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DROPPING PRICES? ‘WE ARE NOT SEEING IT’
Paragon Real Estate Group is throwing some cold water on expectations of a rapidly cooling residential real estate market. The firm reports in its review of the first quarter of 2017 that sales prices might fluctuate but there isn’t yet evidence of a looming plummet in the market. Month-to-month comparisons can be tricky, because different seasons in the year always tend to be higher or lower in sales volume, and different property types can also have different experiences in the market.
“Generally speaking, in higher-priced areas, median house prices have been plateauing or dropping a little, while the more affordable neighborhoods have continued to appreciate: This is a relatively common dynamic around the Bay Area,” Paragon reports.
Paragon then uses the Marina district as a case study, comparing it to other major sections of the city. Of those, “the Marina has by far the fewest house sales and the widest range of individual home sales prices, so it is most susceptible to median price fluctuations caused by other factors besides changes in value — for example, a substantial change in the listings available to purchase in a given year. We do not believe that the same Marina house selling in 2015 would have sold for 15 percent less in 2016: something less, perhaps; 15 percent less, very unlikely. This is a good illustration of the dangers of making too much of median sales price changes.”
Other sources have also reported that sales prices are being supported by a drop in inventory of available properties for sale. Additional condominium units coming online in San Francisco have helped moderate condo pricing, but appetite for those units has still reportedly been strong — helped, no doubt, by the decline in the already-tight inventory of single-family homes.
SAN FRANCISCO RENTS UNAFFORDABLE FOR TEACHERS
Teachers who have been on the job for five years have to spend almost 70 percent of their incomes to rent a one-bedroom apartment, helping to make the city one of the least affordable places to be a teacher, according to a study from Apartment List. Also, unlike many expensive cities where teachers could find affordable rentals in nearby suburbs, San Francisco is surrounded by increasingly pricey suburbs and cities.
Apartment List reports that in the entire Bay Area, only Pittsburg and San Pablo offer teachers the ability to live without paying more than 30 percent of their income for rent.
Out of 50 cities across the country ranked on their affordability for teachers, San Francisco ranked dead last; New York and Seattle were only slightly better in the next two slots.
MILLENNIUM TOWERS HOA SEEKS $200 MILLION
The homeowners association for tenants of the sinking-but-costly Millennium Towers has filed a lawsuit seeking $200 million in damages. The HOA is suing the property’s developer, architects, contractor, and others, including the Transbay Joint Powers Authority (TJPA). The San Francisco Business Times reports that Millennium Partners is blaming the TJPA, saying it’s “reckless behavior caused excessive settlement at 301 Mission.” TJPA, like others being sued, denies responsibility.
MAKE UP YOUR MIND
San Francisco residents want to move somewhere else. Residents from somewhere else want to move to San Francisco. Wait, what?
Real estate website Zillow has been crunching the numbers of its property listings, and it says that you get a sense of whether people want to leave their city (or move into another one) by tracking where people are viewing property listings. Are they looking at homes outside their current city?
Late last year, Zillow found that homes in San Francisco ranked among the top 10 areas nationally in terms of the number of page views from outsiders. But the city also ranked among the top 10 for the percentage of its current residents searching for homes elsewhere.
MORE OF ALL TYPES
California State Senator Scott Wiener wrote an article on medium.com showing that he hasn’t backed down one iota from his commitment to building more units of all levels of housing, including the much-hated-in-San-Francisco market-rate housing.
“Subsidized units clearly play a critical role, particularly for our lowest income residents, and we need many more of them. But … we simply do not and will not have the massive resources we would need to shift to a dominant public-subsidy-based housing approach,” Wiener wrote.
“Which means: In addition to expanding the supply of subsidized income-based affordable units, we must increase the overall supply of housing, and that means — you guessed it — market-rate housing. Some describe all new market-rate housing as ‘luxury housing, because it’s expensive,'” Wiener continued. “Well, of course it’s expensive, since for decades we haven’t built enough of it. According to California’s Legislative Analyst, the state needs to produce about 180,000 units of housing a year to keep up with growth. In practice, we produce less than half that number. And, let’s be real. While the new apartment or condo project down the street is expensive, so is the 75-year-old house or apartment you’re trying to buy or rent. It’s all expensive, and that’s not because it’s ‘luxury.'”
QUOTE UNQUOTE
“Job growth has slowed, and that leads to a lessening in demand to live in the Bay Area. But it’s not like we’re having outright job losses or increasing unemployment. That’s not happening.”
—Hans Johnson, senior fellow, Public Policy Institute of California, quoted in the San Francisco Chronicle
