Archive for the ‘SF: SOMA’ Category
September 30, 2008
A couple of weeks ago, I wrote about several Oakland properties north of me that have been inching closer in price to the amount I paid for my house two years ago. I lamented that I would have done well to wait out the housing bubble: had I done so, I likely could have scored a larger house in a more valuable neighborhood. One of the properties, 1267 Bates Rd., was puzzling since it’s price ($529,000) did not seem to match its location (the coveted Trestle Glen). Readers Rbehs and Optionarm pointed out respectively:
I believe Bates is under large powerlines
and
In the street view for Bates, if you angle the view upwards you can see the large powerstructure
Sure enough, checking out the Google street view for the Bates home, you can see a humongous transformer in the backyard. Ahhh…Nothing like Redfin readers to give you the lowdown on real estate. This prompted several other cool readers (hi Art, David, Jackie and Adam!) to discuss the perils of having a huge hunk of power structure hovering over you: loud humming, definitely not eye candy and possible adverse health effects from EMFs (electromagnetic fields). Thanks dear readers! Not only did you educate me on yet one more item to be aware of when purchasing a house, you got me investigating EMF’s (for this thirtysomething, I hitherto only knew EMF as the band that sang the catchy “Unbelievable”, you know, that song that was played at proms and clubs across the US in the ’90′s?) Interestingly, I couldn’t find much that has been written about EMFs after 2002 when the California Environmental Health Investigations Branch was commissioned to do a study on their alleged health hazards. (See California EMF Program and their Short Fact Sheet on EMF ).
The World Health Organization (WHO) website also has a pretty comprehensive and user friendly overview of EMF’s. What sturck me most was one of their tables comparing acceptable exposure limits. They note that 5,000 V/m (volts per meter) is the highest acceptable “public exposure” while 10,000 V/m is the highest “occupational exposure”. Ok. Fine. So just know what you’re getting into if you work in a field where you’ll have high occupational exposure, right? Not so fast. You should also be aware of possible high exposure if your home is close (under?!?) a power transformer, since “powerline exposure beneath large power lines” is estimated to be around 10,000 V/m (compare this to only 100 V/m exposure for homes not near power structures). Of course, this brings me to the Trestle Glen homes. How much will you be exposed to under those big suckers? While much of the research has not found conclusive evidence of the health risks they pose, WHO states:
There is no doubt that short-term exposure to very high levels of electromagnetic fields can be harmful to health. Current public concern focuses on possible long-term health effects caused by exposure to electromagnetic fields at levels below those required to trigger acute biological responses.
and
Despite extensive research, to date there is no evidence to conclude that exposure to low level electromagnetic fields is harmful to human health.
However, the 2002 California study found:
an association between leukemia and…high magnetic field exposure such as living very near a powerline…
All of this sheds some light on why some of these Trestle Glen homes might be having a hard time selling (on top of our already disastrous market). But what do you say? Would you think twice about living under a power transformer? Let me know your thoughts, and again, a big shout out to everyone who brought my attention to transformers and EMFs in the first place!
More links discussing EMFs:
National Institute of Environmental Health Sciences, National Institutes of Health
US Department of Labor OSHA ELF Radiation Hazard Locations and Solutions
Wi-Fi As A Health Hazard
Electric Power Research Institute
June 27, 2008
Forget your psychic friend and magic 8 ball. CurbedSF has it that today’s savvy home hunters leave it to programmers to come up with a way to tell them, via scientific survey, whether a neighborhood is a good fit or not. Indeed, Hoodeo is the “neighborhood match maker,” your online connector of human to ‘hood.
So I gave it a spin- God knows I am having a hard time finding a place I can afford in SF; maybe Hoodeo knows something I don’t. Among its questions, the survey asks me if I wanted to stay in this city or if I would go anywhere. Since my job and friends and life are here, I actually do want to stay here, but just for fun, I chose “will go anywhere.” Hoodeo also smartly inquires how much I make and how much I “want to spend” on my next home, as well as how big I want it, cleverly reminding me that those square feet I desire will also have to be cleaned (I picked 1000 square feet, and since I had the option, 2 beds and at least 1.5 baths since I share with a man whom occasionally disgusts me). I decided the fair amount to pay, based on what we make, and that we would like to have money left over to travel and buy beer and such, would be 400 to 450K.
