April 9, 2009
Priced at nearly $10,000,000, this former church is still a bargain 585 per square feet. At 17,000 square feet, this may not be the largest single family home in San Francisco. It nominally has 3 bedrooms and 2.5 bathrooms, but it also has an enormous living room and 4 to 6 car parking.
The home’s most stunning feature, however, is entirely transparent two story circular staircase to the bell tower, which is now enclosed as a view pentroom. When I toured the home we were asked to remove our shoes before climbing the glass staircase and I have to admit the climb down in bare feet was one of my more thrilling Tuesday Tour experiences. This property is looking for just the right owner or a developer to take advantage of it’s R-3 zoning. Could it be you?
April 9, 2009
CITK and friend architect James Dixon has some wonderful new resources on his Web site.
The first is an article entitled “10 Ideas for Home Improvement in Today’s Economy – What the Smart, Careful Money Stays at Home.” He discusses why investing in improving your home is a good idea and offers project guidelines and ideas. Click on the picture at right to download the article or click here.
The 2nd article is part of James’s continuing effort to educate people about San Francisco’s architectural styles. I’m sure a number of you have heard me enthusing about this cirricumlum over the past couple of years. I encourage you to read Victorian & Edwardian Residential Architecture in San Francisco because it will enrich your life and help you to make better decisions about home improvements over the years. Click on the image at right to download the article or click here.
Thanks for the great resources James! If you want to reach James for help with a project or just to tell him how much you like his articles, he can be reached at firstname.lastname@example.org. To visit his Web site, click here.
The below is a detailed analysis of current market conditions in San Francisco. The quick and dirty jist of things is: lots of properties are sitting on the market at much higher prices than they will eventually sell for. If you are a buyer, and you see something you like – go for it! If you are a seller, beware the temptation to “leave room to negotiate.” It will cost you in time and ultimately in sale price. Finally, if you are thinking of buying or selling in this complex market, be sure to ask for the help you need. Please always remember, I am here with a great team of financial, staging and marketing professionals to help you and yours get it done with the best possible outcome.
At current market trends, over the next month:*
- 1400 active house & condo listings will be joined by 600 new listings.
- 1 in 7 or 8 of those listings will accept an offer to purchase.
- 1 in 8 will expire or be withdrawn from the market (didn’t sell).
- 1 in 4 will reduce its asking price.
- 75 active bank-owned (REO) homes will be joined by 45 new REO listings: 1 in 3 will accept offers.
- Of the listings that do accept offers, 1 in 3 or 4 will come back on market because the purchase fell through — typically due to financing difficulties, property condition issues or buyer remorse.
*All numbers are approximate; neither TIC sales nor non-MLS new-development sales are included.
List Price, Offer Price, Sales Price
- Of the house and condo listings that SOLD in the first 2.5 months of 2009:*
- 1 in 4 accepted offers within about 15 days of going on market, i.e. almost immediately. Of these, the houses averaged a sales price of about 1% over asking price, while condos averaged about 4% below asking.
- The supply and demand equation is currently weaker for condos than for houses; the equation for TICs and multi-unit buildings is much weaker still — financing is now very difficult for these properties.
- Those accepting offers after 45 to 75 days on market sold at an average of 3% to 4% below last asking price and 7% to 10% below original list price.
- Those accepting offers after 105 days on market sold, on average, 4% to 5% below last asking price and 14% to 18% below original price.
- No matter how long a home was for sale, it still sold, on average, within 3% to 5% of the last price, even as — with price reductions — the discount off the original price grew much larger as time passed.
* For SF house and condo sales reported to MLS by 3/17/09. City districts with high foreclosure rates, as well as confidential sales and ultra high-end sales were excluded to avoid distorting general market statistics.
What it Means
The vast majority of buyers and buyers’ agents will NOT make an offer until they perceive the property’s asking price to be within 5% of “market value” (i.e. what they’re willing to pay).
1) They don’t want to waste time and emotional energy on a listing they consider significantly overpriced, since they believe coming to an agreement with the seller is unlikely. Or
2) They’re uncomfortable with the possibility of provoking a negative reaction from seller or listing agent.
