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Update on Prop 10 and The Repeal of Costa Hawkins

I covered Proposition 10 on November’s upcoming ballot in detail last month. Today’s NY Times article has a brief summary of what it’s about. In addition, there’s a link to another article that explains the pros and cons of rent control, including why most economists on both the left and the right “are almost universally against rent control.” No one, least of all me, is disputing that housing affordability both for renters and buyers is an issue in the Bay Area. I just don’t think that expanding rent control is the way to fix the problem. ...  Additional Details

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Housing Market Slows, as Rising Prices Outpace Wages

This Sunday’s front page NY Times article suggests a national slowdown as wage increases fail to keep up with home price increases. Indeed, it “feels” as though there is some slowing in the market, especially at the higher end – and we do have the data to indicate that there’s been a lot more new inventory coming to the market in the months of August and September than in the previous two years. We do not yet have hard data on whether this and other factors are creating downward pressure on sales prices. Stay tuned! ...  Additional Details

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Prop 10 and How Your Own Home Might Become Subject to Rent Control

I don’t mean to sound alarmist – well yes I do – but there’s a California ballot measure up for vote this November that could significantly curtail your rights as an owner of a single family house or condominium if you should ever decide to rent it out.    

Most people are aware that San Francisco has rent and eviction control legislation.  Briefly summarized and simplified, if you own a multi-unit building (ie. two units or more) which was completed prior to the date the Rent Ordinance was passed, June 13, 1979, you cannot increase the rent of an existing tenant by more than 60% of the annual Consumer Price Index each year. In addition, you can only evict a tenant for a limited set of reasons enumerated under the Ordinance.  In practical effect this means that a lease for a fixed term has no meaning:  once the lease is up, a tenant who is otherwise paying rent on time can stay as long as she wants to stay. And, for as long as she stays, the maximum annual amount that her rent can increase is determined by the Rent Ordinance, not by you.  ...  Additional Details

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2018 San Francisco Mid-Year Real Estate Report: Hot and Hotter

(Writing this from Prague, possibly one of the most beautiful cities in Europe.)  Our mid-year report is out and it reflects nothing less than a sizzling seller’s market for single family homes, one that has re-ignited after something of a two-year lull — if that’s the word for a market that’s “only” been increasing by 6 to 7 percent per year.

Year to date, median prices for single family homes have increased by 14.5% over 2017.  The median price is now $1.62 million (see next two charts). ...  Additional Details

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Poster-Child for A Crazy Market

This modest 2 BR/1 BA Glen Park home, a mere 1,030 SF per tax records, listed in late March for $1.295 million and sold four days later for a whopping $2.105 million. Lovely garden and pleasant views, but no easy means of expansion and on a street that can be challenging. My jaw dropped when I read the sale price. No wonder it made the news.

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Will the Last One Leaving the Bay Area Please Turn Out the Lights?

Media Reports Sound the Death Knell of the Bay Area
– a Mite Prematurely

“49 % of Bay Area residents were looking to move out.”
Business Insider

“San Francisco is such a boomtown that people are leaving in droves.”
Wall Street Journal

“Silicon Valley is over…. In the last three months of 2017, San Francisco lost more residents to outward migration than any other city in the country.”
New York Times

“San Francisco is so expensive that more people are leaving than moving in – and it could mean disaster for the nation’s tech capital.”
SFGate

As our oft-quoted Chief Market Analyst, Patrick Carlisle,  says in his recent report, “That sounds really bad.”  It turns out that the sensational headline stories quoted above were largely based on questionable and selective data and then amplified in the media in the ways that we’ve all become accustomed to.  This month, I’m reposting an abbreviated version of Patrick’s report.  The bottom line:  if everyone’s leaving the Bay Area in droves, you’d think it would be showing up in real estate prices.  It’s not – on the contrary, Bay Area prices, including San Francisco, continue to hit new highs.  Read on! ...  Additional Details

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On the 112th Anniversary of The 1906 Earthquake, Is San Francisco Ready for the Next Big One?

We all know about Millennium Tower’s 14″ lean, but did you know that California’s building code standards for a five story building are the same as those for a fifty story sky-scraper? That’s according to today’s front page New York Times article about the city’s downtown sky-scraper boom, the most visible emblem of which is the 1070′ tall Salesforce Tower, now the tallest building in the Western states. With many of the buildings constructed on sandy soils South of Market, the US Geological Survey says there’s a high likelihood that that the ground will liquefy in an earthquake. That’s not the kind of sand I want to have my head buried in when the next Big One strikes. I can only hope that local building code standards are stronger than the state’s and that Smart People are thinking about these things. ...  Additional Details