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San Francisco Market Update | Q1 2014
We invite you to review Sotheby’s International Realty’s residential Market Update for San Francisco. This Market Update provides data for targeted San Francisco areas for 3-month period for Q1 2014 comparing current year with previous.
Market data provided includes Average List Price, Average Sold Price, Average Monthly Supply of Inventory among others for distinct San Francisco market areas and is broken out by both Single Family Homes and Condominiums. Additionally, included is a brief analysis of the current trend in the Market Overview section of each area which provides information on the latest month.
So you think you can’t afford to move?
We hear this all of the time: “It will cost me more to move than to stay in my current home.” This is especially true for homeowners who have been in their homes for many years. Perhaps you bought your family home in Pacific Heights in 1985. You paid $700,000 for your four-bedroom, three-bath dream home with space for a basketball hoop and raised your children there. You love your house — the memories made there are priceless. But now you are 63 years old, your children are adults, and you are tired of dealing with roof gutters and yard maintenance and all the other work your house demands. You might be thinking, It’s time to enjoy my retirement.
Have you dreamed about downsizing to a shiny new condo in a luxury high-rise building or maybe a beautifully remodeled smaller house? Something turnkey, where you can lock the door and leave it safely behind to travel the world for a few months? If you read the real estate ads, you might be shocked by today’s high prices. Yes, that nice little condo, much easier to care for than your current large home, is now selling for $2 million. And in normal circumstances, the property tax basis for that condo is $2 million, significantly more than your current $700,000 basis from your purchase price 28 years ago. There is no way you want to pay more property taxes. So you think you can’t afford to move?
Let us share some good news with you, which will probably change your mind.
If you are one of these people, and you or your spouse is 55 or older, you can take advantage of Proposition 60. Prop 60 was passed in 1986 and allows homeowners, under very specific conditions, to transfer their property tax basis. This means you can still live in this wonderful city and continue to pay low taxes.
Prop 60 allows you to cash out of your large home in Pacific Heights, now worth $3 million or more, buy a home for the same or lesser value, and transfer your tax basis of $700,000 from your old home. The following are the basic guidelines, but go to the California State Board of Equalization web site for specific information (www.boe.ca.gov/lawguides/property/current/ptlg/rt/69-5.html).
• Both the original property and its replacement must be located in the same county except for the nine counties as of September 2013 that allow intercountry transfers. The nine counties that allow this under the related Proposition 90 are Alameda, El Dorado, Los Angeles, Orange, Riverside, San Diego, San Mateo, Santa Clara, and Ventura. (This means that you can move either within San Francisco or to a home in one of these counties and preserve your tax basis.)
• As of the date of the transfer of the original property, the seller or spouse living with the seller must be at least 55 years old.
• The replacement dwelling must be of equal or lesser value than the original property.
• The replacement property must have been purchased or newly constructed within two years of the sale of the original property.
• The original property must be subject to reappraisal at its current fair market value as the result of its transfer (per the Revenue and Taxation code).
• Without exception, a claim for tax relief must be filed within three years of the date of purchasing the replacement property or the completion of the new construction.
This is a one-time allowable transfer, and only one replacement property is eligible. You can’t have two people living in the same home and have each be eligible for a replacement property, and it must be your primary residence. If a spouse has already taken advantage of this allowable transfer, you may not use it again.
The example above is based on our extraordinary real estate market in San Francisco. Of course, you can transfer your basis very easily in San Francisco, but you can also consider one of the other nine counties that allow the transfer and buy into a much lower-cost real estate market.
If you want to stay in San Francisco, there are many reasons to do so. The city is vibrant and we think keeps you young, if not young at heart. There are also several neighborhoods that are up and coming and still have more affordability. A few of our favorites: West Portal for its friendly atmosphere and walkability. It truly feels like a version of Mayberry, where you know your neighbors and shopkeepers. Golden Gate Heights has fantastic views and has easy access to dining on Irving Street and close proximity to West Portal. The Inner Sunset and Sunset offer some very good value as well. Bernal Heights is red hot right now and has a small-town feel in the midst of the larger cosmopolitan city.
