Inside San Francisco Real Estate

We recently built some spreadsheets for a client who is looking to purchase a condo in Alamo Square, and as part of our due diligence, ran some trending analysis for them.  Alamo Square is a tiny neighborhood with few sales, so finding trends in the area is a tough assignment.  We had to think through adjacent areas that exhibit similar traits, both from a residential and commercial standpoint.  We determined that Hayes Valley, NOPA, and Lower Pacific Heights were similar enough (and also located in MLS District “6″) to lump together with Alamo Square and see what the overall trends were.

Cue the "Full House" intro...

So that’s what we did… we looked at median sales prices for condos in these ‘hoods dating back to 1995.  We wanted to include 2009, so we capped each year at July 15th, controlling for seasonal fluctuations.  We also inflation-adjust the medians, so we could see market movement isolated from the changing value of the dollar.

The last step was to look at the same trends for San Francisco’s condo market as a whole, and place the two lines on a graph to see how similar (or dissimilar) they were.  What resulted was pretty interesting, and you can see the charts by continuing to read –>

Condo Trends in Select Dist 6 Nabes (click to enlarge)

• District 6 peaked in 2008, and is since down ~16%.
• The City as a whole peaked in 2005 and is since down ~18%.
• District 6 showed better resilience than the city as a whole during the last downturn, which took place during the dot com crash and the terrorist attacks of ’01.
• Keep in mind we’re only looking at January 1-July 15 for any given year.

Overall, District 6 condo behavior tends to mirror that of the entire City quite well.  The lines show that it has fared a little better with regard to value retention.  During the last trough it did not fall as far as the rest of the City, which is another interesting tidbit.

Number of Condo Sales - Dist 6 vs City (click to enlarge)

• The volume of sales in District 6 has declined ~67% from peak, which was in 2005.
• The volume of sales in the City has declined ~56% from peak, which was in 2004.
• Year over year, District 6 sales volume is down ~22% vs ~35% for the entire City.

Final Thoughts

The District 6 analysis shows that condos in these areas have fared slightly better than the City overall.  Sales volume and medians are down in both cases, but history showed us that District 6 tends to hold up a little better during downturns.  With the planned Divisadero beautification project, continuing improvements in Hayes Valley, a new Japantown plan, a Fillmore corridor that’s changing for the better, and the slow & steady improvement of NOPA, we feel like Alamo Square is smack in the middle of a lot of good things.