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IPO millionaires may not be top factor in predicted spring rush on S.F. housing

San Francisco anticipates booming housing sales in spring, fueled by a stable of new millionaires with fresh IPO wealth, but another variable may also be at play.

San Francisco realtor Jennifer Rosdail said the low interest rate of 3.75 percent right now is really what’s behind the expected uptick in buyer interest. She said last spring they hovered around 4 to 4.25 percent.

Rosdail, a longtime agent with Keller Williams San Francisco, said that just this month she’s seen San Francisco houses sell at $800,000 over asking on the high end and all the way down to $75,000 below asking on the low end. She said home sales in the $3 million-plus market are the ones more likely to be affected by the new millionaires coming out of this season.

“I don’t know how significant a couple thousand of millionaires are – we have so many,” she said. “San Francisco is a humbling city to be a millionaire in.”

The San Francisco metro area has more than 314,000 millionaires – the 8th most in the world – and the third most billionaires with 74, according to Wealth-X’s 2018 global ranking.

Rosdail, who remembers interest rates for a 30-year mortgage as high as 6.75 to 7 percent more than a decade ago, said just a one-point increase in the interest rate represents a 20-percent decline in affordability for buyers. She said that at this point in spring, buyers can afford almost 20 percent more than they could in the fall.

“If interest rates went up a lot, that’s the only thing that’s going to calm it down,” she said. “I do believe that’s more important than the new millionaires.”

Nonetheless, much hubbub surrounds the direction the IPO herd will rumble in terms of second quarter housing due to the size of their financial potential.

For example, a recent report by real estate brokerage Redfin revealed that just through the wealth created from Lyft’s IPO, current and former employees of the ridehailing business could purchase every single home listed for sale in San Francisco in cash and still have about $12 million left over.

And with other San Francisco-based companies starting to come out of the gate, such as PagerDuty, which raised $218 million with its IPO on April 11, and Uber, which has now filed its paperwork and seeks to raise $10 billion from investors, it stands to reason that the market could soon see some new buyers out of this.

What’s more, some agents have had conversations with sellers who were thinking to catch the rush of millionaires by keeping listings off the market in early spring, said Patrick Carlisle, chief market analyst at Compass, one of the largest private real estate brokerages in San Francisco.

“If that’s the case, we should see those listing back on the market,” Carlisle said.

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San Francisco Real Estate Market Update: April 2019

While San Francisco’s single family home sales prices rebounded in March, they are still down 4% from 2018’s level

And although inventory has risen, it remains very low. The available inventory is selling fast, just not as fast as last year, and with fewer buyers competing for it in multiple offer situations.

Condo/Loft/TIC sales are faring slightly, but not significantly, better.Sales prices, sold price-per-square-foot and selling time are virtually even with 2018. The slightly lower inventory level may be contributing to these results.

It remains to be seen if the hugely successful Lyft IPO will raise overall buyer confidence and the number of buyers in SanFrancisco.The city’s other planned IPO’s, depending on how many materialize and how they fare, could also add more cash-rich motivated buyers to the market.

Another factor that may help buoy prices and fuel more sales in 2019 is lower interest rates,which are down sharply.

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2019: 1st Quarter Perspective

At the end of the 1st quarter we have mixed results for SF real estate. Year over year numbers appear down but I would submit that this is is still from closings of ratifications last fall and very early in the year. I would also point out that February 2018 had so few sales with a few that were really high so the year over year numbers appear down but it’s kind of an illusion. That 1.7 median in February 2018 was an outlier and I am not disappointed to be below that now. Nevertheless, the market is more sensitive than ever to any marketing or physical flaws right now: overpricing, tenants and difficult floor plans are deal killers. (BTW: There are a LOT of tenant occupied single family on the market right now just sitting. Let me know if you want more info.)

The big topic everywhere is that we may have more zillionaires on the way and what effect will that have? We are already so zillionaire heavy here with the 3rd highest number of billionaires and the highest density of millionaires world wide that I think more important news is that interest rates are down again and spurring buyer action PRIOR to the arrival of the new monies – at least in the under 2MM price range.

A warning to all those new zillionaires: San Francisco continues to be a humbling place to be a one. For well priced, and desirable homes, people with all cash and perfect terms are often beaten in bidding wars by OTHER people with all cash and perfect terms. Getting the price right the first time continues to be the way to win the home of your choice. (As a data point, the three listings I have sold so far this year have all been winner take all with no counters to the runners up.)

But if you are looking to buy – don’t worry! You are in good hands and have a competitive advantage over all thenouveau riches. On the buyer side, we have been have already helped 10 families successfully navigate past the competition this first quarter. In fact, per SF Association of Realtor stats, in 2018 we were #1 for buyer representation and helped more families get the home of their choice than anyone else. (Per the same stats we were #12 overall out of 4700 realtors, so we did great on the listing side too.) 

If you haven’t looked into refinancing yet at the current low rates, please ping me at jennifer@rosdail.com or 415-269-4663 to talk about it. I think 30+ of you are doing it right now and saving a bundle.

