Wednesday, January 22, 2014

It's All in the Flow

Whether you're a long-time resident of the City by the Bay or an occasional visitor looking to move in, you know how the feel of the city changes from neighborhood to neighborhood – even block to block.  With every step you take, the vibrant character of the city enfolds you and informs your experiences.

When it comes to choosing a home in San Francisco, the layout of your space can be as dramatic as the change from neighborhood to neighborhood.  Imagine walking into your home and feeling the living room opening up around you, its window facing out over the view from one of the city's great hills, with an open-plan, and eat-in kitchen so that the whole space feels luxuriously vast.  Or perhaps you'd prefer walking into a cozy reading room, set aside from the concerns of the day, and a large second bedroom appointed as a home office.  

The floor plan of your home controls how you move through the space, how you interact with it, and how you live in it. And as the old saw goes: when they are good, they are very, very good.  And when they are bad, they are awful.  Narrow entryways, rooms that aren't conveniently sized for their intended uses, or a lack of storage space that causes clutter to overflow into living areas all contribute to a cramped, restless feeling – not good, for the place you want to be able to unwind in!

These days, many developers are taking the stately old Edwardian and Victorian homes in San Francisco and renovating them into something more modern.  With the value placed on housing inside the city, there's often a call to make the most of a limited space, and a floor plan that emphasizes natural light and an easy flow from one area to another can make a modest home feel much bigger on the inside.

Visit prospective properties to get a feel for them.  Walk the routes through the living rooms and kitchens and to the bedrooms and bathrooms; imagine how furniture would look, and what space it would take up.  See if there's room to stretch out, literally and figuratively, and imagine if the daily motions of your life feel comfortable in the property's layout.  If they do, then congratulations: you might just have found your new home.

Friday, January 10, 2014

Statistical Analysis of Property: Cow Hollow

I’ve always been curious to actually get into the nitty-gritty of the SF real estate data.  We spend a lot of time regurgitating opinions, but for once I actually went to the raw data myself: I got a mathematician from The University of South Carolina involved to conduct a study on property information, covering both the Cow Hollow and Marina Districts.  This is an original piece, so I get to speak with a lot of authority here.

Below are some of the discoveries made on Cow Hollow (click on image to enlarge):

  • The proximity to the median price - the number exactly in the middle - captures over two-thirds of the values of Flats, Single-Family Homes, and Condominiums in Cow Hollow.  Paying attention to the median as a price proxy is, therefore, most important.  It’s also a little better than talking in averages because as you see in the charts above… the data skews nicely.  No surprises there.
  • A predictor model was developed and it was discovered that square feet is a leading predictor of price!  We kind of knew this all along - but now we have the evidence - that's encouraging.
  • After making sure that bedroom and other inputs do not skew the relationship of total square feet to price - we tested for normality.

And that’s exactly what we got: the data we worked with is reliable!  In English: we can trust the results.

Here comes the coolest part of all: we figured out how to model an expected price based on key inputs:
Using the above chart as an example of outcomes: what we are able to do is determine relationships between key factors of a property - number of bedrooms, bathrooms, square footage - which are dubbed “residuals” in fancy terms - and how that tentatively translates into price.

Everything is about comparisons, and this is precisely how we maximize the ability to compare and spit out a more reliable listing indicator.  At the end of the day, most of this is behind-the-scenes work, but for once I wanted to put it out there so you could see at least some of the methodology.  Based on the responses to this I would love to get more specific with other sub-districts.  Feel free to email me at  

Thursday, January 2, 2014

Where’s the Next Goldmine in SF?

Buyers and developers alike always ask me, “Dino, what areas of the city are undervalued – where can I expect the greatest appreciation looking ahead if I were to buy today?”  This is a very good question as most people are seeking price stability, first, with appreciation potential, in addition.  Timing is key.

My high-level, macro answer to this question is that the San Francisco real estate market is truly neighborhood-by-neighborhood, block-by-block even.  Location is vital, patience is necessary, and having the right agent will make sure that the proper execution and correct behaviors are in place to maximize value.  The value of advice translates into real dollars.

At a sub-district focused level, I believe there are two locales in SF that offer greater growth potential than others: Potrero Hill and the Richmond District.  Let me break it down for you as to why I believe this to be the case:

Potrero Hill is a deep hail mary pass away from the hot & hip Mission District, which has been experiencing new construction condo sales of $1,500 per square foot (e.g.  In comparison, the most expensive condo sale of 2013 in Potrero went for $931/sqft (and that’s an outlier).  Aside from being one of the sunniest parts of town (and without the strong winds), garnering killer views of the Bay and City skyline, here are some other reasons why Potrero is on the verge of blowing-up in value:
·         The UCSF Benioff Children's Hospital is currently under construction.  This world-class hospital will act as a boon for employment creating a potential and tangible buyer pool that will be soon reflected in the prices of property.  Unlike any other national area, SF real estate is driven by the economics of supply and demand and this is but a single contributor.
·         Proximity to the South Bay and Valley (via access to freeway and CalTrain) is easy in Potrero Hill.  More and more singles and families alike who work along the Peninsula but prefer City living are recognizing the value of this location.  There is value in getting to the office just a little more easily.
·         Although it’s known to be a little quieter in Potrero (which many prefer), you’re only a short cab ride from the hustle and bustle of the Mission restaurants and shops. Why live on top of the madness when you can still enjoy it slightly removed?

The Richmond District is my personal favorite given its proximity to Clement Street (shopping), and the Golden Gate Park.  Here are some reasons why this sub-district is a perfect value play:
·         Much of the ‘smart’ (investor) money is steadily making its way in this area.  It cannot be ignored, that every avenue in the Richmond is humming to the sound of contractors and developers either renovating for spec or end-user demands.  Bottom line: homes are affordable here, especially for those looking at single-family homes that offer separate in-law / au pair suites.
·         Price per square foot hasn’t been blown out of the water (yet).
·         Farmer’s Market just hit the scene several months back, and one cannot deny seeing the droves of young families and couples moving into the area.  The produce is fresh, too!
·         Clement Street restaurants, shops, and cafes are incredibly diverse – reflecting the people walking amongst them.

I’m happy to provide you with more insight into the quantitative side (the numbers) on both areas, along with other sub-districts that may be of interest - just let me know!  And remember, in real estate: 'you make money when you buy, not when you sell'.