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Kevin Quoted in Mission Local: “Real estate market in the Mission appears to recover, for now – Mission Local”

Is it a good time or not for real estate?

ON THE MEDIA 

Mission Local Talks Real Estate During Corona

Kevin gets quoted and sounds a bit more upbeat and nuanced than all those other agents. 

Is it a good time or not for real estate?

The real estate market in the Mission District and San Francisco appears to be on its way to recovering from the shutdown in March, according to several real estate agents ... 

— Originally published July 9, 2020 on missionlocal.org/2020/07/real-estate-market-in-the-mission-appears-to-recover-for-now/

Real estate market in the Mission appears to recover, for now

 

The real estate market in the Mission District and San Francisco appears to be on its way to recovering from the shutdown in March, according to several real estate agents, although some parts of the market remain sluggish.

“The market is holding up pretty strong, but it depends on the segment,” said real estate agent Ruth Krishnan. “Condos and high-rise buildings are the softest. I would say people aren’t super stoked about getting in an elevator. And people have decided that they really, really value outdoor space and greenery.”

Krishnan said her agency recently sold a condo in the Mission District on Shotwell Street.

“It did very well, but it had this beautiful private garden,” she said. “With condos, definitely the ones that are doing the best, selling the quickest, and selling for the highest prices have outdoor space. That’s a big thing for people right now.”

 

“Most of the stuff sitting right now, it just doesn’t have any yard space,” she added.

Krishnan said that, typically, March is the busiest month for real estate in San Francisco, but this year all listings were pulled when the shelter-in-place order was announced. That didn’t keep things down for long, though. The city added real estate to the list of essential businesses on March 31, and Krishnan immediately started seeing business pick up.

“I was shocked. Right coming out of [March], people were already writing very aggressive offers. I was like, ‘Wait, what? Really? Right now?’” she said.

The monthly median house sale price in San Francisco set a new record of $1.8 million in June, according to the monthly report from the Compass real estate brokerage. “But it’s just a single month,” added Patrick Carlisle, chief market analyst for Compass.

“I never would have guessed that we would see this sort of rebound around the Bay Area, in the midst of one of the greatest health and economic crises in U.S. history,” Carlisle said.

Although the rebound in San Francisco is dramatic, it’s the smallest of the Bay Area, he said. Other counties — including more rural areas like Sonoma, Napa, Monterey, and Santa Cruz counties — have all seen spikes that “may be higher than at any time in history, in terms of offers being accepted.”

The rebound in San Francisco might not be as pronounced, perhaps, because the city has stricter shelter-in-place rules, Carlisle said, or perhaps because it’s the most densely populated region of the Bay Area.

 

“The Mission remains popular and strong,” said real estate agent Jennifer Rosdail. “The shutdown slowed it down at first, but people have figured out how to get their transactions done, and it’s accelerating a little bit.”

Since April, Rosdail said sales started coming back and have improved each month. “I’ve seen that in every segment I’ve checked — except for the luxury homes over, like, $2.5 million,” she said.

There aren’t many of those more expensive single-family homes in the Mission, but in a neighborhood like Noe Valley, the pattern is striking, Rosdail said. Single-family homes priced lower than $2.5 million there are moving much more quickly than those above $2.5 million, and more appear to be entering the market than are being sold.

“I think that dichotomy is interesting. I see a deceleration in the luxury homes” in Noe Valley, Rosdail said.


"All the talk of exodus — that’s the headline-grabbing news — but the real news is that a lot of buyers have a little more affordability. And a little more balance to the market allows them to own a piece of San Francisco." — Kevin Ho


Taking the city as a whole, Carlisle’s analysis shows luxury single-family homes priced above $3 million are increasing in price — but that’s based on properties that have accepted offers, while Rosdail is also examining the growing supply of inventory in Noe Valley.

By and large, Carlisle said he prefers not to look at individual neighborhoods.

“When you look at a specific neighborhood, the sales numbers are so low, it’s hard for the data to be statistically reliable,” he said. “I generally try to look at them only on an annual basis.”

But, even with small sample sizes, it remains the only tool we have.

