Inside San Francisco Real Estate

We’ve been hearing a lot of talk lately about how the high-end of the real estate market is performing better than the overall market.  But what about here in San Francisco?  Some reports tout that the luxury market has remained relatively unscathed, while others say that there is a lag and it will soon be hit.  We wanted to sample some neighborhoods around San Francisco so we could get a feel, not just for the high end of the market, but also for the middle and low ends.

Here’s what we did.  The most expensive single family home to sell in 2008 (per the MLS) is in Pacific Heights.  The least expensive single family home to sell in 2008 is in Bayview. The neighborhood with the highest number of median-priced sales (median is currently $835,004) was Central Sunset. These 3 neighborhoods are our three samples from around the city of the high, the middle, and the low end.

The results from our analysis?

How you fared if you owned your property for... (click to enlarge)

For our commentary, continue reading –>

Clearly it looks as though the low end of the market was hit first by the downturn.  Both Pacific Heights and Central Sunset single family homes held their values longer, but are now clearly affected too.  And look at that– if you had owned your home in Bayview for 11 or more years, you’d be beating out the other two neighborhoods for long-term growth (percentage wise).  The low end of the market shows us a little more volatility… high highs and low lows.

Another interesting tidbit from the chart is that Pacific Heights SFH owners who have held for 7 years are doing a little better than those who held for 9 years.  The reason?  We’re guessing the timing of the dot com bust.  Central Sunset seems steady-eddie, even right up to the last 12 months it’s held its value and barely taken a hit thus far.

The overall wisdom from this chart is holding time.  We’ve written about it a lot, but this really drives the point home.  Real estate is a long term investment, and if you’ve held over the long term, no matter what sector of the market you’re in, you’ve done well for yourself.  Another wisdom is that the extreme ends of the market experience a bit more of a roller coaster ride than being in the middle market.

Any requests on what neighborhoods we look at next?

A rolling stone gathers no moss. Except in real estate... let the stone sit there so the moss can grow!!

Read more appreciation and hold time articles HERE.

*The data was gathered by taking the median sales prices for single family homes only, ranging from January 1 through December 3 of each of the last 14 years.  The appreciation rates were calculated by taking 2008′s median sales price and dividing it by the median sales price at each interval – 1, 3, 5, 7, 9, 11, and 13 years back.  All data is from MLS and does not reflect off-market transactions.  If you have a question about the data, you are welcome to contact us.