Archive for the ‘Home Selling’ Category
July 28, 2009
Closing costs? Yikes. Complicated subject. That is, until now. One of our all-time favorite real estate related websites is www.closing.com and it provides answers to the most detailed of closing cost scenarios. Here’s how it works:
- You tell Closing.com the address of the property you’re looking to buy or sell and the property type (condo, single family, etc).
- Plug in the purchase (or sale) price, down payment, interest rate, and whether you intend to occupy this property or rent it out.
Plug in some basic info...
That’s it. Closing.com will spit back a monthly payment estimate, and it knows the tax rate for the zip you entered. Next, it will lead you to some title insurance and home warranty providers. Select (or shop) policies to arrive at the final screen, your Estimated Closing Costs Report. Handsomely laid out, this report will detail Read the rest of this entry ?
Posted in Home Buying, Home Selling, Neat Stuff & Gadgets, Tips | Tagged closing costs, closing.com, home buying tips, home selling tips, how to calculate closing costs, san francisco real estate | Leave a Comment »
July 26, 2009
Fresh back from a jaunt to Seattle for some much needed R&R, we’re here with our Quarterly Report. A lot of scenes unfolded in Q2. Below is the scoop:
Click HERE for a convenient 1-page PDF document you can print and take with you.
The first half of '09 is over. What wisdom has shone through? (photo courtesy of travel.internetindia.com)
The first half of 2009 is officially history and we have some general observations about the real estate market. Three dramas are currently playing themselves out which can be discerned by dividing the market into three segments; the high end (luxury market), the middle, and the low end.
The luxury market held out longer than any other segment during the downturn, but has now made up for lost time and is experiencing drastic price reductions. It has not yet stabilized, and it could be some time before it hits bottom. The availability of reasonable jumbo loans has played significantly into the fate of the luxury market, making it tough for things to improve. In San Francisco, the luxury market includes homes priced at $2M+.
The low end of the market has shown the most activity in 2009, and it is safe to say that it seems to be stabilizing. It was the first to react to the downturn, and will be the first to stabilize. Homes in San Francisco priced below $750,000 generally fit into this segment.
The middle market is a mixed bag of tricks. There is a gradient of decreasing stabilization as you move from the $750,000 price point up to $2M.
Overall, sales activity in Q2 has picked up quite significantly from a dismal Q1, but is still down year over year. City-wide, prices are down year over year anywhere from 10% to 35%, depending on the neighborhood. Neighborhoods with high foreclosure rates (those south of I-280) have been hit harder than those in the northern parts of the City. Inventory levels also play a major factor in how specific neighborhoods are holding up. Those with a glut of inventory fell harder than those with tight inventory.
Stemming from these observations, we have some of advice that you may find helpful. Read the rest of this entry ?
Posted in Home Buying, Home Selling, Quarterly Reports, Tips | Tagged q2 2009, quarterly report, real estate trends san francisco, san francisco, san francisco real estate | 5 Comments »
July 22, 2009
A new service now exists for people trying to sell their homes but A) don’t have any furniture in their homes, and B) want to save big bucks on staging.
What’s this service called and how is it done? It’s called “Virtually Staging Properties“, and it’s done by placing 3D renderings of furniture, accents, and other odds and ends on top of real property photos. Here, have a look:
Empty Dining Room - Before
Empty Dining Room - After
So what are people saying about Virtually Staging Properties? Reactions range from Read the rest of this entry ?
Posted in Home Selling, News, Tips | Tagged 3d renderings in real estate advertising, home seller tips, real estate marketing, san francisco, san francisco real estate, selling homes, virtual staging, virtually staging properties | 1 Comment »
May 22, 2009
When it comes to real estate, some things never change. One of them is location. Once you choose a spot, well, you have to be happy with that spot. And some spots are so superior to most everything else that they result in the fastest sales.
Case in point, 765 Sanchez, which hit the market on May 1, 2009. Just 11 days later, the home was not only in contract, it had closed escrow (which screams ‘all cash buyer’ when escrow is that short).
