San Francisco Real Estate - Residential

The Front Steps - a new San Francisco Real Estate blog

We are regaular contributors to a new San Francisco real estate blog called The Front Steps. It can sometimes be contentious as the latest round of posts show (topic: Why are Realtors such @$$holes?) but the ultimate goal of the articles is to be helpful and inform. We'd like to thank Alex for giving us a chance to get exposure in his publication.

What we've done today is take one of the questions we answered on that blog and expand the explanation because, in my mind, there was clarification needed. And it is also a great example of how government price controls can actually "hurt" the people it is trying to help. Here is a recent question from a reader:

Hello, Thanks for putting up these Q&A's! (at TheFrontSteps) They're very helpful... ...My sister was actually selected from the lotto (we both entered), and we're excited about the opportunity to purchase a condo (fingers crossed-we're meeting with the banker today about qualifying). My question is, if we get the condo, and want to sell it, let's say 30 years from now, would there be a restriction on the selling price? We aren't looking to use this as an investment property, but if we decide to sell it later we don't want to get totally ripped on the price. Thank you! ~Sophia

Our original reply was this:

Sophia, There are two types of lottery for condominiums in San Francisco. One is the condo conversion lottery which allows apartment buildings convert their units to condominiums. It doesn’t sound like this is what the question is about.

The second type is the lottery for the Mayor’s Program which is geared toward first time buyers. This is probably what you are describing. There are a lot of nuances to a purchase (and sale) like this which may be found here. (Once you decide to sell...) First off, the Mayor’s Office of Housing (MOH) will set the price for you, not the market. Although they try to be fair to all concerned, there is a formula which may be found at the above link in Step 3. To that price you are allowed to add 5% to pay the listing and selling agents, but that is all. And finally, the only buyers allowed to purchase the property must qualify for the Mayor’s program.

The good news is, you can buy a place in which to live for under market prices! The bad news is, there are certain restrictions on how much the MOH will allow it to appreciate over time (as described above). One of the reasons for this is, they want the property to remain in the Mayor’s program to give other people a chance at your home when it comes time for you to move on to your next purchase.

People buy property to build wealth, so this will probably not be a great vehicle for that. While we are not experts on the subject, contacting the Mayor’s Office of Housing would be the best place to start. I hope this helps you with your decision. - Janis Stone

At the time of the writing, it seemed like a clear answer, but I'd like to clarify a few things here.

The good news to people participating in the Mayor's Program is this. If you are a first time buyer, you can purchase a home at below market value and live there. In my opinion, owning is ALWAYS better than buying as long as you can afford it!

However, this program is not a place where you will be able to build wealth from your home when it comes time to sell, mainly because there is an artificial cap put on the price by the MOH.

The formula the MOH uses to calculate the resale value is very conservative because they don't want homes to keep disappearing from their pool of available properties when you do finally resell. So to quote from the MOH Q&A page for reselling below market rate housing, "Many units will be priced in accordance with planning approval the change in the area median income from the time of the current owner’s purchase to the time of sale..." To simplify, that means they will take the area you own in and look at the median income for people living in that area and base the new price on that... NOT the value of the properties which have sold in that area (which is what the free market does). In effect, any improvements you might make will have no effect on determining the resale price.

In a normal real estate transaction, given the current rate of appreciation of properties in San Francisco and the recent rash of multiple offer situations, you could earn a considerable amount in capital gains ($250,000 of which is tax free on your primary residence at the time of this writing) over your original capital investment (cash downpayment). Whereas in the Mayor's Program, you would be limited to the increase allowed by the formula set forth by the MOH worksheet.

- Janis Stone

posted by SFResidence.com @ 7:41 AM 1 comments

Car dents from parking in San Francisco

Parking is a huge issue in San Francisco, and bumps and scrapes are all part of the game. So what can you do when you want to get rid of scratches and dings and keep that new car appearance or if you're trying to get it ready for sale?

We have a fantastic guy who has performed miracles on our vehicles; we swear by him! And it doesn't cost an arm and a leg to have it done!

After sideswiping the garage one evening several months ago, I took the paint off my front fender. We were given the name of a fellow who comes to your house and does factory quality paint repairs right out of his truck. It only took a couple of hours and the car looked like new again!

Then recently one of our partners returned her car to us, and we wanted to sell it. Before putting the "For Sale" sign on it, we had Patrick come and do both front and back bumpers which had taken a beating from City parking. Now it looks like new, and we will probably get top dollar for it!

What's his name? Ironically enough, it is Patrick Carr with Automotive Touch-Up. He can be reached at 415-806-3214. Tell him Janis sent you!

- Janis Stone

posted by SFResidence.com @ 4:04 PM 1 comments

Financial problems with your home?

Though not too many people go into foreclosure in San Francisco, there are those who were troubled by the crash of the sub-prime lenders and may be in trouble with their mortgages. If you are one of those people, there is help for you.