Courtesy of Chris O’Connor of Compass read more →

Bay City Beacon Poetry Series

The Bay City Beacon made me smile this morning with their poetry series featuring each and every Muni bus line … today it’s an ode to the 36 Teresita! Read on: Hooray for the Buses.

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Europe bans single-use plastics. And glitter could be next.

Just say NO when someone gives you a plastic drinking straw or a plastic fork you didn’t ask for. Small individual actions can help save the planet one item at a time. This breaking news made me so very happy. It is a huge step in the right direction. Europe has taken the first step in banning single use plastics of many kinds. Read on!

Plastic drinking straws are a momentary convenience but last forever in most environments. In SF we may recycle some portion them but even here many many end up in landfill or, worse, in our oceans Just requesting no straws when you are at a restaurant – or if you are a restauranteur, only providing them upon request – can have a big impact in reducing your personal contribution to this waste issue. I started thinking about this years ago when I was at a chain restaurant in Reno with my family and for the 7 of us there were over 12 straws presented to us in our drinks. It was an entire handful of single use plastic garbage in a town without recycling for anything but soda cans! San Francisco was a leader in banning single use plastic bags over a decade ago and it became a state wide ban in 2014. At first some people were annoyed and now bringing your own bag is just a normal part of life. Last fall, California passed a law banning the use of single use plastic straws at dine-in restaurants except upon request that went into effect January 1. Have you even noticed a difference? The biggest distributers – fast food, etc. – are still using them freely. The next step is to ban them entirely and San Francisco’s law doing this will go into effect July 1. Way to go SF!
 

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Rare and Stunning Views in The Center Of The City

3352 John’s Way,
San Francisco California

>Offered at $2,500,000

Click here to Request a Showing
Click here for detailed Directions to the property
Click here to Download Disclosures

Showing schedule:

Saturday, April 27th from 2:00-4:00pm
Sunday, April 28th from 2:00-4:00pm
Tuesday, April 30th from 12:30-2:00pm
Showings By Appointment
  • Quiet, above it all location
  • Four bedrooms – three upstairs and one downstairs
  • Three full bathrooms
  • Panoramic water and downtown views from all three levels
  • Desirable open floor plan with large living room adjacent to dining room and kitchen
  • Remodeled kitchen with new quartz countertops and stainless appliances
  • Center of the City location with quick access to Noe, Eureka and Cole Valleys
  • Sunny view roof deck with greenhouse/yoga retreat
  • Walk-out rear garden with large level patio and terraces
  • Large laundry room off kitchen with ample storage and room for projects
  • 200+ bottle wine cellar!
  • 2 car parking – 1 garage + 1 parking pad
  • Year built: 1938
  • Square footage: 2,372 sq. ft. per graphic artist

A Spacious Home With a View

Oh the changes this home has seen … built in 1938 when the Bay Bridge was just 2 years old and the tallest building on the San Francisco skyline was the 32 story Russ Building at 235 Montgomery … It has watched as the fog has come and gone and buildings have risen to unprecedented heights. The view just keeps getting more intricately layered – better and better – but it’s majesty is unchanged. And the lifestyle at 3352 John’s Way remains tranquil and removed from the fray … Practically floating above the City, 3352 John’s Way is everything you never thought you could have – a conveniently located, spacious, quiet and secluded oasis with views forever, a walk out garden and 2 car parking on a private drive. The huge remodeled kitchen is ready for you to entertain the friends who will flock to watch the colors change on the Salesforce Tower with you as well as the amazing daily light show nature puts on from sunup to down. Replete with refinished floors, fresh paint and 3 remodeled/refreshed bathrooms the home is all ready for new residents. There is a landscaped rear garden with level patio for entertaining that can be accessed from the upper master suite or the kitchen. In addition, off the upper bedroom, there is a view roof deck with a greenhouse/yoga retreat. The location is wonderful with quick access to shopping and restaurants in Cole Valley, Eureka Valley/Castro and Noe Valley. Freeways south and public transit are also nearby.

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San Francisco Real Estate Market Update: March 2019

Further signs of a cooling market are showing up in the San Francisco housing market data.

February continued the trend downwards in median sales price for single family homes, dropping 2.4% year-on-year. Condos eked out a 0.87% increase.

Another indicator is climbing Days on Market for single family homes, up 8.5%. Condos are a bit more resilient right now, with theirs unchanged.

Two other key indicators of buyer appetitefor aggressive offers also declined. First, the percentage of single family homes and condos that sold above list price both fell, by 7.4% and 3.9%, respectively. Second, the median percentage of list price received also fell for both, by 4.2% and 1.1%, respectively.

And, more listings are showing up advertising “transparent pricing”, with agents not counting on buyers bidding up below-market list prices.

However, because inventory remains extremely low, it is still a sellers market. As more buyers enter the Spring buying season, expect continued competition for entry-level homes, but with fewer multiple offers and less exuberant overbid levels.

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