Memorial Day 2020 Update
When every day feels like Tuesday or Thursday lately it can come as a surprise that it’s Memorial Day already, which means we may be that much closer to when shelter in place orders end or at least get curtailed for the Bay Area. Memorial Day is typically in the middle of the high season of real estate, at least for San Francisco.
So what’s been happening?
As many of you hear me say, real estate is always good in May no matter what year you’re considering — even this one. We’ve found this to be true even through a pandemic. Real estate has picked up for sure with more listings coming back to the market — some 930 listings are currently “active” on the MLS, up from a mere 400 just a few weeks ago, which is just under the usual 1,200 we usually see in May. Given that there are also more than 250 “coming-soon/off-market” listings in the pipeline, then you can see that we’re not too far off from where inventory has been over the past few years.
Even a ‘locked down’ city can’t resist the fact that sunnier days and warmer weather will always drive people outside. Given that there’s the extra layer of cabin fever, it’s no wonder that people are out and about looking for new shelters for themselves when and where they can.
And while public open houses are still barred, private, mask-and-hand sanitizer, waiver-signed showings are taking place are happening a lot these days. Seeing a property from the convenience of your current home has never been easier with all the 3-D virtual tours that have become the norm, property videos and Zoom open houses taking place. For more on what COVID-19 real estate looks like and how it’s practiced, see our guide here.
What about prices?
Good question, we thought you’d never ask. Compared to the same period last year, March 16 until May 24, we saw remarkably consistent sale prices for single-family houses and slight declines for condominium sale prices. Tenant-occupied properties have slowed to a halt because showings would require tenants to leave their homes during a pandemic. Probably not a good look. Overall, we’ve seen that there are just about half the number of sales reported than last year. Not too bad when you consider other sectors are seeing 90% declines.
Recent Client Wins — The Masked Crusading Buyers
We’ve been YouTubing properties when we can, but we spend many of our days getting our clients ready to see properties they may like. This involves reviewing disclosure documents before ever seeing a property, ensuring pre-approval letters and proof funds are in order and ensuring that all those waiver documents are signed, and that’s just to get an appointment to access a property. And for those of you who know how thorough we are, we’re bound to stay at a property for at least an hour or more (with masks, gloves and social distance of course) so that by the time we’re done seeing a home it’s been a few hours. Well the good thing is that this process has proved rewarding for many of our clients.
Check out some of the success stories below.
Top-Floor Pre-emptive to Offer Date
A set of Floridians turned Californians and their puppy who live in a ground-floor studio in the Tendernob are going to be the new owners of a top-floor, updated 1920s, 1-bed+, 1-bath condominium at 1151 Broderick Street, near Anza Vista. The tree-lined block leads right into NoPa and after seeing the property, listed at $775,000, the couple followed our advice of a tactical preemptive offer that we knew would either be accepted or would make us memorable to the sellers who eventually set an offer date some 4 days after our preemptive offer went in. So, by the time the offer date came, and 4 other groups had written we were getting called by the listing agent to see if our buyers were indeed coming back or not, a ‘will-they-or-won’t-they’ type of narrative. We did come back only with a higher offer and slightly better terms that allowed our buyers to win the property without having to go through the ordeal of a multiple-counter offer. Normally, we’d say the property would have a fair chance of hitting the $900,000 price point given its location, setting and finishes. Instead, we’re in contract at $850,000 with a June closing date.
Get that House… Stat!
A somewhat different story across the Bay for another set of physician clients — an ER doctor and UCSF researcher. A Tahoe-like A-frame house in the Oakland Hills in the Montclair neighborhood at 6607 Heartwood, which was listed at $1,234,000 (no, really, 1, 2, 3, 4). The somewhat quirky house screams out professor (indeed a professor had owned the property in the recent past) but is perched on a large hillside parcel with stunning, stunning views of the Bay and is sandwiched between two reassuringly tall redwood trees. With the listing agent telegraphing that there were 72 disclosure packages out on the eve of the offer date, our clients asked us where the property would end up. Given all those indications, we thought that the property would end up in the $1.5 million to $1.6 million price point, which was more than our buyers wanted to go.
