San Francisco Residential Market Trends in Realtor District 5

A statistical market overview by the Paragon Real Estate Group for Noe Valley, Eureka Valley & the Castro, Cole Valley, Mission Dolores, Haight Ashbury, Ashbury Heights, Clarendon Heights, Parnassus Heights, Corona Heights, Glen Park, Twin Peaks & the Duboce Triangle

July 2011

Below are a variety of charts detailing overview market statistics and trends in the neighborhoods of San Francisco’s central Realtor District 5. District 5 is one of the more homogeneous districts in San Francisco in terms of property values, but still any analysis of an area with so many properties of different type, location, condition and quality can only be a very general overview.

District 5 soared in value between 1996 and 2008 and was one of the last districts to peak in value before the financial markets meltdown in September 2008. Values then fell about 20% very quickly and then stabilized in 2009 and 2010. With the surge in high-tech buyers in 2011, many of whom wish to be close to highways to the peninsula, activity in this district has picked up significantly. It’s a very hot market right now for appealing, well-priced homes, and we are seeing a good number selling very quickly in multiple offer situations. If it continues, this supply and demand dynamic would typically begin to exert upward pressure on prices.

Generally speaking, monthly fluctuations up and down — especially of median price — are relatively meaningless unless continuing for an extended period of time. In real estate, the longer term trends, seen across a wide variety of statistical measurements, are the meaningful ones.

Median House & Condo Sales Prices in District 5

For the past 2 plus years, the median price of houses in District 5 has generally been oscillating between $1,200,000 & $1,350,000 and for condos between $750,000 and $825,000. Median prices of homes of varied location, size and quality will naturally fluctuate without being particularly meaningful as pertaining to changes in value — until the trend up or down is consistent over the long term (minimally 3 to 4 quarters).


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Percent of Listings Accepting Offers

A very precise snapshot of supply and demand. This percentage is at its highest point in 3 years, reflecting very strong buyer demand vs. a very limited supply of homes for sale.


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Average Dollar per Square Foot for Houses & Condos

Both houses and condos in District 5 have generally been oscillating up and down within a $50 band of average dollar per square foot value for the past 2 plus years.


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Inventory of Homes for Sale

The number of homes for sale in District 5 in June 2011 was 40% below that of June 2010 reflecting the very low supply of inventory, which is certainly constraining sales numbers.


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Months’ Supply of Inventory (MSI)

At 1.9 months, June 2011 was at a very, very low level of MSI, one that would typically be indicative of a strong “Seller’s Market” in District 5.


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Average Days on Market (DOM) Before Acceptance of Offer

Average DOM is close to the lowest number in the past 13 months, reflecting strong buyer demand for appealing new listings coming on market.


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District 5 Total Home Sales vs. Distress Home Sales

Home sales in District 5 in the second quarter were a tad above those in the second quarter of 2010, however in 2011 there was no double-homebuyer-tax-credit boosting sales as we had last year, and, more importantly, inventory was way below that in 2010. To increase sales with far fewer homes available to purchase = a market heating up. The cross-hatched portion of each column shows the quantity of distress home sales within total sales — in District 5, distress home sales do not make up a significant percentage of sales and have had very little impact on values. Most distress sales in SF are clustered in specific neighborhoods in the lower price segments.


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District 5 House, Condo & TIC sales by Price Range

This is a snapshot of sales by price segment over the past year. In the second quarter of 2011, the overall median sales price in District 5 for houses, condos and TICs was something over $900,000.


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MEDIAN SALES PRICE is that price at which half the sales occur for more and half for less. It can be, and often is, affected by other factors besides changes in market values, such as short-term or seasonal changes in inventory or buying trends. Though often quoted in the media as such, the median sales price is NOT like the price for a share of stock, i.e. a definitive reflection of value and changes in value, and monthly fluctuations are generally meaningless. If market values are truly changing, the median price will consistently rise or sink over a longer term than just 2 or 3 months, and also be supported by other supply and demand statistical trends.

