Results of Spring Market – June 2019 Real Estate Newsletter

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Results of Spring Market – June 2019 Real Estate Newsletter

Greetings Friends and Clients – Summer is here!

School is out and our fog is thicker- that means time for vacation and the seasonal real estate slow down begins. Spring 2019 held another solid market performance, with luxury home prices increasing another 13% over Spring 2018 and while median sales prices didn’t skyrocket, they stayed consistent compared to last year. Both condo and home prices are at peak 2018 levels, unemployment is a half percent lower, and SF is home to the largest amount of millennials in all of the Bay Area – all hopeful signs of a promising Fall 2019. Where ever your summer vacation takes you, have fun!! If you have any questions about a specific neighborhood or property, let me know.

-Sue

FIRST QUARTER 2019: The Wild Ride & What’s Next

Greetings!

The first quarter of 2019 was interesting to say the least! Interest rates lowered sharply, the stock market
surged, and a rush of IPO money is predicted throughout the year. See below for the figures and details on how all these elements shaped Q1.

As always, If you have questions about a specific neighborhood, property or anything real estate, let me know!

-Sue

 

How’s the Housing Market Right Now?

Interest rates are dropping and buyers are looking to purchase while they can make best use of their resources. Here in San Francisco, inventory is still low, however there has recently been some resistance in regards to price pushing and this article brings up some good points. Here is a link to the full article and listed below are some of the most pertinent ideas as related to our area.

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  • Buyers should only consider the most recent comps, which means the last three months, because that is the most accurate reflection of where the market is.
  • Location, location, location. Real estate is still very neighborhood-driven. While you might see a softening market in some areas, others may still be in a strong seller’s market.
  • Days on market – which means how long a property has been waiting to sell. If you’re hoping to buy in an area where days on market are staying low, you’ll have to be prepared to act a little faster. But in areas where this number has started creeping up, you might be able to look around a little more.
  • Interest rates are predicted to rise in 2019 and 2020, so buyers would be wise to shop for and lock in their interest rate as soon as possible.

 

Contact me for all things Real Estate!

– Sue

 

San Francisco Spring Event Guide – 2019

As we move out of these rainy winter months, there are so many amazing events to attend in our city. Listed below are some of the highlights. Chocolate, art, St. Patrick’s Day, multiple garden/floral expos, beer, wine & more! A little something for everyone. Looking forward to so many of these!

Enjoy,

Sue

 

St. Patrick’s Day Parade & Festival

March 16, 11:30am, From 2nd St. & Market St to the Civic Center

You don’t need to be Irish to enjoy this vibrant display of history and culture. The parade and festival feature over one hundred colorful floats, live performances, along with delicious Irish food and beverage.

San Francisco Flower and Garden Show

March 20-24, Cow Palace

Take a stroll through artfully curated gardens created by world-class floral designers. Learn how to create your own beautiful arrangements with hands-on demonstrations and seminars.

Bay Area Brew Fest

March 23, 12pm-4pm, 5:30pm-8:30pm, Pier 35

Back for the 8th year, Bay Area Brew Fest showcases hundreds of beers, food trucks, and a dueling piano bar. General admission grants you unlimited samples from over 80 breweries and an excitement-filled day.

SF Chocolate Salon

March 30, 10am-5:30pm, SF County Fair Building

Calling all chocolate lovers—taste and experience the creations of some of the top chocolatiers and chocolate makers.

SF Giants Home Opener

April 5, 1:35pm

It’s almost time for the return of America’s favorite pastime. Whether you’re watching from the stands at AT&T Park or cheering from the comfort of your couch, the 2019 Home Opener game is a cause for celebration.

Rock N Roll Half Marathon

April 7, 6:15am

Starting Line at Pier 39; Finish Line at Maritime Museum

For runners and spectators alike, the 7th annual Half Marathon is a perfect way to give back while enjoying 13.1 miles of the beautiful scenery of the Bay and the Golden Gate Bridge.

SF International Film Festival

April 10-23, Opening night @ Castro Theater

As one of the longest running film festivals in the US, SFIFF showcases cinematic expression and culture through film from over 50 countries around the world.

Cherry Blossom Festival

April 13-14, 20-21, Post St. between Laguna and Fillmore

With over 200,000 attendees, the SF festival is said to be the second largest celebration of the arrival of spring and blooming of the cherry blossom. It is also held at one of the last three remaining Japantowns in the United States!

Polk Street Spring Wine Walk

April 12, , 4-8pm, Polk Street

Wine-taste your way down Polk Street and enjoy the local eateries along the way. Participants will receive a wine glass and a map of the merchants between Post and Filbert Streets.

International Beer Fest

April 20 , 7-10pm, Fort Mason Center, Festival Pavilion

Enjoy unlimited beer samplings in a souvenir mug, or experience the VIP Brewmaster option for an exclusive sampling and access to the VIP lounge.

