Real Estate Roundup: San Francisco Luxury Condo Buyers Are the West’s Most Educated
June 1, 2015 by Pacific Union • Posted in Weekly Real Estate News Roundups   

Here’s a look at recent news of interest to homebuyers, home sellers, and the home-curious.
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The Stanford University campus in Palo Alto.

BAY AREA LUXURY BUYERS ARE A HIGHLY EDUCATED BUNCH
Do you hope to eventually become the proud owner of a high-end, high-rise unit in San Francisco? If one recent study is any indication, your chances get a whole lot better if you obtain an advanced degree.

Citing a survey of more than 12,000 luxury condo owners in six Western U.S. cities, The Wall Street Journal reports that 97 percent of buyers in San Francisco hold a bachelor’s degree or higher — tied with Seattle for the highest percentage of college-educated owners. The survey says that 60 percent of San Francisco luxury condo owners have graduate degrees, the most of the six cities by a sizable margin. Across the bay in Emeryville, 92 percent of luxury buyers have bachelor’s degrees or higher and 33 percent have earned advanced degrees.

According to the article, the Bay Area likely has brainier residents than other places due to its concentration of tech and biotech companies, which have many positions that require highly educated workers. Another reason is the region’s top-notch colleges, with one San Francisco real estate professional citing the city’s proximity to Stanford University as a factor.

NEW GRADS NEED SIX-FIGURE SALARIES TO MAKE RENT IN SAN FRANCISCO
San Francisco’s plentiful, high-paying jobs are drawing recent college graduates from around the globe. However, these new workers may find it sobering to learn that they will need to earn three times more than the median income in order to afford San Francisco’s astronomical rents.

A recent Trulia study says that the median annual income for recent college graduates in San Francisco is $41,244, the most in the nation. But with a median monthly rent of $3,500 for a two-bedroom unit as of May, grads would actually need to pull in a yearly salary of $137,272 – also the most in the country — in order to afford to live comfortably. According to the company, 3.9 percent of rental properties in San Francisco are affordable to new grads, who need to take on an average of 2.3 housemates to meet the monthly payments.

Oakland also ranked among the top 10 markets where new grads require the largest yearly incomes: $76,971 to afford the $1,963 monthly rent. A recent Oakland grad can expect to earn $27,841 per year after earning his or her degree. Trulia says that just 0.8 percent of Oakland units are affordable for new grads, who would need to find 1.7 housemates.

Trulia concludes that “The lesson here for recent grads is that although it may be tempting to seek out metros with the highest wages, doing so may not necessarily lead to a better quality of life because these metros also have high rents.”

BAY AREA RESIDENTS CAN SAVE BIG BUCKS BY BUYING A HOME NOW
Bay Area residents who are tired of paying the aforementioned high rents and are considering buying might be surprised to learn how much money they can save by acting now while interest rates remain low.

Citing data from Realtor.com, a Bloomberg article estimates that San Jose buyers who can get in the market today will save almost $62,000 more than they would if they waited another year to purchase a home. The publication projects that San Francisco residents will save nearly $300,000 over the course of 30 years by purchasing a property instead of renting one.

Realtor.com Chief Economist Jonathan Smoke told Bloomberg that it was no surprise that high-priced markets such as the Bay Area offered the greatest long-term financial reward, but he noted that a median-income household in San Jose could currently afford less than 10 percent of homes for sale.

U.S. PENDING HOME SALES HIGHEST SINCE 2006
Demand for real estate across the country remained strong during the traditionally busy spring buying season this year, with U.S. pending home sales reaching their highest level in nearly a decade.

The National Association of Realtors’ Pending Home Sales Index increased to 112.4 in April, up 3.4 percent from March and 14 percent from one year ago. April marked the fourth consecutive month of pending home sales gains, and the index is now at its highest point since May 2006, when it was at 112.5.

The PHSI in the West was 103.8 in April, a month-over-month increase of 0.1 percent, up 16.4 percent from one year earlier.