Non-profit organizations exist to get you back on track. For a complete list, you can see the brochure put together by the National Association of Realtors (NAR) here. But for starters, NeighborWorks is a good resource. They can be reached at 888-995-HOPE.

- Janis Stone

posted by SFResidence.com @ 1:09 PM 1 comments

Things to do in San Francisco - Part 27 - Metreon

posted by SFResidence.com @ 8:00 AM 1 comments

Fast Facts from CAR and Freddie Mac - May 2007

The May report for home prices in California are finally in. As mortgage rates keep creeping up, the California market is slowing down. Though interest rates are still fairly conservative, all things considered, it might take time before consumers adjust to the new higher rates... provided they stop rising!

As you can see from the numbers, the median price dropped from last month meaning that other parts of California are having a harder time of it than we are here in the San Francicso Bay Area. Look for our July report with June's figures to be released this weekend on our website. We think you will see why San Francisco real estate continues to be a great investment!

Calif. median home price - May 07: $591,180 (Source: C.A.R.) (note: compared to $597,640 last month)

Calif. highest median home price by C.A.R. region May 07: Santa Barbara So. Coast $1,325,000 (Source: C.A.R.) (note: compared to $1,475,000 last month)

Calif. lowest median home price by C.A.R. region May 07: High Desert $313,550 (Source: C.A.R.) (note: compared to $317,420 last month)

Calif. First-time Buyer Affordability Index - First Quarter 07: 25 percent (Source: C.A.R.) (note: compared to 25 percent last month)

Mortgage rates - week ending 6/21:

• 30-yr. fixed: 6.69%; Fees/points: 0.5% (note: compared to 6.37% and 0.4% points last report)
• 15-yr. fixed: 6.37%; Fees/points: 0.5% (note: compared to 6.06% and 0.4% points last report)
• 1-yr. adjustable: 5.66%; Fees/points: 0.7% (note: compared to 5.64% and 0.6% points last report)

- California Association of Realtors & Freddie Mac

posted by SFResidence.com @ 7:25 AM 0 comments

TRI Coldwell Banker San Francisco real estate statistics - last week in review

SFResidence is part of the TRI Coldwell Banker office at 1699 Van Ness in San Francisco which is one of the premier offices in the City and has the market share numbers to prove it. We have some of the top agents selling real estate in the San Francisco Bay Area. As a result, our office posts some impressive numbers.

As summer is upon us, the market seems to be slowing from a month ago, but still going strong. Multiple offers are not as common as they once were, but the sellers can only accept one anyway! Sales have been steady this past week where, once again, our ratified deals outpaced our new listings almost 2 to 1.

Here are the numbers for this week:

6/27/07

• 7 new listings (average price $972,850 - low $539,000, high $1,908,000)
• 13 ratified sales (pending) (average price $1,869,385 - low $599,000, high $4,995,000)
• 6 closed sales (sold) (average price $2,156,667 - low $576,000, high $3,610,000, 1 confidential)
• 1 reduced ($869,000)

- Janis Stone

posted by SFResidence.com @ 4:30 PM 0 comments

Mortgage Weekly Update - Last Week in Review

Foster Weeks publishes a weekly mortgage report which is updated every Monday morning. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Foster points out this week the "roller coaster" ride last week's rates took even though they ended the week relatively unchanged from the beginning. This would indicate that timing of the loan might be crucial to getting that all important low rate locked in.

Bond Traders and investors alike didn't buy tickets for this ride [the roller coaster], but they've had that "funny feeling in their tummy" for the past few weeks, as Mortgage Bonds and home loan rates continue to swing sharply higher, then plummet back lower, sometimes in the course of just a few hours. Say what indeed - what's causing all this dramatic action?

Last week, there was a definite lack of economic headlines to drive the ride, but the action was still intense for a variety of reasons. Our Mortgage Bonds are purchased by many foreign investors, who are watching global interest rates rise, and contemplating keeping more of their money "closer to home" and investing in their own country, rather than in the US. If they sell off...Mortgage Bonds plunge nauseatingly lower. Additionally, US companies that issue their own Corporate Bonds also buy and sell huge blocks of Treasuries and Mortgage Bonds, which can jolt the Bond market higher or lower on any given day. They do this in an effort to protect their own Corporate Bond issuance against rising interest rates, as they prepare and then sell off their own Corporate Bond issuance. Further, with oil prices ratcheting ever higher, investors pulled money out of Stocks on Friday and sent them swooning lower...but parked the money in Bonds, helping Bonds regain the altitude they'd lost earlier in the week.

A little sick to your stomach just trying to follow all the action? The good news is that despite lots of midweek action - home loan rates pulled back into the station on Friday around the very same levels they started the week at. But last week may have just been a kiddie ride compared to what the coming week may have in store...read on for this week's forecast, and learn why the action is likely to stay intense... Read more.

- Foster Weeks

posted by SFResidence.com @ 8:59 AM 0 comments

San Francisco Real Estate Market Update for 6/16 - 6/22/07

Read what Rick Turley, President of Coldwell Banker, San Francisco/Peninsula says in his latest weekly report:

There was no report for the week of June 9-15th due to a family emergency.

