in that void.
  • Is a market change coming?  Sure, it always does, but there is a built in demand in West Portal/Inner Parkside that will keep it desirable even in down times.

Eric Castongia, Broker Associate at Zephyr Real Estate (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 First Quarter 2018 Real Estate Market Update

2018 took off like a shot in the real estate world.  We’ve seen this before, and I’m wondering if we’ll see it level off just as fast, as buyers get worn out and frustrated.  Last year, it took a while to ramp up and the activity continued into the fall, before it became a steady, ‘less wild’ pace.

On the west side in the past month or so, I’ve noticed a few properties on the market that should have been sold, or that I would have expected to sell for more than they did.  Given West Portal/Inner Parkside’s built-in lack of inventory, I haven’t seen it and I don’t expect this to be an issue for the short term, but I will continue to watch.  It usually becomes more evident when a property is mispriced.  Here are this quarter’s stats:

  • At the close of the first quarter of 2018, we had three active, four pending and seven that closed escrow.
  • Of the seven sold, six received multiple offers and all seven sold over their asking price.  Note the seventh sale was a ‘pre-emptive’ offer for a listing on the market, or it would have undoubtedly received multiple offers.
  • The amount of over bids ranged from $60,000 to $710,000 over asking.
  • It’s worth pointing out that the listing with the $710,000 over asking offer was also the first West Portal home on the open market to sell over $3,000,000.
  • I looked back at history to make some sense of the sales in the first quarter to see if there is a number we can expect at this time of year.  The majority of the time, the range was from 6-10.  Interestingly, in the 2013 and 14, sales reached 15. I suspect the spike to 15 was a build up of demand on the part of sellers as they waited to recover from the recession; the previous years of 2011 and 12 were as expected, when the market was heading into recovery mode.
  • Three of the seven sales (43%), were reported as all cash (no loan).  Also of note, two of them were on larger sales, confirming that there is fierce fighting for premium properties.
  • As SocketSite would say, ‘comparing apples to apples’, there were three on the market this quarter.  They ranged from an appreciation of 78% from a 2008 sale, to an astonishing 234% for a home previously sold in 2012, which had been remodeled since that sale.
  • Typically, in my analysis, I compare specific property types, sizes, conditions and locations, from quarter to quarter and year to year rather than median price.
  • From the fourth quarter 2017 to the first quarter of 2018, appreciation ranged from even to nine percent.  Nine percent was on a larger, two story home.
  • From first quarter 2017 to 2018, appreciation ranged from 16% to 23%, again with the larger, two story homes leading the way.
  • I theorize that the larger, two story homes are seeing enhanced appreciation and demand, despite their price tag, because they are not frequent in our marketplace and attract a more affluent buyer.

Eric Castongia, Broker Associate at Zephyr Real Estate (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 2017 Annual State of the Neighborhood

Year-End Real Estate Market Update

By Eric Castongia, Zephyr Real Estate

Citywide, the real estate market in 2017 got off to a slow start, and then took off like a shot in March and April. Buyers remained active and anxious until Labor Day, after which, they were more critical about property values and flaws.  West Portal/Inner Parkside remains in it’s own bubble of desirability; when something comes up, it generally sells immediately-unless it’s overpriced.  Here are some interesting stats for the year:

  • The total number of sales for 2017 was 58, up from 46 in 2016.  Adding a layer and a trend line, 2015 had 42; historic normal has been around 50 annual sales.  The rise in sales could be seller anticipation of a height in the market.
  • In the last quarter of 2017, there were 17 sold properties, with 13 receiving multiple offers over asking.  The amount of over bids ranged from as little as $101,000 to as much as $550,000.  The most under asking price was $100,000.
  • 48 of the 58 sales for the year were multiple offers, and 46 of them (79%) were over asking.
  • Four of the year’s transactions identify as ‘failed to sell’, however, in the final tally, two of those properties did ultimately sell-having to be taken off the market, repriced and remarketed.  It is remarkable that only two properties failed to sell the whole year, indicating both motivated sellers and buyers.
  • For sales reported as all cash; there were eight for the year (14%), essentially holding steady from 2016’s seven (15%).  Interestingly, 26% of the market in 2015 reported cash sales.
  • In most cases, buyers writing offers with loans did not include financing contingencies, taking on the risk of getting a loan, in order for their offers to look more attractive in competition.
  • 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, seem to be level from quarter to quarter and year to year.  Whereas, the same type of home North of Ulloa, which has historically been less expensive, values have increased six percent from quarter to quarter and 16% year to year, putting the prices of those homes on par with West Portal and Inner Parkside.  My thought is that we could be reaching the top limit of affordability for this type of home.  Buyers instead, are changing neighborhoods, ir moving out of the city out of frustration and lack of options.
  • Moving to other housing types, the number of ‘super-remodeled’ homes has increased steadily, but not quite enough to compare them quarter to quarter and year to year.  Since they are so different than the local housing stock, I am using them sparingly in comparisons.
  • Two story homes have always been a premium.  They have continued to rise in price and I’m figuring the increase from quarter to quarter and from year to year, is approximately eight to 11 percent.
  • The beginning of 2018 ramped up quickly; mainly from a lack of inventory and buyers who were not successful finding a home last year.  I am telling my seller clients to get on the market as soon as they can.
  • Buyers need to set priorities and be willing to buy less house than they would like and very likely in areas they hadn’t planned.  As affordability becomes an even bigger issue, the question is whether it will trigger a break in the market.