Crunching the numbers for the Mission, Rosdail said things were picking up in terms of volume and price — but that didn’t mean losses had been fully recovered, especially for condos. Comparing the median price of a two-bedroom condo that sold in May this year with the same time period last year, the price had dropped from $1.25 million to $1.05 million — or about 16 percent less. But, again, prices have gone up since then.

“April was a terrible month to sell your home. May wasn’t so bad. June was pretty good,” Rosdail said. “I don’t think we’re going to experience a summer slowdown this year; I think we already had it in April. People are just going to keep charging forward.”

The pandemic has also shifted what many people normally think of as in-demand neighborhoods.

“Outer Richmond is hot right now. The Sunset is doing great, because people want more space, they want to be away from each other,” Rosdail said.  Meanwhile, condos in SoMa haven’t been moving as quickly.

“A lot of renters have become buyers,” observed real estate agent Kevin Ho. “All the talk of exodus — that’s the headline-grabbing news — but the real news is that a lot of buyers have a little more affordability. And a little more balance to the market allows them to own a piece of San Francisco.”

Ho said more of the buyers right now seem to be people who want to live in the home they’re purchasing, rather than using it as an investment. He said some of the recent changes to the law around tenant protections and rent forgiveness might be having an impact, and investors “don’t necessarily want to assume that risk.”

In San Francisco, the market for apartment buildings has also changed. For buildings with six or more apartments, Ho said the market had “quieted down, with not much movement.”

“For four units or under, we’re seeing good activity, because it’s more manageable,” he said. “Bigger buildings with multiple units, we’re seeing that market kind of take a pause as they wait and see how this pans out, because of all those changes” to rental laws.

Not all real estate agents Mission Local spoke to were convinced prices would continue to climb. An agent familiar with the Mission District, but who did not wish to be quoted by name, conveyed skepticism that the rush the city had seen over the past few months would be sustainable. Buyers may become choosier before submitting an offer on a less-desirable property, they argued, which could lead to more houses than buyers.

Analyzing numbers can tell us how the market has performed so far, but predicting the future remains as elusive as ever.

For More Media Mentions ...

 

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Kevin Quoted in Mission Local: “Real estate market in the Mission appears to recover, for now - Mission Local”

“A lot of renters have become buyers,” observed real estate agent Kevin Ho. “All the talk of exodus — that’s the headline-grabbing news — but the real news is that a lot of buyers have a little more affordability. And a little more balance to the market allows them to own a piece of San Francisco.”

Ho said more of the buyers right now seem to be people who want to live in the home they’re purchasing, rather than using it as an investment. He said some of the recent changes to the law around tenant protections and rent forgiveness might be having an impact, and investors “don’t necessarily want to assume that risk.” In Mission Local.

Kevin on KTVU-2 Talking About Corona and SF Real Estate

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SF Gate's Sound Off: Will the 49ers playing in the Super Bowl affect open houses this weekend? 

We compare how San Francisco real estate stacks up against its Super Bowl rivals Baltimore and Kansas City. It’s not even close.

SF Gate’s Sound Off: Will the 49ers playing in the Super Bowl affect open houses this weekend? 

Sound off from the San Francisco Chronicle (Feb 2, 2020 Edition)

Will the 49ers playing in the Super Bowl affect open houses this weekend?

We get asked to share our take on real estate by our friends at the San Francisco Chronicle/SF Gate, like the one above. Here's our answer to this week's question about the Super Bowl's impact on open houses: 

This weekend you’re likely to see more red and gold and fair-weather civic pride out there than open house signs. The cutest condo ever can’t compete with a spectacle as big as the Super Bowl, especially when our hometown team is playing, which no one expected.

Because us agents work hard to keep property listings from become stale (or even being perceived as such), many will advise sellers to come to market after folks are done being distracted by the holidays, which should really also include the Super Bowl as 115 million people travel during the holidays and about 100 million watch the game.

