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Thursday, July 29, 2010
SF not the best city for renters after all?
After Jenny P.'s article on changing attitudes toward renting in this country, as well as Tracey Taylor's article on Money Watch's report that San Francisco is a better city for renting than it is for buying, the rent question is back.
But this time, for this blog, the question isn't rent vs. buy, which frankly is a highly personal question with equally individualized answers. Now it's actually whether San Francisco is such a great city for renters after all.
Knee-jerk reaction is to say, "Yes." SF census data projects the city to be composed of 65-75% renters, compared to a national average of less than 40%. And since this makes for a majority, no one should be surprised that renter-friendly policies end up on ballots, nor that they pass. San Francisco famously has some of the most stridently pro-tenant legislation in the country, if not the world.
So is this a great city to rent in? Not according to a recent study compiled by Chris Thorman of Software Advice. Thorman took data from several important rent-oriented categories and found that among the top ten best cities to rent in, San Francisco is not one. In fact, this fair city doesn't appear until #24 on a list of the top 50 most populated in America.
Thorman's research factors in the following:
* Cost per square foot of a 2-bedroom apartment
* Change in rent prices from 2009 to 2010
* Residential vacancy rate
* Rental cost as a percentage of median income
* Tenant councils
* Tenant-friendly foreclosure laws and rent control laws
Now again, most people would say the latter two categories would put SF at the top of the list. However, the former four categories do have potential to cancel the benefits of tenant-friendly policies.
Here then are the top ten cities for renting, according to Thorman's study:
Sure, he didn't factor in what makes the high rents "worth it" to some people, considerations which are both emotional and practical in nature. Such factors include art, culture, natural and architectural beauty, climate (both political and geophysical), schools, jobs, pets, and kids.
The question then, boiled down: if you are a San Franciscan at heart, Sacramento or Fresno may be a lot cheaper, but at what cost to your soul? And will your soul finally have to just shut up when you realize one day that your body has to work way too hard to live comfortably here?
| Jul 29 at 10:45 AM
Wednesday, July 28, 2010
S.F.'s housing market like the weather: unpredictable
Another data point about the housing market has been released and once again, contributes to a mixed message about the real estate climate in San Francisco. Yesterday, the S&P/Case-Shiller home price index reported that San Francisco topped 20 other metropolitan regions in the year over year price change from May 2009 to May 2010. Our city by the bay posted a 18.3% increase in its home price index level from a year ago. San Diego, the runner up, was a distant second, logging a 12.4% jump in its price level from the prior year.
While the double digit increase is welcome news to many homeowners, especially those who are underwater, the positive jump isn't providing any reassurance about where the market is heading in the future.
"While May's report on its own looks somewhat positive, a broader look at home price levels over the past year still do not indicate that the housing market is in any form of sustained recovery," says David M. Blitzer, Chairman of the Index Committee at Standard & Poor's.
Though the San Francisco region topped the 20 city list in the annual growth, the price level grew by 1.7% from April to May, a bit of a slowdown from the 2.2% increase home prices experienced from March to April. Signals that continue to point to an uneven and shaky market still for the Bay Area.
Nationwide, the 20 cities tracked by the index is up 4.6% from May 2009 to May 2010. Similarly, only 12 of the 20 cities had better month-over-month increases in the month of May than in April. The S&P/Case-Shiller index is just another temperature check, but the forecast continues to be unpredictable for the foreseeable future.
| Jul 28 at 01:28 PM
Tuesday, July 27, 2010
Reduced... and reduced: SF's biggest price cuts
As discussed in our last blog on price reductions, every buyer likes a bargain; and though we would be hard pressed to find an actual bargain in the San Francisco real estate market, those homes whose prices have come down at least give us the illusion of a "good deal" that draws our attention.
In this way a reduced price home can be a win-win. The buyers win because they get what they percieve as a good price. The sellers meanwhile win because they get to sell their home, hopefully still with some appreciable profit. Of course, we stress that price reductions can be, but are certainly not always, great for all involved. When sellers have to cut prices so much that they are selling for less than they paid in the first place... well, that ugly situation is happening all over America.