The home, a fixer with plans, sits high in Dolores Heights with drop-dead views of the City and nothing slated to block its view in the future. Its potential to shine with the right renovations and decor is huge. It was listed at $3,250,000 and sold for an undisclosed amount. The home boasts 3 bedrooms, 2.75 baths, around 3,271 square feet, and was built in 1959. The list price was about $994/square foot, and if this home sold near asking, represents the highest sale in District 5 so far in 2009.
765 Sanchez Exterior
Why this spot is adored...
For more photos, continue reading –>
Read the rest of this entry ?
Posted in Dolores Heights, Home Buying, Home Selling, Neighborhood Info, Snatched Up, Taking You Inside, Tips | Tagged 765 sanchez, all cash, district 5, dolores heights, fast sale, liberty hill, location, san francisco, san francisco real estate | 3 Comments »
May 18, 2009
About six weeks ago we wrote about our observations that the high end of the market is hurting while the low end is experiencing a mini-boom. We now have more evidence that this trend is taking place.
Terradatum, a company that crunches and publishes real estate statistics, puts together a list of spreadsheets and sends it out to the SFAR (San Francisco Association of Realtors) each month. We borrowed some data from Terradatum’s most recent email blast and built our own graph. We were interested in seeing how San Francisco’s housing market has changed over the past two years.
How badly is the luxury market hurting?
First, we took the median list price for single family homes in the City and plotted the monthly points over the past two years. Then we took the median sales prices for single family homes in the City and plotted those monthly points over the past two years. The results were pretty nifty. Not only did we find a trend, but we actually identified the cross-over point… the point in time where the luxury market started to recede and the low end of the market began to pack more oomph. Read the rest of this entry ?
Posted in Home Buying, Home Selling, Macro-Level Info, Nerdy RE Analysis, Tips | Tagged luxury market, predictions, real estate trends, san francisco, san francisco housing market, san francisco real estate, terradatum, Tips, trends | 2 Comments »
May 14, 2009
We recently discovered a website that aggregates rental data for many metros across the U.S. It’s called Zilpy. You can use it to find rental comps, discover rental trends, and to learn more about your local rental marketplace. We find it quite helpful and well laid out.
The start screen is simple and welcomes users with three options — Are you an investor, renter, or a landlord? From there you can search the Google Map mash-ups and delve into oodles of stats. Have fun!
www.zilpy.com
Need rental comps? Zilpy can handle that.
To share this article, continue reading –>
Read the rest of this entry ?
Posted in Home Selling, Neat Stuff & Gadgets, News, Tips | Tagged apartments, landlords, real estate investing, rental market trends, rental stats, rentals, san francisco, san francisco real estate | Leave a Comment »
April 27, 2009
It’s something we’ve often pondered. If you have a fixed mortgage payment over 30 years, that payment becomes more and more like child’s play as the years progress and inflation rises. What once seemed like a fortune when you first purchased your home is diminished over time with rising salaries, consumer prices, and paying back your loan with less valuable dollars than you initially borrowed.
Inflation Rates of Nations Around the World (click to enlarge)
It’s an interesting theory, and we read an article that talks about inflation-hedging investments. You can click HERE to view the article, which was published by USA Today (John Waggoner). If you don’t have time, here is a snippet from the part that discusses real estate: Read the rest of this entry ?
Posted in Home Buying, Home Selling, News, Tips | Tagged deflation, hedge, inflation, News, preparation for inflation, san francisco, san francisco real estate | Leave a Comment »
April 23, 2009
This story comes to us from Atlanta, GA. It illustrates a little tip to those of you looking to get into a real estate investment or purchase a home. Here’s the advice: Your builder does not care about you.
How do we know? Let’s take an example from this Atlanta story. Why Atlanta? Well, we don’t want to smear anyone in SF on a public message board, but 2,500 miles away in the A-T-L… we’re blowing the whistle. Off the public board, however, we advise our clients how things shake out here locally.
