San Francisco Commercial Real Estate News: “The Scoop”

Total Sales: 356 (23% of the city’s house sales)
Total REO (bank-owned) Sales: 74

This is the most active segment by volume for houses, and unit sales were up 41% year over year. Once again, most of the sales, 63%, occurred in the city’s less affluent southern neighborhoods: Excelsior, Portola, Crocker Amazon, Ingleside & Oceanview. But there were also 53 sales in the Sunset/Parkside districts, 21 in Bernal Heights, 17 in Sunnyside/Miraloma, and 6 in Glen Park.

21% of sales in this price range were REO sales. (In San Francisco, the higher the price range, the fewer the foreclosures.) The neighborhoods with the most REO sales in this price range were again on the southern border, Ingleside/Oceanview across to Portola/Visitacion Valley, though there were also a few each in the Sunset, Glen Park, Bernal Heights and Sunnyside.
53% of these REO sales went pending sale within 30 days of going on market (i.e. very quickly) to close at an average 6% above list price.

Median room configurations and sales prices, and average square footage and dollar per square foot for house sales by neighborhood.

• Bayview: 4-bedroom, 2.5 bath, 1669 sq.ft., $512,500, $325/sq.ft.
• Excelsior/Portola/Visitacion Valley: 3 bedroom, 1.25 bath, 1351 sq.ft., $558,000, $442/sq.ft.
• Sunset/Parkside: 2-bedroom, 1 bath, 1103 sq.ft., $615,000, $564/sq.ft.
• Sunnyside: 2-bedroom, 1bath, 1005 sq.ft., $600,000, $591/sq.ft.
• Bernal Heights: 2-bedroom, 1 bath, 1140 sq.ft., $595,000, $541/sq.ft.

The months-supply-of-inventory is a very low 2 months. High demand, low supply.

There are a few things you should know.

1. It’s competitive. I have clients in contract for a SFH (single family home) in Parkside right now. We were the winning bid out of 9 offers - some of which were all cash offers.

2. Be prepared for some expensive repairs either immediately or within a year or two. Homes in this price range generally suffer from some form of deferred maintenance. The home I helped my clients purchase had a $36,000 pest report - which is not uncommon. The expense in this case was caused by rotten wooden stairs (patios, decks and wooden stairs covered by plaster are by far the most common reason for pest reports of this amount).

3. It REALLY helps to have a good agent. I know I know, annoying plug for the industry only it’s true. Having a good agent can mean the difference between making 15 offers, only to lose out on all, and only having to make a couple (if there are nine offers on a property chances are one or two of those that wrote had good agents and still lost out).

A good agent with a good reputation in the business can be the difference between getting an offer or not. Think of it this way, if you are a listing agent in a competitive situation and have three offers, all similar terms and pricing (assuming you know you are at the highest price the market will bear); you are going to counsel your client to pick the offer with an agent who has a reputation for getting things done on time, without drama, and without messing around with you and your clients after you are in contract with them.

Which means: good buyer’s agents with a great reputation are adept at qualifying their own clients as well as educating them properly about the neighborhood, local laws, what to expect and what is going to be expected of them during the escrow process, developing a rapport with the listing agent, all prior to the time they’ve made that offer that is sitting in front of you. And if you’re a listing agent with a number of offers to sort through, it becomes apparent within moments who has their act together and who doesn’t.

Which also means, asking your cousin who just happens to be an agent, and lives and works in Southern California, to write up your offer, is not really going to help you in the long run (and if your cousin is a good agent - they will be the first to tell you that).

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