The charming 2-bed, 2-bath, house can’t compete with J.Lo and Shakira just as the pricey open floor plan can’t compete with the far pricier spectacle where the commercials alone cost $175,000 a second. Sports fans rule the roost this weekend for sure, but don’t worry real estate fans, prime time is just about to kick off.

Published at: Sound Off: Will the 49ers playing in the Super Bowl affect open houses this weekend? - SFGate 

That got us to thinking about how we stack up to ourselves and to our rivals:
It's Pricy Here for Sure.

Now and Then, Here and There. What if you bought a house last time the 49ers were in the Super Bowl? And how does SF stack up against its opponents real estate wise?

 

If you liked this, check these out.

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Kevin Quoted in Mission Local: “Real estate market in the Mission appears to recover, for now - Mission Local”

“A lot of renters have become buyers,” observed real estate agent Kevin Ho. “All the talk of exodus — that’s the headline-grabbing news — but the real news is that a lot of buyers have a little more affordability. And a little more balance to the market allows them to own a piece of San Francisco.”

Ho said more of the buyers right now seem to be people who want to live in the home they’re purchasing, rather than using it as an investment. He said some of the recent changes to the law around tenant protections and rent forgiveness might be having an impact, and investors “don’t necessarily want to assume that risk.” In Mission Local.

Kevin on KTVU-2 Talking About Corona and SF Real Estate

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SF Chronicle Sound-Off Q+A: On Setting a List Price with Kevin Ho + Jonathan McNarry

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ABC 7: Kevin Talks About the Market Impact of San Francisco’s Millennium Tower’s Upcoming Fix

Kevin being interviewed.

I N T H E N E W S

A Monumental Fix for SF's 'Sinking' Tower

Kevin is interviewed by ABC7 Bay Area about the latest chapter in the Millennium Tower (301 Mission Street) saga a $100M fix where more than 200 pylons are to be driven into the ground to prop up the leaning luxury skyscraper. (If the story doesn’t play for you, click here).

Kevin’s experience as a reporter meshes well with his real estate experience and tendency to stay current on what’s happening in San Francisco real estate. This makes him and Jonathan the perfect market experts for reporters to call when newsworthy items pop up, which is a great attribute for their clients to have at their disposal. 

Kevin being interviewed.
Kevin Ho is interviewed with ABC7 Bay Area about a development in one of the biggest stories to hit San Francisco real estate at the Millennium Tower (301 Mission Street).

More Media Coverage 

SF Chronicle Sound-Off Q+A: Still Busy During Covid with Kevin+Jonathan

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Kevin Quoted in Mission Local: “Real estate market in the Mission appears to recover, for now – Mission Local”

“A lot of renters have become buyers,” observed real estate agent Kevin Ho. “All the talk of exodus — that’s the headline-grabbing news — but the real news is that a lot of buyers have a little more affordability. And a little more balance to the market allows them to own a piece of San Francisco.”

Ho said more of the buyers right now seem to be people who want to live in the home they’re purchasing, rather than using it as an investment. He said some of the recent changes to the law around tenant protections and rent forgiveness might be having an impact, and investors “don’t necessarily want to assume that risk.” In Mission Local.

Kevin on KTVU-2 Talking About Corona and SF Real Estate

San Francisco real estate and the coronavirus/COVID-19 as discussed by Kevin Ho of San Francisco’s Vanguard Properties, the leading locally owned luxury brokerage for the San Francisco Bay Area. The forecast is optimistic, the question is when.

Top Places for LGBTQ Folks to Live—and It’s Not Just NYC and San Francisco | realtor.com

Talking about destination neighborhoods for LGBTQ folks, Kevin Ho of Vanguard Properties discusses how the Castro in San Francisco’s Eureka Valley, stacks up compared to other destinations and why it has a unique appeal.