Well, real estate is anything but boring, right? The next morning the listing agent said that while offers had come in (with multiple counter offers out) the high disclosure package count scared off many buyers and that the property was still available with a buy-it-now price of $1.4 million. In the car we got to go see the property that afternoon and after a stunning sunset and realization that this was indeed “the” property for our clients. Our non-contingent, $1.425 million offer was written by the next morning and, despite other buyers falling over themselves to make something happen, was accepted by that evening. The agent said the seller and the agent thought that they’d get the $1.5 million+ range but the fact we had included a letter to the seller and that we presented our offer the way that we do, the seller felt happy with the outcome of having the house go to people who will really appreciate it, which they will.
Seller Success on Kite Hill: 180 Corwin, Unit 2 in Contract After Just 10 Days
2-Bed, 1-Bath, 1-Parking TIC Unit. Listed at $949,000
Our seller at 180 Corwin Street, after working with us since January to prepare and update his place for sale accepted an offer after just 10 days on the market (the average for 2-bed, 1-bath TICs in the City is 59 days!)
With more than 20 disclosure packages sent out and 15 private, COVID-19-compliant, showings. The 270° stunning-view property that is set next to the equally dramatic Kite Hill open space perched just about the Castro was listed at $949,000 and has 2 beds, 1 bath, 1-car parking and just over 950 sqft of living space. There were multiple offers and we will set an all-time record for the street when we close, which some coordinating with closing out a group TIC loan, should happen by July.
What Will Summer 2020 Hold for San Francisco Real Estate?
We said this in the early days of the shelter-in-place orders and are finding it to be especially true now that those orders are being relaxed gradually: there is a large amount of pent-up buyer demand. Of course, we know there are tough economic circumstances for a lot of people and don’t want to trivialize that. But there is still a large number of folks who are willing, able and capable of buying homes how when the circumstances have been the most favorable than they have been in years.
This past week alone we were introduced to 5 different sets of new buyers — hello out there to you new buyers (you know who you are) — and were contacted by several folks wanting to sell their properties. We also saw a trio of properties go into contract too (see below for more).
The mix of fear and opportunity that you may encounter out there now will gradually turn to opportunity and optimism. While there are certainly challenges ahead, Bay Area people will do what they always do: methodically focus on their goals and keep heading towards it improvising and adapting all along the way. The goal here is to weather the virus and its circumstances and prepare for what’s next as the virus and its effects will eventually pass.
Buyers will have, at least temporarily, the ability to ask for contingencies — usually just one and that one tends to be a financing contingency — and still get the property.
More properties will come to the market… eventually.
There will be an increase in “coming-soon” and “off-market” properties in the meantime.
You will see more people buy second homes outside of the City in Marin, Napa and Sonoma Counties, especially if they can work at home more often
Commercial properties — office space and retail space — will take a hit as life becomes tied closer to staying at home.
The Rise of the First-Time Buyers. Because of low interest rates and the perception that there may be less competition out there, entry price point properties will be strong, which will drive prices up and the pressure to minimize the duration or even the necessity of having any contingencies at all.
Similarly, there will be a Rise of the Upgrade Home Buyers. All those people who have outgrown their first homes will have to go somewhere right? Sheltering in place may have revealed how people’s current homes don’t make good workspaces or that they really want a yard instead of a deck. Being locked in your current space for 2 months will likely accelerate the natural tendency to upgrade into your ‘forever home’ sooner than you would have otherwise thought you would.
The traditional summer slowdown in San Francisco won’t be so slow. Because you really can’t go on summer vacations for now and thanks to a potentially earlier start to the school year start in July, San Francisco’s usual slow down over July and August will instead coincide with the easing (we hope) of shelter-in-place orders, which should spur activity.
Hi, we’re Kevin Ho and Jonathan McNarry of Vanguard Properties in San Francisco, California. We’re partners in life and in business. Together with our big black Labrador retriever, Raffi, we are top producing Realtors in San Francisco’s competitive and valuable residential real estate market.
We truly love what we do and are passionately committed to our clients, their needs and advancing their interests. We represent both buyers and sellers with many repeat clients but we are always expanding our client base. Our belief is that by working with you you will make better informed decisions in this most important of areas of life.
We invite you to contact us to learn more and to start your success story now.
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Kevin K. Ho, DRE 01875957/SBN 233408
Jonathan B. McNarry, DRE 01747295
2501 Mission Street, San Francisco, CA 94110
555 Castro Street, San Francisco, CA 94114