Union Street Spring Celebration

April 21, 10am-5pm, Union Street

Known as the “Biggest Little Parade in SF,” this annual Spring celebration offers something for everyone—live entertainment, outdoor dining, pony rides, petting zoo, and more!

Art Market San Francisco

April 25-28, Fort Mason Center

The fair features 75 modern and contemporary art galleries from across the globe that will showcase painting, ceramics, jewelry, sculptures, photo, mixed media, and more.

SF Decorator Showcase

April 27-May 27, 3800 Washington Street

The highly-anticipated Decorator Showcase is back again for its 42nd year. The 2019 edition will showcase a completely reimagined 18,000-square-foot mansion modeled after the Petit Trianon in Versailles.

Bay to Breakers

May 19, Time TBD, Starting line Main St. & Howard St.; finish line Ocean Beach

San Francisco’s silliest, most energetic footrace is back for another year. Whether you’re a giving it your all on the 7.46-mile course or just exercising your fashion sense, Bay to Breakers is an event you won’t want to miss!

Bouquets to Art

June 4-9, de Young Museum

Experience the week-long “floral takeover” of the de Young galleries. The exhibition features brilliant floral interpretations of the de Young’s collection of paintings, objects, and sculptures.

When you think you have seen it all – 101 Reasons to Love San Francisco

Living in San Francisco for 20 years, like everyone else, I get so caught-up in the day-to-day of work, appointments, errands and the general business of living, that I sometimes glaze over the unique beauty that is our city. Coming across this article in Curbed was a great refresher and gave me so many ideas for outings with my kids, new places to take visiting guests and a heavy bit of nostalgia for the areas and attractions that have slipped my mind or I’ve missed altogether.

Curbed listed 101 places, attractions and reasons to indulge, embrace, and venture out into areas that we may not be as familiar with. Having a passion for architecture and landscape, I’m a bit partial to the gorgeous landmarks and expansive outdoor spaces of Dolores & Golden Gate Parks, the many beautiful gardens and recently with the additional of our sweet pup Ginger, dog parks! That said, there is so much to choose from and enjoy no matter your interests. Whether you’re looking to fill a rainy day, enjoy the sunshine to the fullest or just be reminded of what is in your backyard waiting to be discovered.

Enjoy,

Sue

https://sf.curbed.com/2017/2/14/14606020/reasons-love-sf

 

From Mansions to Fixer-Uppers

SF version


From Billionaires in Mansions
to Flippers & Fixer-Uppers

 

A Comprehensive Survey
of Bay Area Real Estate Markets73,000 Bay Area home sales worth $76 billion
were reported to MLS over the past 12 months

June 2018

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Bay Area Home Value Appreciation Rates
since 2011 (the post-crash bottom of the market)Bay Area Home Appreciation Rates

 


The county and city appreciation percentages in the chart above were calculated by averaging changes in both median sales prices and average dollar per square foot values. We also incorporated S&P Case-Shiller SF metro area calculations based upon its algorithm breaking the market into thirds by price segment. Each city and county includes within itself a wide variety of individual real estate markets of different price segments and varying dynamics, so these percentages are broad generalities. It is impossible to know how they apply to any particular home without a specific comparative market analysis.IMPORTANT NOTE: As with stock market (or bitcoin) performance, comparative appreciation rates in housing markets vary wildly depending on the exact start and end dates of the analysis.


Bay Area Median Home Price Trends
since 1990
Bay Area County Median Home Price Trends

Major Factors in Bay Area Appreciation

The appreciation rate and market dynamics of each individual Bay Area market since 2011 has each been affected by a mix of different factors – to greater or lesser degrees:

1) Being at the center of the high-tech boom (San Francisco, San Mateo, Santa Clara); 2) proximity to the central counties, but with significantly lower housing costs (Alameda County and especially Oakland are prime examples): 3) being affected to an outsized degree by subprime financing and the 2008-2011 distressed-property price crash (Oakland and many outlying, less expensive areas); 4) relative affordability: in recent years, as home prices soared, the highest pressure of buyer demand moved to less costly markets within and between counties; 5) substantially increased supply due to new construction (SF condo market); 6) increases in the average size of homes sold (+13% in SF); and 6) the general national economic recovery: U.S. home prices have appreciated by about 49% since hitting bottom in 2011.

This chart illustrates the dynamics of the enormous appreciation rate in Oakland since 2011, following its drastic crash in prices during the market recession: Chart: Oakland median price changes. And this chart based on Case-Shiller data illuminates the vast differences in the magnitude of bubbles, crashes and recoveries of different home price tiers: Chart: Appreciation Trends by Price Segment.

Generally speaking, the most affluent neighborhoods, with the most expensive homes, have appreciated less on a percentage basis (but more on a dollar-increase basis) than more affordable neighborhoods – especially over the past 2-3 years. This dynamic also occurred in the latter period of the last housing boom.