SF Chronicle Sound-Off Q+A: On Setting a List Price with Kevin Ho + Jonathan McNarry

Setting a property’s list price or better yet trying to find a property’s real market value is always tricky especially in high-value and competitive markets like San Francisco. See how Kevin Ho and Jonathan McNarry, top-ranked agents at San Francisco’s luxury boutique brokerage Vanguard Properties handle the question in the San Francisco Chronicle’s Sound-Off Section

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Curbed SF: Why Do Some Realtors Use “Eureka Valley” Instead of “Castro”? – Curbed SF

Kevin Ho talks about why the Castro is its own neighborhood with Curbed SF

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San Francisco Chronicle: Q+A: How do I determine my priorities before I search for a home? By Kevin Ho + Jonathan McNarry

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San Francisco Chronicle: Q+A: How Has the Internet Impacted Real Estate By Kevin Ho + Jonathan McNarry (Jan 20, 2019)

The intersection of the Internet and real estate has made it even more important to have experienced agents like Kevin Ho and Jonathan McNarry whose perspective and deep familiarity with San Francisco markets help their clients win in the City’s competetive markets.

SF Chronicle: Q+A: How Do Agents Get Each Other’s Attention?

Q+As re San Francisco Real Estate

Besides broker tours, how can agents introduce other Realtors to their new listings?

There are so many ways to reach fellow agents these days like email and social media but at the root of a lot of client successes are tried and true ways of talking to agents face to face or spreading the word word-of-mouth in person, on the phone or via text.

Given the fact that Kevin is a trained lawyer and Jonathan is a trained nurse, they have a natural background to delve deeper and to be more inquisitive. As one of Kevin’s classmates at U.C. Berkeley’s law school said, “we’re a school of researchers, there’s nothing we won’t uncover!”

1. Word of Mouth. In person, via text or on the phone. There’s nothing like direct contact that are, of course, enhanced by established networks and good reputations.

2. In An Agent’s Own Office. There’s usually a list or repository of coming-soon or pocket listings. That or an agent will give their colleagues sneak peeks or early access to listings.

3. Top Agent Network. The invite-only, email forum for top-producing agents in the City to promote off-market or coming-soon listings or other information like upcoming price reductions or ‘buy-it-now’ prices

4. The MLS. Either as “coming soon” listings or, for active listings, what agents will say in the private comments section of a listing.

5. Direct Email. Less effective because folks are inundated with emails but it still does work in that they reach a wider audience of more agents.

Got a Question?

We have an answer

The worst question is the unasked one. So go ahead, tell us what’s on your mind. 

Got a Question About San Francisco Real Estate? See Kevin+Jonathan's Take.

How many new listings were there last month?

San Francisco Chronicle: Q+A: How do I determine my priorities before I search for a home? By Kevin Ho + Jonathan McNarry

K E V I N + J O N A T H A N  I N  T H E  M E D I A 

Question: How do I determine my priorities before I search for a home?

A: Home buyers can easily get wrapped up and turned around in questioning what their priorities really are — from the esoteric, “What am I actually buying?” (especially for tenancy in commons and condominiums); the overwhelming, “How am I really going to pay for this?” to the existential, “How can a space really be ‘0’ square feet?”

But must-haves and deal-breakers really come into focus when we ask our buyers to take a look at their calendars, weekend plans and daily routines.

After work, do you nest or is home just a pit-stop before spin class and dinner? (Read: location/starter home).

Are you making dinner at home tonight? (Read: kitchen quality).

Did you leave you clothes in the washer again? (Read: in-unit laundry and closet space).

Just how often will those out-of-town guests really visit you? (Read: budget/room count).

By taking a look at the humdrum of daily life, disoriented buyers may well see that the answers were right in front of them all along.

What's important to you? Let's discuss and we'll figure it out and find the right place for you together!

Want to Learn More?

Our Experience and Knowledge is Just a Click Away

There’s a reason why they ask us to write columns, it’s because we know what we’re talking about. See how you too can benefit and succeed in San Francisco’s high-value real estate market by contacting us now. 

From time to time we get asked to chime in the Sunday San Francisco Chronicle’s real estate Ask-a-Realtor column “Sound Off.”  This week’s question asked about how the Internet has impacted real estate.

Appearing in the San Francisco Chronicle’s “Sound Off” real estate column as published on April 1, 2019, see the online version here.

