In the Know with Kevin + Jonathan: Sept 21, 2014 Ed., No. 38
Setting the Stage Correctly
Our Market is being spotty demonstrating how important agent perspective, presentation and intelligence matters all the more
Given that there were only 90 new listings submitted to the MLS in the 24 hours before this weekend, you can see why some people are naturally wondering if that’s it for our fall push. Indeed, the true number of sales closed has not been tremendous as new monthly figures from the SF Association of Realtors show below as do the numbers of the week show too. If present trends continue then it’ll make it all the more imperative for buyers to compete harder for what’s out there even before it’s out there and for agents wanting to list properties for sale work that much harder as this week’s Stories of the Week will show and as what’s happening at the yet-to-be-released 35 Dolores will show (hint: units are already selling even though there’s no sales office open yet).
If true, what this means for buyers out there is that they should be shaken out of a mentality that has been preventing people from acting when necessary because of that familiar mantra that “something better might be coming.” Because of that mentality some buyers may well be missing out on properties that are otherwise good ones in hopes that something else better will come along this fall. So what’s really going on? Some think that this fall’s inventory is pretty much out. The reality is that the market’s new inventory parade isn’t probably done yet but if you see something you like go for it! And the nice thing we’ve been seeing more recently is that list prices seem to be more inline with closing prices for more and more properties.
Highlights from This Week and Last Week
- There’s no standard for pricing these days as prices are all over the map — literally. Remember that while the spring is nice, prices are still wildly varied. For example, there was a fixer that sold for $640/sqft in Pacific Heights vs another property that sold for a $1000/sqft in Forest Hill Extension.
- There were only 90 new listings entered into the MLS in the 24 hours before the Friday noon submission deadline for a listing to be included in this weekend’s open house listings. This is down by 20 from last week.
- SF State is looking for 60,000 sqft of space in Hunter’s Point/Bay view
- Uber announced it was buying two parcels on Third Street from Salesforce.com in Mission Bay on the way to Dogpatch to build a 400,000+ sqft office complex — these parcels are considered to be the last of the ‘big’ parcels left for commercial office space under San Francisco’s cap on this type of space under Proposition M.
- Meanwhile, the other part of the Salesforce.com parcel was scooped up by UCSF across the street from its soon-to-open children’s hospital on Third Street. The nearly 4-acre parcel may house 500,000-sqft of research labs and facilities.
- More from the Mission Bay/Dogpatch area: apartment-building conglomerate AvalonBay is planning on building a $92 million, 330+ unit apartment building with sidewalks, dog park and parking at the corner of Indiana and 20th — across the street from Esprit Park that will be designed, in part, by San Francisco-based architect Owen Kennerly. Construction is slated to start next September with completion scheduled for September 2017.
- The single-family at 760 Diamond in Noe Valley at 24th Street curb presence with very steep and shallow stairs had more than 700 people through last weekend and, according to the agent, had 5 folks say they were going to write preemptive offers. The listing agent subsequently set an offer date for Tuesday, Sept 23 at 5 pm.
This week’s San Francisco Business Times reports that:
- The current inventory of new-build condominiums in San Francisco is only at 15% of our 2008 inventory.
- But that excludes the 656 new units of the second phase of the Infinity, known as the Lumina, that’s coming soon. Indeed, two members of the sales team who have worked with us significantly and successfully before, are coming to Vanguard to brief us on what will be available at the 37-story building that’s still being built right now.
- Developers used to expect about a 50% premium for projects that were entitled – mainly sites with approved with plans from the city — that figure has gone down to nearly 25 to 35%. Meaning that investors and developers are stepping up properties for regardless of their planning and zoning designation because the returns are just that good.
- The dubious distinction of being a “luxury home” in the Bay Area far surpassed the million-dollar mark a long time ago we know, but by how much? Well new figures from First Republic show that the area average ‘luxury’ home price is now at $3.3 million, a 15% average gain since 2013.
For the past 7 days (September 14-21, 2014) we continued to see fewer MLS-reported closings — 127 — due perhaps still due to the annual August slowdown. Here are the details:
- Single-family homes: 42 (-5 from last week); 10 sold under list price, 1 at the list price and the other 31 sold above the list price.
- Condominiums, Tenancy in Common/Co-Ops: 63 (+2)
- 2 to 4 unit buildings: 9 (+2)
- 5+ unit buildings: 5 (+4)
This week’s Most-Over-Asking-Price Single-Family-Home Award should come as no surprise for frequent readers: 3955 19th Street, the 1/2 fixer perched above the Castro with stupendous view listed at an inappropriately low $1.195M for this 1550-sqft three-level home with a 2003-built garage (aka, the hardest part of any renovation was already done) on an extra deep (and steep) lot with curb appeal and it’s 270-degree view of, well, everything. The buyers had lost out on a few properties before and therefore stepped up here. While the interior of the 2-bed, 2-bath, circa 1910 house needs to be updated (no stove in the kitchen at present), a prime example of what’s possible is only a few houses down at 3987 19th Street (the chic, 2500-sqft home listed at $1.895M). 3955 received 17 offers and closed after 12 days at $1.83M or at $1180/sqft — a mere 153% of list price.
And this week’s most expensive home prize goes to the exquisitely redone home at 16 Spruce Street in Presidio Heights. The 5-bed, 5-bath completely redone home was listed for $9.5M that sold and closed in just 7 days, all-cash to one of the founders of PayPal, who is himself renovating his $30M home on Billionaires Row on Broadway. Interestingly, this updated mid-century home was itself as renovation that last sold in June 2013 for $4.3M.
And last week’s Most-Over-Asking Price Single-Family Home Award went to 1493 Newcomb, a 2 bed, 1 bath 1700+sqft fixer single-family home that is about 1/2 done in the Bayview listed for $408,888, selling at $623,700 or at $365/sqft at 152% over asking. And the Most Expensive was an off-market listing for a Potrero Hill 3-bed, 2-bath, 2400+ sqft home at 201 Arkansas (as previously advertised in this very newsletter) receiving 2 offers, closing at 117% of asking at $2.2M at $911/sqft.