Defying the normal cycle, July's sales hit a new all-time record as the market continues to move up. The new median price for all properties hit $1,280,000, which is 6.7% above last July's median. Single-family homes moved up again as they have consistently - this month up 9% to $1,461,000. But apartments (condominiums, TICs and coops) also hit a new record high median price, $1,157,500 an increase of 5.2% year over year. This is notable because apartments had slowed earlier in the year but now are well over the previous high from June of last year. Overall, July's numbers this year defied the normal cycle when prices dip in the summer and then rise in the Fall (usually in October when post Labor Day sales close). Anecdotally, the under $1,500,000 million part of the market is quite hot, with nicely presented properties selling very quickly, with multiple offers and way over asking. Are we seeing the start of a new run-up in prices? We will not know until the Fall market is well under way; the increases could be due to a relatively slow Spring and pent up demand.
Other statistics do seem to indicate that another run-up is possible. Inventory remains very very low as it has been all year. July's active listing were down almost 33% from last July. And that is across the board, including single family homes and apartments (although the latter numbers are misleading, since most new construction condominiums are not listed on the MLS). Median day on market was at 17 days, just a few shy of the record, and showing a very similar pattern to the last big run up in prices in early 2015. Median percentage of list price received (107.8%) and the percentage of properties selling over list price (72.1%) are both moving up, another sign of rising prices. But neither is near record territory so perhaps any run up will be more moderate than a few years ago. In summary, buyers would do well to consider a purchase now if it fits into their life-plan, and sellers have a great opportunity to take advantage of an "up" market at least for the moment.
Small (2-4 unit) apartment building statistics are consistent. Median price rose 15% year over year to $1,842,500. Buildings are selling fast (34 days) and for well over list price (109% - for those selling within 30 days). Both of these numbers are consistent with what we saw last year. But the big change is that there are more properties on the market (50 versus 41 last July). Normally, an increase in inventory depresses prices but it not, showing that demand is strong and that the apartment building market is considered a good investment vehicle, even with San Francisco's ever more stringent rent control regulations. (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.)
All districts saw healthy increases, but of course some parts of the city are quite a bit more frothy. As in June, the west side surged ahead with District 3 in the southeast corner of the city again running up the biggest gains (with one exception - see below), up 13.4% over last year. District 1 (Richmond, Sea Cliff) also saw double digit increases (10.7% to $1,500,000). But District 2 (Sunset, Parkside) which surged up 11% in June lagged in July, up "only" 5.6% to $1,320,000. The biggest winner city wide was the least expensive, District 10 (Bayview, Excelsior, Portola) breaking $900,000 median price, a whopping 16.4% increase from last year.
The center of the city saw steady but smaller increases, with District 4 (West Portal, Diamond Hts, Westwood Park) up 6.1% to $1,501,000, District 5 (Castro, Noe, Haight) and 6 (Hayes Valley, Lower Pac Hts, NOPA) up 7.8% ($1,585,000) and 4.8% ($1,210,000) each. Perennial winner District 7 (Marina, Pac Hts) slipped below $2 million, but was still up 4.2% to $1,860,000 almost $300,000 higher than the next highest district. Neighboring District 8 (downtown, Civic Center, Russian/Nob Hills) was the loser this month, appreciating only 1.6% to $1,125,000. Finally, District 9 (SOMA, Potrero, Dogpatch) surged again after several months of low appreciation. It was up 7.2% to $1,225,000 probably reflecting the recovery of condominium prices. (All district statistics are three month rolling averages, to mitigate for low numbers of sales.)
This Summer's increases may be a sign of a market turning up from the slow pace of last Fall and this Spring, or it may just be an anomaly reflecting shifts of sales that usually happen in the Spring. This Fall's market will be very interesting to watch. No one has a crystal ball, but it looks like demand is still strong and therefore without a flood of new inventory, sellers can count on healthy appreciation. At the same time, buyers have an incentive to take advantage of still-low interest rates. Everyone should remember to not focus on the numbers at the expense of their lives. If you need to make a change, or are just interested in the value of your property or the one you want, give me a call so I can analyze your specific situation and use my experience and skills for you.