More Columns from Kevin + Jonathan

San Francisco Chronicle: Q+A: How Has the Internet Impacted Real Estate By Kevin Ho + Jonathan McNarry (Jan 20, 2019)

K E V I N + J O N A T H A N  I N  T H E  M E D I A 

From time to time we get asked to chime in the Sunday San Francisco Chronicle’s real estate Ask-a-Realtor column “Sound Off.”  This week’s question asked about how the Internet has impacted real estate.

Appearing in the San Francisco Chronicle’s “Sound Off” real estate column as published on Jan 20, 2019, see the online version here.

Want to Learn More?

Our Experience and Knowledge is Just a Click Away

There’s a reason why they ask us to write columns, it’s because we know what we’re talking about. See how you too can benefit and succeed in San Francisco’s high-value real estate market by contacting us now. 

Question: How has the Internet changed how homes are bought and sold?

A: Some may say the intersection of Internet and real estate spells the end of real estate agents — like it did for travel agents. But a house is far more important (and expensive) to most people than a flight and hotel package.

Real estate isn’t something you can just figure out on your own based on search results. The search results are only a starting-off point.

The Internet has democratized the buying and selling process radically. It’s also accelerated the process, for sure. It allows you to look at properties far and wide any time of day. It allows you access to an enormous amount of market and sales data — whether the data you unearth is outdated, incomplete or plain wrong is something the Internet can’t tell you.

If anything, the intersection of the Internet and real estate has made it even more important to have experienced agents — those who have perspective and deep familiarity with your market and, most important, your needs — guiding you through this process. This is the kind of help that only good ol’ human agents can provide. Or at least that’s what the algorithm says.

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San Francisco Chronicle: Q+A: Kevin Ho and Jonathan McNarry Talk About Real Estate as a Hedge Against Risk

In the Media: Kevin+Jonathan on San Francisco Real Estate

The San Francisco Chronicle's Sound-Off Question Asks How Recent Stock Market Turbulence Could Impact Real Estate

Kevin+Jonathan in print on and the web. This week's question asked about stock market volatility and its impact on real estate

Real Estate as the Eternal Hedge to Risk Especially in San Francisco

Question: How concerned should buyers and sellers be about corrections in the stock market and a potential recession?

Answer:

TO HEDGE AGAINST RISK in the economy, folks should do what they always do in these times: turn to real estate. 

Unlike a stock, option or index fund, real estate is not only a means to building wealth, but owning a home has built-in tax benefits and savings while also being a potential source of revenue even during a recession.

You can live in a house, you can rent it out, you can borrow against it. You can fundamentally alter a property’s value yourself à la Home Depot or Lowes. (Think about the jail time if you altered a stock’s value yourself).

Buying real estate during turbulent times is a smart move especially if you can lock-in a relatively low mortgage interest rate (even 1/4th a point lower rate will save thousands over 30 years).

And unlike renting where money out never comes back to a tenant, mortgage payments are really payments to yourself. You’ll benefit from either increased home equity or from capital gains savings if you sell.

Now What Am I Supposed To Do?

Now that you have a sense of how Kevin+Jonathan approach an issue, see how they'd tackle your real estate goals.

For sagely advice based on client successes, email Kevin+Jonathan today

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San Francisco Chronicle: Q+A: August 26, 2018 – K+J on Open House Etiquette

K E V I N + J O N A T H A N  I N  T H E  M E D I A

From time to time we get asked to chime in the Sunday San Francisco Chronicle’s real estate Ask-a-Realtor column “Sound Off.”  This week’s question asked about open house faux pas. While the other folks talked about opening drawers during open houses, we focused on the bigger picture.
 

Appearing in the San Francisco Chronicle’s “Sound Off” real estate column published on Aug 26, 2018, see the online version here.

Question: What is proper etiquette when attending an open house? What are some unwritten rules?

Answer: Open houses may resemble kabuki theater sometimes, but first impressions matter a great deal in real estate. 

There’s nothing worse for buyers than feeling ignored at an open house. Agents should always greet and acknowledge you — even a simple nod works. Seeing an agent who’s engrossed in their phone by themselves is disheartening. We’ve attended open houses with our clients and weren’t sure if the showing agent knew we were even there. If they don’t care about an open, what else have they ignored?   