True, SF sellers do not face that hardship anywhere near as often as people might in other parts of the country-- even the state. But that doesn't mean that local sellers are immune. In fact, without much effort, buyers can find homes that have been greatly reduced from original asking. Witness:
835 Darien Way is a Spanish-Med 4 bed, 3 bath single-family with a garage, Japanese tea room, master suite, jacuzzi tubs- you get the picture. And here's an actual picture:
Since being listed, this home has been reduced a full 100K, landing it now at $1,088,000, which is actually just $8,000 more than it sold for in 2004.
A few miles away, 722 Steiner is a Victorian in the Painted Lady tradition, boasting four levels of restored splendor, plus a legal in-law unit and an attic suite with its own bath. Still though, this property has been reduced not once, not twice, but five times since it originally listed in Feb. of this year-- coming down $800K in the process to (a still steep!) $3,199,000.
Price cuts aren't always just at the high-end, either. A La Playa Street condo is down $40K to $359,999. A Bayview single-family home has been reduced to just $263K.
Right, so: Reductions are out there. If you want to see just how many, and that the reductions are happening all over the city, with every type of property, prove it to yourself. Both Redfin and Trulia allow you to search for reduced properties, or you can go to Craigslist property listings and search "reduced." And yes, you can also find properties worth less now than they were when last sold, as well as bank owned and foreclosed listings, though the latter take more work and sometimes fees to uncover.
The upshot? For buyers looking for not only the best deal, but the best understanding of what homes are worth right now, a little legwork (Easy! Just typing from the comfort of your laptop) will go a long way.
| Jul 27 at 09:30 AM
Monday, July 26, 2010
Rent may no longer be a four letter word
Several weeks ago, many readers thoughtfully shared their personal views and opinions on why home ownership is the American Dream. Though federal government policies have existed to promote a "homeownership society," many readers commented that it wasn't the mortgage interest deductions or other financial incentives that propelled them to pursue owning their own home. While the tax breaks help, it appears that many want to live in their own house due to other reasons, mainly related to landlord-tenant issues. As reader jpk1 effectively summarized:
"Many of us decided to become homeowners because we were tired of landlords who didn't perform."
Going forward however, it looks like the federal government will be singing a different tune regarding homeownership. As reported in the Washington Post, the Obama administration will be tackling housing finance reform as its next big item on the agenda. But, the message won't be a "homeownership for all," motto:
"In previous eras, we haven't seen people question whether homeownership was the right decision. It was just assumed that's where you want to go," said Raphael Bostic, a senior official in the Department of Housing and Urban Development. "You're not going to hear us say that."
NPR also talked about the possible shift in policy:
[Nicolas Retsinas, the director of Harvard's Joint Center for Housing Studies], says "rent" is no longer a "four-letter word." "In the past, you rented if you didn't make enough money," he says. "You rented if you weren't ambitious. You rented if you weren't sort of smart enough. But as it turns out, as we look in recent years, renting turned out to be a pretty smart thing to do."
In the high priced Bay Area, rent is an all too common term and didn't ever seem to be a four letter word. Renters rented because the housing prices were and still are just too expensive and out of reach for many. With the way the economics of the Bay Area work, a more balanced policy on both renting and owning may have no effect on this region. Renters made a wise decision in the past few years, regardless if it was by choice or not. With less emphasis on homeownership from the White House, would your perspective on owning vs. renting change? What if the mortgage interest and property tax deductions were taken away? Even if renting becomes the new buying, are awful landlords enough to keep you yearning for a mortgage?
| Jul 26 at 10:16 AM
Friday, July 23, 2010
The Bay Area market - it's all relative
Everyone knows that real estate is all about location, location, location and then some. Here in the Bay Area, that is especially true. Like the weather and temperature, hundreds of real estate micro climates exist all around the bay. And it doesn't just vary from one city to the next; within cities, one neighborhood can be in high demand and the adjacent neighborhood experiencing a cold spell.