North Bay Transit
One of the regions our Bay Area is so beautiful is the dramatic geography of mountains and bay. But those physical features also form barriers to transportation, with our bridges the most prominent connections across to the north and east. Those bridges can only handle so much traffic, however, and long ago it was recognized that we need other ways to get around the Bay. The most prominent regional transit system, BART, was originally intended to extend to Marin, with planned extensions to Sonoma and Napa. But in 1962, Marin (and San Mateo) opted out of the BART system and it was built out in San Francisco, Alameda and Contra Costa only. Although San Mateo and Santa Clara have now opted into the BART system with the existing extension to SFO and under-construction East Bay extension to San Jose, the North Bay remains cut off from the region except via the ever more crowded Golden Gate Bridge.
But some relief is rapidly approaching. The Smart Train is coming with a first phase connecting northern Santa Rosa's Sonoma County Airport with San Rafael ready to go pending final testing of the safety system by federal inspectors. But how to get across the Bay to the city without having to wait in line for a bridge? Via the extensive ferry system already in place, of course, and to reach that an extension to Larkspur is already under construction and scheduled to open in early 2019. Want to reach your vacation home in Healdsburg? The next phase extends the line even further north, all the way to Cloverdale in northern Sonoma County. And with the electrification of CalTrain helping to speed southern trips and making high speed rail into the middle of downtown San Francisco possible, we can look forward to faster transit, less pollution and less stress. We could not do without our stunning geography, but more connections (maybe a second BART tube across the Bay, more Muni underground lines?) also bring us closer together as a region and boost the economy all around. Let's get moving! More details here, here and here.
Visitacion Valley Spotlight
Continuing our review of San Francisco's neighborhoods, we move to the southeast corner of the city to Visitacion Valley. The name comes from the original rancho which in turn was named after the Biblical Visitation of the pregnant Virgin Mary to Elizabeth who was carrying John the Baptist at the time. Legend is that Franciscan friars were exploring in heavy fog, which cleared to reveal the beautiful valley - all on May 31, 1777, the day of the Catholic calendar celebrating the Visitation.
In the nineteenth century Henry Schwerin ran a large dairy farm that also raised ferns, tulips and bees. Francoise Pioche raised roses and other European immigrants established truck farms irrigated by windmills, giving the area the name Valley of the Windmills. Industry arrived in the 1870s, including breweries, a ribbon factory, and the Schlage lock company, all employing recent Italian and Irish immigrants.
During World War II the Navy opened the Hunters Point Shipyard nearby and thousands of mostly African-American workers came to the area to help in the war effort. The Sunnydale project, originally private housing, was built to handle this surge of new people and eventually converted to public housing. The 20 story Geneva Towers were also built, but after the war both projects declined and eventually the towers were destroyed.
Today, the area has risen in value along with the rest of the city and offers a large number of a rare commodity - reasonable single family homes with yards that are under $1 million. The median home price was $364,000 in 2012, but has risen to $878,000 now (up 20% in the last year alone). The area abutting Potrero up on the hill takes advantage of fantastic Bay views and proximity to the walking trails of McLaren Park. And further down in the valley is close to the Third Street T line. And of course the entire area is readily accessible to the 101 and 280 highways. Moreover, development is coming. The Schlage factory site has been approved for a massive mixed use development with housing and parks and will extend the Leland Avenue commercial area for several blocks, creating a nice commercial area which someday may be linked to the existing Caltrain station. Details here, here and here.
San Francisco has a long history of public social spaces. For the LGBT community this includes many bars and social clubs that date back to at least the turn of the last century. One of the most beloved is Ginger's of which there have been three previous incarnations. The first, on Eddy St. in the Tenderloin opened in 1978, and Ginger's Too opened on 6th Street. Then in 1991 "Ginger's Trois" opened on Kearney St. in the Financial District and stayed there until 2009. Now the owner of that space has reopened "Ginger's" in the basement of the building to revive the beloved concept. Updated nostalgia aside, it's good to see some diversity in the offerings downtown. For a list of other gone-but-not-forgotten gay bars, look here and here.