Blog

Affordable SF Home Ownership Success Story: Where There’s a Will, There’s a Way Part 2

Meanwhile, back in the Inner Sunset, Bridget asked me to meet with her in late May. She asked if her friend Harini could join us. Bridget had learned that the Mayor’s Office of Housing (“MOH”) was expanding the Down Payment Assistance Program (“DALP”) both in terms of the income limit and the amount of money available to a borrower. In addition, the Teacher Next Door (“TND”) program was clarified to include more kinds of educators – charter schools, non-classroom teachers, school social workers, (Bridget, Meghan and Harini are all school social workers and Josh works for a SFUSD Charter School), etc., which was going to make it easier to use those funds as well. She asked if her friend Harini could come along to them meeting. The changed program was going to be available in early July, and Bridget and Harini wanted to be ready to spend their summer getting their families homes and moving in.

After several weeks of looking and a couple of offers, each couple was able to get into contract to buy a home in the Sunset District. In each case there was competition, but also, in each case, the sellers were happy to see SFUSD teachers buy a home. And It’s not true you have to have all cash and waive all contingencies: both couples were able to do inspections and negotiate small credits subsequent to their offers being accepted.

With the usual work out of the way, now came the fun part – getting the Mayor’s Office of Housing loans closed.

screenshot-sfmohcd-org-2016-09-28-12-33-44

Wth the program revisions effective early July, we though we were in good shape to close both deals by about August 15. We wanted to be first in line in case the program was flooded with requests and based on my past experience with MOH, this would take 15-25 days longer than a normal transaction – about 45-55 days. Unfortunately, we were naively unaware of some of the details of the program launch. The lender we were working with, Laura Levine, had a long track record of doing employer and municipal 2nd mortgages similar to the DALP. Unfortunately, her new company, All California Mortgage, did not have a current relationship with the SF MOH, and they were required to take training not offered until August before any file could be officially accepted. So, even though the packages were complete and submitted to the MOH in July, the MOH did not consider them submitted until after the training in August.

Then there was the fact that we did manage to be first. The early bird doesn’t always just get the worm. The early bird can tend to be the one to help work out kinks in the process. Bridget & Kai were literally first in line for the expanded program and Harini & Josh were 2nd. There were kinks. Documents were submitted and rejected due to format, documents were submitted but never received, or were in any case requested again (and sometimes again). The RockStar loan processors at All California Mortgage patiently responded to all of the MOH requests and the diligent and lovely people at the MOH worked assiduously to complete and perfect the files – but all of this took a lot of time and elapsed days. Then, in late August, Josh’s TND loan was denied because he works for a SFUSD charter school (we thought that was fixed?). By early September the Sellers were losing patience on both deals. The biggest problem wasn’t that they wouldn’t wait, but that we couldn’t even tell them exactly how much longer it would be. They were worried it would be 2017! One of the sellers even started making plans to move back into the home.

At this point, the buyers sought the intervention of their representatives Katy Tang and Scott Wiener, whose staff helped to get clarity on closing timing. There were some sleepless nights for the buyers, but with the assurance of the closing timing, the agents were able to keep the sellers committed. Harini’s eloquence was also able to get the MOH to take another look at Josh’s TND and get it reinstated.

It is not well known or understood that the lenders who work on these deals are compensated in no way for the difficult processing of the MOH loans. In fact they have to pay the city an annual fee for the pleasure of working for free. You could say, well, they get paid for processing the 1st mortgage and the MOH loans enable the 1st mortgages. I still say, hat’s off to them!! This is truly community service because these loans are a vast amount of work. On Josh and Harini’s deal, for example, there were three MOH loans in addition to the 1st mortgage (two TND and a DALP). All of them have some separate paperwork and issues that have to be calculated into the mix.

It is a testament to the interpersonal and professional skill of everyone involved, hope, patience and community that these deals closed. Bridget and Kai closed on their house on 9/8 after 74 days in escrow. Harini and Josh closed 9/23 after 77 days in escrow.

I, and I know my clients, are so thankful for the dedication of every person who touched this deal. To the listing agents, Michael Lewin and Luda Duwe, for having faith in our team and not giving up, to the lending team at All California Mortgage (Kim, Marc, Laura!!!!) for all of their pro-bono hours, to the great employees of the Mayor’s Office of Housing (RUTH!!, Jeanne!! Sonia!! and Maria!!), to the elected officials and legislators who created these programs in the first place, and to our great escrow officers who had to do the closing statements so many times (Terry Pizzo at First American West Portal and the entire team at Chicago Title on Junipero Serra), I am deeply appreciative.

If you want to know more about the Mayor’s Office of Housing and their programs, click here. And, yes, I’m willing to take this on for you and yours should you want to pursue homeownership in San Francisco. It’s hard in every price range, but it can be done and it changes the lives of the new homeowners permanently for the better every time it happens.

– Jennifer read more →

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

read more →

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

111

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

theo

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.

read more →