The West Portal/Inner Parkside 2009 Year-End Real Estate Market Update

By Eric Castongia, Zephyr Real Estate

Let me be the one to tell you how lucky we are in San Francisco and specifically West Portal/Inner Parkside.  While we have experienced some loss in property values, we have not felt what areas outside our peninsula have felt. 

In order to convey a digestible message, news reports generally use the ‘median sales price’, the sales price of the house that sells in exactly the middle of all homes that sold, to indicate a trend in the real estate market.  The number gets skewed down if there are more sales on the lower end, where we are seeing more foreclosures and short sales; likewise, it gets skewed up when there are more sales on the upper end in a seller’s market.

To get a more accurate ‘property value’ one must look more specifically at location, property type and condition.  My comparison method is much more scientific; it involves printing out all the sales in a given quarter and spreading them out on my dining room table.  Lucky for me, our neighborhood is small enough that I can see the properties on the market and compare them to each other.  The following is my interpolation of data from the San Francisco Multiple Listing Service and an analysis of the real estate market in the West Portal/Inner Parkside area.

  • The total number of sales for 2008 was 54; up significantly from 37 in 2007.  To check the consistency of the area, I compared total annual sales since 2004.  The range has been between 52 and 60 each year, except for 2007.  It would seem that sellers held out to see if things would improve from the number of homes that didn’t sell in 2006; with the increase in listings in 2008, sellers didn’t or couldn’t wait any longer to sell.
  • Comparing listings that failed to sell, the total in both 2007 and 2008 was 10.  To check consistency of the area, I compared total annual failed to sell listings since 2004. The range has been between seven and 11 each year, except for 2006 when there were 19; the increase in that year seemed to be in the first two quarters of the year.  I believe this indicated the end of the sellers market in 2005.
  • Looking at sales in the 4th quarter 2007, six of the eight sold for over the asking price, two sold under; as a reminder, list prices came down during that time to keep buyer activity up.  Compare this to 4th quarter 2008 sales, where of the 15 sales, only four sold for over the asking price; nine sold under; this indicates a move to a buyers market.  Fewer ‘real buyers’ with financing negotiated list prices down.
  • For 2008, the properties that saw the most stability were typical West Portal Area homes, remodeled, with rooms and baths down, in good locations-they saw values flat to down four percent.  Properties needing remodeling, additional development, or in less desirable locations saw property values down four to nine percent.  I’d still rather have my money in real estate than the stock market!
  • The Federal Reserve has reduced interest rates and the stimulus package is working its way to banks. So far, banks seem to be hoarding and continuing to give loans very conservatively.  Some loosening of credit will have to occur in combination with an up-tick in consumer confidence before we come out of the economic slump.
  • I expect the next six to nine months to be a terrific time to buy real estate.  Values have come down, borrowing money is relatively inexpensive and consumer confidence will start to come back once more is known about how the new administration will operate.

Eric Castongia, Residential Sales Specialist at Zephyr Real Estate provided the information in this article.  Eric can be reached by e-mail at Eric@EricsSFHomes.com, or via mobile phone at (415)307-1700.

The West Portal/Inner Parkside Second Quarter 2009 Real Estate Market Update

By Eric Castongia, Zephyr Real Estate

The West Portal/Inner Parkside Real Estate Market in the second quarter of 2009 was steady from the same quarter last year.  We’re seeing more buyers in the real estate marketplace creating some competition and overbids on our limited inventory.  People are starting to feel like we’ve hit the bottom of the challenging economy and want to take advantage of the better pricing.  The following is my ‘state of the neighborhood’; an interpolation of data from the San Francisco Multiple Listing Service and my analysis of the real estate market in the West Portal/Inner Parkside area.

  • The number of sales in the second quarter of 2009 was up from four in the first quarter to 11 in the second.  Note this is typical from year to year; the first quarter is typically slower than the second. In looking at the data from year to year, each quarter tends to be similar to the quarter in the previous year.
  • The inventory is steady.  Our second quarter total transactions, including active properties is right on target at 31; it was 30 in the second quarter of 2008.  For active listings from this year to last in the same quarter, there were seven. There’s not a lot of inventory for buyers to choose from, which is the reason why demand  remains constant in our neighborhood.
  • Five of the seven currently active listings are in the prime West Portal/Inner Parkside areas which is the reverse of what it typically is; usually the area outside prime West Portal/Inner Parkside (including the area around the Safeway on Taraval and 19th Ave.) have the most listings available.  It seems the inventory is getting snapped up in these areas.
  • The highly anticipated homes at the corner of 15th Ave and Wawona have started coming onto the market.  Priced between $1,995,000 and $2,195,000, they are definitely setting a new benchmark in the neighborhood.  It will be interesting to see what happens with them.
  • Buyers remain selective.  Desirable, well-priced property with nice remodeling or great potential, are still well-visited and in demand.  A recent listing on Ulloa that was beautifully remodeled and well-priced, sold with multiple offers approximately seven percent over asking.  In contrast, there were two properties on the market in the prime West Portal area in the last quarter that did not sell. Both were inappropriately priced for market conditions.
  • As I have previously reported, my scientific comparison method for determining property value involves printing out all the sales in a given quarter and spreading them out on my dining room table, then comparing them to each other.  I experimented this month with looking at property values for typical West Portal/Inner Parkside area homes with two bedroom, one bath with a room down (or expansion potential) in each second quarter since 2005.  These are yearly averages and don’t take into account quarterly fluctuations.
    • In 2006, there was a 20 percent increase in values from 2005.
    • In 2007, there was a 10 percent reduction in values.
    • In 2008, prices remained steady.
    • In 2009, we have seen a five percent drop in values.
    • As of today, we are still above 2005 prices.
  • Interest rates, have bounced around a bit, but remain low.  Obtaining financing still requires lots of hoops to jump through, so qualified buyers are gold.
  • If you are going to buy, remember location, location, location.  If you are going to sell, prepare your home to make a great first impression and price it correctly.

Eric Castongia, Residential Sales Specialist at Zephyr Real Estate provided the information in this article.  Eric can be reached by e-mail at Eric@EricsSFHomes.com, or via mobile phone at (415)307-1700.