For walkability and easy access to downtown, we love the North Waterfront. Stroll to the Embarcadero, Ferry Building, or center of the City. Leave the hills behind. South Beach and the Mission Bay area are home to several luxury developments and great weather. Maybe it’s time to explore other neighborhoods; you’re New Year’s resolution might include a move.
This information is provided as a brief overview. If you are considering this tax advantage, please consult a professional tax specialist. If the new property is even $1 over value of your current home, you will not be able to transfer the basis.
What SF Homebuyers Bought in 2013: A SurveyPenthouses, Mansions, Short Sales & Fixer-UppersWhat Did San Francisco Homebuyers Buy in 2013?
Views, prices, architecture, neighborhoods, property types and sizes, parking, probate sales and appreciation rates: We data-mined all of San Francisco’s 2013 sales reported to MLS through the end of November and charted the results below.
SF Ranked Top City For Trick-or-Treating
For the third consecutive year, San Francisco takes the prize asÂ Zillowâ€™s top US city for trick-or-treating. To help identify locations that could potentially dish out the most candy and present the least amount of safety and walking concerns, Zillow determines their rankings based on four categories of equal value: theÂ Zillow Home Value Index, population density,Â Walk Score, and local crime data fromÂ Relocation Essentials.
Other California cities that land in the top 20 are San Jose (#4) and Los Angeles (#6) eachÂ moving up a spot from last year, as well as San Diego (#12).
Curious which part of town takes the crown? Zillow also includes in their rankings the top five neighborhoods per city. San Franciscoâ€™s may surprise you:
#5-Â Glen Park
#4-Â Presidio Heights
#3-Â Cow Hollow
#2-Â Sea Cliff
#1-Â Noe Valley
Zillowâ€™s ranking is, of course, just one way of looking at it. Weâ€™ve gotten feedback that lists Cole Valley, St. Francis Wood, and West Portal as tried and true. Weâ€™d love to hear more â€“ chime in with your pick!
The Home-Selling Process
Selling residential real estate in the San Francisco Bay Area is a complicated financial transaction involving many important issues: home preparation, pricing and fair market value, comprehensive marketing across a wide variety of media, buyer profile and buyer qualifying, contract negotiation, showing the property, statutory disclosure of the propertyâ€™s condition and circumstances, buyer due diligence, appraisal and financing and liability management. Doing these things well can make a huge difference in time and money.
Below is a simple graphic that outlines the process, followed by a detailed step by step description from the first consideration of market conditions to having the proceeds of sale wired into your bank account. It’s relatively self-explanatory, but will make even more sense when reviewed with your agent, who can explain the decision points along the way and the strategies and options you will have at each step.
The Home-Selling Process â€“ in DetailFirst Steps
- Agent reviews Sellerâ€™s needs, preferences, priorities, timeline and special requirements
- Agent collects detailed information on the propertyâ€™s condition and circumstance
- Agent prepares comparative market analysis assessing current market conditions and comparable sales, pending sales and competitive properties
- Agent develops marketing plan to maximize buyer and broker response
- Agent and Seller review the listing, marketing and sales process; how to prepare the property to show to its best advantage; Sellerâ€™s relocation needs; and Agency
- Agent and Seller calculate estimated costs and proceeds of sale
- Agent and Seller review and sign state Agency Disclosure and listing contract
- Agent and Seller discuss timeline for preparing, marketing and showing property, protocol for offer presentation and Sellerâ€™s preferences for close of escrow
- Agent and Seller prepare property disclosure package of statutory disclosures, and other pertinent reports and documents
Preparation & MarketingÂ
- Agent collects keys, genies, alarm codes, showing instructions; HOA, building manager, condo or tenant information (as applicable)
- Agent coordinates staging and/or landscaping consultation
- Agent and Seller develop the property-preparation to-do list
- Agent begins development of marketing materials: flyers, brochures, direct mail and email pieces, newspaper and magazine advertising, open house advertising, sign, professional photography, Internet marketing, broker to broker marketing, etc.
