I’ve been making the case recently that SF’s enormous run-up in prices has caused formerly overlooked or “B” neighborhoods to suddenly become the latest battlegrounds in the bidding wars. The reasons’s simple: with more and more people priced out of their first choice neighborhoods, they are increasingly moving on to their second and even third or fourth choices.
Bernal Heights has always had its charms — fine weather, great views, and pretty good freeway access, depending on where you are. But, with its wicked-narrow streets and generally modest housing stock, it’s often been seen as the poor cousin to Noe Valley or even Potrero Hill.
Not any more, apparently. According tothis recent article at SFGATE, Bernal Heights was just picked as THE hottest neighborhood in THE COUNTRY, according to Redfin, the national real estate brokerage company. They based their findings on such metrics as how often their users saved Bernal Heights homes to their “favorites” list, how often the area was searched, etc. That sort of attention has resulted in a median sales price increase of 38.2%, according to Redfin. Our own numbers come in at a more believable 20.3% change for the average home price.
Still, there’s no doubt that Bernal Heights has finally “arrived” as a neighborhood.
Fiesta on the Hill is a community based, high-profile and energetic Festival with an attendance of over 20,000 friends and neighbors from San Francisco’s Bernal Heights area, neighboring communities and the greater Bay Area. The event is in its 25th year and continues to grow and enhance the ethnic, cultural and economic diversity of the Bernal Heights District of San Francisco and surrounding neighborhoods.
Presented by the Bernal Heights Neighborhood Center, an organization devoted to community action, equity and justice in the Bernal Heights area, the 25th annual Fiesta is an alcohol free event that emphasizes the importance of well being to the vitality of the neighborhood. The event includes a petting zoo, pony rides, a pumpkin patch, non-profit booths, live music on two stages, great food and a great sense of healthy, inclusive community.
Sunday, October 20, 2013 from 10:00 AM to 6:00 PM PST Cortland Avenue from Bocana Avenue to Folsom Street, Bernal Heights, San Francisco No admission fee
5 White-Hot Districts in a Red-Hot San Francisco Market
July 2013 Report
Virtually every area of San Francisco and the Bay Area has been experiencing dramatic home-value appreciation in the past 12 to 18 months. Some that were hard hit by distressed property sales, which experienced the largest price declines, have surged in price but remain 20% – 30% below previous peak values reached in 2006 – 2008. As a state, California is still about 25% below its 2007 pre-crash median home price. And in San Francisco itself, many if not most neighborhoods now appear to have re-attained or moved slightly beyond previous high points.
But in this past quarter, a handful of neighborhoods and districts in the city have leapt well beyond the highest average home values achieved in the past. Interestingly, comparing these white-hot areas with one another, there are often huge differences in property type, era and style of construction, and neighborhood culture or ambiance. But all of them have been very affected by affluent – often newly affluent – high-tech professionals of one age group and level of affluence or another. Naturally, these neighborhoods are highly desired by other buyers too – often professionals in finance, bio-tech, medicine and law – but the high-tech-buyer dynamic has generally super-charged these markets in particular.
However, please note that the difference we’re talking about between these neighborhoods and the rest of the city is between white hot and red hot: Honestly, they’re all very hot markets right now.
The Inner Mission Super hot, super hip, generally young: this neighborhood has seen very dramatic changes since the early nineties as a classic process of gentrification occurred — changes which have recently accelerated. Houses here are often large, classic Victorians, while the condos are mostly modern, built within the last decade or so. This area has a large, vibrant and diverse commercial district centered around Mission and Valencia Streets, but is still close to Noe Valley and the Castro. This chart focuses on the condo market, in which values are approximately 15% above the previous peak.
