Affordable SF Home Ownership Success Story: Where There’s a Will, There’s a Way Part 1

This is a long story with a lot of happy endings. Please stick with me. It’s worth it – I promise.

home-1353389_640Back in February 2015, Patrick called me. He was a renter in a building on 5th Avenue in the Richmond that was about to go on the market. He thought just maybe he, his wife and his downstairs neighbors could buy the building from the landlady and pre-empt their evictions. There was just one problem. All four of them were educators, three of them for San Francisco Unified School District (“SFUSD”) with limited resources.

There are affordable home ownership programs offered by the Mayor’s Office of Housing (“MOH”), but none of them apply to the purchase of a multi-unit building, so they were going to have to piece it together and see if they could buy the building without outside assistance. (Also, the MOH income limits were also so low in 2015 that even two SFUSD educators were over-qualified for the assistance.)

I went to the building and met with both couples. Bridget and Kai were expecting their 2nd child. Patrick and Meghan already had two. Between them they could come up with about 15% down. They talked to a lender and found that if they received some gift funds from a friend (another teacher couple if you can believe it), they could make a decent offer on the building. They did so, but it was rejected by the owner who had decided to move in to Bridget and Kai’s unit and sell Patrick and Meghan’s on the open market.

So, Bridget and Kai moved to another more expensive rental in the Inner Sunset. They thought about buying a home using the Mayor’s Office programs, but found they were outside the income limit and that the amount available – around 250k in assistance – wasn’t enough to get them into a home. More on that in Part 2.

Meanwhile, following Bridget and Kai’s eviction, Patrick and Meghan tried to buy their unit but found that the overall condition of the building was too poor for them to proceed, so they spent the summer of 2015 showing the house to prospective buyers who would presumably evict them. Then, in the Spring of 2016, the owner decided to move her mother in to Patrick and Meghan’s unit using a Relative Move In” or “RMI” eviction and they found themselves looking for housing after all.

The aforementioned friends (Vanessa and Jack) who were able to gift funds to the group so they could attempt to purchase the 5th Avenue building had outgrown their condo. They also have two children. Vanessa & Jack and Patrick & Meghan decided to hunt for the impossible two unit building to live in together. Patrick and Meghan were able to rely on a few extra funds from the RMI relocation payment, which they badly needed. After about four weeks of searching, the perfect building on 19th Avenue came on the market. It was a stiff competition with five offers and multiple counter offers, but they were able to win the bidding war to buy it. The only problem was there was a tenant in one of those units. Fortunately, this tenant was asking to be “bought out” and the group was able to make an agreement with him shortly after closing and will have possession late in 2016.

Great right? It was. But upon learning that Patrick & Meghan were in contract to buy a place, the landlord on 5th Avenue decided to attempt to rescind her Relative Move In, and take back the relocation funds which are required for an RMI eviction. And Patrick & Meghan only were able to buy because they received these funds. You simply cannot make up a story like this. (This month, a court found that the landlord was in the wrong and Patrick & Meghan got to keep the funds.)

Soapbox: Extending the MOH assistance programs to apply to multi-unit buildings where all units will be occupied by program recipients would really help close the affordability gap for a lot of families. Not only is the price per housing unit lower, tne of the economies that Patrick & Meghan and Vanessa & Jack now have in their 2 unit building in the Richmond is a support system between the couples for childcare/pickup that further stretches their tight budgets. In the above example, Vanessa, Jack, Patrick & Meghan are all SFUSD educators and none of them could use the TND program for which they were otherwise qualified because they chose to share a multi-unit building rather than buy condos or single family at a higher price.

Teamwork, ingenuity, community, friends helping friends and being flexible won the day. There is so much more that happened here, but with this happy ending, we have to get back to the Inner Sunset and see what’s happening to Bridget & Kai…

Stay tuned for part two… read more →

September 2016 – Further Evidence Of The Shift

In last month’s Market Report newsletter, we gave our assessment that San Francisco single family home sales prices had peaked early this year and were starting a correction. We now have another price decrease from July to August and are off 9.5% from the peak in February. This represents a significant price correction in the single family home sales market.