Anyhoo, there is a company that built a high rise condo building in Midtown Atlanta in 2004. Units sold like hotcakes at the time. The sales center opened and it was like an old west land grab over the ~380 units. The building, named “Spire”, caters to a young, professional, and hip crowd addicted to city living, incredible views, and night life that never ends. Owners happily moved and settled in. The builder had acquired a nice batch of customers.
Spire was a hot commodity in '04.
Fast forward to 2007. The same builder went directly across the street and built Read the rest of this entry ?
Posted in Appraisal 101, Home Buying, Home Selling, Tips | Tagged atlanta, builder discounts, condos, inventory, over development, price gouging, san francisco, san francisco real estate, spire midtown, viewpoint midtown | 1 Comment »
April 9, 2009
The first quarter has been interesting. We’ve broken the market into price segments and tallied up the action going on in each bracket. Then we compared this year’s first quarter activity to the first quarter of 2008. The numbers are telling, and they probably explain why medians have come down so far this year. Here are the bullet points from our research:
- Activity in the lowest price bracket, under $499,999, actually increased by nearly 15% year over year.
- The next bracket, $500,000 thru $999,999 saw a drop in activity of nearly 29% year over year.
- $1M thru $1,999,999 saw a more significant drop in activity, with a 55.78% decline in the number of transactions compared to Q1 2008.
- And the highest portion of the market, $2M and above, is hurting the most, with a 71.08% drop in activity!
- Total Sales Volume for all price brackets is down nearly 35% year over year thus far.
- With more action taking place on the low end of the market and less on the high end, it’s no wonder why median prices are down so much this year.
After putting the market under the microscope, we've determined that the low end is smokin'!
When we published our Q1 2009 Report, we mentioned that we had noticed these trends in the marketplace, and now we have the numbers to prove the point. This is very useful information if you’re in the market right now. As we mentioned in our report, the time is ripening for buyers to get into the higher ends of the market. Jumbo money has slightly loosened up recently and rates have eased. If you’re selling on the low end, it could be a good time for you as well.
Want the full spreadsheet? Click HERE.
*Please note that the total number of sales is for San Francisco only, and property types include single family homes, condominiums, stock cooperatives, lofts, TICs, and 2-4 unit buildings.
To share this post, continue reading –>
Read the rest of this entry ?
Posted in Home Buying, Home Selling, Macro-Level Info, Nerdy RE Analysis, Tips | Tagged market trends, numbers of sales, q1 2009, sales volume, san francisco, san francisco real estate, Tips, year over year change | Leave a Comment »
April 7, 2009
In the April 2009 edition of Realtor Magazine, there was a particularly interesting article about real estate market cycles. It addressed issues such as inventory levels, appreciation, and stages of a market cycle. Some of the bullet points include:
- Appreciation was out of whack from 2000-2006, a time in which values went up on average 89%.
- The market is in balance when there is 5-6 months of inventory available.
- The stages of a market cycle resemble Elisabeth Kubler-Ross’s states of death and dying. Optimism, Excitement, Euphoria, Denial, Fear, Panic, Despondency, Depression, Hope and back to Optimism.
We scanned the most interesting box, which details these bullets.
Market Cycle Info (click to enlarge)
We’re big believers in keeping close tabs on inventory levels in individual neighborhoods. We have put together a spreadsheet that contains all of San Francisco’s neighborhoods, how many properties have sold during Q1 2009, how many are for sale, and how many months of inventory there are in each. From these figures we are able to determine which neighborhoods are:
- Strong sellers’ markets
- Sellers’ markets
- In balance
- Buyers’ markets
- Strong buyers’ markets.
You may be surprised at the results from Q1 ’09. Because the spreadsheet is too large to post here on the blog, you may contact us if you’d like a copy for yourself. We continuously update this spreadsheet throughout the year so we can track the individual neighborhoods.
And why do we do all this? We’re big believers in the notion that there are a myriad of opportunities no matter the market’s condition. The key is understanding where they are. And it’s info like this that paints a picture of where the opportunities lie.
To share this article, continue reading –>
Read the rest of this entry ?