On the other side, we tell our buyers to behave nicely: say hello, tell the showing agent you’re working with us (super important to avoid confusion early on), pick up a statement but never put it back if you’re uninterested (recycle it elsewhere later). If you don’t like a house, smile and nod but don’t say anything negative about it within earshot of other folks even if you’re trying to psych out potential competition, because good agents will remember who came by and what they said.    

ABOVE: The kabuki theater of open houses.

E X T R A  C R E D I T

Some Tips + Definitions

We’re known for our educated and prepared buyers. Our buyers oftentimes endear themselves to Listing Agents at open houses by being polite and nice. We encourage you to introduce yourself to the Listing Agent and feel free to ask some questions but you should mention that you’re working with Kevin Ho and Jonathan McNarry of Vanguard right away. Here are a few tips: 

New Buildings

Introducing yourself and telling them you’re working with us is  even more important when you go to new construction buildings as you want to be clear that you have independent representation, which is always important but more so in new construction as these buildings will have in-house sales staff where commission questions may come up. 

Open Houses

Open houses are times when the seller’s agent invites the public to come and see the property. They usually take place on Sundays from 2:00 p.m. until 4:00 p.m. with fewer taking place at the same time on Saturdays and some homes being open on Thursday nights for ‘twilight tours’ after work gets out for most people. If you can’t make it, let us know and we can set up an appointment to see it with you.

Agents

The seller’s agent is called the “Listing Agent” and your agent is the buyer’s agent. Some agents specialize as being one of the other, we specialize in both! Sometimes the Listing Agent will also act as a buyer’s agent too but if you think you’ll gain an advantage in getting the property this way beware as potential conflicts of interest may arise. Sellers pay commissions to both agents.

Asking Price/List Price

This is published price a property will have on the MLS. It bears little relationship with its closing price in San Francisco as nearly 75% of properties close above the list price.

More Columns by Kevin + Jonathan

SF Chronicle: Keeping it in the Family: tax benefit that keeps property inventory low

August 17, 2018 San Francisco Real Estate

California tax shelter saves children big bucks on inherited property

 
 
 
 

About 60,000 to 80,000 properties in California pass between parents and children each year without being reassessed, Uhler estimated. That’s about 10 percent of all property transfers. In 2015-16, this reduced property tax revenues by about $1.5 billion or 2.5 percent statewide.

 

A state law that protects children from steep tax increases on inherited property is likely contributing to the shrinking inventory of homes for sale in many parts of California.

As Baby Boomers — the oldest of whom are 72 — die and leave homes to offspring who convert them to other uses, the shortage could get worse.

Without the law, “I think there would be notably more housing turnover,” said Brian Uhler, a fiscal and policy expert with the Legislative Analyst’s Office.

The tax break, passed in 1986, lets parents transfer a primary residence of any value, plus a generous amount of other property, to their children without it being reassessed at market value for property tax purposes. In California, where long-held homes are typically assessed at a fraction of their current value, this can save children thousands or tens of thousands of dollars per year.

Rather than lose this tax shelter, many children who inherit homes they don’t want to occupy convert them to rentals or vacation homes rather than selling them. Data from Los Angeles County over the past decade support this, according to a report last fall by Uhler.

This may help renters, but makes it harder for buyers to break into the tight housing market. It also “has exacerbated (property tax) inequities among owners of similar properties,” Uhler wrote.

About 60,000 to 80,000 properties in California pass between parents and children each year without being reassessed, Uhler estimated. That’s about 10 percent of all property transfers. In 2015-16, this reduced property tax revenue by about $1.5 billion, 2.5 percent, statewide.

Some, including Uhler, say it’s time to revisit this break. Santa Clara Assessor Larry Stone said he would not vote for the measure if it was on the ballot today. It’s “just a way for people to transfer wealth to another generation,” he said.

The California Association of Realtors is preparing an initiative for the November 2020 ballot that would scale it back, in part to pay for another property tax break the group is pushing for in this year’s election.