Noe Valley – Eureka Valley (Castro) – Dolores Heights These neighborhoods are part of a district that includes Cole Valley, Ashbury Heights, Clarendon & Corona Heights, Duboce Triangle, Mission Dolores and Glen Park, all of which have seen enormous recent appreciation. Housing here is typically older, built in the first 4 decades of the last century; there are many parks for kids and pets; the streets are tree-lined and the ambiance of the neighborhoods is relaxed and family friendly. This district surged in popularity and price in the mid-late nineties, was one of the last to peak in value in 2008, and has been at the forefront of the market rebound which started early here, in 2011. Among other advantages, it has relatively easy access to highways south to Silicon Valley. The district also has a large condo market, but this chart focuses on house values. Numbers Table
South Beach & Yerba Buena After the Embarcadero freeway came down in 1991 and then AT&T Park built in 2000, this area changed from a place for B and C-class offices and car stereo installations to the home of some of the most dramatic and expensive condo and loft buildings in the country. More condos are now sold here than anyplace else in the city and high-floor units with staggering views often sell for millions of dollars – one sold for $28 million. It’s popular with a number of demographics – high-tech and bio-tech workers working in offices nearby in SoMa and Mission Bay, financial district professionals, and empty-nesters who want to enjoy city life and have all the amenities, but without the responsibility of maintaining a house. Affluent foreign buyers are also a significant segment. Its neighborhood ambiance is very urban. This chart is for condos below the price of $1,800,000, but the dynamic for ultra-luxury condos is also white hot, with an average dollar per square foot value of over $1200. Numbers Table
Bernal Heights Like Noe Valley and Glen Park, this was originally a blue-collar neighborhood filled with Victorian houses. Noe Valley soared in value first, becoming wildly popular, and now people who want a similar family-friendly neighborhood ambiance, but at a more affordable cost, have increasingly turned to Bernal Heights. It also has easy access to highways south to the peninsula. Numbers Table
Hayes Valley-North of Panhandle (NoPa)-Alamo Square This condo market is made up of two totally different types of property: Edwardian flats that have been turned into condos and brand new, ultra-modern condo developments. The Hayes Valley commercial district is very hot and hip, similar to, but still different from the Mission’s Valencia Street. Buyers who are priced out of the nearby Cole Valley-Haight Ashbury condo market often look here for a similar neighborhood ambiance at lower cost. Hayes Valley is also close to the Civic Center cultural cluster of museum, opera, symphony, ballet and other performing arts, which attracts another buyer demographic as well.
If you have questions or would like information regarding a neighborhood not listed above, please call or email.
Statistics are generalities which usually mask large disparities in the underlying individual sales: they are best used as indicators of longer term trends. Average and median statistics are often affected by factors besides changes in value – buyer profile, inventory available to purchase, significant changes in the distressed or luxury home segments – and how they apply to any specific property is unknown. Only a certain percentage of sales report square footage: average dollar per square foot values and average size are based on those that do. However average sales price is based upon all sales, thus there may be inconsistencies between the three statistics. All data from sources deemed reliable, but may contain errors and is subject to revision. Numbers should be considered approximate.
Potrero Hill Houses: another challenging place for statistics because of the low number of sales and the variety of houses that do sell. Median and average prices jump all over the place, but there’s a relatively clear, consistent story for dollar per square foot.
Below are 3 maps delineating recent median home sales prices and/or average dollar per square foot values for San Francisco neighborhoods and communities around the Bay Area. These statistics are generalities which may fluctuate for a variety of reasons, but still give an idea of comparative home values in and around the city.
Generally speaking, home price appreciation is continuing and indeed accelerating in 2013, extending the upward swing that began in 2012. This is being supercharged by increasing demand meeting inadequate supply. For more information about current market conditions and trends, please click on the “Market Dynamics Charts” link above.
In the maps below, “k” signifies thousands of dollars; “m” signifies millions; “$/sf” means average dollar per square foot; and “N/A” means there wasn’t enough data to generate a reliable number.
Home Values around the San Francisco
San Francisco Neighborhood HOUSE Values
San Francisco Neighborhood CONDO Values
Real estate statistics in the Bay Area are based upon that relatively unique basket of homes that happen to sell within any given period, so instead of being exact measurements applicable to specific properties, they should be considered indications of the direction and approximate scale of market trends.
Median price is that price at which half the sales occurred above and half below – a single additional sale can sometimes make a 3-5% difference in overall median price, especially when the number of sales is low. Dollar per square foot is based on “livable space”, which should not include decks, patios, yards, garages, unfinished basements and attics, or rooms built without permit (“bonus rooms” and “in-law apartments”). Square footage figures are often unreported, measured in different ways or simply unreliable. Both these statistics can be affected by other factors besides changes in value, such as seasonality, available inventory, variations in buyer profile, changes in the distressed and luxury home markets, and variations in average home size (all things being equal, a smaller home will have a lower sales price but a higher dollar per square foot value than a larger home). These analyses were performed in good faith with data derived from sources deemed reliable, but they may contain errors and are subject to revision. If you have any questions, please contact us.
In 2012, the market turned with a vengeance and grew very hot very quickly. Now in 2013 it has grown even hotter. Recent deal-making stories almost make the seemingly crazy, multiple-offer tales of last year appear sedate. The supply of listings is drastically low against buyer demand, and the pace of price appreciation looks to be accelerating. Some city neighborhoods appear to be surpassing the previous peak values reached in 2007-2008. As seen below, the first quarter’s numbers reveal big increases in home values year over year. And the month of March alone saw a particularly big jump of almost 9% above February’s median price.
March sales prices reflect the heat of the market 4-8 weeks earlier, when the offers were actually negotiated. Much of the first quarter’s sales data reflects offers negotiated in late 2012. In a rapidly changing market, we’re always looking in the rearview mirror.
How Does Supply & Demand Affect Prices? The past 18 months give a text book example of how the supply and demand dynamic affects home values. Months supply of inventory (MSI) measures the strength of buyer demand against the available inventory of homes to purchase: the lower the MSI, the hotter the market. The hotter the market, the greater the upward pressure on prices.
