January Newsletter

San Francisco Rankings, Real Estate Prices & Trends, and the Biggest Home Sales of 2012
January 2013 Paragon Market Report

Here is a look at how a diverse group of major and minor organizations have recently ranked San Francisco on a wide variety of important and whimsical measures. Where disagreements existed — 3 different surveys ranked SF as the 1st, 2nd and 3rd “Greenest City” in America, and 2 surveys ranked us as second and third smartest city in the country — we naturally chose the highest grade as most accurate.

The ranking report is followed by some fascinating snapshots of the San Francisco and Bay Area real estate markets.

1

Median Home Sales Prices around the Bay Area

This mapped analysis calculates median prices from both distressed and non-distressed property sales around the Bay Area as reported to MLS. Median price is a very general statistic and many cities include districts of wildly varying value. For example, San Francisco contains neighborhoods whose median prices vary by over $4,000,000: The overall statistic mixes them all up together and comes up with $810,000. Maps with SF neighborhood values are included later in this report.

2

The 2012 Rebound

Exactly a year ago, we suggested that, based upon the changing market and economic dynamics we perceived developing in 2011, the SF real estate market was on the cusp of a major turnaround in 2012, possibly similar to what occurred in 1996 when the market blasted off after years of doldrums. And that is what happened, not only for the city, which led the way early in the year, but for the Bay Area, state and country somewhat later. Note that the SF house median price quoted here for 2012 is for 4th quarter non-distressed sales only.

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San Francisco Neighborhood Values
This map charts median sales prices and average dollar per square foot for houses by city neighborhood. And this link goes to a map for SF condo values:
SF Condo Values Map

5
 
 
Year over Year Changes in Values
Very generally speaking, and depending on neighborhood and property type, SF home values have risen by 10% to 20% over the past year. Here is a chart assessing the surprisingly consistent change in overall SF condo value statistics and this link looks at SF house statistics.
SF House Value Statistics

6
SF Homes Sales by Price Range
One client once called this the “high-heel shoe” graph of San Francisco home prices. One of the big components of the 2012 market was the resurgence in luxury home sales, the chart for which can be found using this link:
SF Luxury Home Sales

7
Sales by Property Type
Gradually, with the addition of the big new developments in the SoMa-South Beach district (and other areas of the city), condos have become the largest single category of property type sales in the city. This trend will only accelerate with the new burst in construction plans. And this link leads to a chart showing the resurgence in unit sales. Unit sales would have been much higher in 2012 if inventory had not been so drastically low:
Unit Sales Trends

8
Distressed Sales: Goodbye to All That
Distressed home sales have been a market aberration caused by the collapse in loan underwriting standards and the refinancing frenzy of the bubble years. Fair market value is defined as “the price a willing, able and reasonably knowledgeable buyer would pay to a seller not under distress.” But bank and short sales radiate distress: underwater sellers, overwhelmed and unresponsive banks; often the physical condition of the homes themselves is distressed. Buyers demanded a huge discount to deal with them. In SF, this market segment was largely confined to the lower price ranges and less affluent neighborhoods. Now, with the market recovery, the city’s distressed home market is rapidly dwindling and should soon disappear altogether.

9
Percentage of Listings Accepting Offers
This one statistic provides the context to everything we’ve seen in the market this past year: ferocious, pent-up, buyer demand met a drastically inadequate inventory of homes for sale, leading to much more competition for listings and strong upward pressure on prices.

10

Median SF home prices vary on some of the charts above, depending on whether the price specified is for both distressed and non-distressed properties together, only non-distressed homes, for the last 4 months of 2012 or for the last quarter of the year, or whether price limits were placed on the analysis (limiting sales to under a certain sales price). This is natural: the statistics will change depending on the parameters of the analysis, and it’s always useful to look at the market from slightly different angles.

Statistics are generalities and should be considered approximations: How they apply to any specific property is unknown. 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 don’t hesitate to contact us.

© Paragon Real Estate Group, January 2013

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What Costs How Much Where in San Francisco

San Francisco Home Values
By Neighborhood, Property Type & Bedroom Count

MLS Sales February 1, 2012 – mid-August 2012

The charts below apply to non-distressed home sales with at least 1 car parking. Distressed home sales — bank-owned property and short sales — typically sell at a discount, but as the market recovers the number of such listings is rapidly declining.

If a price is followed by a “k” it references thousands of dollars; if followed by an “m”, it signifies millions; “N/A” means that there was not enough data to generate a reliable statistic. Where abnormal “outlier” sales were identified that significantly distorted the statistics, these were deleted from the calculations. Within each chart, the neighborhoods are sorted by median sales price, highest to lowest.

Very generally speaking and varying widely by city neighborhood, thus far in 2012, San Francisco home prices have increased by 5% to 15% over 2011 values.

Trends in Dollar per Square Foot Values for Non-Distressed Houses
in Selected San Francisco Neighborhoods

2012 Numbers reflect 2nd Quarter Sales Only


Trends in Median Sales Prices for Non-Distressed 2-Bedroom Condos
in Selected SF Neighborhoods

2012 Numbers reflect 2nd Quarter Sales Only

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.

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