Likewise, we predicted that hindsight would show that the condo/loft market had peaked this past June – we stand by that. August is a bit above July but down 6.5% from June. With more and more condos coming on the market, sold prices will continue to weaken.

The number of sales of single family homes was the lowest August for the past 10 years – just 186 sales. Year-to-date, the number of single family home sales is 1401, down 6.9% for the year, and the fewest sales since 2009.

And, as happened last month, the number of new-on-the-market single family home listings continues to be lower than in 2015, now off 6.2% year-to-date.

The number of months of inventory of condos/lofts city-wide has stayed above 2.6 for the past five months, reaching 2.9 in June and July, a territory it hasn’t staying in since mid- 2012. District 9 is even higher, up 50%, with a 3 month’s supply, the highest since July, 2012.

Again, months of inventory is rising in the condo/loft market because the number of units selling is less than the number of new listings coming on the market.

213456The information contained in this report is taken from a variety of sources including SFARMLS, SPUR, the City of San Francisco Planning Department, the Federal Reserve Bank of San Francisco, the Bureau of Labor Statistics, and others. The data may have errors, omissions and be subject to revisions and is not warranted. It is deemed reliable but is not guaranteed. Questions may be directed to Keller Williams San Francisco | 415.483.9285 | calBRE 01995149 | © Keller Williams San Francisco 2016

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San Francisco Schools Ranking – Under-Appreciated Excellence

920x920Go into any San Francisco coffee shop full of people with strollers and you will hear them lamenting the public schools and talking about how they might move out of San Francisco to get into a “good school district.”

The latest US News & World Report rankings placed four of the top 30 high schools in the Bay Area in San Francisco Unified School District. Lowell, Ruth Asawa School of the Arts, Lincoln and Washington High Schools all made the list. Lowell is rated #3 in the state and the schools it is behind are much, much smaller. San Francisco, in fact, has to keep making Lowell bigger because there are so many motivated, qualified kids trying to get in. It’s currently up to 2,700 of the hardest working kids you’ve ever seen.

Read the article here.

You’ll be surprised who is and isn’t on the list. Piedmont, so famous for it’s schools it’s often in divorce decrees that a parent live there, isn’t in the top 30.

You might say, “But that’s high school – I have five year old and the elementary schools are awful. The process is awful. You can’t tell where you are going to go.”

With this end result, how could one conclude that the elementary schools are no good? There are 77 public elementary schools and the vast majority of these college ready, amazing high school kids came up entirely through SFUSD! Sure a few independent school and parochial school kids opt in at 9th grade, but it’s a minority. The thing that scares parents away from SFUSD – the lottery system – is one of it’s strengths. You can find the right school for your kids if you just trust the system. You will be in a diverse environment and have lots of choices (Mandarin, Cantonese, Korean, Japanese, Spanish, Italian or Filipino language pathways for example). It is not comfortable not knowing exactly where you are going to end up, but families seem to end up at the right schools in the end.

I am proud to be a San Franciscan, proud to be a SFUSD parent and exceedingly proud to have represented so many San Francisco teachers in the purchase of their homes. I am thrilled to help keep these teachers in SF and am grateful for their contribution to our city. Being a great city – not just a 20s/30s party town – requires great public schools. We have them, and I am so happy to see them acknowledged. read more →

Value of a 2nd bath


Some clients considering remodeling asked me yesterday to evaluate the value of 2nd bathrooms versus 1 1/2 baths versus just one bath. I hadn’t quantified it in a while so I didn’t have a calculation off hand. I pulled all the sales of two bedroom condos in District 7 (Cow Hollow/Pac Heights, etc.) because of the volume of sales created a big enough pool to get some meaningful averages.