Eric Castongia, Broker Associate at Zephyr Real Estate (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 Real Estate Update

Third Quarter 2017 Market Update

By Eric Castongia, Zephyr Real Estate

The real estate market got off to a slow start this year, but once it started, we didn’t see the summer slow down that has occurred for the last two years.  Buyers were/are waiting semi-patiently for homes to come onto the market, but remain in the driver’s seat, deciding what properties are worth and leaving the ones that are challenging and/or poorly priced; there are three in the neighborhood in the last quarter that buyers left on the market.

  • At the end of the third quarter, there were three active, nine pending, three withdrawn (failed to sell) listings and 11 sold properties; all 11 received multiple offers and 10 sold over asking. The amount of overbids ranged from as little as $180,000 to as much as $382,000.  Contrast this with third quarter 2016 with a similar number of sales, but overbids ranging from $50,000 to $300,000.   Offers have become more aggressive and prices have gone up, despite lower list prices.
  • In the second quarter of this year, comparatively, there were more sales (19-not unusual for that time of year) and some higher overbids. The amount of over bids ranged from as little as $101,000 to as much as $630,000.
  • There was only one sale reported as all cash (no loan); there were five in the previous quarter.
  • There were a few ‘apples’; properties that have sold and resold in a short period of time. One example is a property selling for $1.049m in 2014, with a subsequent interior remodel, selling recently for $1.710m.  Figuring the sellers could have put $250k into the remodel, the return on that one was still good for a 4 year hold.
  • As part of my tracking, for kicks and a little history, I note when properties last sold. A few interesting ones from the 1970’s popped up.  One selling in 1973 for $42,500 is currently listed for $1.659m and another selling in 1974 for $77,500 is listed for $2.195m.  The lower priced one went up 39 times its original value; by my calculation 3900% appreciation.
  • Figuring out the appreciation rate has been more of an educated guess than a science. Year to year, the numbers showing up in comparing various homes range from 11 to 30 percent appreciation.  Realizing that’s a big spread, the ‘X’ factor takes into consideration what is in the market place from quarter to quarter, their location and condition.  A case in point, a grand West Portal home a block from the Avenue sold a year ago for $2.33m.  In the current quarter, an Inner Parkside house of 1960’s vintage and similar size sold for $2.425m.  Year over year, that appreciation rate is about 4%.  West Portal homes sell for more than Inner Parkside homes, as do older vintages, over more modern ones.  I think the real appreciation rate is more like 20-25% year to year, which is hard to show, since there isn’t anything matching last year’s home.  For those of us who have been around for a while, it wasn’t that long ago that sales prices going over $2m was astounding.
  • Making an educated guess, an 10-15% year to year appreciation for most homes is more realistic, and those with ‘Dwell Magazine’ level remodels seeing more aggressive pricing (that 25-30% number); as most people don’t want to deal with remodeling and will pay a premium.
  • What will happen next? Hard to say.  With the Bay Area employment market and a restricted inventory, I think we are in good shape for the short term to keep our upward pressure on the market.

Eric Castongia, Broker Associate at Zephyr Real Estate (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 Real Estate Update

Third Quarter 2017 Market Update

By Eric Castongia, Zephyr Real Estate

The real estate market got off to a slow start this year, but once it started, we didn’t see the summer slow down that has occurred for the last two years.  Buyers were/are waiting semi-patiently for homes to come onto the market, but remain in the driver’s seat, deciding what properties are worth and leaving the ones that are challenging and/or poorly priced; there are three in the neighborhood in the last quarter that buyers left on the market.