Posted in Home Buying, Home Selling, Macro-Level Info, Nerdy RE Analysis, News, Tips | Tagged appreciation, depreciation, inventory levels, inventory spreadsheet, market absorption, market cycles, san francisco, san francisco real estate | 3 Comments »
March 4, 2009
I’m about to share something with you that I learned many years ago in real estate appraisal school. When I first heard it, I thought my instructor was joking. But as she proceeded to explain, I realized it was very real.
The story has to do with how real estate values are affected by paranormal activity, ghosts, or stigmas of being haunted. I learned that if a seller knows of any of these activities going on in their home, they must disclose it! Sound too kooky to be true? That’s what I thought… but consider this scenario:
Mike and Ann are moving from New York to New Orleans. They found a charming old home in the Garden District, one with incredible architecture, rich history, and plenty of character. The home has been on the market for nearly a year. Mike and Ann submit a low offer, and much to their surprise, it’s accepted! They are very excited about their move.
After settling in, they quickly learn from neighbors and locals that the home has long been rumored to be haunted. Mike and Ann are now the rightful owners and become frightened by the news. There was nothing in the disclosures that stated anything out of the ordinary. They decide to list their home and after 2 years on the market, realize that they’re sitting on an illiquid asset. What happens here?
First and foremost, if something is material fact it must be disclosed. The fact that the home had “paranormal activity” of course cannot be proven. The stigma in the market area, however, is very real, and is a material fact. Court rulings have set precedent in these instances that would give Mike and Ann a case.
The lesson? If you’re in doubt about whether or not to disclose something, it’s always best to disclose it. Or, like my old appraisal instructor used to say… “Disclose, disclose, disclose!!”
We got a sweeeet deal!
Interesting articles that discuss haunted houses, superstitions, and paranormal activity as it relates to real estate:
Article One | Article Two | Article Three
To share this article, continue reading –> Read the rest of this entry ?
Posted in Appraisal 101, Home Buying, Home Selling, Tips | Tagged disclosure, ghosts, haunted houses, law suits, paranormal activity, san francisco, san francisco real estate, superstition | Leave a Comment »
February 26, 2009
All right now, get those dirty thoughts out of your heads. What we’re referring to here is the power that buyers have over the market right now. Let’s take a look at some interesting phenomena we’re seeing out there :
1) In any given market you’ve got a batch of sellers. Which ones are the truly motivated ones? Most of the time it is tough to tell. Present market conditions have created a grand exposé. The curtains are now pulled back and buyers have more insight than ever into who the eager sellers are.
2) Sellers generally have a bottom price in mind when they list their homes. They usually list their homes above that bottom to build in a little cushion to negotiate. That bottom figure is top secret. They play their cards very close to their vests and you usually never know what bottom is for them until you begin negotiating. This comes as no surprise. However, what we’re seeing play out in the marketplace lately is sellers are feeling increased pressure from falling prices, rising inventory, and the lowest consumer confidence levels on record. This is causing more sellers (particularly the smart ones) to cut to the chase and list their homes at levels that will attract attention.
Buyers are now able to peek behind the curtains.
3) The typical seller is currently challenged by chasing a moving target. The market has changed so dramatically over such a quick period that finding the true market value a home ain’t all cotton candy and ferris wheels. It’s become a major headache for sellers, who have desperately been trying to find that number with price drop after price drop, causing even more apprehension on the part of buyers. This leads to a vicious cycle.
4) Buyers are either sitting on the sidelines, waiting for confidence to build, or are bidding very cautiously. We have seen some homes selling at and above asking, with multiple offers, but nothing on the scale of years’ past. Generally speaking, buyers seem to be in complete control right now.
Why are these points important? Two reasons. First, if you’re a buyer, take full advantage of seeing the other players’ cards right now. If you’re a seller, particularly a motivated one, be realistic about your asking price and know the psychology of the typical buyer before you launch your home into the marketplace. If you’re interviewing listing agents, don’t fall for the one with the highest list price. You’ll want the agent that tells you how it is, despite how tough that pill may be to swallow.