I should be, according to Hoodeo, living in Philidelphia. Wait, but you didn’t ask if I like sub-zero winters! I don’t!
Back to Hoodeo then, this time insisting on staying in the Bay Area. If I am to spend what I want to spend, I will need to think about Pacifica, San Bruno, South San Francisco, or– if I want the city proper– Bayview. Wait, you didn’t ask if I like gunfire in my front yard. I don’t!
Needless to say, Hoodeo has left some poignant questions off the list in determining if a ‘hood will fit you. For instance, nowhere am I asked what I think of On Deadline’s report that
Members of the Presidential Memorial Commission tell the San Francisco Chronicle that they’ve already collected 8,500 signatures on a petition to put the proposal before voters this November. If it passes, the Oceanside Water Pollution Control Plant would be renamed [the "George W. Bush Sewage Plant.]
To which I say: I am home.
May 17, 2008
I know—there are more than 6, but it’s a beautiful day. Hard to imagine who’s in the mood to sit and read long blog posts at the computer. Plus, I found an interesting article in the Washington Post that actually reduces homebuyer essential knowledge to 5 categories, to which I would like to add one.
From The Post:
1. Mortgage interest rates can change quickly, pushing a home out of your budget in a matter of days. Check in with lenders before making a bid to get an up-to-date estimate of monthly payments based on current rates.
2. Include in your offer a requirement that the sales price be equal to or less than the appraised value as determined by the mortgage lender. Without such a contingency, a lender can require the buyer to make up the difference between the appraised value and the sales price.
3. Do your research. Compare the price of the home you are interested in with the prices of similar homes on the market or recently sold. In areas where home prices have been falling quickly, some real estate agents recommend narrowing the data to the last three or four months instead of year-old sales, which can be outdated.
4. If you decide to bid significantly below the asking price, be prepared for rejection. A lowball offer could be flatly rejected by an annoyed seller or viewed as the starting volley in negotiations.
5. Don’t assume that because the price of a home has been reduced, there isn’t more room for negotiation. Research prices in the area, and compare the lowered price with recent sales.
As an extension of #2, however, comes my number 6. In the wake of our current mortgage sunami, appraisal is becoming a complicated issue. An SF Gate article warns that “A major legal brawl is breaking out over how homes are appraised, at what cost and by whom. The outcome could directly affect the price you pay for your next piece of real estate and the amount of mortgage money you can obtain.”
Under then tenants of the out-of-court settlement, the result of New York Attorner General Cuomo’s investigation of “the mortgage finance giants’ appraisal practices,” these giants must adopt a particular “home valuation code of conduct.”
The code, which is scheduled to take effect on Jan. 1, would shake up the entire appraisal system:
—Mortgage brokers, who originate roughly 60 percent of all new loans, no longer would be allowed to select or pay appraisers. That could force some mortgage shoppers to pay for multiple appraisals rather than just one.
—In-house appraisers at banks and mortgage firms no longer would be permitted to do appraisals for loans to be funded by their organizations.
—Lenders would not be able to use appraisals generated by management companies – firms that contract with networks of appraisers nationwide – if they have a significant financial stake in the management company.
To some eyes, forcing Fannie Mae and Freddie Mac to reform appraisal is a great idea: “Inflated appraisals—often involving either pressure by loan officers or fraudulent collusion by appraisers themselves—played a role in at least some of the mess we’re seeing in many housing markets.”
Opponents meanwhile, such as financial and banking trade groups, claim the settlement is “bad policy.” Aside from the potential dismissal of qualified and ethical professional appraisers who work for banks, brokers “should not be prohibited from hiring independent appraisers because the current system—if strengthened by greater use of review appraisals to double-check accuracy—works efficiently for consumers and the mortgage industry as well.”
Plus, under this new agreement, “consumers would be financially tied to the first lender they, or their mortgage or real estate professional, submits their application.”