Over in the East Bay, Robert Selna reports in the SFGate how some dramatically different zip codes ended up in Zip Realty's top 10 list of zip codes where homes sold above ask. Location, of course, played a main role, but the type of buyer (investor vs. primary home buyer) was a factor as well.
Further evidence that real estate can be such an individual experience is a Wall Street Journal report examining four Bay Area micro markets: San Francisco's Outer Sunset and Crocker Amazon, Berkeley and the Evergreen community in San Jose. The Outer Sunset seems to be tracking the average decline experienced by the city of San Francisco as a whole. Meanwhile, the Crocker Amazon area has experienced a larger drop. The article suggests that the overall Bay Area market is starting to rebound, though it's very uneven, depending on the community or neighborhood.
Theo Rigby for The Wall Street Journa
A San Francisco Outer Sunset home purchased in 2007 for $830,000 sold in 2010 for $1,010,000 after renovations
While all this data and news is most likely no surprise to anyone. Everyone has probably seen a house sit for months while another house just down the street sell for over asking within days. This does prove that while it's wise to keep abreast of market data and news, shopping and buying for a home is a very individual and unique experience. It's helpful to know how things are trending, but at the end of the day, no one property is like another and each home buyer's wish list is unique. So when you wonder why someone would pay such and such price for this or that house. keep in mind that as the saying goes, someone's trash is someone else's treasure.
| Jul 23 at 11:55 AM
Thursday, July 22, 2010
Seller, reduce: 5 signs you need to cut your asking price
Seller, you may already know this sad reality, but Trulia.com recently announced that more than 30% of listed homes in 20 of the largest American cities have had at least one price cut. Cutting prices is never fun for the seller, but on the other hand, doing so can entice a buyer who'd otherwise never look twice. And sometimes, selling really is necessary: not everyone can list a house at his or her chosen asking price and simply wait, arms crossed over chest, chin set in stubborn determination, until the market recovers and all power returns to the seller.
So how can you tell when it is time for a price reduction? Trulia offers five common sense signals that you may need to lower the list price of your home:
1. Multiple listing agents told you to list it lower.
Hopefully, you interviewed more than one agent to get their marketing plans and marketing analyses before you listed your property. Some agents will have different strategies for price setting. Some will base their recommendations on comps; meanwhile, some will recommend sellers list lower than market value to generate multiple offers. In the end, these recommendations are just that: recommendations. As the homeowner and seller, the ultimate list price is your decision, but make it an informed one.
2.Broker feedback says so.
Since over 80% of qualified homebuyers already have an agent, open houses are a great way to expose an available property to interested (and qualified) buyers. However, broker open houses can also provide very valuable pricing feedback. After all, if the buyers have a broker telling you or your agent that your home is overpriced, that is exactly what s/he is telling the buyers too.
Also, if your home is not selling, your listing agent can and should contact the agents who have shown your home to their clients, but failed to make offers, to see if the price was an issue.
3.Your home is not being shown at all.
These days, buyers and their agent search for homes online primarily by minimum bedrooms, minimum bathrooms and maximum price. If the other homes meet the required size and other desired qualification but are listed lower than yours, buyers may have no reason to see your home at all.
4.Your home has been on the market way longer than average.
The DOM (average number of Days On the Market) for homes like yours, in your neighborhood, before they go into contract, is actually public record now through various real estate search and information sites like Redfin.com. If the local DOM for comparable properties is 30 days, and your home has been on the market 60 days, with no bites, you need to slash the list price.
5.You've received multiple offers: all lowballs.
If you have received more than one offer for your home, but the prices offered were way below your list price, reduce! Buyers are finding your home compelling, but the market does not bear the asking price.
Though you may not initially think so, such a situation is kind of a blessing. It means that if you do drop the price, your chances of selling are very high. If all your lowball offers came in at around the same price point, the market is telling you the right price for your home (although you can maybe create a bidding war and get a little bit more with multiple buyers making offers in the same price range).