- Agent schedules professional photo shoot of the property
- Agent coordinates pre-sale inspections of property: structural pest control, contractor, energy/water compliance, as appropriate
- Agent orders statutory 3rd party reports: city/county, natural hazard, etc.
- Property posted as featured home on Paragon and agent websites
- Property description, photos, brokersâ€™ tour and Sunday open house entered into MLS
- Property posted to hundreds of real estate listing websites with multiple photos, extended description and showing information
- Agent creates property-showcase website with description, photos, slideshow, neighborhood information, financing options, etc.
- Property is posted to Craigâ€™s List with photos, description and open house dates
- Agent orders property-purchase loan scenario sheets
- Agent arranges for catering of first Brokersâ€™ tour and Open House, as appropriate
- â€œJust Listedâ€ or Open House invitation cards mailed to surrounding area
- Agent alerts area brokerages via email announcements of new listing, showcase-website address, broker tour and open house dates
- Agent finalizes disclosure package of disclosures, reports and other pertinent documents
- Agent and Seller review market updatesâ€”new competitive properties, recent sales, changes in economic conditionsâ€”and revise marketing/pricing strategy as appropriate
- Property preparation to show is completed
Property Showing & Offer Review
- First brokersâ€™ tour; agent solicits feedback and reports to Seller
- First open houses; agent solicits feedback and reports to Seller
- Showings by appointment
- MLS, websites and advertising revised to reflect next brokersâ€™ tour and open houses
- Offer(s) received. Agent and Seller review offer(s)â€”price, terms, contingencies, close of escrowâ€”negotiating strategies and possible counter-offers. Agent negotiates, on Sellerâ€™s behalf and instruction, to achieve best possible price and terms
Offer Acceptance, Contingencies of Sale & Close of Escrow
- Offer is ratified; back-up offer is also ratified, if possible
- Agent confirms that escrow is opened and Buyerâ€™s initial deposit received
- Agent prepares Timeline for the Removal of Contingencies and Close of Escrow
- Agent provides Sellerâ€™s loan payoff information to Escrow Agent
- Property marketing continues until all Buyer contingencies are removed
- Agent coordinates the delivery of all outstanding statutory disclosures and documents to buyer
- Agent and Seller review Preliminary Title Report
- Agent coordinates and attends Buyer property inspections, and supplies Seller with inspection report copies
- Agent coordinates financing appraisal and monitors Buyerâ€™s loan approval process
- Agent monitors Buyerâ€™s removal of contingencies item by item as contractually specified: approval of RETDS, other disclosures and reports, inspection contingencies, loan and appraisal contingencies, approval of Preliminary Title Report, etc.
- As appropriate, Agent counsels Seller and facilitates Seller collection of additional informationâ€”contractor quotes, title and permit data, legal advice, etc.â€”necessary for Seller to understand, quantify and resolve contingency removal or renegotiation issues
- As necessary, Agent coordinates any statutory compliance or repair work necessary: energy and water conservation compliance, smoke detectors, water heater strapping, etc.
- Agent represents Seller should Buyer attempt to renegotiate purchase price or terms; Agent coordinates delivery of Sellerâ€™s Notice to Perform to Buyer, as necessary
- Buyer contingencies of sale are removed
- Agent confirms Buyerâ€™s increase of deposit into escrow, and Receipt for Increased Deposit under Liquidated Damages is completed, if and as contractually required
- Agent coordinates final Buyer walk-through
- Agent provides final escrow instructions, and schedules appointment for Seller to sign closing documents; Agent and Seller review Sellerâ€™s Estimated Closing Statement
- Agent and Seller meet at Title company for signing of closing documents
- Agent confirms with Escrow Agent everything is done for close of escrow: final Buyer monies deposited, funding of Buyerâ€™s loan
- CLOSE OF ESCROW
- Seller receives proceeds of sale; Agent coordinates delivery of keys, genies, alarm codes to Buyerâ€™s Agent
The quality of the agent working on your behalf, his or her competence, integrity, work ethicÂ and commitment to your interests can make an enormous difference in the outcome of yourÂ home saleâ€”often to the tune of tens or even hundreds of thousands of dollars.