Last Sunday being Father’s Day, and the more than 540 open houses held last weekend were mostly well attended. Typically, the summer months see a slowing of the market as it competes with graduations and vacations. We have yet to see that typical slowdown in most areas. Though some areas are reporting lighter activity, others are seeing sales pick up. Once again, the standard patterns of real estate in the Bay Area continue to elude definition. Our reports reflect the week’s activity in each particular branch office, and it appears that “busy” sales weeks directly follow an influx of newer listing inventory in that office’s market. In the City and the Peninsula, we are not seeing increases of inventory followed by slower sales activity. In most offices, it’s quite the opposite.

A $2,795,000 listing in the Liberty Hill/Noe area of San Francisco received four offers. A San Francisco Parkside area home received 21 offers significantly over the list price, however several other properties in the City were lucky to receive one offer. On the Peninsula, inventory is sporadically feast or famine depending on the location. Woodside/Portola Valley, Foster City, Redwood Shores and the most desirable San Mateo area neighborhoods all suffer from low inventory. Menlo Park is seeing a steady, healthy market; listings are picking up, and are selling just as quickly. The past two weeks have seen a few more $5M+ sales on the Peninsula. Buyer confidence is strong; the Dow and NASDAQ have made some local residents more flush which helps fuel the positive activity.

The rest of the Bay Area reports a similar mix of ups and downs. Castro Valley, Livermore and Pleasanton are all reporting that “things are picking up” with their sales activity. New, attractive listings in the core areas of the Berkeley market remain hot commodities. Many markets in the North Bay remain hot, especially in Marin County. Sonoma continues to be haunted by a glut of inventory, however this may bode well in the near future as frustrated buyers from other areas start reconsidering Sonoma as a viable place to settle with a wide selection of well-priced homes. And then we get the reminder we need to hear from time to time; an East Bay office reports that three separate deals each died a day after ratification last week. In a more “normal” market, the hard work and the majority of negotiations simply begin once the property sells.

Listing Activity was reported as steady by the majority - 20 offices. It increased for seven offices, and only decreased for two offices. Even with the seasonal slowing in the market, sales activity for our offices were reported as being steady by 16 offices, increasing for six, and decreasing for seven offices.

In an unpredictable market, an overwhelming “steady” report well into the month of June certainly says a lot about the power and expertise of Coldwell Banker Sales Associates.

- Rick Turley

* For an e-mail alert when this report is updated, send a note to info@SFResidence.com with "weekly market report" in the subject line.

posted by SFResidence.com @ 7:05 PM 0 comments

LUXURY CONSUMERS STAY BULLISH ON REAL ESTATE

Despite the recent cooling of the real estate market, luxury homeowners remain positive about the market, according to the 2007 Coldwell Banker Previews International® Luxury Survey. A full 56 percent of survey respondents expect the value of their home to increase at least somewhat, and 10 percent expect it to increase significantly, during the next 12 months. Thinking more long term, 36 percent of respondents believe the value of their primary residence to increase significantly over the next five years, while 58 percent believe their residence will increase at least somewhat over that time period.

“These responses tell us that the affluent truly understand the value in owning real estate,” said Jim Gillespie, president and chief executive officer, Coldwell Banker Real Estate Corporation. “It is important to remember that in addition to being a home, real estate is a long-term investment, one that can withstand periodic changes in the market.”

The survey also revealed that affluent women are even more optimistic than men. Sixty-one (61) percent of female respondents expect the value of their home to increase somewhat over the next 12 months, compared to 50 percent of male, while both genders remain even at approximately 10 percent in predicting their homes’ value to increase significantly in the next year. Over the long term (five years), 40 percent of female respondents expect the value to increase significantly, compared to 32 percent of male. The sexes come out fairly even (60 percent male, 56 percent female) in forecasting that their homes will increase in value somewhat in five years.

“I’m not at all surprised that women are more positive about their home values than men,” Gillespie continued. “Women continue to comprise a significant segment of the home buying public; in fact, 22 percent of all homes sold last year were to single women. That statistic, together with affluent women’s confidence in real estate, suggests that women may, in fact, be the driver that ultimately helps the market turn the corner.” Read more.

David Siroty
Coldwell Banker Real Estate Corporation
973.407.7199
David.Siroty@coldwellbanker.com

Lauren Naru
MS&L
212.468.3040
Lauren.Naru@mslpr.com

posted by SFResidence.com @ 3:20 AM 0 comments

Things to do in San Francisco - Part 26 - Wyland Galleries

posted by SFResidence.com @ 8:20 AM 0 comments

TRI Coldwell Banker San Francisco real estate statistics - last week in review

SFResidence is part of the TRI Coldwell Banker office at 1699 Van Ness in San Francisco which is one of the premier offices in the City and has the market share numbers to prove it. We have some of the top agents selling real estate in the San Francisco Bay Area. As a result, our office posts some impressive numbers.

