Here at the beginning of the Spring market we do not know statistically whether the market is up or not. But the feeling out on tour and at open houses continues to indicate that we should have strong appreciation the first half of this year. Nicer homes are selling for way over asking prices and way over what comparable houses sold for last Fall, at least sometimes, and buyer traffic is very strong. There is certainly not an across the board frenzy for all properties, but at price points below $2 million and in desirable neighborhoods, competition is the norm. We will see if we have another Spring boom or just a steady increase in prices. But certainly the San Francisco residential real estate market remains strong by any measure, reflecting the stable economic factors at play.
For all properties, sale prices were up 1.5% in February (year over year). In a turnaround, condo/TIC/coop sales far outpaced single family homes. Homes have been appreciating much faster than apartments for at least 6 months, but in February homes actually lost ground, falling in price 7.6% year over year to a median price of $1,285,000. Condo/TIC/coop prices shot up to a median price of $1,200,000, 9.3% higher than last year. This differential is probably an anomaly but we will have to wait for more information to see.
In another sign of market strength, inventory of available properties continues to be very low, down 11.5% from last year. If that continues, available properties in general can count on multiple buyers, quick sales and resulting price increases. Bolstering this view, the median days on the market was only 16, down 23% from last year.
2-4 unit buildings surged, with the median price up 14% to $1,800,000. To achieve those prices, properties sat on the market about 15 days longer, but there is just as much inventory as last year. So, with the increased demand prices should feel upward pressure. As always, small numbers of 2-4 unit sales skew these figures, as well as the fact that many sales of apartment buildings (and other commercial properties) are not reported through the MLS.
February statistics for the ten different real estate districts make for a very interesting story. District 1 (The Richmond) continued to surge, up 34.8% year over year to a median price of $1,550,000. Only a year ago, it seemed like District 2 (the Sunset) might be coming up to the same level as its cross-park rival. But District 2 has been lagging, up "only" 8.3% to $1,245,000. The second biggest increase this month was in District 5 (Castro, Noe Valley, Haight, Glen Park) which increased by 17.8% to median price of $1,685,000. That is very close to District 7 (Pac Hts, Marina) which has always been the most expensive area by far, but this month was down 7.2% to $1,725,000.
The other big winner in February was District 3 in the southwest corner of the city, up 14.3% to a median price of $1,150,000. That puts it over Districts 8, 9 and 10; for many years, District 3 outpaced only District 10 and usually only by a hair. District 8 (downtown, Civic Center, Nob & Russian Hills) was down 2.5% to $999,000, District 9 was down 7.9% to $1,017,500 and District 10 was up 7% to $822,000. (All district statistics are three month rolling averages, to mitigate for low numbers of sales.)
Once March sales are reported we will have a better idea of the direction of the market, but all indications (especially inventory) indicated full steam ahead. That said, recent interest rate increases may eventually cool buyer demand, so now is a good time to sell and certainly if you are in the market to buy now is the time to lock in the still-low rates. If you are thinking of making a move, or just curious about the market, give me a call so I can use my always up-to-date knowledge for you.
As most everyone is aware, the Mid-Market neighborhood centered on Market Street from 5th Street to Van Ness has seen some radical change in recent years. With the current tech boom, and particularly Twitter's 2012 relocation the former Design Mart building, the area has become ground zero for gentrification arguments with new upscale apartment buildings filling as fast as they can be built and older office buildings being converted for new, richer tenants. The benefits, in terms of tax payments, jobs and street activity are apparent, but so are some of the difficulties, as long-time residents are pushed out of what used to be one of the city's most inexpensive areas. Can the historic culture survive the onslaught of the newcomers? It's an interesting question that applies all over our dynamic city.
Certainly the transformation cannot be stopped completely. Just completed is 6X6, a new retail shopping complex that says it will be like no other. Rather than a luxury enclave like Union Square, or a mall like the Westfield Center nearby, 6X6 is set up as large open floors that blend all types of specialty retailers with food offerings all in a building fully open to the street through floor to ceiling windows. The idea is to make the complex part of the street, not to separate it from the public space. That kind of revitalization is certainly welcome and hopefully will contribute to a diverse street life.
And developments in the area at least are attempting to balance the big changes they will help bring with the history of the area. 950 Market, a new hotel/condo complex with over 400 new units has agreed to help fund a transgender community center and establish a transgender historic and cultural district in the area. This, after activists noted that three early gay bars occupied part of the site and that it was a center of the "meat rack" area frequented by transgender hustlers for decades through the 1970s. And 1028 Market, designed to provide somewhat more affordable, smaller units, is just the latest development to include large scale public art. It will have a rainbow "waterfall" on its side intended to both beautify the building and reflect the area through its prism-like lenses. Let us hope these efforts help make Mid-Market a vibrant place for both old and new residents. More detail here, here and here.
As the center of the tech industry, it would seem that San Francisco homes should be filled with the latest technology. But this is also an old city that sometimes lacks the infrastructure to allow for the latest advances. Two recent developments give us hope for advancement.
The first is legislation to allow micro-trenching, which would allow internet service providers to place their lines in shallower conduits. Why is this important? Because digging major trenches adds significant cost, effectively shutting out smaller providers and preventing competition. Let's hope the legislation passes and city departments can make this sensible change happen so that we will have better WiFi everywhere. Details here.
The second development is AT&Ts installation of small-cell wireless antennas. As everyone knows, cell phone coverage is problematic in the Bay Area (we came in 58 out of 125 metropolitan areas in a wireless quality survey). The bay itself causes disruption, as do hills and trees. On top of that local politics sometimes prevent conventional cell-tower placement for aesthetic reasons, and some people are concerned about health effects. The new small-cell antennas may help because they can be located almost anywhere (on a lamppost, for example), and cover a smaller geographic area making them less likely to be overwhelmed by the ever-increasing demands for data. The first one was installed downtown in February and AT&T plans to put in almost 300 more in San Francisco before the end of the year. Clear calls are in our future! Details here and here.
Time to Eat!
One of the best things about San Francisco is the food. It seems that every week a great new restaurant opens, and we are blessed to have such choice. And the restaurant experience is not just about the food. This is also design central, with stunning spaces that enhance the meal and, sometimes, make up for it. Here are two lists, one for hottest new restaurants and the other for the best restaurant designs (some of them years old). Go out and enjoy!