The upshot of this debate is that 6th thing homebuyers should know: Appraisal is a complicated process, with multiple (and often conflicting interests) at stake. Until we achieve an improved system with “much-tougher penalties for lenders who pressure appraisers, much-tougher penalties for appraisers who give in, and more accurate appraisals for the consumers who pay for them,” proceed with caution.
May 15, 2008
The Sunset gets a bum rap. People think it’s all fog and sand in your eyes, too far from the city central and devoid of culture or “hipness.” I like this out of the way quality. At least in the Outer Sunset, you can escape the regularly exhausting bustle of the city: with acres of parking, the Golden Gate Park, and miles and miles of ocean. And on days like today, all sunshine and glitter on the sea, there’s no better place to live.
Still, this area has never been #1 on the SF Desirable Neighborhood list, and its homes have generally fetched less than those in more easterly locations. Yet at the height of our crazy, over inflated market, even the most drab and barren properties shot up to 800k, 900k, a million.
Not so now. Submedian blogs about the current Sunset slump here:
of the 13 homes that list the previous sale price 6, or 46% are listed for less then what they were previously purchased for…..[and] anybody selling a Sunset home purchased within the past five years is showing negative appreciation. And in some cases, it is drastic: 1491 43rd Ave is now listed at $720,000. It’s high water mark was it’s purchase for $875,000 in April 2005. That’s a whopping $155,000 depreciation over three years.
He also notes that people who bought a decade ago or more, and are now selling, do stand to make profit, but how much profit is hard to know, since
They have across the board higher listing prices then the newer homeowners, and are paying the price for their desire to hang on to those higher prices by having much higher DOM’s: 54 is the DOM average for the people who have owned their homes more then five years, compared with 26 for the folks who are newer homeowners.
If you are buying, and like a little beach in your backyard, you might find a deal in the Outer Sunset. Here are a few SFH listings.
2627 47th Ave., 2/1 SFH, reduced to $560K
2646 45th Ave., 3/2 SFH for $628K
2142 42nd Ave., 2/1 SFH for $685K
2209 46th Ave., 2/1 SFH for $699K: Open this week (see link for details)
May 12, 2008
Back in February, a whole bunch of readers vociferously opposed the idea of the federal government’s economic stimulus package bailing out homebuyers facing foreclosure. At the time, I was caught by surprise and wondered if David, Doug, Slappy, Scott, Red and others weren’t being a bit cold. Well, looks like they were way ahead of a national movement.
The Angry Renter blog exists for one purpose: to oppose government bailouts, and man, when they say they’re angry, they mean it. (Check out the video, above, they created to oppose the bailouts.) They claim to have gained 45,000 signatures on the petition they posted on the site.
But how is throwing these people into the street going to help the angry renters on this and related sites such as ”Stop The Subprime Bailout,” “NoBailout.org,” and “NoMortgageBailout.com“? Isn’t it going to mean their neighborhoods will soon be infested with drug dealers and homeless people squatting in abandoned, foreclosed houses? (This is going on in my Contra Costa County ‘hood right now and it is not fun.) And that their entire neighborhoods will suffer? How does punishing these people do renters or non-foreclosed homeowners any good?
May 1, 2008
Local developments are showing signs of weakness as the big incentives start to roll out.
The Potrero above Whole Foods in Potrero Hill is offering one year of no mortgage payments on its remaining 25 homes available. The offer is good from May 1st to June 15th. These units have already seen price reductions in recent months, and this is basically another reduction that amounts to anywhere from $40k to $80k in my estimation.
Signature Properties is also offering a price guarantee for two years on eight developments in the Bay Area, including one in San Francisco and the rest in the East Bay. If you buy a home at one of these properties, and they lower the list price within two years, they claim to reduce the purchase price of your property. Of course there is another asterisk advising you to contact them for further details on how that “reduction” (refund?) occurs. With the current and expected price declines in the coming two years, this is a fairly drastic move (but necessary) to move inventory.
April 21, 2008
The real estate information service DataQuick reported last week that March was the slowest month in the Bay Area since they started recording statistics in 1988. Monthly sales numbers have been setting record monthly lows each month since September.