Summer's almost here and we are not getting the listings we normally do at this time of year. The general feeling is that interest rates might be giving people second thoughts, but we're not sure why that would be. Generally rising interest rates affects buyers who need to get a loan, not sellers who are putting the house on the market... But the number of listings is still unusually low as we approach summer (which officially starts tomorrow!). Our office manager made the claim today that almost every transaction in our office last week involved multiple offers, mostly because of the lack of inventory. This is good for sellers, but not so good for buyers. So if you are thinking of putting your home on the market, now might be the right time!

Here are the numbers for this week:

6/20/07

• 5 new listings (average price $2,526,200 - low $735,000, high $6,450,000)
• 14 ratified sales (pending) (average price $1,339,714 - low $580,000, high $3,485,000)
• 9 closed sales (sold) (average price $1,674,556 - low $702,000, high $4,000,000)

- Janis Stone

posted by SFResidence.com @ 11:22 AM 0 comments

June swoon? Hardly! San Francisco real estate is in high gear!

Spring has been hot (market-wise, not weather-wise) and it looks like summer will be even hotter. I can not stress to you how the absence of inventory can cause double-digit appreciation when the few listings we do have sell, and it often creates multiple offer situations.

Every week (tomorrow) on this blog I post the statistics of our TRI Coldwell Banker office on Van Ness which boasts the market share of residential real estate sales for San Francisco. If you are a regular reader, you will see that our pending sales far outpace the number of listings. So even if our agents don't have the listing, chances are one of us represented the buyer! And in this sellers' market it takes an experienced Realtor to negotiate the best price for her clients.

A new listing I had in Laurel Heights was marketed for 8 days, received several offers and sold well in excess of the asking price of $1,495,000. The sellers received advice from staging expert, Arthur McLaughlin, and hired him to stage their condo using mostly their own furnishings. We had 2 open houses broker's tours and then looked at multiple offers. If you have a property you would like to sell, I can advise you on the best way to prepare it for market so you receive the top value. I represented them as buyers in 2001 and when they sold this year, they received close to 10% annual appreciation on their condo. San Francisco real estate is a GREAT INVESTMENT!

- Janis Stone

posted by SFResidence.com @ 6:03 PM 0 comments

Mortgage Weekly Update - Last Week in Review

Foster Weeks publishes a weekly mortgage report which is updated every Monday morning. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Foster points out that many of these so called "experts" are often more wrong than they are right in their predictions.

...After Bond prices and home loan rates recently suffered their most dramatic worsening in more than three years, Bill Gross, CEO of monster Bond fund PIMCO, just decided that despite his previous position to the contrary, he is now a self-proclaimed "Bond Bear". Dollar short, day late for that visionary input, Bill. But interesting...he has notoriously been on the wrong side of the crystal ball in recent years - and the significant improvement in Bond pricing over the last several days makes one wonder if Traders are betting the odds, and doing exactly the opposite of what Bill Gross suggests.

Last week started out nasty for Bonds and home loan rates, as Traders continued to sell off Bonds on their fears of continued inflation, and reduced demand for our US Bonds from foreign investors. But later in the week, things began to turn around - dramatically. One big reason was the very welcome news on Friday that inflation actually does appear to be backing down. The Core Consumer Price Index (CPI) measures what we pay for the goods and services that we buy on a regular basis, but pulls out the often-volatile prices of food and energy. The latest read on inflation, which arrived on Friday, indicated that the year-over-year Core CPI dropped to 2.2%...the lowest read in more than a year. This was great news for inflation-hating Bonds and home loan rates, and although the mid-week action was volatile, rates finished up the week about where they had started... Read more.

- Foster Weeks

posted by SFResidence.com @ 9:08 AM 0 comments

Bond market update

I wanted to give you a brief update on the bond market action for the past few days. As I discussed in the Wednesday morning meeting, the bond market seemed to be showing signs of selling capitulation and, with help from benign PPI and CPI numbers Thursday and Friday respectively, I was looking for the buyers in the bond market to return and pricing to start improving. Fortunately, that is exactly what we are seeing so far and the highs that rates hit on Wednesday morning appear to be the upper boundaries of rates at this point.

We are seeing lenders starting to reprice today for the better already and with continued follow-through, I would expect to see better pricing next week as well. Please call me or come by if you want any further information!

