West Portal Property Values on Fire
By Eric Castongia
Residential Sales Specialist
It may be hard to believe, but the market has actually gotten more accelerated than the last time I filled you in. Signs of recovery started quickly at the start of 2012, over the course of the first few weeks of February. In 2012, we saw multiple offers, over asking prices and steady appreciation. In the fall, it slowed a bit and then in January of 2013, we were off to the races again; this time with prices even higher and offers more aggressive. We are seeing no contingencies on the part of buyers in an effort to look more appealing to a seller. It’s hard to believe that it was as recent as 16 months ago buyers were reluctantly in the market and were able to negotiate as they pleased.
At the close of the first quarter of this year, we had one active (it just came on the market and hasn’t taken offers yet), eight pending (not yet closed) and 13 sold (closed) properties.
Of the 13 sold, 10 received multiple offers (77%) and all 10 sold over their asking price. The amount of over bids ranged from as little as $5,000 to as much as $241,000 (really). Conversely, $70,000 is the largest amount under in which one listing sold.
For a little perspective, at the close of the first quarter of 2012, we had eight sold (closed) properties. Of the eight, five received multiple offers (63%) and four of them sold over their asking price. The amount of over bids ranged from as little as $14,000 to as much as $52,000. Conversely, $69,000 is the largest amount under in which one listing sold.
We were coming out of a slow market in 2011, so $52,000 over asking at that time was really good; now we can get a sense of the level of competition there is in the market one short year later. Buyers who win in competition are setting the market, those who are not, are following it.
We did not have any short sales and foreclosures on the market in this neighborhood this quarter; it was down citywide too.
Interest rates remain historically low. Part of the panic in the mind of buyers now is getting to take advantage of the low interest rates while they can.
The market is still being driven by a supply and demand problem (lack of inventory).
For West Portal and Inner Parkside up to Ulloa, prices were up from the end of last year to now (one quarter!) 12 to 18 percent. This percentage is based on one specific property profile that had the most activity-two bedroom, one baths with rooms and baths down. That segment had eight of the 13 sales in the first quarter.
The area that I call North of Ulloa, has seen a big change in property values for the better. This area got hit the hardest when the economy went down and it has regained much of what it lost. I figure approximately 17 percent in the past year.
Interestingly, North of Ulloa typically has the most sales in the neighborhood, but that is not true in the current analysis; they had only three of the 13 sales, which is exactly opposite of expectation. Notably, seven of the eight properties pending in the first quarter due to close in the second are all in this area. Once these properties close, I think we will get a better sense of how this part of the neighborhood really appreciated in the last quarter.
This may be a great time to sell but a few words of warning: 1) buyers still take a hard calculating look at what is available, if there is more than one fatal flaw in the property, they may pass you by, and 2) Iist price is still critical; it must seem like it is a good value in order for buyers to be motivated to act. Pricing a little under neighborhood expectation is still the best way to net you the most on your sale.
Eric Castongia, Residential Sales Specialist at Zephyr Real Estate provided the information in this article. The content of this article is an interpretation of data from the San Francisco Multiple Listing Service 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. DRE Lic. No. 01188380