The parent-child tax break amended Proposition 13, the landmark law passed by voters in 1978. Under Prop. 13, real property in California is generally reassessed at market value only when it is sold or transferred.

In between changes of ownership, the assessed value can go up by no more than 2 percent a year, plus the value of improvements. Property taxes, including local ones, average about 1.2 percent of assessed value. Normally, when long-held properties change hands, taxes soar. But voters have excluded some transfers from reassessment.

Proposition 58, the law passed in 1986, excluded transfers between spouses. It also excluded transfers — by gift, sale or inheritance — between parents and children of a primary residence and up to $1 million in assessed value for other property. It’s most often claimed by children who inherit property, but the parent doesn’t have to be dead, and it also applies to transfers from children to parents and can be used by an unlimited number of generations.

Escape hatch

In 2016-17, about 16,200 Bay Area homes and other properties escaped tax increases thanks to state laws that exclude from reassessment transfers between parents and children (and between grandparents and grandchildren if the parents are deceased). This is how many exclusions each county granted that year:

County Exclusions granted
Alameda 3,113
Contra Costa 3,393
Marin 726
Napa 415
San Francisco 1,079
San Mateo 1,669
Santa Clara 3,201
Solano 1,028
Sonoma 1,579
Total 16,203

Source: California Board of Equalization

Proposition 193, passed a decade later, exempts transfers between grandparents and grandchildren, but only if the grandchildren’s parents are dead. These exclusions are pretty rare. For simplicity, we’ll assume children are inheriting property from a parent.

If they are inheriting the parent’s primary residence, there is no dollar limit on the exclusion, and children can rent it out without triggering a reassessment. However, if two children inherit the home and one sells or transfers his or her share — even to the other sibling — that share will be reassessed for tax purposes.

If one child wants the home and the other doesn’t, parents should consider leaving the home to one and other assets to the other, said Terri Lyders, an estate planning specialist with Fidelity Investments in Burlingame.

Each parent can transfer up to $1 million in other property — such as a vacation home, rental unit or strip shopping center — to one or more children combined. The $1 million limit applies to the assessed value, not the market value.

“Say I have a $1 million assessed value on a shopping center I’ve owned for 30 years and now it’s worth $25 million. I can transfer that assessment, plus the low assessment on my house,” to children, the assessor Stone said.

James Zapata applied for and received the exclusion on a Mountain View home he inherited from his father, who died last fall. His grandparents bought the modest, 1,017-square foot home around 1962 and gave it to his father as a wedding present.

His father was a machinist whose business went “belly-up” during the “manufacturing exodus” of the early 1980s, and he never recovered financially or emotionally, Zapata said. A decade ago, Zapata quit his job as a cable lineman to care for his father, who developed multiple sclerosis at a young age, and his mother, who died in 2013.

The home is assessed at about $54,000, and the property tax last year was $948. Homes in his neighborhood are selling for around $2 million — and often being torn down to make way for larger ones. Had Zapata’s home been reassessed at $2 million, his taxes last year would have been close to $24,000.

Zapata said he “never anticipated getting” the tax break, but it has helped him stay in the home he’s lived in since birth. He also got the exclusion on an inherited home in Sunnyvale his family had purchased around 1972. He rents it to his sister at a deep discount.

In 2016-17, county assessors excluded about 62,000 properties from reassessment under Props. 58 and 193.

That is seven times the number they excluded under Propositions 60, 90 and 110. These three measures let homeowners who are 55 and older or permanently disabled sell their primary residence and transfer the tax assessment from that home to another one in the same county or in one of 11 counties that accept incoming transfers. However, the replacement home can’t cost more than the original home, and homeowners can only do this once.

The Realtors association says those restrictions keep empty-nesters in their homes and has placed an initiative on the November ballot that would loosen them.

Proposition 5 would let seniors and disabled homeowners transfer their property tax base to a replacement home of any price, in any California county, any number of times. If they bought a more expensive home, the difference in price between the old and new home would be added to the old home’s assessment. If they bought a less expensive home, their assessment would actually be reduced.

