Tuesday, January 31, 2012

Pacific Heights: A Brief Interlude

Bound by Bush Street, Presidio Avenue, Union Street, and Van Ness Avenue, the Pacific Heights sub-district of San Francisco is one of the most enchanting, affluent and scenic areas of SF.  As a resident of Pacific Heights, I am often amazed by the various architectural details, ranging from Victorian to Mission Revival style homes – not to mention the exquisite views found once within!  Whether you are a passer-by or live in the area, you will undoubtedly fall in love with the beauty that lies here.

With a longstanding history, Pacific Heights was first developed in the 1870s, with small Victorian homes, and grown to become one of the most expensive parts of town.  You do not need to swing the latest Chanel bag to take advantage of this attractive area, as there is something for everyone to enjoy!  To help paint a picture of the splendor that exists, let me take you through some of the wonders found here:

·         Lyon Street Stairs: Once you reach Lyon Street, head down the Lyon Street stairs – all 269 of them!  And yes, back up them too.  You will be rewarded with beautiful landscaping, views of the Bay, and peek-a-boo looks into the homes that line the staircase.  If you go in the springtime, the blossom trees are like little pink clouds that will follow you up and down the stairs.
·         Alta Plaza Park & Lafayette Park: These green spots are located within blocks of each other, and offer a place for animal lovers to let their little creatures run and play amongst themselves.  Alta Plaza & Lafayette Park also caters to children with various swing sets and playpens.  And for the young at heart – tennis courts with fairly even pavement are here, which also present sweeping views of the City skyline once atop the parks.
·         Fillmore Street: Nearly all of the shopping in PacHeights is located on Fillmore Street, the definite retail and business hub of the neighborhood.  From Jurlique, which is a natural skin care product store - to Zinc Details, which offers small household items – you will find everything you need on Fillmore!
·          Cafes & Restaurants: The list goes on-and-on for scrumptious bites found right on Fillmore!  You will just have to take a stroll for yourself to find the many eateries, cafes and delicacies found on this historic street.  My favorite: Dino’s Pizza, which is on the corner of California & Fillmore ;-)

There are clearly many more intangibles to note about how wonderful Pacific Heights is and the many joys the neighborhood brings to its residents. 

One final, complementing point regarding real estate values I want to add is that the "average" selling price has increased by 12% over the past six years in PacHeights – remarkable given the downward pressure experienced in real estate values throughout the majority of the country!  This just goes to show you that ‘location, location, location’ is ever-so crucial when it comes to identifying a sound piece of property – and Pacific Heights fits the bill to the fullest!

Thursday, January 5, 2012

Snippet from WSJ on Multi-units

Today’s WSJ details Federal Reserve action on the Housing market:

WSJ, January 5, 2012:

            …“Multifamily property has been the star of the real estate sector for more than a year, generating profits for landlords but headaches for renters struggling with the economic downturn…”

            …“By contrast to national figures, San Francisco’s landlords managed a 5.1% gain over the past year, while San Jose climbed 5%, fueled by a booming tech sector…”

… “The rental market has also been fueled by a dearth of new supply. Just 8,865 units were produced in the fourth quarter…the second lowest quarterly figure since 1999…”

Tuesday, January 3, 2012

Bang for your buck? – Let the Stats decide…

If you are looking to buy your ideal home and keep within your budget it is a great idea to check out and review the S&P / Case-Shiller Home price index (we will call this ‘The Index’ from now on).  It will help you understand where you can get the most bang for your buck in the long and short term – as ‘The Index’ examines the stats for homes in San Francisco, San Mateo, Marin, Contra Costa, and Alameda County – among other metropolitan cities.

‘The Index’ latest stats help us rank homes into three simple categories:
  1. Top 3rd (homes over $599k) is down only 1.6% year-over-year, but rose 0.3% from September to October, 2011
  2. Bottom 3rd (under $319k) is down 9.1% year-over-year, and the
  3. Middle 3rd (everything in between) is down 8.1% year-over-year

What we are seeing is that in the Fall of 2011 the Middle and Bottom 3rd of homes lost the most value compared to the year before, and the Top 3rd of homes actually gained value when examined on a monthly basis. Hmmm, I know the question you are asking yourself: ‘Why did the Top 3rd do better?’

It can be interpreted that the higher priced, amenity rich homes in San Francisco tend to hold their values longer and stronger than homes found on the other side of the spectrum where a great degree of gentrification may be taking place, for example (i.e. Bayview-Hunters Point).  Am I suggesting buying outside your means?  Overspend?  No, I am asking that you think about your long term plans and if that extra ‘stretch’ will be worth it while also making sure you are okay with the compromises you may be making.  When you have a free moment, Google ‘mortgage calculator’ and run the numbers to see just how marginal an additional $50K to $100K mortgage may be on a home.  You may be surprised!

Often times, during my Buyer clients home search, we come across the hurdle of determining whether the additional monies needed to bump-up to the next tier of homes’ offers a true, longer-term benefit worth taking.  In the end, we have experienced time-and-time again that making that extra financial ‘push’ proves beneficial, as:

  1. the buyer pool is larger when one goes to resell the home
  2. the overall resale value is thereby greater
  3. supply / demand dynamics are more robust
  4. one typically gets a home they can ‘grow into’ vs. compromise on size and space 

So, take the aforementioned stats as an indicator that (more often than not) if one is able to afford slightly more and spring-up to another tier of homes offered, then you will likely get a more resilient asset with greater long-term benefits to boot.