- Stacey Fleece
Senior Loan Consultant
Princeton Capital
415.229.1228
StaceyFleece@princetoncap.com

posted by SFResidence.com @ 3:07 PM 0 comments

Things to do in San Francisco Recap - 1-20

Recap of things to do in San Francisco 1-20:

Part 1 - Golden Gate Bridge, Part 2 - Alcatraz, Part 3 - Japanese Tea Garden, Part 4 - Cable Cars, Part 5 - Fisherman's Warf, Part 6 - Exploratorium, Part 7 - Mission Dolores, Part 8 - San Francisco Museum of Modern Art, Part 9 - Lombard Street, Part 10 - Giants Stadium, Part 11 - Mission Cliffs Rock Climbing Center, Part 12 - Beach Blanket Babylon, Part 13 - Palace of Fine Arts, Part 14 - Asian Art Museum, Part 15 - Coit Tower, Part 16 - Musee Mecanique, Part 17 - Palace of the Legion of Honor, Part 18 - The Octagon House, Part 19 - Holy Virgin Cathedral, Part 20 - San Francisco Ghost Hunt Walking Tour

posted by SFResidence.com @ 7:39 AM 0 comments

Things to do in San Francisco - Part 25 - Haight-Ashbury Street Fair

posted by SFResidence.com @ 7:31 AM 0 comments

SFResidence Blog celebrates 1 year anniversary!

Many thanks to everyone who has read or contributed to our blog as we celebrate our one year anniversary!

- Janis Stone

posted by SFResidence.com @ 7:19 AM 0 comments

TRI Coldwell Banker San Francisco real estate statistics - last week in review

SFResidence is part of the TRI Coldwell Banker office at 1699 Van Ness in San Francisco which is one of the premier offices in the City and has the market share numbers to prove it. We have some of the top agents selling real estate in the San Francisco Bay Area. As a result, our office posts some impressive numbers.

This week sales seemed to go into a slump for our office. For the first time in a long time the ratified sales were almost the same as the number of new listings. Could the market be slowing down for summer? Could this mean we are running out of inventory? I don't think so, but we'll have a better idea next week.

Here are the numbers for this week:

6/13/07

• 8 new listings (average price $849,875 - low $599,000, high $1,395,000)
• 9 ratified sales (pending) (average price $851,656 - low $469,000, high $1,395,000)
• 8 closed sales (sold) (average price $1,360,625 - low $555,000, high $2,610,000)

- Janis Stone

posted by SFResidence.com @ 5:08 PM 0 comments

San Francisco Real Estate Market Update for 6/2 - 6/8/07

Read what Rick Turley, President of Coldwell Banker, San Francisco/Peninsula says in his latest weekly report:

Some subtle changes were noted in our Bay Area market this week. The East Bay offices report ratified offers on well priced properties, and positive response from price reductions on some older inventory. With only a few exceptions (Orinda and Berkeley), the majority of East Bay offices reported no multiple offers. North Bay offices speak of slower activity, with Marin reporting the upper-end properties are still scarce and hot. San Francisco and the Peninsula reflect the same as Marin – it seems the higher the price, the better the opportunity for a quick sale. That should not be taken as advice for Sellers to raise their price from the current market analysis. It simply points to a greater demand for new inventory in the $2M+ range in the City and Peninsula markets.

For the City, there was a decline in the number of multiple offers, but very strong activity. I checked a 24 hour Market Watch in the SF MLS, and during one 24 hour period last week, MLS reported 42 new listings, and 45 new pending sales for the same time period. At first glance, we’re selling more than is coming to the market. The Peninsula, from Burlingame to Palo Alto continues the highest rate of multiple offer activity, with more than 50% of reported sales in multiple offers, the exception is Half Moon Bay.

The recent declines in the stock market have moved the bond yield up, and we are already experiencing the upward pressure on interest rates. As SF Lombard noted, we should be aware that the combination of a fatigued Buyer and rising interest rates could slow us down this summer. For the immediate future, fresh inventory remains to be the key. I would encourage every potential Seller to finish their projects and get their property on the market. In most years past, we’ve said a Seller may have missed the best opportunity by waiting until June – not the case this year.

Buyers are out in full force with most areas reporting strong attendance at the nearly 600 homes held open during the week. More than 100 groups came through a Berkeley Hills listing. A home in Millbrae had over 200 attendees, and it wasn’t even its first open. The Internet and emerging technologies continue to play an increasingly important role in bringing buyers and sellers together, and increasing foot traffic at open homes. A Woodside/Portola Valley sales associate posted her listing to a Blog and had a huge turnout at her open home. The sales associate noticed that every buyer for this starter home had come as a result of Internet searches as opposed to looking in the newspaper.

Listing inventory remained steady for 13 offices, increased for 12 offices and decreased in only four. Sales activity was reported as being steady for 19 offices. It increased for seven offices and just three offices saw a decrease.

- Rick Turley

* For an e-mail alert when this report is updated, send a note to info@SFResidence.com with "weekly market report" in the subject line.

posted by SFResidence.com @ 6:53 AM 0 comments

Mortgage Weekly Update - Last Week in Review

Foster Weeks publishes a weekly mortgage report which is updated every Monday morning. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Looks like our days of low, low rates are finally over.

...luck hasn't been on the side of home loan rates, as Mortgage Bonds tipped over the edge on Thursday, adding to the brutal cascade lower which began on May 8th, and causing home loan rates to move significantly higher along the way. Last week the damage was particularly dramatic, as Thursday brought the largest single-day worsening in Bonds and home loan rates seen in three years. Although Friday brought a small amount of recovery, home loan rates still increased by .25% across the board overall... Read more.