(Photo: Flickr/Don McCullough)

Modern Condos To Replace Western SoMa Parking Lots As Proposed

Modern Condos To Replace Western SoMa Parking Lots As Proposed

With the three Western SoMa parking lot parcels on the east side of 8^th Street, between Folsom and Heron, on the market for $6.5 million, plans for a modern 38-unit building designed by RG-Architecture to rise on the site have been submitted to San Francisco’s Planning Department for review.

And as proposed, the development would include a 1,200-square-foot café or retail space fronting 8th Street, but it wouldn’t include any replacement off-street parking spaces for the residences above.
The 349 8^th Street site, which is zoned for building up to 55-feet in height and directly across the street from the massive 350 8th Street development underway, fronts 8^th and Rodgers and is currently leased to a parking company with a 90-day notice to terminate.


 Articles and Photos sourced from : www.socketsite.com

San Francisco's Housing Market to Remain Steadfastly Bonkers in 2015

Welcome to House Calls, a new feature in which Curbed tours San Franciscans' lovely, offbeat, or otherwise awesome homes. Think your space should be featured next? Drop us a line.

Photos via Patricia Chang

When Catie Nienaber moved into her Hayes Valley apartment almost five years ago, she kept what you might think of as a typical studio: a desk, some space-conscious shelving, and a bed right smack in the middle of the main living space. "When you have people over, there's the unacknowledged vulgarity of the bed right there in the living room," she says. "I wanted this to be more of a space where I can have friends over and have chairs for people to sit in. Hence Iturned my walk-in closet into the world's smallest one-bedroom."




Nienaber, who works by day as a human resources administrator for a startup and runs the online store Dronning Vintage in her off hours, went looking for a mattress that would fit in her walk-in closet, but the closet wasn't deep enough for a standard twin. So she had one custom-made. "It's basically a Euro-twin: a twin bed, except 10 inches shorter," she explains. Inside, there's no clearance around the mattress—that would take up too much space!—so Nienaber has to get into bed from the bottom, the way you'd crawl into a tent. There's no lamp, no bedside table, not even an outlet. Think of it as a cave for sleeping. "It's pitch dark," says Nienaber. "I sleep so well. It's the best I ever sleep because everything's just shut out."



The apartment, located in a multi-unit building that began its life in the 1920s as a hotel, clocks in at 430 square feet, including the closets. Oddly, though, the presence of a wall-to-wall mattress cloaked in darkness is only the second most remarkable thing about it. For such a small place, it's impressively empty. When we visited, Nienaber had about 400 items for Dronning's Etsy store stashed around the apartment, all cleverly hidden away in closets, bins, and—in the case of about a dozen hats—a vintage 1970s cooler. Canvas baskets atop the bookshelves house handbags and shoes, and storage bins of clothes line the space above the kitchen cabinets, though most people don't spot those, says Nienaber.



When she moved in, the walls were off-white—"that rental French vanilla beige"—and the blinds were those standard-issue metal slats that come coated with years of other people's dust. Nienaber painted most of the walls gray and ordered a custom set of slouchy Roman blinds, which she installed with a vintage drill that had been her grandfather's. "It's so badass," she says. "It weighs 15 pounds." Nienaber left one wall white in the kitchen, where she wheels in her dress form to shoot pictures for Dronning's Etsy store.

With bare walls and one high shelf, her bedroom is the apartment's sole unadorned space. "It's not decorated at all because I never intended anyone to see it," Nienaber says.



A Sears drill that once belonged to her grandfather.




Nienaber labels her shoeboxes with pictures of the shoes that are inside.


Nienaber uses this 1940s hat mannequin to model hats for her Etsy shoots. "They're hard to find now," she says of the mannequins, which were once common in department stores. "There are a lot of reproductions."






Nienaber's brother-in-law, a carpenter, made the coffee table.


In only 430 square feet, Nienaber still has room to pack in eight years of Vogue.


At left, a portrait of the Kennedys. “I like that the photo’s about her and not him," she says.