Here is what I found for 3/11/16 to 9/11/16:

2 bedrooms/1 bath: 6 sales, average price: 1058k
2 bedroom/1.5 bath: 2 sales, average price: 1,272k or + 20.2%
2 bedroom/2 bath: 44 sales!, average price: 1,487k or + 16.9%

It appears that, at any San Francisco price point, the value of a 2nd bath justifies putting it in. In the case of District 7, the value may be more than 4x the maximum cost I can imagine for installation. Another way of looking at it, is that it appears that each 1/2 of a bath is worth approximately 200k in district 7. That is a huge increase in value.

To be completely fair, places with 2 baths are on average a bit more re-done generally so they may be higher in value for that reason as well. But with this many sales being used for the calculation, it seems to me that the bath itself is to be credited for a lot of the value differential. Even if we cut the overall increase in value in half, the increase between 1 bath and two is just under 20%. Still very worth doing from a value – and probably from a lifestyle – perspective.

Call the plumber! And let me know if you need to know who to call! read more →

Sold: 707 Guerrero #2

1-707guerrero2-extSold for $1,525,000
Bedrooms: 2
Baths: 2

(more…) read more →

110 15th Avenue


This home should serve as a caution to anyone considering radically modernizing a period home. While updating a home to a “au courant” style can be fun at first, over time I find that the home is served better with a less is more approach. This home has stunning floors (under the wall-to-wall), great space, floorplan and location going for it. But the 1960s demanded tribute of all other period details – moldings, fireplace, built-ins are all gone.

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August 2016 – The Shift Has Started

At last week’s Keller Williams Mega Camp in Austin, Texas, Co-Founder and Chairman Gary Keller focused heavily on the Shift that is beginning in the real estate market and how sellers, buyers and agents must be preparing for it.

What’s the Shift? It’s the inevitable cyclicality of the real estate sales market. It is the constant tide flowing from a sellers market to a balanced market to a buyers market to a balanced market and back to a sellers market.

In San Francisco and the Bay Area, we have been in a strong sellers market for the past three years. This year in San Francisco, single family home median prices peaked in February at $1,390,000 and have been trending down since then, currently at $1,335,000 in July. In a normal buying season, median price peaks in June or July (as it did in the past three years).

198 single family homes sold in July, down sharply from June’s 245, and also the lowest number of July sales in four years.

In the Condo/Loft market, median price has been bouncing around $1.1M for the past 16 months. This June’s $1,162,500 was the top so far (a fraction above last June’s $1,150,000), but it dropped sharply ($100,000!) in July to $1,062,500. Count on June being the top of the market for this cycle.

Mimicking the falling number of single family home sales, the 220 condo/lofts sold in July was also the lowest number of July sales for the past four years.

How to prepare? When pricing property, sellers and agents should be looking at three sets of data:

  • Past Sales
  • Current Competition
  • Forecasted Trending

Once the market has started shifting, the critical action is to get out ahead of a falling curve. A great question to ask is “How much of the gain from the last three years do you want to give up? Because in a down-trending market, that’s the cost of incorrect pricing – the longer the property is on the market, the more of that gain is lost.


As in June, year-on-year Median Days on Market are up considerably for Resale Condos-Lofts clocking in this month at a 50% increase over July 2015. Likewise, Single Family Homes also continued the upwards trend , at 37% ahead of last July’s number. We still have a strong sellers market, but buyers are shopping more and standing on the sidelines more.

Months Supply of Inventory dropped slightly from June to July for Resale Condos-Lofts and was level for Single Family Homes. It is up, however, year-on-year (see next page for details)


Single Family Homes New Listings dropped by 18 from June to July, 2016 and is also down 124 year-to-date from 2015.

Resale Condos/Lofts is also down year-to-date, with 76, or 4.4%, fewer new listings in 2016 than 2015.


Why Months of Inventory is Rising:

Single Family homes have had 115 fewer sales in 2016 than 2015, while the number of new homes on the market has also fallen, but only by 124. Likewise, Resale Condo/Lofts have had 92 fewer sales year-to-date than 2015, while the number of new listings has also fallen, but only by 76.

So, we have a less active sales market, coupled with a slight inventory build up, which leads to a larger months-of-inventory calculation. read more →