This Spring's market was, in a word, remarkable. The continuous run up in prices that began in 2011-12 appeared to be moderating last Fall and some anticipated that Spring would bring a slowdown if not an actual decrease in prices. But that is not what happened. Overall sales prices in May remained essentially the same as the record high in April, just slightly below $1.4 million median for all properties. That is 8.8% above last year and a remarkable run up from January when the median price was only $1,245,000. Single family homes lead the way, increasing 9.8% to a median of $1,620,000. Condos/TICs/coops also surged, however, up 8.2% to $1,265,000 - that is more than $150,000 in appreciation since the beginning of the year. The overall market is up, but at the high end - above $3 million - there is skittishness with some properties sitting on the market for awhile as they try to lure a well-heeled buyer to make a move. And more high-end sellers came forward this Spring with the number of properties trading hands at that level up over 30% year over year. Perhaps as a result of that dramatic inventory increase, median prices of over $3 million homes have fallen slightly since last Spring's market. Is the market dividing into two where the "low" end continues to appreciate while the "high" end stagnates? If so, that creates what I call compression - where relatively small increases in purchase price buys much more house.
No doubt inventory constriction is still driving median price increases across the market as a whole. The number of homes available is 21% lower than last year - there was simply no surge of new properties this Spring unlike in the last two years. With buyers still out in force and the city's employment and in-migration numbers still up that means an increase in prices. This situation also drove an uptick in the percentage of properties selling over list price (75.4%, up 9% over last year) and the amount over list received (10.3% over list, up almost 4% from last year). But neither of these numbers were as high as they were in the last big Spring market, 2015, so that shows some level of moderation. Nevertheless, the median number of days on the market stayed at its all time low of 14 days (same as last month and down 17.6% from last year) driven at least partly by a "frenzied" mentality at the low end especially. It is very important to not use these overall statistics in analyzing your particular situation, however; as the example in the last paragraph shows, the market is not moving as a monolith and you have to look at your price point, your type of property and your neighborhood.
2-4 unit buildings did not appreciate as fast this Spring as houses and apartments but that market is still strong. The median price was up to $1,914,000 in May, which is 5.3% over last year. As earlier in the Spring, the number of sales was way up, almost double last year, but still selling very fast - a median of 17 days. This increased inventory may be moderating prices in this segment, but we will have to see if that trend continues through the rest of the year. Of course, the vagaries of investment properties, especially with San Francisco's dense regulatory controls - rent control and condo conversion in particular - require that each property be considered separately. As a long-time landlord and investor I know this area well and am always happy to talk about your property - or the one you want. (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.)
Looking at the city's ten different districts gives us a different perspective. This month, let's look geographically from West to East. On the West side of town, bordering the Pacific Ocean, there was extraordinary appreciation in May. District 1 (Richmond) was up 16.9% year over year to a median price of $1,725,000. That represents a recovery over the past couple of years when the Richmond and Sunset seemed to converge. Now the Sunset (District 2) is well behind at a median price of $1,475,000, up "only" 13.5%. District 3 around Lake Merced was the big winner, ending at $1,300,000, showing appreciation of a whopping 25.6% over last year. This likely reflects the desirability of single family homes, of which there are a lot and relatively affordable apartments close to commuter trains. But amazingly, it puts District 3 ahead of all three of the eastside districts (running from North Beach to Bayview) after years of values more aligned with only one of them - District 10, its southern neighbor.
Looking at the middle of the city, the biggest winner was District 4, comprised mostly of treelined suburban-like areas like St. Francis Wood, West Portal, Westwood and Miraloma Park. That area was up 21.1% to $1,725,000, tied for second place as the most expensive area of the city. This is likely a result of the predominance of single family homes, which have gone up faster, and that the area has a lot of large ones, which of course, are generally more expensive. By contrast, District 5 (Castro, Noe, Haight), which includes many apartments and smaller houses and for many years nevertheless outpaced District 4, now stands slightly lower at a median price of $1,675,000 after appreciation of 4%. We will see if this realignment persists. District 6 (NOPA, Hayes Valley and Lower Pac Hts) continues to perform well, up 20.3% to $1,375,600. And once again, the "compression" in prices has hit District 7, still the most expensive, but not outstripping the others by much after decreasing in median price by 11.7% (the only area to decline in value) to $1,837,500.
Finally, on the city's east side there was more consistent and moderate appreciation. District 8 (Downtown, Nob/Russian Hill) was up 8.3% to $1,207,500. District 9, stretching from SOMA through the Mission and Potrero HIll to Bernal Heights was up 10% to $1,265,000 and District 10 (Bayview, Portola) remains the only area with properties at a median price below $1 million but just barely (median price of $976,000, up 11.3%).
Final Spring numbers will be out next month, but a focus on seasons may be deceiving. In the last several years the "Spring market" has sometimes filtered far into the Summer. At any rate, the overall picture is of a very healthy market with some small indication that we may be in the "plateau" where prices in the city do not increase for a few years. But there is no substitute for a real full-time agent looking at your specific property and your personal position. If you are 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. More statistics, updated constantly, are at www.danslaughtersf.com.