Sales Prices Over & Under List Price As the market has strengthened, the percentage of SF homes selling for over — and sometimes far over — list price, has soared to almost unbelievable levels. In the last 2 months, 30% of SF house sales have sold for 15% or more above asking price.
This link shows the huge decline in inventory since the market turnaround began. Typically, we see a surge in early spring. Not this year, at least not so far: Inventory of Listings for Sale
Percentage of Listings Accepting Offers This is another excellent indicator of demand vs. supply, and it is now at the highest levels in memory for virtually all property types.
This link goes to our chart on average days on market. Generally speaking, the hotter the market, the faster listings go into contract and that is what we are indeed seeing now: Average Days on Market
Here’s our latest in-depth price survey by neighborhood and property type. We begin, above and immediately below, with the quintessential American dream: the 3 bedroom single family home. There were 445 sales spanning the five month period from September 2012 through February of this year, making this the second most popular property type in number of sales after two bedroom condos.
San Francisco Home Values by Neighborhood & Bedroom Count
The March 2013 Paragon Market
We’ve just completed our semiannual review of SF house and condo values by average and median prices, average size and average dollar per square foot for sales occurring September 1, 2012 – February 28, 2013, as reported to MLS.
The maps contain median sales price data only, while the tables include the full range of value statistics. (The tables are easier to read, but they’re not as colorful.) If a price is followed by a “k” it references thousands of dollars; if followed by an “m”, it signifies millions. Remember that medians and averages are very general statistics.
Further down in the newsletter are charts tracking supply and demand dynamics and price appreciation trends for the city’s residential real estate market. Statistical definitions can be found at the very bottom. For the smaller images, you’ll need to click-to-expand them to really make them decipherable.
4-Bedroom House Values This is the table for 4-bedroom house sales over the past 6 months. This link goes to the full analysis by property type, neighborhood and bedroom count. Neighborhood, Property Type, Bedrooms
2-Bedroom Condo Median Price Map A map of median sales prices for 2-bedroom condos around the city. The table in the full analysis provides further statistical measures. Full Analysis
Trends in Inventory & Sales Volume Sometimes there’s nothing like a chart to depict trends. Here one can clearly see the drastic decline in inventory. And this link goes to a chart on Months Supply of Inventory, another statistic of supply and demand: Months Supply of Inventory
New Listings Coming on Market The quantity of new listings ebbs and flows by season, however even accounting for seasonality, the number of new listings coming on market is much lower than usual. And this link shows the increasing demand since the market recovery really got underway in 2012: Percentage of Listings Accepting Offers
Median Price Trends by Month Monthly price data often fluctuates due to a variety factors. For example, median and average prices almost always drop in January since the higher end of the market usually checks out for the holidays: Values haven’t changed; the demographic of buyers and available inventory changed. However, the clear upward trajectory of prices over the past year is clear in both median and average sales prices. Average Price Trends
The MEDIAN SALES PRICE is that price at which half the properties sold for more and half for less. If there were 3 sales, at $1, $2 and $10, the median price would be $2. If there were 4 sales at $2, $2, $5 and $10, the median would be $3.50. Median sales price may be affected by seasonal trends, and by changes in inventory or buying trends, as well as by changes in value.
AVERAGE DOLLAR PER SQUARE FOOT is based upon the home’s interior living space and does not include garages, storage, unfinished attics and basements; rooms and apartments built without permit; decks, patios or yards. These figures are typically derived from appraisals or tax records, but can be unreliable, measured in different ways, or unreported altogether: thus consider square footage and $/sq.ft. figures to be very general approximations. Generally speaking, about 60-80% of listings report square footage, and dollar per square foot statistics are based solely on those listings. All things being equal, a house will have a higher dollar per square foot than a condo (because of land value), a condo will have a higher $/sq.ft. than a TIC (quality of title), and a TIC’s will be higher than a multi-unit building’s (quality of use). All things being equal, a smaller home will have a higher $/sq.ft. than a larger one. The highest dollar per square foot values in San Francisco are typically found in upper floor condos in prestige buildings with utterly spectacular views.
The AVERAGE SIZE of homes of the same bedroom count may vary widely by neighborhood: for example, the average size of a 4-bedroom house in Pacific Heights is much larger than one in Noe Valley; and the average of a Marina 2-bedroom condo is larger than one in South Beach. Besides the affluence factor, the era and style of construction often play large roles in these disparities.
Some neighborhoods are well known for having additional ROOMS BUILT WITHOUT PERMIT, such as the classic 1940′s Sunset house with “bedrooms” and baths built out behind the garage. These additions often add value, but being unpermitted are not reflected in $/sq.ft. figures.
Many aspects of value cannot be adequately reflected in general statistics: curb appeal, age, condition, views, amenities, outdoor space, “bonus” rooms, parking, quality of location within the neighborhood, and so forth. Thus, how these statistics apply to any particular home is unknown.