Generally speaking, ours is not a society comfortable with aggressive negotiating, even though it can reap large rewards. Remember that a negotiation is a conversation between buyer and seller that doesn’t really begin until an offer is made. And until it’s made and the negotiation concludes, no one knows what price and terms might result — so don’t make ironclad assumptions based upon either asking price or initial offer price.
Lessons for Buyers
If you see a home you like, ask yourself: at what price would you be a buyer? Review recent comparable sales and market trends with your agent, and then make an offer — at or under whatever price you’re willing to pay. The first rule of negotiation is, “You never know until you ask.” A few buyers are negotiating discounts of 10% to 25% off list price, because they’re unafraid to make low offers.
Don’t waste time asking the seller or listing agent if they would entertain a low offer — they almost always say no (out of pride and/or a misunderstanding of how negotiations proceed). No one knows how anyone will actually react to an offer until the offer is made.
Ultimately, the home you buy will be a good or great value based upon the price you pay, not the price the seller asks. So focus on the first, instead of the second.
That said, those properties perceived as excellent values are still generating offers — and sometimes, multiple offers — quickly, and a home purchased 20% below asking price is not necessarily a better value than another purchased at full price: it all depends on the property and how it was priced to begin with.
Lessons for Sellers
Never discourage buyers from making offers. Counter-offer unacceptable offers instead of rejecting them outright.
Those 25% of sold homes which accept offers within 2 to 3 weeks of going on market achieve the highest percentage of sales price to list price. To do so in today’s market, your property must stand out as an excellent value: priced, prepared and marketed perfectly.
A listing will never get as much attention as in its first few weeks on market and pricing properly to begin with almost always results in more money than starting out high and reducing later. Most buyers will NOT make offers on homes they consider over-priced — and the longer a home stays on the market, the less value it holds in buyers’ calculations.
If you do need to make a price reduction — and in a changing market, the right listing price can change — do it as soon as possible and make it dramatic enough to recapture attention.
The only definition of fair market value that counts is: “That price a qualified and reasonably knowledgeable buyer will pay to a willing seller after the property has been properly exposed to the market.” To make it more complicated, that price is changing all the time.
Paragon in a Changing Market*
For SF home sales (house, condo, TIC) from October 15th, 2008 — when the 9/15/08 financial meltdown began to show up in sales data — through March 16, 2009, Paragon had the highest average sales-per-agent of any brokerage in the top 10 with at least 20 agents: higher than Sotheby’s, McGuire, Hill & Company, Pacific Union, Coldwell Banker, Zephyr, Vanguard and Alain Pinel. Paragon also had the lowest days-on-market figure of any of those companies. And year-over-year for this period, our market share increased by 38%.
As the market becomes more challenging, we’re working harder for our clients and obtaining superior results.
*Per Broker Metrics, for SF home sales reported to MLS as of 3/16/09
The purchase or sale of one’s home is typically one of the largest, most complicated financial transactions of one’s life. The quality of agent working on your behalf — his or her competence, integrity, work ethic and commitment to your interests — can make an enormous difference in the outcome. In this market where so many companies are shrinking, Paragon continues to grow because of our strategy of hiring only the best agents with the ability to generate business through referrals that are earned based on long-term competetent service to our community. I am committed to being your real estate advisor for life and sincerely appreciate the continuous support you all provide to my business.
All data from sources deemed reliable but subject to error or omission, and not warranted. 3/25/09
April 9, 2009
Paragon’s new listings this week certainly run the gamut on price point. There’s something for everyone! As always, feel free to share with your friends and let me know if you’d like a sneak peek!
$2,849,000/ South of Market/1417 15th St. BR/BA: 2/2.5 PKG: 3 Brief Description: Incredible one of a kind 8500 +/- Sq. Ft. Live/work loft with vaulted ceilings, exposed steel , the big cool sliding barn door, fireplace, the works. Free-standing building. Look for the martini/jd grand opening invite!