- Foster Weeks

posted by SFResidence.com @ 7:51 AM 0 comments

IMPORTANT BOND MARKET UPDATE

Hi everyone!

Wanted to provide you all a quick bond market update today in light of the fact that a) I didn't get a chance to present at yesterday's meeting as it went long and b) the market is moving against us significantly today.

As you may remember, a few weeks ago I mentioned at the Wednesday meeting that the bond market had ticked below the 200-day moving average and that was most likely an indication that rates would get worse before they get better. However, even I did not anticipate rates moving against us to the degree that they have in the past week or so with today being the worst day we have seen in almost a year. Treasuries are selling off sharply (meaning rates going up) and the 10-year treasury yield is above 5% for the first time since August 2006. We are now down 75 basis points on the day - that is a huge move for one day.

So what is causing this major selloff? There are multiple things going on in global markets that are causing it...

1. The first factor is global growth and inflation as illustrated by both the recent rate hikes and strong data reports in several countries...most recently an unexpected rate hike in New Zealand. Yes...the economy in New Zealand effects our mortgage rates. Why? Because there is competition for foreign investment in the bond market and with rate hikes overseas, the foreign markets become more attractive as their debt instruments become higher-yielding. Therefore, investors take money out of the US bond market to buy overseas, our bond market drops causing the domestic bond rates to go up.
2. Another factor I believe is leading to the selloff in bonds is expectations of a fed rate cut that has been priced into the market to some degree starting earlier this year based on widespread perception that the economy would weaken enough to persuade the Fed to cut rates. However, this hasn't happened, and a number of data reports and other indicators of late have pointed to unexpected resilience in the economy causing inflation fears to raise their head again.
3. Lastly, with the 10-year ticking over 5% this morning (now at approximately 5.12%), the bond market took out a significant emotional threshold which caused the selling volume to escalate.

So the question is...what can we expect now?

Certainly, we are seeing lenders reprice today (and some lenders are already on their 2nd reprice today) for the worse...they, like some investors, are running a bit scared of this action today. Technically, the bond market has taken out some significant levels of support and that has investors and lenders nervous. That being said, the bond market is extremely oversold right now and if we can get any sense of stability, I believe we will be able to recover much of this selloff in pretty short order. I will keep you posted if anything significant changes in the market but for right now, we are definitely on Mr. Toad's Wild Ride (a Disneyland reference for those not familiar!) so hold on to your hats!

Please let us know if you have any questions!

- Stacey Fleece
Senior Loan Consultant
Princeton Capital
415.229.1228
StaceyFleece@princetoncap.com

posted by SFResidence.com @ 10:41 AM 0 comments

First Republic publishes its first quarter report for luxury real estate San Francisco

In the San Francisco Bay Area, there was no change in values from the fourth quarter of 2006 and values were virtually unchanged from the first quarter a year ago. Agents said luxury home values in the city of San Francisco, along the Peninsula and in Marin County were increasing. There appears to be pent-up demand in these markets, reflected by brisk sales activity for luxury homes in San Francisco and the fact that the median-priced home in Marin County topped $1 million in April for the first time.

"In the $3 million to $5 million range in prime neighborhoods in San Francisco, there is a real shortage of good inventory," said Steve Gothelf of Pacific Union in San Francisco. "When quality properties pop up and are priced correctly, they fly off the shelf. The reason is that we have an abundance of extremely well-qualified people chasing very few properties. That ratchets up prices."

On the Peninsula, the market is also very active. "A majority of the deals are generating multiple offers," said Hugh Cornish of Coldwell Banker in Menlo Park. "We have a strong national and local economy and very little supply of luxury properties. We had half the inventory we normally have in the first quarter."

In the East Bay community of Lafayette, buyers are clearly being more discriminating. "If something is unique, shows well and is priced right, the property is selling," said Kim Strand of Better Homes Realty of Lafayette. "In high demand areas with good schools and a history of appreciation, it's really a normal market. However, in the recent past, you'd have multiple offers. We don't see that very often. The time to sell is now 30 to 45 days, not a week to 10 days."

See the statistics here.

- First Republic Bank

posted by SFResidence.com @ 6:23 PM 0 comments

The effect of a short sale on your credit

A short sale of real estate happens when the owner of the home or property owes more on the property than what it sells for. This can happen when a home owner chooses to sell when property values have dropped drastically or when an owner has taken out equity loans on top of the mortgage loan and the loans equal more than the value of the home. A short sale can also occur when a homeowner is forced into foreclosure and the bank sells the house for less than the amount still owed. In any case, when all is said and done, the owner comes out owing money instead of earning a profit after the sale of the property.

