Property Taxes Around The Country

Do you ever wonder about property taxes in other places? I know I have. Property taxes are used to fund state government and pay for things like schools, jails and county health services. CNN has put together this handy interactive map using data from the Tax Policy Center. Predictably, when you leave the map set to “dollars” the Bay Area has some of the higher tax bills. But when you set the map to “% of home price” we are among the lowest – only 0.59% in San Francisco! Many places nationally pay over 2% on average annually. Take a look! read more →

Why is the value of tenant occupied property in SF so low compared to the rest of the market?

Why is tenant occupied property harder to sell and less valuable than vacant property in San Francisco? There are a few different factors making tenant occupied property less valuable and/or harder to sell.
#1: Property condition
In San Francisco the majority of properties are prepped to sell to the hilt to achieve maximum value. New paint, refinished floors and staging are the starting point. But often we change the light fixtures, fix anything that’s broken and even may go so far as to remodel the kitchen and/or baths to get the highest price. We might also do significant landscaping. In the last year I have renovated/remodeled more than six homes before putting them on the market. Some examples of before and after values:
One in the Sunset: would have sold for 1.2 and we got 1.465M= 265k or + 22%
One in NOPA: would have sold for 1.1 and we got 1.5M= 400k or + 36%
One in Pacifica: would have sold for maybe 650 because it was moldy and we got 1015k= 365k or + 56%
In each case, the investment on the part of the owner was less than 50k and you cannot make these improvements with tenants in the home.
#2: Difficulty for the new owner to occupy the property
Many people are willing to buy a home where the tenant has previously be evicted or bought out but they would never undertake this themselves. Here are some reasons why:
-they are morally opposed
-it just makes them uncomfortable
-This is the big one: they are spending everything they’ve got just to buy the house and the financial risk that the tenant might not move is too much for them.
Roughly, the process of doing an owner move in eviction costs 18k+/- and will take a minimum of 2 months based on statutory requirements. It is generally wise to budget 25k and 4 months. The tenants may want to be bought out at a higher than statutory rate because they think they have a way of fighting the OMI. The fact that in order to occupy the property they will have to go through an legal process with an uncertain outcome is something most buyers cannot stomach and this decreases the value of the property in proportion to the perceived risk.
There is a lot more to say on this subject and you can find more info here:
#3: Rents are low
This is important especially in multi unit where you have investor buyers. The value of a property is related to the cap rate or gross rent multiplier (“GRM”) and this is based on the rents for the units. Buildings in Sf sell for between approximately 14 and 22 GRM depending on the outlook for turnover, banked rents, etc. The GRM is the number of years it would take to pay back the purchase price based solely on the gross rent (without subtracting expenses). So if you have a property with rent of 2500/month, the value will be between 420k and 660k to an investor if they cannot see an easy way to raise the rents.
#4: Harder to show the property and people looking are just uncomfortable
Some tenants are lovely and make it easy to want to keep them in possession of their homes. They clean up, make the bed, and serve homemade piroshki to the realtors (true story). Other tenants – not so much. There might be threatening signs, deliberately bad housekeeping, or shouting. You name it, I’ve seen it. I was followed through a SFH in the sunset with a movie camera, a movie light with a a boom microphone flapping in my face. Most tenants are somewhere in the middle. Whatever the case, most buyers are uncomfortable with the feeling they are invading someone’s home – and perhaps rightly so! I think it is easy to see why this causes the property to sell for less.
How does all of this affect value? When I’ve studied SFH, tenant occupied homes without illegal in-laws sell for about 30% less than their value. Tenant occupied SFH with occupied illegal units can sell for as low as 50% of their vacant, improved value. With the median price of a SFH at about 1.6MM, this is a lot of money.
I have done extensive research into 2 unit buildings in particular and I found that a single vacant unit increased the value of the building by about 20% and that having both units vacant increased the value about 25%. This is in cases where the building was not remodeled. If an owner is able to, as in #1 above, stage and improve the home, the difference can be far greater.

If you have questions about a property you own or are interested in, I am happy to weigh in on the potential. Just give me a call or shoot me a text at 415-269-4663. read more →

Rare Blood Super Moon Happening Sunday!