To share this post, continue reading–> Read the rest of this entry ?
Posted in Home Buying, Home Selling, News, Tips | Tagged buyers, commentary, home prices, market forces, market trends, prices, san francisco, san francisco real estate, sellers | Leave a Comment »
February 24, 2009
We were perusing through some stats the other day (imagine that!) and happened upon a list of the top 5 states with the newest housing inventory. Here is the list, courtesy of Arun Barman, Research Economist at Realtor.org.
- Nevada – 7.7%
- Arizona – 6.7%
- Florida – 5.4%
- Idaho – 5.4%
- Texas – 5.0%
We’ve long held the hypothesis that run-away development can ruin a real estate market, but we’d yet to really see a macro-level list that corroborated that thought. What of course jumped off the page to us is the top 3. Nevada, Arizona, and Florida all have had major real estate busts.
Where is California, you might ask. California experienced growth in new inventory over the past real estate boom. However the growth in new inventory did not cast a shadow over existing inventory (as it did in the other states) which is why California did not make the list. With development costs in California so high, investors and/or developers are more apt to rehab and flip property than they are to build new. The places where property values have taken the biggest hits in California (and the Bay Area) are the newer suburban and exurban developments. In general, the more established communities have been hit, but not as hard.
Getting back to the hypothesis, it really all comes down to value. The four tenants of values are demand, utility, scarcity, and transferability (remember it as “DUST”). An item (any item) must have all four of these characteristics to have value. When developers go crazy, building anything and everything in a booming real estate market, they put downward pressure on the existing homes in the area. This is because all the new inventory greatly affects the scarcity portion of the value equation.
It is for this reason (we believe) that San Francisco’s market has not imploded the way other markets around the nation have. The lion’s share of San Francisco inventory is old, scarce, and one-of-a-kind. Furthermore, our local government makes it very difficult for developers to build massive structures that send un-welcomed, downward property value pressure throughout our neighborhoods.
Age of San Francisco's Housing Stock - Courtesy of Propertyshark.com (click to enlarge)
This is a big reason why we’re especially cautious when taking clients around the newer parts of the City. We’ve seen what an onslaught of new inventory can do to real estate markets and we’re wary of what it will do here (albeit localized to just a few select pockets within SF).
Do we hate developers? Read the rest of this entry ?
Posted in Appraisal 101, Home Buying, Home Selling, Macro-Level Info, Nerdy RE Analysis, New Developments, Tips | Tagged arizona, developer, florida, housing development, housing stock, markets, nevada, san francisco, san francisco real estate, value, year built | 5 Comments »
February 20, 2009
This is a very important question, as many new developments have sprung up over the years, particularly in parts of the city south of Market Street. The answer is yes, it is okay to buy in a new development, but keep in mind the following tips:
The area south of the financial district has seen rapid condo inventory growth.
1) Always bring an agent. You have to have your agent with you during your first visit to any given sales center if you plan on using one. Very few developers will allow you to visit alone, and later come back with an agent to represent your best interests. This is a developer custom that has evolved over the years, because like all sellers, they pay your agent’s commission. Fortunately, having an agent represent your interests costs you nothing.
2) Why use an agent? There are countless reasons, but an important one with regard to new developments is that good agents know how soft prices are at each development. Some make concessions, some are taking low offers (in some cases VERY low offers) and some are throwing in goodies such as hardwoods and appliance packages. Conversely, some are not making any concessions. A good agent will know what’s going on at each development and how to get you more for your money.
3) Above and beyond negotiation, another thing a good agent will do for you is keep you away from developments that are fledgling or are headed for big trouble. There are developments (both new and existing) that I wouldn’t let my clients touch with a ten-foot pole. Mismanaged HOA’s, annual budget deficits, lots of REO’s, poor construction quality, and law suits are just the tip of the iceberg. Beware the agent that says all these developments are perfectly good investments. They’re not.
Four more great tips if you continue reading –> Read the rest of this entry ?