The credit implications for a short sale are very different for those voluntarily selling their property and those forced into fore¬closure. If the property owner voluntarily selling the property can payoff the amount owed out of pocket by using assets already owned there should be no credit implications. If the property owner needs to take a new loan from a bank in order to make up the difference from the short sale, then the credit implications would be the same as the credit implications of taking out any loan. In fact, sometimes taking out a loan can improve a credit rating. Whether the new loan raises a credit score or lowers a credit score, most likely the new credit score will not be drastically different than the property owner's credit score before the short sale.

However, if the short sale is due to foreclosure, the property owner's credit could be negatively and severely affected. Here is why. Say the homeowner owes $100,000 on the foreclosed property, but the lender only gets $70,000 from the sale. The lender can then sue the homeowner for the $30,000 difference. But, the homeowner won't have the $30,000. If he did, he most likely wouldn't have gone into foreclosure in the first place. If the lender chooses to sue, and the homeowner cannot pay, a deficiency judgment would appear on the homeowner's credit report, negatively affecting the homeowner's credit.

Often, the bank chooses not to sue, but to take the loss as a write-off. In this case, there would be no deficiency judgment on the homeowner's credit report; however, there is another implication. The $30,000 that the homeowner did not have to pay would be considered by the IRS to be income. The lender will send a 1099 to the homeowner at the end of the year, and the homeowner will be required to pay taxes on that $30,000. Even when the bank chooses not to sue, the foreclosure can end up showing up in credit checks because it is a public record.

- Submitted by Dennis Kowalski
(415) 229-1241
denniskowalski@princetoncap.com

posted by SFResidence.com @ 8:05 AM 1 comments

Things to do in San Francisco - Part 24 - Vesuvio

This quirky and colorful landmark is still a gathering place for the "mad ones", just as it was in the 1950's!

Yahoo Travel says this about Vesuvio:

Above the colorful stained-glass windows of this 1950s beatnik haunt reads the mantra: "We are itching to get away from Portland, Oregon," and the names of the North Beach underground, the "mad ones," are drawn in cement near the cafe's front door. Such echoes of SF's literary history, along with an unbeatable second-story view of the colorful crux of Broadway and Columbus, bring a mixed bag of writers, artists and tourists to drink where Kerouac & Co., the aforementioned "mad ones" once did.

255 Columbus Ave
San Francisco, CA 94133-4508
+1 415 362 3370
vesuvio@vesuvio.com
Open Hours: 6am-2am daily
http://www.vesuvio.com

Neighborhood: North Beach

- Mick Orton

Part 1 - Golden Gate Bridge, Part 2 - Alcatraz, Part 3 - Japanese Tea Garden, Part 4 - Cable Cars, Part 5 - Fisherman's Warf, Part 6 - Exploratorium, Part 7 - Mission Dolores, Part 8 - San Francisco Museum of Modern Art, Part 9 - Lombard Street, Part 10 - Giants Stadium, Part 11 - Mission Cliffs Rock Climbing Center, Part 12 - Beach Blanket Babylon, Part 13 - Palace of Fine Arts, Part 14 - Asian Art Museum, Part 15 - Coit Tower, Part 16 - Musee Mecanique, Part 17 - Palace of the Legion of Honor, Part 18 - The Octagon House, Part 19 - Holy Virgin Cathedral, Part 20 - San Francisco Ghost Hunt Walking Tour, Part 21 - Yerba Buena Ice Skating & Bowling Center, Part 22 - 49-mile Scenic Drive, Part 23 - Segway San Francisco Electric Tour

posted by SFResidence.com @ 10:24 AM 0 comments

TRI Coldwell Banker San Francisco real estate statistics - last week in review

SFResidence is part of the TRI Coldwell Banker office at 1699 Van Ness in San Francisco which is one of the premier offices in the City and has the market share numbers to prove it. We have some of the top agents selling real estate in the San Francisco Bay Area. As a result, our office posts some impressive numbers.

After many weeks of frenzied activity the feeling is that the market may be slowing down, an unusual occurrence as summer draws near. Usually our summer market is booming, but if we don't have the inventory, that probably won't happen. We'll see what the next few weeks bring, but unless the listings are there to buy, Realtors have a hard time finding a new home for their clients. This week reports of multiple offers were there, but not as prevalent as in the recent past.

Here are the numbers for this week:

6/6/07

• 6 new listings (average price $1,436,167 - low $599,000, high $2,495,000)
• 11 ratified sales (pending) (average price $1,141,344 - low $539,000, high $2,150,000)
• 12 closed sales (sold) (average price $1,395,692 - low $636,300, high $3,250,000)

- Janis Stone

posted by SFResidence.com @ 1:05 PM 0 comments

San Francisco Real Estate Market Update for 5/26 - 6/1/07

Read what Rick Turley, President of Coldwell Banker, San Francisco/Peninsula says in his latest weekly report:

The long Memorial Day weekend gave Buyers, Sellers, and Agents a bit of a break. Some offices reported a quiet week, but the activity which did occur was mainly tied to sales - consuming more of our already depleted inventory, rather than listing new properties. Menlo Park/El Camino was the exception, reporting that quite a few new properties were introduced at the sales meeting this week. MP also commented on seeing a healthier listing/sales ratio in their marketplace. Dare we look for a balanced market this summer in the Peninsula??? Throughout all of Santa Clara county, there are 40% more properties currently available compared to the same week last year. But looking more closely at our Palo Alto, Menlo Park, Los Altos and Mountain View markets, there are 18% fewer properties available this year over last, holding true to the fact that higher priced communities are selling much more rapidly than the vast suburbs. San Francisco Van Ness reports their new sales outnumbered their new listings 3 to 1, but are looking for more listings coming in now that the holiday weekend is past.