It seems San Francisco is always experimenting with new forms of transportation. For several years we have had public bike stations where you can rent a bike and drop it off at your destination. Then came Jump, with it's bright red electric bikes intended to expand that notion and make riding more attractive. In March of this year small electric scooters (where you stand on a platform and hold the two handles) started appearing on our streets and, of course, the controversy followed soon after. Bird, LimeBike and Spin are the three startups pushing this new mode. The idea makes sense in some ways - the scooters are relatively small, taking less room than a bicycle when parked, and the electric propulsion solves the "arriving drenched in sweat" problem resulting from having to use your own muscle, especially on those hills. The lack of any dedicated parking stations (a problem Jump has also) immediately caused problems, however, as inconsiderate riders dumped the devices where ever they landed, blocking sidewalks and entrances and also creating visual trash on our streetscapes. In addition, the lack of a shared notion of how or where to ride them - on the sidewalk (which is illegal), in the bike lane, in the car lane, on park paths? - creates conflict. The scooter companies (and Jump) made efforts to enforce a standard of civility - advising riders to use helmets, stay off sidewalks and park graciously. But even bicycles, which have been around forever, do not always follow the rules. So the city stepped in and started confiscating the un-permitted scooters and has now created new scooter regulations that require the companies to have insurance and take steps to keep sidewalks clear and usable. Beginning this month, the companies pulled their scooters while the register and comply, but look for them to be back in a month or so. Will scooter be a permanent part of our transportation grid? Or just a passing fad like Segways? Time will tell.
More details here, here, and here.
Go Karl!July (and August) are the months for summer fog in San Francisco. Although many bemoan the cooler temperatures and obscured sun, the fog does keep us from the sweltering heat experienced in much of the rest of California at this time. The summer fog is ocean moisture pulled into the city by the high temperatures inland. It's a great display and one of the best things about San Francisco - it even helps us spot tourists with their quickly-purchased SF sweatshirts over tank tops and shorts. Think of it as a weather display that does not require rain or high winds! Rather, we get the majesty of piles of fluffy fog being driven through the Golden Gate and over our hills. Even if it does blot out our Fourth of July fireworks most every year, true San Franciscans cannot help but love Karl! Details about where to see it best and what it is here, here and here.
Offering sweeping views west and north in the center of the city, the steep hills of Clarendon Heights sandwiched between Twin Peaks and Cole Valley are covered with large houses on terraced streets built to capture those views. The history of the area is intimately tied to San Francisco's water system. Indeed, one of those terraced streets is Mountain Spring Ave, named after the nineteenth century spring owned by Behrend Joost that supplied water to the entire area from where Corbett and Clayton are now. Mr. Joost was also instrumental in developing the first railroads over the hills to reach the Rancho San Miguel area and open it up to large scale residential development. At the northern edge of Clarendon Heights is Tank Hill Park, named after the water tank built there in 1894 to store water pumped from Laguna Honda. Its position at the very top of the hill could feed the water via gravity all the way down the hill. It was covered by eucalyptus trees during WWII to hide it from possible air attack, and then replaced by the Twin Peaks reservoir (also surrounded by eucalyptus and lots of open space with hiking trails) on the southern edge of the neighborhood.
Most of the houses in Clarendon Heights were built after WWII, but the street grid was already in place before that time and some houses already built. Nevertheless, the area has quite a few mid-century style homes with large plate glass windows capturing the views, breezeways, and open floor plans. But it is not a time capsule, new houses are being built as we speak, some with decidedly modern aesthetics. So the style is eclectic, with each of the streets having its own "look." For example, Clarendon Ave appears as a wall of buildings and much more vertical than higher up streets like St. Germain and Palo Alto, where the houses are much more likely to include street-facing yards and a more low-slung appearance. And around the hill to the south (Graystone & Villa Terrace) there is increased density with a large number of apartment buildings and very narrow roadways. The whole area is very convenient, however, being right above Cole Valley and easily accessible via Clarendon Ave, Twin Peaks Blvd and Upper Market/Portola to the entire city.
Pricing-wise, Clarendon Heights has always been expensive - the views are a big draw. But statistics are not very helpful, because the area has so few properties and, as "dream homes" owners tend to stay for long periods, making sales rare. Like the rest of the city, prices have been steadily increasing since 2011, when the median was around $1,500,000. Now it is nearly $3 million. But interestingly, the area has slipped significantly below Cole Valley on a per square foot basis; before last year, they were more comparable, but now Cole Valley trades at over $1100/sq. ft. and Clarendon is only around $900, similar to Twin Peaks. I attribute this to increasing preference for walkable neighborhoods and the fact that Clarendon's properties are larger and more expensive to buy, decreasing the possible buyer pool drastically. But those views will never go away, and single family houses are an increasingly valuable commodity city-wide, so I expect the area to increase in value over time. (I used a 12 month rolling averages for these statistics so as to adjust for the low number of sales.)
More details here, here and here.