For West Portal/Inner Parkside:

  • At the end of the third quarter, there were three active, nine pending, three withdrawn (failed to sell) listings and 11 sold properties; all 11 received multiple offers and 10 sold over asking.  The amount of overbids ranged from as little as $180,000 to as much as $382,000.  Contrast this with third quarter 2016 with a similar number of sales, but overbids ranging from $50,000 to $300,000.   Offers have become more aggressive and prices have gone up, despite lower list prices.
  • In the second quarter of this year, comparatively, there were more sales (19-not unusual for that time of year) and some higher overbids.  The amount of over bids ranged from as little as $101,000 to as much as $630,000.
  • There was only one sale reported as all cash (no loan); there were five in the previous quarter.
  • There were a few ‘apples’; properties that have sold and resold in a short period of time.  One example is a property selling for $1.049m in 2014, with a subsequent interior remodel, selling recently for $1.710m.  Figuring the sellers could have put $250k into the remodel, the return on that one was still good for a 4 year hold.
  • As part of my tracking, for kicks and a little history, I note when properties last sold.  A few interesting ones from the 1970’s popped up.  One selling in 1973 for $42,500 is currently listed for $1.659m and another selling in 1974 for $77,500 is listed for $2.195m.  The lower priced one went up 39 times its original value; by my calculation 3900% appreciation.
  • Figuring out the appreciation rate has been more of an educated guess than a science.  Year to year, the numbers showing up in comparing various homes range from 11 to 30 percent appreciation.  Realizing that’s a big spread, the ‘X’ factor takes into consideration what is in the market place from quarter to quarter, their location and condition.  A case in point, a grand West Portal home a block from the Avenue sold a year ago for $2.33m.  In the current quarter, an Inner Parkside house of 1960’s vintage and similar size sold for $2.425m.  Year over year, that appreciation rate is about 4%.  West Portal homes sell for more than Inner Parkside homes, as do older vintages, over more modern ones.  I think the real appreciation rate is more like 20-25% year to year, which is hard to show, since there isn’t anything matching last year’s home.  For those of us who have been around for a while, it wasn’t that long ago that sales prices going over $2m was astounding.
  • Making an educated guess, an 10-15% year to year appreciation for most homes is more realistic, and those with ‘Dwell Magazine’ level remodels seeing more aggressive pricing (that 25-30% number); as most people don’t want to deal with remodeling and will pay a premium.
  • What will happen next?  Hard to say.  With the Bay Area employment market and a restricted inventory, I think we are in good shape for the short term to keep our upward pressure on the market.

Eric Castongia, Broker Associate at Zephyr Real Estate (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 Real Estate Update

Second Quarter 2017 Market Update

By Eric Castongia, Zephyr Real Estate

2017 started a little slower than expected.  Historically, we start seeing buyers come back into the marketplace after the holidays, around February.  This year, we started seeing the first of the year bump around the end of March and it’s been going strong since.

For West Portal/Inner Parkside we saw:

  • In the first quarter of 2017, there were 10 sold properties, with eight receiving multiple offers and seven over asking.  The other three offers were at and below asking.  The amount of overbids ranged from as little as $80,000 to as much as $555,000-tied by two different sales.
  • In the second quarter of 2017, there were 19 sold properties, with 16 receiving multiple offers; all 19 offers sold over asking.  The amount of over bids ranged from as little as $101,000 to as much as $630,000.
  • In most cases, list prices have come down to get these huge overbids, largely to get numbers of people in the door; the more people that see it the better.  Warning to sellers though, buyers are savvy to market value and prices; they’ll only play if they can see a bargain; if you start too high on list price, you’ll be all alone on offer day.
  • Last year, I noted that less than perfect properties in the marketplace were not getting snapped up for big bucks with multiple offers, that’s changed.  Because of limited inventory, some buyers are being more flexible, accepting challenged properties and paying more for them.
  • As for sales reported as all cash (no loan); there was one (10%) reported in the first quarter and five in the second (26%), clearly indicating more aggressive bidding in the second quarter.
  • Interestingly, despite big overbids in the first quarter, prices actually went down as much as 11 percent from the end of 2016.  For the last few years, we have seen a tapering off of the number of bids, and the amount of traffic in open houses about mid year.  Summer vacations likely have something to do with that, but I think the bigger issue is buyer fatigue.  There are only so many times you can write an offer, get beat and then get up again for more.  Buyers, from July through the end of the year may be a good time for you to stay in the game.
  • The second quarter was more aggressive; all that was lost in the past six months came back.  Comparing year-to-year values, we were back up between seven and 20 percent.  The large range correlates to differing property types; the typical Sunset style homes with two bedrooms up and a room and bath down behind the garage saw the greatest appreciation-they are generally the most available and affordable to price sensitive buyers.
  • I like to watch for ‘apples’, or properties that have sold recently and are now being resold.  When that occurs for a job or relocation change-it is a good barometer for market changes.  The most recent ones have all been fixer properties that have been remodeled and then flipped.  They are fun to watch, but in this case, it doesn’t give us an idea as to market condition.
  • Is a market change coming?  Yes, but not yet.  There is still a lot of money and interest rates are low. Even when that does happen, the prime hub of West Portal Inner Parkside will continue to be popular with a smaller correction, while areas with less desirable locations, will see larger changes.

Eric Castongia, Broker Associate at Zephyr Real Estate (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.