There were sometimes specific local factors, such as the terrible fires in Sonoma, or the opening of the new Apple spaceship headquarters, which played roles in boosting home prices in their locales.


Bay Area Average Price per Square Foot Values
SF Bay Area Average Dollar per Square Foot values

San Francisco County Median Price Trends
since 1993

Within SF, appreciation rates have diverged between houses
and condos due to classic supply and demand factors.

SF Median house and condo price appreciation

Many more analyses specific to San Francisco County and its neighborhood markets can be found here: San Francisco Market Report


Bay Area Median Condo Prices by County
Year-over-year changes

Condos are the distinctly more affordable home purchase option, though that is less true in San Francisco than in other counties. Indeed, overall in the city, condos sell at higher price per square foot values than houses, but, of course, average condo size is much less.

Bay Area condo markets and prices

The high-tech boom has led to a considerable divergence between Bay Area and national home price appreciation rates, as illustrated in this graph based on Case-Shiller data: Long-Term Home Price Appreciation Trends


Fixer-Uppers: Median Sales Prices

Bay Area Fixer Upper Prices

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Bay Area Luxury Home Markets

There are very expensive neighborhoods and enclaves throughout the Bay Area, but the fabulous creation new wealth has supercharged Silicon Valley high-end real estate sales above all others.

Bay Area luxury home markets by county

How much luxury home one gets for the money varies considerably between counties. On a dollar per square foot basis, the highest values are found in San Francisco luxury condos, often high-rise units with utterly spectacular views.


SF Bay Area luxury home values by county
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Bay Area Real Estate Market Dynamics

Sales by Price Segment

These next 2 charts break out house and condo sales in the 9-county Bay Area by price segment. (We roughly estimate another 10 to 12% of such home sales were not reported to MLS, and not included below.)

Bay Area house sales by price

Bay Area condo sales by price

Respective Market Sizes

By unit sales volume, the Bay Area is utterly dominated
by Santa Clara, Alameda & Contra Costa Counties.

SF Bay Area House and Condo Sales by County

San Francisco & San Mateo close the gap in dollar
volume sales due to their high home prices.

Bay Area dollar volume home sales by county

The above chart tracks dollar volume sales for houses, duets, condos, co-ops, TICs and 2-4 unit residential buildings. If the sales of larger multi-unit residential buildings and commercial buildings were included, sales volumes would soar for some counties. For example, in San Francisco, 74% of all transfer taxes collected in 2017 related to property sales of $10m+, the vast majority of which were larger apartment buildings and commercial properties.

Home and Lot Sizes

As the economy recovered from the recession, people began to buy larger houses, which is one factor in increasing median home sales prices. The average size of houses sold in San Francisco increased 13% over the period, but is still far below those in Marin, and in Diablo Valley & Lamorinda in Central Contra Costa County.


Bay Area Average House Sizes
Marin & Diablo Valley also have the largest median lot sizes.

Bay Area median home lot sizes by county

Homeownership & Tenant-Occupancy Percentages

Of the 9 Bay Area counties, only San Francisco has a higher percentage of renters than of homeowners (though certain cities of other counties do as well).


SF Bay Area homeownership rates

On the issue of rent and eviction controls, people have a tendency to vote their own financial interests (and not according to their opinions on macro-economic housing-supply theory): Tenants for controls, and landlords and homeowners (potential landlords) generally against them. This is why strong rent control measures are typically found only in CA cities with majority tenant populations, such as SF, Oakland, Berkeley and Santa Monica. Upwardly spiraling rents, as illustrated in the below chart, has made this one of the most intense political issues of the day, to be voted on at the ballot in November.

Bay Area Rent Trends

The Bay Area has the highest rents of any metro area in the nation.

Bay Area rents historical trends

Supply, Demand & Market Seasonality

Most Bay Area markets will now start to transition from the more heated spring sales season to the less active summer season. Part of this dynamic is a marked increase in price reductions. Seasonal trends do vary by county: Sonoma, for example, has a strong second-home market which can peak in mid-summer. San Francisco and Marin typically see dramatic spikes in sales during the short autumn selling season. All markets head into big slowdowns for the mid-winter holidays, before waking up and beginning the cycle again in the new year.

Bay Area Active Listings historical trend

Bay Area Real Estate Seasonality

Price Reductions

As the spring market ends, the major period
for listings reducing their asking prices begins.

Bay Area price reductions historical trend

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Bay Area Population & Housing Statistics

Bay Area population by county

Bay Area Population Growth since 1969

Bay Area Square Miles by County

Bay Area population density by county

Our report on local demographics is here: San Francisco & Bay Area Demographics. We guarantee you will learn surprising and interesting things you never knew before.