For instance, here's a property that caught our attention: Not only is it attractive, in a fairly central, family-friendly area, but this 4 bed/2 bath single-family home at 2321 16th Ave. was reduced $46K on July 15 of this month. Bet if you were a buyer looking for a house that size in the Golden Gate Heights/Inner-Sunset area who bypassed this house before, when it was well over $800K, you're going to look again now.
See, buyers love a reduced price. Instead of thinking that reducing signals failure or weakness, you should consider that doing so is like putting a great big neon sign over your home: Look at me! Buy me! Great deal! Only you won't need so many exclamation points to get the message across.
| Jul 22 at 10:34 AM
Wednesday, July 21, 2010
Avoid foreclosure by becoming a part-time innkeeper
Profiled in SFGate earlier this year, Airbnb is one of the handful of social B&B sites that have sprung up to connect travelers with local hosts and offer an alternative to fancy hotels or no frills hostels. These sites provide residents, like you and me, the opportunity to offer accommodations to out of town travelers, who are seeking local flavor and a cost effective temporary roof over their head. What one offers need not be fancy. It can be as budget as a simple air mattress on the living room floor to that luxurious 2nd apartment you've been keeping up in the wine country for weekend getaways.
While travel is the primary focus of these social B&B sites, they too have been affected by the crumbling real estate market - but in a good way. These sites have served as saving graces for homeowners on the brink of foreclosure. As reported in Bloomberg, these social B&B sites have helped struggling homeowners make an extra dime by offering out part of their home to travelers and avoid default.
A woman in Brooklyn, three months behind in her mortgage payments, successfully converted part of her three unit house into a short term rental business:
With bills mounting and foreclosure looming, [Nichelle] Morant converted the space into a bed and breakfast. Using the San Francisco-based rental site Airbnb.com to take reservations, she was soon raking in $4,500 a month, enough to cover her mortgage.
While it is not the intention of the sites to help struggling homeowners, this byproduct is a sign of the times.
"We've made a huge contribution to saving a whole bunch of homes," said Airbnb's [Brian] Chesky, who's received more than 300 e-mails from customers that were on the brink of losing their residences. "There were so many people who just couldn't pay their mortgage and couldn't sell their home."
Despite this clever way to seek relief, the lodging and hospitality industry aren't too thrilled. State lawmakers in New York just passed legislation banning short term rentals of less than 30 days in apartment and multi-family dwellings, which will affect homeowners like Nicelle Morant, who may no longer provide her bed and breakfast service and possibly risk foreclosure again. The city of San Francisco does not pose any type of restriction, though there are other considerations, such as condo by-laws or home owner association rules which may have a word or two to say about short term rentals.
Since the bay area is a top destination locale for tourists, this is a great option if you are interested in meeting out of town travelers and generate some extra funds from your humble abode, regardless if you are in dire need or not. Would you become an innkeeper to keep your house? What other creative solutions have you seen or tried?
| Jul 21 at 06:00 AM
Tuesday, July 20, 2010
Live like Martha: unique planned communities
One of the many things that the majority of us who live in the Bay Area love about the region is the diversity of the cities and communities that make up this area. From the physical landscape and weather to the various cultures of Bay Area residents, one can go from the northern border to the southern fringes and, in essence, travel the world.
There is something to be said, however, for living in an area that caters to a desired lifestyle. And that's how many new home developments often market themselves. While new home communities exist in the Bay Area, none are as extreme as some other master planned communities across the country. Fortune recently highlighted some unusual planned communities that have attracted those who want to live on a theme, such as religion or even Martha Stewart. Interestingly, of the five communities the article highlights, three of them are in Florida.
A quick overview of the communities on their list:
1. The Villages in Central Florida: If you are 55 or older and want to live in a camp like environment in your retirement, this might be the place. No resident under 19 is allowed and children can't visit for longer than 3 weeks straight. Oh, and a golf cart is the preferred mode of transport.