We held almost 400 homes open during the week, and the lower-than-normal Memorial holiday attendance level was anticipated. The coast at Half Moon Bay was quiet largely due to both agents and clients vacationing.

The Bay Area market continues to be predictably unpredictable. In most areas, it is specific neighborhoods, schools, locations and streets that are generating the interest and buyer activity more so than the actual homes themselves. Berkeley, Oakland and El Cerrito saw multiple offers on homes in all price points. In Kentwood, a $3.95 million listing closed for $5 million after having received nine offers. In San Francisco, two properties in the Sunset district received 11 and 22 offers respectively. More frequently the numbers of multiple offers received in the City are closer to 4-6 competitors per multiple-offer sale. A listing of a SFR in the Inner Mission of San Francisco at just over $1M was all set for waiting through a Broker’s Open and the weekend of open homes before seeing offers. Plans changed when a buyer walked into the home unescorted while a painter was there working. They then got their agent involved in making a strong pre-emptive. Of course, that prompted another agent to submit on behalf of their client who had been waiting patiently as told to do. Ultimately the Seller decided to review the pre-emptive offers, issued multiple counters, and accepted a very strong deal before the first open house could be held. As Tim Curran would say: “What a country!”

Of the offices reporting, listing inventory remained steady for 16, increased for five and decreased for eight. Sales activity remained steady for 9 offices. It increased for 13 offices, and decreased in only seven.

- Rick Turley

* For an e-mail alert when this report is updated, send a note to info@SFResidence.com with "weekly market report" in the subject line.

posted by SFResidence.com @ 8:52 AM 0 comments

Got parking tickets?

A reader asks:

We recently had a situation where we loaned someone a car for an extended period of time (over a year) before they returned it to us. Is there a way to see if there are any outstanding parking tickets? We don’t want any surprises when we sell to a third party.

Our reply:

As a matter of fact, the City has a very good online system which may be reached through the Department of Parking and Traffic website. It allows you to search by citation or license number (which is what you will want to use). Keep in mind the records are about 48 hours behind.

- Janis Stone

posted by SFResidence.com @ 8:04 AM 0 comments

Discount brokers... do you get what you pay for?

By now I'm sure you've seen the 60 Minutes piece which aired on May 13th about Internet based real estate companies like Redfin putting forth the notion that people save money by using a company like this. Perhaps on the surface it looks that way by not paying a high commission, but the National Association of Realtors has done studies to show that people who work with a Realtor for 15% more than selling it themselves (which is essentially what Redfin helps you do), netting an amount over what a "sell it yourself program" would get. Read our article here.

Let's take a property with a market value of $500,000. Using the statistics above, an individual or couple selling the home themselves would end up selling that home (on average) for 15% less or $415,000. Many reasons could contribute to this fact (lack of knowledge of the current real estate market, the emotional drain of selling one's own home, stressful negotiations over the price, etc.). Regardless, selling the house with a Realtor at a 6% commission at full market value, the sellers would net $470,000 or 13% more that they probably would using a "sell yourself" company like Redfin. This is not something that 60 Minutes even considered.

Alex Perriello, President and CEO of Realogy (the parent company of Century 21, ERA, Coldwell Banker, and Sotheby's International Realty) submitted this letter to CBS News in response:

Your story on the real estate industry that aired on May 13th had more holes than a leaky roof.

Putting aside the inaccuracies regarding "sacrosanct" commission rates, lack of industry oversight and state governments conspiring to stifle competition, the segment grossly oversimplified the complexity of buying and selling a property.

Real estate brokerage is a performance-based industry. Clearly, not all real estate companies are alike. Results will vary dramatically based on a variety of factors, including the experience and track record of the professional you select. Picking an agent to represent you based solely on discount, rebate, or other cash back scheme may seem like a good idea at first glance, but not always at the closing table when all is said and done.

The bottom line is that consumers have ample choice when deciding which real estate company and business model they prefer to represent them in a transaction. Competition is good for the consumer and the industry and is the basis of our free market economy. At the end of the day, the companies that offer the best value proposition to home buyers and sellers will prosper.

What was also not disclosed in the story is the fact that "rebates" like the ones they showed Redfin giving their customers are illegal in some states.

- Mick Orton

posted by SFResidence.com @ 7:26 AM 0 comments

Things to do in San Francisco - Part 23 - Segway San Francisco Electric Tour

posted by SFResidence.com @ 8:04 AM 0 comments