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.