2. Twin Lakes in Cary, NC: Martha Stewart wannabe? Then move on in to these homes co-developed and designed by KB Homes and Martha Stewart Omnimedia. Floor plans and paint colors all inspired and approved by Martha.
3. Celebration, FL: Inspired by Walt Disney and developed with hope for a utopia of living. The description seems to recall the neighborhood on the "Truman Show" movie.
4. Ave Maria in Naples, FL: If religion is your calling, then this might be the place. While primarily developed around the Catholic faith, it bills itself as open to every religion, ethnicity and age.
5. Sienna Plantation in Missouri City, TX: The unusual thing about this one is the fact that this area was previously a plantation for sugar cane and cotton. However, the grand plan is to have parks, nature preserves and trails mixed in with the golf courses and 20,000+ homes.
Any of these communities appeal to you? What kind of theme community would you develop?
| Jul 20 at 04:31 AM
Monday, July 19, 2010
Live where Marilyn Monroe died: Norma Jean's Brentwood home for sale
Oh, if walls could talk...
The fetching, Spanish-y looking 4 bedroom, 3 bath home where Marilyn Monroe lived, was listed this month for $3,595,000. When she bought the home herself in 1962, she paid a reported $90,000.
It's not the first time this historic (haunted?) home has hit the market; it's changed hands several times since the icon herself died in it. And accordingly, its look has changed as well. Here's a shot from Marilyn's day, via the LA Times.
Less like a 50's night club and more like a typical Southern California home now, the staging at least seems to hearken back to the home's original feel, since Marilyn is said to have traveled to Mexico, purchasing furnishings and rugs for this place when she owned it.
Refreshingly, unlike the expected mega-mansion we'd expect from a celebrity of this stature (or any stature, frankly), the dimensions aren't gargantuan and subsequent owners have not felt the need-- at great expense to the environment, their neighbors' views, and their own bank accounts-- to expand the home past its 2,624 square feet. The bulk of this property is in the lot itself (over 23,000 square feet), including a very Hollywood-esque swimming pool along side which one can easily picture Marilyn, spilling out of a white one piece.
Sadly, Marilyn poolside is not included with the sale, though no doubt fans can buy that bathing suit somewhere, EBay or Sotheby's or some such. That plus bleached platinum hair and one might mistake oneself for the lady herself. For surely, such fantasy is part of this property's asking price.
| Jul 19 at 10:30 AM
Friday, July 16, 2010
June Bay Area stats - tough times on the horizon?
June statistics are out for the Bay Area real estate market. As reported today in SFGate, Bay Area sales declined 3.1% last month when compared to June 2009, and was due in part to the expiration of the federal government's homebuyer tax credit program on April 30th. Interestingly, while year over year sales were down, sales were actually up by 1.3% in the Bay Area when compared to the month of May. While national incentives are no longer, Bay Area home shoppers seem to still be on the hunt, spurred on by the state's tax credit rebate program.
Along with this mixed news in sales data, the number of listings rose in the month of June, both nationally and in the Bay Area, according to the Developments Blog in the Wall Street Journal. In what is usually a traditionally slow month in terms of listings, the article also pointed to the ending of the federal government's incentives as a factor in the rise in the number of homes for sale.
Inventories typically decline modestly in June, as the summer slowdown begins...[It] grew amid signs that demand plunged after the expiration of the home-buyer tax credit.
The number of Bay Area homes on the market increased by 8.7% from May to June, with 22,403 homes looking for new owners. This number is expected to keep growing well into the rest of the year:
Inventory could continue to rise over the second half of 2010 as more banks take title to homes through foreclosure. More than seven million households are behind on their mortgage payments or in some stage of foreclosure.
Looks like it's still going to be a rough road ahead for the Bay Area housing market.
| Jul 16 at 10:00 AM
Daily commentary on the nation's most diverse and unpredictable real estate market.
By Anna Marie Hibble, Carolyn Said, Robert Selna, Read Bios
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