The nine-county Bay Area saw 4,898 sales take place in March, an increase of only 22.8% from February. Compare this to the historical jump from February to March each year at 40% and we are off to a poor start in the spring selling season.
DataQuick President Marshall Prentice is quoted as saying the following:
“Other parts of the state have been hit harder by the downturn in the housing market than the Bay Area. Most of the distress is in areas that absorbed spillover activity during the 2004 and 2005 frenzy. For the most part that’s the Central Valley and inland Southern California. It still appears that a lot of Bay Area activity is just on hold, waiting for the mortgage markets to open back up.”
I agree with him on the comments regarding the Central Valley and Southern California, but I disagree that the Bay Area activity is simply on hold. There may be some buyers and sellers who were waiting for the jumbo-conforming loans to come online, which they now are but at higher rates than regular conforming loans, but I don’t think they are waiting any longer. Supply is growing and demand is softening as more and more are figuring out it is a buyer’s market and prices are heading down quickly in most areas. Supply will continue to increase this summer and there won’t be enough buyers to absorb this growing supply. It isn’t just as simple as supply and demand. but it explains a lot of it! This is just the natural correction process for a ridiculously overvalued market. I don’t the think “activity is on hold” as he puts it – it is falling off a cliff just the way it should be.
April 13, 2008
In today’s San Jose Mercury News, I came across an article with disturbing facts – rents have continued to climb and many Bay Area residents cannot afford even a basic 2 bedroom rental. An affordable housing advocacy group reported Monday that a worker must make $24.87 per hour in Santa Clara County to afford such a rental, and $30 per hour in San Mateo and San Francisco Counties. The fair market rent in 2008 in Santa Clara County is $1293, and to afford this, a family must earn $51,720 yearly.
We cannot be a community of all white collar workers with no diversity, and our freeway congestion is heavily impacted by all the lower wage workers who are forced to commute from other areas as they simply can’t afford to live here. Adding to their financial burden is the recent spike in gas prices – which are now almost at the dreaded $4/gallon level. Food prices are also spiking, and show no signs of a slowdown.
High rent prices are blamed on the current mortgage crisis and federal policies that encourage home ownership over renting. Many landlords have taken advantage of the sheer numbers of former homeowners who are now forced to rent, and have increased rentals. This drains the pockets of those hoping to return to home ownership, at the same time mortgage companies are adopting higher standards for achieving a new mortgage.
We can only hope that new leadership in the White House will consider the plight of the common man and make some much needed changes. Or that rental price increases will slow as we near the bottom of the mortgage crisis.
March 20, 2008
Wow. What a fiasco. A friend and I decided to check out the One Rincon Hill sales office and see just how painful their process really is before letting you see an actual unit. Let’s just say we were even more disappointed than we expected to be.
After the usual sign-in sheet where you put a fake name or maybe your own name with fake contact info (unless you are seriously interested in buying there), we were rounded up into a small group tour—not what I was looking for. We had to sit through the grade-school-style tour of the nice miniature model of the complex, the Rincon Hill neighborhood map and city plan on the wall, and then a mock kitchen and mock bathroom with an admittedly-short shower enclosure (they seriously couldn’t get that right?). These things probably took at least 20 minutes—painfully slow for any experienced home/condo open house “tourist.”
Finally, we get to walk into the full-sized 2-bedroom model unit, also in the sales office across the street from the actual tower. My friend and I agreed that this thing is staged beyond utility—so much crap in there, albeit nice, that you can’t appreciate the size of the unit at all, which is not that spacious to begin with. And they have these nice Bay Bridge, downtown, and water view murals on curtains pulled down behind the windows. I get what they are doing but it feels so enclosed and encapsulating, I think it does more harm than good.
For units asking near and sometimes above $1000/sq ft, I expect and demand more. The kitchens are plain with yesterday’s granite and nice appliances. Same with the bathrooms. Both bedrooms are not especially spacious. So, basically they tried to sell us views on curtains for $1000/sq ft. Great marketing plan.