The Legislative Analyst’s Office estimates that if Prop. 5 passes, local governments and public schools would each lose $150 million a year in tax revenue in the early years, growing over time to $1 billion or more per year. Needless to say, governments and schools are against it.

While pushing ahead with Prop. 5, the association is hedging its bets by submitting another initiative to the attorney general for the November 2020 ballot. It would do the same things as Prop. 5, but offset the cost by capping the parent-child exclusion on a primary residence, eliminating it if the child does not live in the house, and abolishing it on other property.

It also would rein in “the shenanigans” big businesses use to avoid reassessment on property transfers, said the association’s lobbyist Alex Creel. He called this provision a “reasonable alternative” to a more sweeping split-roll initiative that would require reassessment of commercial and industrial property, but not homes and small businesses, at least every three years.

Although Zapata benefits from the parent-child tax break, he could see limiting it on high-end homes and eliminating it on other property. “The top 1 percent doesn’t need another break,” he said. “We have all these people who need help; if a little higher property tax would help I’m willing to chip in. What I don’t want my money going to is pension obligations” for government employees.

Contra Costa County Assessor Gus Kramer said he thinks the exclusion “is fine the way it is. People voted on it.” In fact, it got 76 percent of the vote in 1986.

Where it’s most useful is “when someone with special needs had a home modified for them” and is able to keep it, Kramer said. “Or sometimes you have a child who is not as successful as the rest, they’ll never be able to buy a home. You can transfer it to them so they have somewhat affordable housing.”

San Francisco Chronicle: Q+A: Sound Off: How important is parking and access to public transportation?

K E V I N + J O N A T H A N  I N  T H E  M E D I A 

From time to time we get asked to chime in the Sunday San Francisco Chronicle’s real estate Ask-a-Realtor column “Sound Off.”  This week’s question asked about how much value parking and proximity to public transit adds to homes.

Appearing in the San Francisco Chronicle’s “Sound Off” real estate column as published on Jan 21, 2018, see the online version here.

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Question: How Important Is Parking, Access to Public Transportation?

A: For a city that supposedly favors mass transit, San Francisco buyer behavior still shows that having parking impacts a property’s value equally for condominiums and single-family houses. In 2017, condominiums with parking sold for about $350,000 more than those without (an average of $1.3 million vs. $900,000), while houses with parking sold for $400,000 more than those without ($1.78 million vs. $1.38 million) per MLS data.

But for folks who are willing to lead a car-less life proximity to mass transit will impact property values significantly. These buyers are looking for an “urban” experience that relies on mass transit, Uber or foot power to get to work, entertainment and food — throw in an area close to a farmer’s market and you’re golden.

And while you’d expect younger, entry-level, Millennial buyers to value proximity as an amenity (as we see among our own buyer pool), we also see the same willingness to spend more for proximity from Baby Boomer buyers who sell their empty nests to flock to the city.

More Columns from Kevin + Jonathan

As Featured in the Chronicle’s Sunday Real Estate Section: Two-bedroom in Potrero Hill, 875 Vermont

And we had more than 250 people through!

East of McKinley Square with west-facing windows, this updated condo offers LED lighting, quartz counters and wood floors, as well as floor tiles in the bathroom. The unit includes one-car parking. Listing agent: Kevin Ho, Vanguard Properties, (415) 297-7462, [email protected] kevinandjonathan.com; Jonathan McNarry, Vanguard Properties, (415) 297-7462, [email protected] jonathan.com. 875 Vermont St., Unit 103, Potrero Hill, $699,000.

Source: Two-bedroom in Potrero Hill open Sunday

SF Curbed’s 2017 Roundup: Kevin+Jonathan’s Contributions

For the past few years our friends at SF Curbed have asked us to take part in their annual roundup of local luminaries such as architects, bloggers, urban planning folks and noted bloggers (we’re the real estate folks of course). This year was no different.

Here are the questions and answers from that coverage:

Salesforce’s new tower in 3 words

Design trends that need to stay in 2017

Favorite SF Neighborhoods 

Trends We’d like to see in 2018

 

 

 

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