$1,950,000 / Noe Valley/4110-4112 24th Street BR/BA: 0 PKG: 0 Brief Description: Noe Valley 4 Unit Victorian Commercial building. One tenant other offices are owner occupied
$1,595,000/Marina/ 1756 North Point BR/BA: 3/3 PKG: 1 Brief Description: Beautiful, traditional spacious flat. Very well maintained and updated building with huge manicured garden, Deeded parking and plentiful storage
$1,549,000 /Cole Valley/ 167-69 Downey BR/BA: 167 – 3/2 BR/BA: 169 – 2/1 PKG: 2 Brief Description: two unit building with views, garden, upper unit is two-levels
$1,349,000/Marina/3530 Webster St. BR/BA: 2/2 PKG: 2 Brief Description: Fabulous, large (1560 SF) updated 2-bedroom, 2-bathroom condo with 2 car parking (!!) in a 2-unit building. Great location just off Bay Street.
$1,149,000/ Duboce Triangle/ 23 Beaver (at Noe) BR/BA: 2/1 PKG: 2 Brief Description: SFR w/1br in-law Victorian home in need of updating
$995,000/ Cole Valley/ 955 Clayton #1 BR/BA: 2/ 2.25 PKG: Brief Description: B’ful Arts & Crafts condo, over 1,900 sq. ft.,w/gourmet kit, hardwood flrs & nice views
$990,000/ SOMA / 355 Bryant St. #107 BR/BA: 1/2 PKG: 1 car leased Brief Description: Stunning Brick & Timber Loft with 20 ft ceilings, exposed wood beams, courtyard outlook, & a timeless renovation. Den area converts to a guest bedroom leading to a guest bathroom. Outstanding storage space.
$799,000/Glenpark/145 Swiss BR/BA: /2 PKG: Brief Description: Cute, light filled home on a quiet, tree lined street-just a block to Glen Parl Canyon & 5-6 blks to BART. 4 rms up, additional (unwarranted) rm & ba down. Hdwd flrs, built in bookcases, newer eat in kit. Secluded deck & yard.
$628,000/ Parkside/ 1938 34th Ave BR/BA: /1 PKG: 1 Brief Description: Nicely updated Parkside charmer; junior 5 w/large eat in kitchen, skylights, bonus room/bath down w/out permits, deep lot. (Open Sun 1:30 – 4:30)
$595,000/ Inner Richmond/ 795 8th Ave., #401 (at Fulton) BR/BA: 2/1 PKG: 1 Brief Description: Light filled corner unit across from Golden Gate Park
$545,000 /Financial District / 201 Sansome St. #305 BR/BA: 1/1 PKG: 0 Brief Description: Sophisticated residence in The Royal Insurance Bldg. Fully furnished – contemporary,high end finishes, hdwd throughout. Roof Terrace.
$398,000/ Nob Hill/ 1177 California St # 203, BR/BA: 0/1 PKG: 1 Brief Description: Well appointed studio across from Grace Cathedral that is move-in ready at Gramercy Towers. Includes high-end, custom Murphy Bed that serves multiple functions with built-in shelving, this home is ideal for the first time home buyer or a pied-a-terre and has views to Twin Peaks and partially south (Must See). Building is a full amenity property and HOA includes earthquake insurance and most utilities, inquire with agent about details, what value!!!
$TBD / Noe Valley / 228 30th Street BR/BA: 3 / 1 PKG: 2 Brief Description: Spacious home with expansion possibilities down. Great walking and commuting location, near many shops and eateries. Beautiful yard.
$TBD/ SOMA / 300 3rd Street – Museum Park BR/BA: 1/1 PKG: 1 Brief Description: Very delightful one bedroom unit (almost 900SF), remodeled kitchen, wood floors, in-unit laundry, leased parking in the building
$TBD / Corona Heights / 146 Beaver St BR/BA: 1/1 PKG: 1 Brief Description: Meticulously maintained condo in Marina-style building. Remodeled kitchen and bath. Period detail and woodburning fireplace. Huge storage in garage. Downtown views. Approx. 863SF per the condo map.