And You Thought San Francisco Home Prices Were High?

According to an interesting story in The Economist, home prices in the U.S. might not be over-priced when compared with other countries.  The outrageously high home prices in Hong Kong, Australia, France, Spain, Sweden (and other developed countries) make American real estate look like a relative bargain.

To Rent or To Buy? That is the question.

Prospective clients often ask me how they can calculate whether it makes sense to rent or to buy.  Finally there is an excellent Rent vs Buy calculator from the New York Times that calculates the variables quickly and accurately.  Check it out here.

Case-Shiller Home Price Index

The latest Case-Shiller Home Price Index Report has just been released.  This report has long been the holy grail of the US real estate market.

Take a look.

Excitement at Ike’s Place

The outrageously popular sandwich joint Ike’s Place seems to be falling victim to its own success.  This well-known Castro sandwich joint has been the focus of complaints by neighbors.   Numerous grievances about long lines of customers, the odor of bacon, and general noise have been filed by residents in the area as well as the building’s landlord.  Those complaints combined with an apparent issue with the Ike’s permit status have led to a judge issuing an eviction date of August 26th.   Read more here.

San Francisco Rental Statistics

I’m often asked how the rental market is doing.  The answer can be found on an interesting mash-up site called SFRentStats which rolls up all of San Francisco’s past & current Craigslist rental listings.    There are some cool features on the site, but the most useful to me are the graphs showing historical rents.  Check out the site here.    Click on Overall Stats and then Graphs of Rents Over Time.   Like it?  Hate it?  Let me hear from you.

Better Late Than Never: Here Comes Tower Two on Rincon Hill

A second Rincon Hill condo tower is now moving forward.  Until now, the solitary 60-story One Rincon south tower has long seemed out-of-place with no immediate neighbors.  Looking like a tall, lonely oscillating fan to many locals, the single building has been an odd sight hovering over the Bay Bridge entrance ramp.  The new smaller second tower across Harrison Street might help to even things out, standing at 45 floors, it was planned years ago but was put on hold as a result of the recession.     The SF Examiner reports that Gavin Newsom signed the green light legislation yesterday .

California Now Requires Carbon Monoxide Detectors in Single-Family Homes

On May 7, 2010, the Governor signed SB 183, a bill that requires all single-family homes (that have fossil fuel burning appliances, fireplaces, or an attached garage) to be retrofitted with a carbon monoxide device (CO) on or before July 1, 2011—six months after the effective date of the bill.   More details of the requirement can be found here.

Prices are Up, Time on the Market is down

The past year has been interesting in SF.  The median price for single family homes has increased by almost 12% (greater than any other area of the country).  Also interesting,  the average length of time that a property sits on the market has dropped by a third, from 54 days down to 36 days.   A common barometer of the state of any housing market is the MSI (Months of Supply of Inventory).  This is an estimate of how long it would take to deplete all available home inventory.  This figure has dropped from 4.4 to 3.9 months.   Is this a complete market recovery?   Maybe not, but it is certainly hard to ignore annual trends like these.

More details here:   SF Single Family Home Snapshot

Size Matters

Ask 10 SF residents to describe what they love about our city by the bay and you’ll probably get 10 different answers.  One thing that most would agree on though is that they love the compact size of San Francisco.   Essentially surrounded by water, we are lucky enough to live in a place that has weathered nationwide housing market volatility pretty well.  In my opinion, some of that is due to the fact that there is just no available land to build new homes here, which means that our housing supply generally never increases dramatically.  This concept is the opposite of what’s happened over the last few years in places like Phoenix, Las Vegas, Tampa, and other cities where land is plentiful and prices bottomed out as available inventory far outpaced demand.  A recent article at Smartmoney.com echos this as San Francisco posted an 11.9% increase in home values over the last year (the highest in the nation).  It seems that being small may be one of San Francisco’s largest assets.

San Francisco tops the list (for the seventh time)

A key vital sign of the American real estate market was just released yesterday (cool, maybe it will help make sense of this market!). The Case-Schiller Home Price Index summarizes the state of home prices nationwide and is considered one of the more reliable real estate market barometers.

The report revealed that for the seventh month in a row San Francisco has seen positive growth in single family home prices.  (FYI, condos and TICs are not included in this report).

The report shows that San Francisco home prices increased by about 1.7% in October.  Compared with the free fall of prices going on in many cities around the country, the 7 month upward trend is hard to ignore.  This is especially clear when compared to cities like Las Vegas which has apparently lost a big bet and is now in its 38th month of consistent price declines.

In a way, none of this should really be much of a surprise.  We live in our own microcosm here in our city by the bay.  Defying trends and bucking the system is what we’re all about.  Its been that way for years.   It seems to me that the small geographic footprint of SF combined with relatively limited inventory may have insulated us from some (but not all) of the volatility that has plagued other areas.  We simply never had the luxury of turning thousands of undeveloped acres in to many thousands of new beige stucco homes complete with granite counter tops and huge garages (think Florida, Arizona, and Nevada). This seems to have kept our excess housing inventory (and resulting major price drops) to a minimum.  Sure, SF still has a boatload of new construction condos to sell but that is about the extent of our excess inventory these days.

Of course, SF is not immune to price declines.  We experienced an 11% drop in median sale price for single family homes over the last 2 years, but that roller coaster seems to have reversed as of 7 months ago.  Condos, TICs, Coops, and Lofts dropped 14% over the same period but that segment of the market has yet to show any upward price movement.

With all that said, there are definitely some amazing deals in SF for buyers these days.  Especially in the TIC and condo market.  If you are curious about what’s on the market, feel free to take a look at MLS Direct.  It’s free (I pay for it, you don’t), its easy, and it shows you 100% of every listing out there in real-time.  Create a password and you’re on your way.

For more on the Case-Schiller Report and all this home pricing stuff check this out.

As always, I welcome your comments.