Posted in Financial District, Home Buying, Home Selling, Neighborhood Info, SoMa, South Beach, Tips | Tagged condominium, condos, high rise, inventory, new developments, san francisco, san francisco real estate, soma, south beach, Tips, trends | 2 Comments »
February 4, 2009
One can often tell how hot or cold a real estate market is by how long it takes a typical home to sell. When homes are selling within a few weeks of hitting the market, things are pretty hot. Conversely, when homes sit on the shelf for a while, the market is cold. The duration of time a home is on the market is known as “marketing time”, “days on market”, or “DOM” for short.
In any given U.S. market, marketing times averaging less than 30 days signal a red hot market where properties are selling like hot cakes. Average marketing times between 31 and 59 days signal a strong market. When marketing times are between 60 and 180 days, the market is believed to be in balance.
Remember when homes were selling like hotcakes?
Once average marketing times surpass 180 days, however, things are looking grim and signal a weakening of the market in question.
How do we know these cutoffs are reliable indicators of market conditions? Well, we didn’t just make these numbers up– they’re actually what the banks have set forth as their guidelines. Matter of fact, average marketing times are printed right there in the appraisal report, which the lender scrutinizes carefully (especially these days).
Appraisal report snipit (click to enlarge)
Now that we’ve discussed marketing times and what a hot market, a market in balance, and a cold market look like, how would you like to see some trends in San Francisco? Well that’s just what we’ve done. We plotted average and median marketing times for all property types in the City and looked at the trends over a 14-year history. Here’s the chart:
Read the rest of this entry ?
Posted in Home Buying, Home Selling, Macro-Level Info, Nerdy RE Analysis, Tips | Tagged analysis, days on market, dom, history, marketing times, san francisco, san francisco real estate, Tips, trends | 1 Comment »
Show me your bottom!
February 26, 2009All right now, get those dirty thoughts out of your heads. What we’re referring to here is the power that buyers have over the market right now. Let’s take a look at some interesting phenomena we’re seeing out there :
1) In any given market you’ve got a batch of sellers. Which ones are the truly motivated ones? Most of the time it is tough to tell. Present market conditions have created a grand exposé. The curtains are now pulled back and buyers have more insight than ever into who the eager sellers are.
2) Sellers generally have a bottom price in mind when they list their homes. They usually list their homes above that bottom to build in a little cushion to negotiate. That bottom figure is top secret. They play their cards very close to their vests and you usually never know what bottom is for them until you begin negotiating. This comes as no surprise. However, what we’re seeing play out in the marketplace lately is sellers are feeling increased pressure from falling prices, rising inventory, and the lowest consumer confidence levels on record. This is causing more sellers (particularly the smart ones) to cut to the chase and list their homes at levels that will attract attention.
Buyers are now able to peek behind the curtains.
3) The typical seller is currently challenged by chasing a moving target. The market has changed so dramatically over such a quick period that finding the true market value a home ain’t all cotton candy and ferris wheels. It’s become a major headache for sellers, who have desperately been trying to find that number with price drop after price drop, causing even more apprehension on the part of buyers. This leads to a vicious cycle.
4) Buyers are either sitting on the sidelines, waiting for confidence to build, or are bidding very cautiously. We have seen some homes selling at and above asking, with multiple offers, but nothing on the scale of years’ past. Generally speaking, buyers seem to be in complete control right now.
Why are these points important? Two reasons. First, if you’re a buyer, take full advantage of seeing the other players’ cards right now. If you’re a seller, particularly a motivated one, be realistic about your asking price and know the psychology of the typical buyer before you launch your home into the marketplace. If you’re interviewing listing agents, don’t fall for the one with the highest list price. You’ll want the agent that tells you how it is, despite how tough that pill may be to swallow.
To share this post, continue reading–> Read the rest of this entry ?
Posted in Home Buying, Home Selling, News, Tips | Tagged buyers, commentary, home prices, market forces, market trends, prices, san francisco, san francisco real estate, sellers | Leave a Comment »