The San Francisco Rental Market and Why It Matters

Posted on May 26, 2016 by Misha Weidman

For starters, the most recent US Census Bureau estimate (2014) concludes that about 57% of San Francisco’s population are renters. That’s reason enough, especially when housing affordability is perhaps the major social and economic challenge that San Francisco faces over the long-term.

Rent and Condo Conversion Control. With strength in numbers comes political power: San Francisco’s Rent Control ordinance applies to the vast majority of San Francisco’s housing stock, regulating everything from the rental increases that landlord’s can charge to existing tenants to how much interest owners have to pay renters on their security deposits. Other ordinances have severely restricted the ability of owners to “remove” units from the rental market by converting them to condominiums. Regardless of whether you think these controls are a good or bad idea, they have created an incredibly complicated legal landscape. Whether you’re a tenant or an aspiring landlord, it pays to know your rights. Here’s my favorite cheat sheet, courtesy of the Law Firm of Bornstein & Bornstein.

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Home Prices: Chicken and Egg. Furthermore, the correlation between the price of renting and owning is well-known, as this fascinating article from the Economist shows. All things being equal, high rental rates tend to make buying – for those who can – a more attractive option. When rents fall, home prices may fall too due to less demand. Conversely, high home prices may swell renter demand while falling home prices may entice more renters into buying. Of course, other factors are at play too: rents and home prices will fall if employment drops, interest rates increase, wages fall, etc. This is a complicated “chicken and egg” cycle – my guess is that while we can say there’s a correlation, it’s probably impossible to say which comes first.
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Mapping the Spread of the Million Dollar Home in the Bay Area

Posted on May 23, 2016 by Misha Weidman

Thanks to my well-read friend at The Economist for sending me this fascinating infographic.

You can find the full article here at The Atlantic. Their choice of Westwood Park as their poster-neighborhood is an interesting one. On the one hand, it’s a tiny area tucked in to the west of City College between Monterey and Ocean Avenue and it’s not exactly a household name, even to longtime SF denizens. On the other hand, the statistics are impressive: four years ago, according to the article, just 2.9% of its homes cost $1 million or more. Today, 96% of them do.

Only in San Francisco would a $1 million home be considered “a bargain.” But I think that it’s precisely in the lesser-known neighborhoods loosely clustered around Mount Davidson like Westwood Park, Miraloma Park, and Monterey Heights, where a buyer can still find “value.”

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Bubble Pop? One Developer’s View of the Condo Market

Posted on May 6, 2016 by Misha Weidman

The Mark Company has been developing iconic projects throughout the Bay Area and beyond for years and they put out excellent monthly summaries that track new construction across the city, from approval stage through to completion and sale. In my last newsletter, I referred to recent articles that had misquoted Paragon data to suggest, essentially, that the sky was about to fall on San Francisco Real estate. The Mark Company just published its own detailed rebuttal, and for those might be thinking about a high rise condo purchase, it’s worth a read. You can find it here.

While it’s clearly in the Mark Company’s interests to deny that the condo market is about to fall, our own data and conclusions are very much in line with theirs. In a nutshell, despite the 35,000 units that are in the pipeline for development, all but about 7,000 of them are in huge long-term developments that may or not ever get approved. Meanwhile SF’s economy and job creation remain strong.

To their credit, they don’t deny that the market is recalibrating. Here’s the takeaway: “These key facts help us point toward a normalizing market, not one on the verge of another recession.”

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Calling Giants Lovers. Live Next to Home Plate!

Posted on April 29, 2016 by Misha Weidman

I’ll be hosting an open house at 207 King Street, Unit 410, this Sunday, May 1, between 1 and 3:30. Located a pitcher’s throw away from AT&T Park, this condo is not of the all-too-common shoe-box variety! With 2 beds and 2 baths occupying around 1800 SF on two levels, it is genuinely spacious. Tons of natural light, soaring ceilings, and sleek finishes complete the package. Priced to sell at $1.75 million, that’s below the minimum $1,000 a foot you can generally expect to pay for much less appealing condos in the area. Located in The Glassworks, one of Mission Bay’s premier boutique buildings. Come visit!

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San Francisco (and Bay Area Rents) the Highest in the Nation

Posted on March 21, 2016 by Misha Weidman

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Unicorns and Startups A Dying Breed?

Posted on February 23, 2016 by Misha Weidman

Unicorn Yesterday’s front page article in the New York Times Business Section might sound a cautionary note for the local San Francisco market. What if our tech industry Millennials’ stock options and – even – jobs (gosh!) start disappearing? I mentioned this in my 2015 Real Estate Wrap-Up as a possible brake on the Continue reading →

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Mark Your 2016 Calendars!

Posted on February 18, 2016 by Misha Weidman

Every year, Paragon puts out a calendar of local events, covering everything from Giants Opening Day (March 31) to Hardly Strictly Bluegrass (September 30 – October 2). Check it out below and mark your calendars for whatever tickles your fancy!

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Are Condos Cooling? Are Homes Still Hot?