Bay Area Housing Statistics

In recent years, some counties have embraced growth in housing supply, and others have resisted it. For better or worse, no county has resisted growth more than Marin. Any way you slice it, housing supply has not come close to keeping pace with the surge in population, a major factor in our real estate markets.

Bay Area Housing Construction since 1967

Bay Area Housing Construction by County

According to a recent report by Turner & Townsend, San Francisco has the second highest construction costs in the world, behind only New York, and these costs continue to accelerate due to a number of factors: land and labor costs; the long planning, approval & permitting process; political opposition to growth; and affordable housing requirements.

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Income, Poverty & Housing Affordability

SF bay area median household income increases

According to the above calculations by the CA Association of Realtors, Bay Area median household income has increased by 23% since 2015, as compared to a 7% national increase (as calculated by Seeking Alpha). Among other factors, it has been reported that people moving into the Bay Area earn considerably more than those moving out.

Poverty percentages in the Bay Area

The Bay Area high-tech boom has been one of the greatest new-wealth-creation machines in history, but many residents have not shared in its benefits, or, indeed, been negatively affected by its impact on housing costs. The Bay Area ranks third for its number of billionaires (after NYC and Hong Kong, according to Wealth-X), but, on the other hand, over a million local residents live in poverty (according to the Public Policy Institute of California). We have one of the great luxury home markets in the country, and one of the worst problems with homelessness.

Q1 2018 Housing Affordability Statistics
per the California Association of Realtors (CAR)

According to CAR, despite very significant increases in median home prices and interest rates, affordability rates ticked up a little year-over-year in most Bay Area counties due to increases in household incomes. This surprises us, but we have not been able to review all the underlying data employed in the CAR Index. CAR has not yet been able to incorporate the recent federal tax law changes into their calculations, which would presumably lower affordability rates due to new limits on the deductibility of state and local taxes (such as property taxes) and mortgage interest costs. Depending on specific financial circumstances, our, admittedly unqualified, back-of-the-envelope estimate is that this will probably mean the loss of tens of thousands of dollars in federal income tax deductions for someone, say, owning a San Francisco house at the current median sales price. (Get more qualified counsel from your accountant.)

According to National Association of Realtors calculations, the San Jose and San Francisco metro areas are the least affordable in the country, just a bit below Honolulu.


Bay Area Housing Affordability Percentages
San Francisco Housing Affordability Index

Bay Area Income required to buy home

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Mortgage Interest Rate Trends

Interest rates play a large role in ongoing housing costs (for those who do not pay all cash). They have risen appreciably in 2018, but so far that only seems to be motivating buyers to act more quickly before rates go higher. Still, at some point, if rates continue to rise, presumably there would be some negative impact on the market. Though considerably above the historic lows of recent years, rates are still very low by long-term standards.

Short Term Interest Rate Trends 2018

30-Year Mortgage Interest Rates since 1981

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Bay Area Employment Trends

One of the foundation stones of the current Bay Area economy and housing market has been the spectacular increase in employment over the last 7 years, often in extremely compensated jobs: It recently came out that the median salary at Facebook was $240,000. (On the other hand, Mark Zuckerberg made a salary of just one dollar in 2017: Hopefully, he has other sources of income.)

As with all economic trends, employment numbers can also decline suddenly and precipitately, as occurred after the dotcom bubble burst. Note: We are not making comparisons between the two high-tech booms.

Bay Area employment trends

Bay Area unemployment rates historical

Additional reading for those interested:

Report: Positive & Negative Factors in Bay Area Markets

Will the Last Person Leaving Please Turn Out the Lights

30+ Years of Bay Area Real Estate Cycles

All our reports and articles can be found here: Market Analysis & Trends


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These analyses were made in good faith with data from sources
deemed reliable, but may contain errors and are subject to revision. It is not
our intent to convince you of a particular position, but to attempt to provide
straightforward data and analysis, so you can make your own informed decisions.
Median and average statistics are enormous generalities: There are hundreds of
different markets in the Bay Area, each with its own unique dynamics. Median
prices can be and often are affected by other factors besides changes in fair
market value, and longer term trends are much more meaningful than short-term. It is impossible to know how median prices or general appreciation rates apply to any particular home without a specific comparative market
analysis. All numbers in this report are to be considered approximate. 

© 2018 Paragon Real Estate Group


Goodbye Gorgeous Tree

At the corner of Magellan and Dorantes, we have been watching this gorgeous tree get cut down. Tree remover estimated it to be 120 years old. From the permits on the tree, it sounds like not everyone wanted the homeowner to cut it down. Not sure what the homeowner has planned, but hopefully some other trees will be planted in its place.

Contact Us

Sue Schlutes, Selling San Francisco’s Finest Homes
DRE# 01422014
415.307.0153
info@sueschultes.com


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1400 Van Ness
San Francisco, CA 94109

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