Finally, we leave the unit and are escorted back to the main lobby to watch a “virtual demo,” or something like that she called it, on a plasma TV on the wall. It starts out looking just like the website but does have a nice feature that shows views from various floors and units (see, this post isn’t ALL negative). Luckily, I got a call from my mom in the middle of this demo and gladly accepted the call and walked away for awhile. When I returned several minutes later to catch the end of it, my friend was providing some “constructive criticism” to the salesperson. There was a mother and her son also on the tour with us, and they seemed like very serious buyers from the start—and not very familiar with anything about the project or location it seemed. One of the comments that was made before we left made by the salesperson to the mother/son regarded units that were “possibly being taken back” from the developer. We didn’t think these buyers quite understood what she meant by that—that due to many people trying to reassign their contracts/deposits currently, the developer may be taking several units back and relisting them. My friend politely asked her to be sure to explain exactly what she meant by these units “possibly being taken back.” She was too busy touting the notion that One Rincon Hill is 97% sold while Infinity is only 80% sold. This is nearly impossible to confirm or deny, so I just don’t quite believe those numbers.
Based on this painful 45-minute experience, we went in to the Infinity and immediately asked if we could see an actual unit in the building and was told to come back in about 2 weeks. That took about 30 seconds. Now we knew.
What we didn’t know until later was that we could have viewed a 2bed/2bath unit on the 24th floor at One Rincon Hill that was the first open house listed on the resale market. Doh.
March 19, 2008
The tenancy-in-common (TIC) has been San Francisco’s answer to shared, affordable housing in hundreds, if not thousands, of its architecturally significant Edwardian and Victorian buildings. But since the city restricted the number of annual conversions to 200 beginning in 1994, the pool of potential units and buildings has grown immensely. Owners of units in 3-6 unit buildings must hold a coveted winning ticket in annual lottery (2 unit buildings bypass the lottery after meeting the owner-occupancy test after 1 year). The lottery was created in 1983.
The issue for would-be condo converters in recent years has been the rapidly increasing number of entrants into the lottery while the cap remains at 200. Since 2003 the number of entrants has increased 75% to 1,736 last year. While the lottery system is meant to give “losers” a better chance each ensuing year with extra tickets, the growth in entrants has rendered this system useless and odds actually can decrease each year. According to well known attorney, and the recognized creator of virtually all of San Francisco’s TIC agreements, Andy Sirkin states the current estimated time to convert a building to condominiums is at least 15 years.
Advocates for condo conversion reform say home ownership is great for the city and neighborhoods — you know, creating that “ownership society’ that Dubya talked about. And I emphasize “talked” in past tense. It has also been the only way for some San Francisco residents to afford a home of their own, and to finally escape the life of renting.
Opponents of TIC creation cite the displacement of too many renters, often elderly “protected” tenants in rent-controlled buildings, who now have nowhere to go and cannot afford to rent a new place. The greed of real estate investors (both professional and amateur) have been allowed to make hundreds of thousands of dollars at the expense of good citizens who need a place to live, they say.
In recent years, a new financing option has been made available by a handful of banks, mostly local, by offering “fractionalized” loans, with stricter qualifications, of course. This differs from the traditional group financing necessary in TIC arrangements where all parties are on one giant mortgage and share the responsibility for maintaining that loan obligation. (I am sure you can see the danger and risks of this, especially when parties do not know each other well). This new fractionalized loan essentially eliminates the need to condo convert because it allows the units to be separately deeded and therefore frees each owner of the shared loan responsibility with his/her co-tenants (that is what they are called in a TIC agreement).
In the interest of full disclosure, I used to own a unit in a 3 unit TIC building, but like a lot of things in my life, found I was too impatient to hold the property long enough to convert to condominiums, and the terms for the fractionalized loans were new and much more expensive than they are now.
So, whether reform happens regarding the number of units allowed to convert via the lottery or not, TIC owners have options. And the appeal of a TIC in the first place is that you typically get more for your dollar compared to a condo. And once you do convert (historically, assuming you have a terrible sense of timing) or refinance into a fractionalized loan, you will extract added value and build equity, assuming all else is equal.