DAYS ON MARKET (DOM) are the number of days between a listing going on market and accepting an offer. The lower the average days on market figure, typically the stronger the buyer demand and the hotter the market.

MONTHS SUPPLY OF INVENTORY (MSI) reflects the number of months it would take to sell the existing inventory of homes for sale at current market conditions. The lower the MSI, the stronger the demand as compared to the supply and the hotter the market. Typically, below 3-4 months of inventory is considered a “Seller’s market”, 4-6 months a relatively balanced market, and 7 months and above, a “Buyer’s market.”

DOLLAR PER SQUARE FOOT ($/sqft) is based upon the home’s interior living space and does not include garages, unfinished attics and basements, rooms built without permit, lot size, or patios and decks — though all these can still add value to a home. These figures are usually derived from appraisals or tax records, but are sometimes unreliable or unreported altogether. All things being equal, a house will sell for a higher dollar per square foot than a condo (due to land value), a condo higher than a TIC (quality of title), and a TIC higher than a multi-unit building (quality of use). Everything being equal, a smaller home will sell for a higher $/sqft than a larger one. (However, things are rarely equal in real estate.) There are often surprisingly wide variations of value within neighborhoods and averages may be distorted by one or two sales substantially higher or lower than the norm, especially when the total number of sales is small. Location, condition, amenities, parking, views, lot size & outdoor space all affect $/sqft home values. Typically, the highest dollar per square foot figures in San Francisco are achieved by penthouse condos with utterly spectacular views in prestige buildings.

SAN FRANCISCO REALTOR DISTRICTS

District 1: Sea Cliff, Lake Street, Richmond (Inner, Central, Outer), Jordan Park/Laurel Heights, Lone Mountain

District 2: Sunset & Parkside (Inner, Central, Outer), Golden Gate Heights

District 3: Lake Shore, Lakeside, Merced Manor, Merced Heights, Ingleside, Ingleside Heights, Oceanview

District 4: St. Francis Wood, Forest Hill, West Portal, Forest Knolls, Diamond Heights, Midtown Terrace, Miraloma Park, Sunnyside, Balboa Terrace, Ingleside Terrace, Mt. Davidson Manor, Sherwood Forest, Monterey Heights, Westwood Highlands

District 5: Noe Valley, Eureka Valley (Castro, Liberty Hill), Cole Valley, Glen Park, Corona Heights, Clarendon Heights, Ashbury Heights, Buena Vista Park, Haight Ashbury, Duboce Triangle, Twin Peaks, Mission Dolores, Parnassus Heights

District 6: Hayes Valley, North of Panhandle (NOPA), Alamo Square, Western Addition, Anza Vista, Lower Pacific Heights

District 7: Pacific Heights, Presidio Heights, Cow Hollow, Marina

District 8: Russian Hill, Nob Hill, Telegraph Hill, North Beach, Financial District, North Waterfront, Downtown, Van Ness/ Civic Center, Tenderloin

District 9: SOMA, South Beach, Mission Bay, Potrero Hill, Dogpatch, Bernal Heights, Inner Mission, Yerba Buena

District 10: Bayview, Bayview Heights, Excelsior, Portola, Visitacion Valley, Silver Terrace, Mission Terrace, Crocker Amazon, Outer Mission

Some Realtor districts contain neighborhoods that are relatively homogeneous in general home values, such as districts 5 and 7, and others contain neighborhoods of wildly different values, such as district 8 which includes both Russian Hill and the Tenderloin.

Median and average statistics are generalities subject to fluctuation due to a variety of reasons (besides changes in value): how they apply to any specific property is unknown. Averages may be distorted by one or two sales substantially higher or lower than the norm, especially when sample size is small. Sales not reported to MLS – such as many new-development condo sales — are not included in this analysis (except in the specific chart on the SF new-development condo market). All figures should be considered approximate and are derived from sources deemed reliable, but may contain errors and omissions, and not warranted. We are happy to provide or direct you to the original data upon which each chart is based.

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