On Sunday night at 7:30 there will be a lunar eclipse of a rare blood super moon. Not only will the moon appear to be extra big, it will be very red AND THEN it will get eclipsed by the Earth. That’s a lot of things coinciding and I can’t wait to see it. This will be the last total lunar eclipse for several years – the next one will be May 26, 2021! For more info click here. read more →

Sold: 88 King Street #1406

Offered at $1,349,000
Sold for $1,351,000
Buyer Represented

(more…) read more →

Sold: 352 17th Avenue

Offered at $1,995,000
Sold for $2,141,000
Buyer Represented

(more…) read more →

San Francisco Real Estate Market Update: December 2018

Uncertainty in the market and the economy is the watchword. November followed October’s stock market gyrations with the result that all major worldwide stock markets are now in negative territory for the year. The Federal Reserve Chair has now hinted that the Fed may not raise the discount rate as previously planned in December.

In San Francisco, four SF-based unicorns, Lyft, Uber, Pinterest and AirBNB, have each announced plans to IPO in 2019. Since real estate is the biggest item that people buy following an IPO, this could buoy the San Francisco real estate market in spite of uncertainty or even a downturn in the US economy or continued interest rate rises.

Locally, fewer buyers are participating in multiple offers and the percentage of homes selling above list price is falling. And, month-by-month, the median sales price of SF single family homes has eased downwards since April.

The signs of the market shift are here: homes that are in move-in condition and priced well sell quickly with multiple offers. However, homes with problems are sitting on the market and taking price reductions and selling for far less than sellers had hoped to get.

Single Family Homes:

  • The three-month rolling average median sales price of $1,540,833 is up 9.1% over last year’s*.
  • Year-to-date, new listings are up 4.9% while sales are down 3.1%.
  • November’s inventory of 2.1 months is 17% higher than in 2017.
  • 75% of homes sold over their list price and the median percent of list price received was 111%.


  • The three-month rolling average median sales price of $1,188,333 is up 3.0% over last year’s*.
  • Year-to-date, new listings are up 3.9% while sales are up 5.9%.
  • November’s inventory of 2.4 months is 4% lower than in 2017.
  • 55% of condo/loft/TIC’s sold over their list price and the median percent of list price received was 101%.

read more →

What Buyers Want…

A great Realtor colleague in the south bay just shared this article with me about what buyers want when they are looking for a home. In San Francisco, we are rarely going to achieve the full complement of amenities that this report says buyers want, but it is good to keep in mind. The one that surprised me is the double sink. This seems hopelessly outdated to me as I really like my big farmhouse sinks. One thing that didn’t surprise me – buyers want environmentally friendly features but aren’t willing to pay more. At lease they want them! We will get there eventually!

Read on …

The National Association of Home Builders conducted a nationwide survey on what home buyers are looking for when purchasing a new house. Both people who had recently bought a home as well as prospective purchasers were asked what they felt were the most important features.

  • Buyers want a home with a median of 2,226 square feet
  • Lot size was important to 75% of purchasers
  • Close to half want 3 bedrooms while about 30% want 4 bedrooms
  • 65% want either 2 or 2.5 baths
  • 57% of buyers prefer a single story home
  • Over half want a 2 car garage
  • For 65% of buyers, the most critical characteristic is ‘living space and the number of rooms that meet their needs’
  • Buyers focus on quality and appearance for most home features
  • 85% or more buyers are interested in energy efficiency and organization/storage
  • 84% want a walk-in pantry, table space for eating and a double sink in the kitchen
  • Over 80% of buyers ant both a tub and shower in the Master bath
  • 65% of buyers would sacrifice space in the Master bath for a larger Master bedroom
  • 90% of buyers consider outdoor lighting essential
  • 50% would like to have a wireless security system in their new home
  • 62% would choose a small home with high quality products and amenities VS a larger home without
  • 67% of buyers want an environmentally friendly home but aren’t willing to pay more for it

read more →

Sold: 1778 48th Avenue

Offered at $998,000
Sold for $1,465,000
Seller Represented (more…) read more →

Sold: 611 Mason #602

Offered at $699,000
Sold for $851,000
Buyer Represented

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Sold: 1687 31st Avenue

Offered at $1,299,000
Sold for $1,401,000
Buyer Represented

(more…) read more →