Online Resources: All Things San Francisco
Online Resources for San Francisco Home Buyers
- Home-Buying Process
- Making an Offer
- Buyer and Seller Closing Costs
- Property Taxes
- Holding Title in California
- Home Inspections
- Getting a Loan
- Property Search
- Search Open Homes
- Real Estate Market Reports
- SF Neighborhood Values
- Mortgage Calculators
- SF Neighborhood Map
- Glossary of Real Estate Terms
- Online Home Design
- Remodeling Idea Books
Schools & City Services
- SF Unified School District
- SF Schools Parents Group
- SF Public & Private Schools
- School Academic Ratings
- SF Public Schools Map
- SF City Services Directory
- Dept of Building Inspection
- Property Look-Up: Permits, Zoning, Map
- SF Assessor’s Office
- 25 Planning Dept Maps
- Getting a Permit How-To Guides
- San Francisco Crime Map
- San Francisco Police Department
- SF Natural Hazard Maps
- USGS Susceptibility Maps
- Natural Disaster Preparations
About San Francisco
- Things to Do in SF
- Public Transport
- City History, Stories & Images
- Old San Francisco Photos
- Guide to SF NeighbordhoodsÂ
- San Francisco Parks
- SF Architecture
The Home-Buying Process
Buying a home is typically the largest, most complicated, and often most emotional financial transaction of one’s life. There is a lot at stake, not just money but also issues such as security, happiness and everything else wrapped up in the concept of “home.” One of the main reasons why it can be so stressful is that one’s agent never explains how the process actually works step by step, what the decision points will be and the options one has at each step. When one understands the process and has a sense of control over how it will proceed, much of the stress is alleviated.
Below is a simple graphic that generally outlines how one thing leads to another from first beginning the search for a new home to having the keys to the front door put into your hands. It’s relatively self-explanatory, but will make even more sense when reviewed with your agent. Remember that you are the sole decision-maker throughout the process: a good agent renders honest, experienced counsel and helps manage and coordinate everything that needs to happen, always with an eye to protecting your interests, but never presumes to make decisions for his or her client.
The quality of the agent working on your behalf, his or her competence, integrity,
work ethic and commitment to your interests can make an enormous difference
in the outcome of your home purchase.
From our NorCal network : The Artisan Group
516 Sugar Pine Drive
Incline Village, NV 89451
Offered at $1,199,000
For more information about this property or a referral to other areas of Northern California, please contact me.
Bay Area Home-Value Map
Home Values around the San Francisco Bay Area
A map of median house sales prices by city and town
for 3rd quarter 2013 sales reported to MLS.
In the map above, “k” signifies thousands of dollars and “m” millions of dollars. In one or two instances where the number of sales was insufficient for meaningful statistics, the median sales price is for the 2nd and 3rd quarters combined.
Maps that break down median sales prices and average dollar per square foot values for houses and condos in the different San Francisco neighborhoods can be found here:
Median Sales Price is that price at which half the sales occurred for more and half for less. The single median price for a town, city or neighborhood almost always disguises an enormous variety of sales prices in the underlying, individual home sales: For example, median house sales prices in the city of San Francisco range from under $500,000 to over $4,000,000 by neighborhood. Median sales prices may be and often are affected by other factors besides changes in value, such as seasonality; changes in financing conditions, buying patterns and available inventory; and significant changes in the distressed and luxury home segments. Short-term fluctuations are much less meaningful than long-term trends.
North Bay Real Estate Report: 3rd Quarter 2013 Update for Marin, Napa, Sonoma
Later this week on Parascope we will feature our New Home Developments Interactive Map –stay tuned!