We've been blanketed in fog for several weeks now, and memories of summer are long forgotten. I always enjoy Tuesdays--for Brokers Tour and seeing lots of great properties and for the wonderful opportunity to drive around the city during tour. This morning in Telegraph Hill and North Beach it was foggy! As I moved around the city, I hit some patches of sunshine and warmth. I realize that this is a good metaphor for the current real estate market. It feels like we have patches of warmth and fog.
We are starting to see multiple offers on some properties (with sales prices over asking, at asking, or sometimes under asking), we see properties that are quite lovely sit on the market with no buyers even though the asking price seems to be at an appropriate value range. There are also many homes and condos on the market that are terribly mis-priced--way to high. Some of these homes get reduced, others are withdrawn from the market.
In Telegraph Hill, there are currently 8 condos on the market, and three are in contract. In the last 6 months, six condos have sold. The mix of properties that have sold in the past six months is a bit different than those that have sold in the last six months. Recent sales are mostly of smaller condominiums. One bedroom homes--some used as pied a terres, others as residences.
Reivewing the active properties, seven of the eight condos actively on the market are luxury homes. Reviewing sales of all condos over $1,500,000 in the last year (citywide), reveals that prices of these condos have declined on average by 2%. Not bad, given the turmoil and huge declines in the stock market and the volatility in real estate markets across the country. A more remarkable number shows that only 5 condos over $1.5 million sold in June 2009, compared to 16 sales the prior year in June. Looking at all of the condo sales in Russian Hill, Telegraph Hill, Nob Hill, Pacific Heights, the Marina, and Presidio Heights, sales of condos over $1.5 million declined 3% year over year. Four condos were sold in June, compared to ten the previous June. Why are sales of luxury condos down? I suspect the biggest reason is the difficulties associated with Buyers getting financing. Fewer banks are lending in the jumbo arena, rates for jumbo loans are higher, many Buyers lost money in the stock market (and funds for their down payments smaller). For jumbo loans, rates for 30 year fixed money are also much higher than rates for loans fixed for 7 or 10 years.
A few things to note about current market activity:
383 Lombard Street #305 closed escrow last week for $625,000. An all cash offer with a really quick close, well below the $670,000 asking price. Another unit in the building, 373 Lombard #202 closed escrow in April for $750,000. Unit #202 has a fabulous patio in the back and is a bit more updated. Still a big price difference between the two.
Five of the active listings in Telegraph Hill are all at 567 Vallejo Street. The penthouse, unit 500 is listed for $4,750,000. Still available, plus the other four units in the building.
1440 Kearny is still available and still fabulous. I am surprised.