The bar cart's on wheels so Nienaber can move it out of the way for her product shoots.




Nienaber's collection of vintage tins. “These were my mom’s," she says. "I still use them.”












First communion photo of Nienaber's grandfather, who was born in Brooklyn in 1921.

Article and Photos sourced from:  http://sf.curbed.com/archives/2015/01/05/how_to_squeeze_into_a_microsize_studio_sleep_in_the_closet.php#more

Written by Lamar Anderson

S.F. condo market passes precrash peak

Earlier this month, there was an invite-only reception at Vida, a condominium project being built next to the New Mission Theater.

As Jose Roberto Hernandez's trio played, 250 potential buyers sipped on cans of Modelo and ate tapas provided by the Mission Language and Vocational School. Two days later, 20 units were in contract - and the building won't even open until January.

Daniel Kennedy packs up items for his move into a condominium at the Marlow development on Van Ness Avenue, one of just four new condo projects to hit the market in S.F. last year. Photo: Deborah Svoboda, The Chronicle

Kennedy (left), with partner Alek Chainam, saw prices at the Marlow soar after he hesitated on his initial decision to buy. Photo: Leah Millis, San Francisco Chronicle

Alek Chainam and his partner, Dan Kennedy pack up some last belongings for Chainam to drive to their new place, from their old unit in San Francisco, Calif. on March 30, 2014. Photo: Deborah Svoboda, The Chronicle

"It was a madhouse," said Matt Fuller of Zephyr Real Estate.

If that sounds reminiscent of late 2007, when buyers lined up outside One Rincon Hill until the wee hours, it is. Median condo prices in San Francisco are now above $830,000, about 8.2 percent higher than the peak reached right before the economic crash in early 2008. The latest Standard & Poor's/Case-Shilling home sales price index shows that San Francisco prices have jumped 23 percent in the past year.

Units that seemed terminally underwater are now high and dry. At One Rincon Hill, a unit sold recently for $815,000, a 15 percent profit over its early 2008 purchase price. The seller's broker, Leslie Bauer of Sotheby's International, said, "Even a year ago it would have sold for about $650,000."

Another One Rincon Hill unit traded in February for $1.14 million - 31 percent over its 2011 price of $870,000.



The frothiness is being whipped up by a combination of the robust tech economy, low interest rates and a supply of new condos that is at an all-time low. San Francisco has fewer than 100 new units on the market, compared with the average of 1,000 units on the market at any given time between 1999 and 2009.

A year ago four condo projects hit the market, totaling about 300 units: Linea at 1998 Market St., Marlow at 1800 Van Ness Ave., Blanc at 1080 Sutter St. and the 300 Ivy St. development. Marlow, Blanc and 300 Ivy are sold out, while Linea has about a dozen units left.
'The new normal'

The average price per square foot at both 300 Ivy and Marlow topped $1,000.

"The new normal for new construction is $1,000 a square foot, and it goes up from there," said Chris Foley, a principal with Polaris Pacific, which is handling sales for Vida, Blanc, Linea and Marlow. "Vida will sell out before construction is finished."

Daniel Kennedy, who moved into his new one-bedroom condo at Marlow this week with his partner, Alek Chainam, knew what he was getting into. After all Kennedy, who works in marketing for a tech company, had sold his previous unit near the Caltrain station about a year ago.

"I knew the market would be tight, but it was worse than I thought," he said. "It seemed like every month it was getting tighter."
Hesitation costs buyer

Kennedy was originally the first buyer in contract at Marlow, but he decided to wait and look around. The hesitation cost him: Marlow's prices rose 17 percent from the start of construction to the closeout.

"Of course I ended up having to pay more because I came in later."

And unlike in 2007, when buyers got away with 5 percent down, postcrisis banking regulations are stringent: You better have a job, strong credit and 20 percent cash to plunk down.

Many buyers, however, are putting down even more. At Marlow, where the price per square foot averaged $1,060, 28 percent of buyers paid all cash.

"The buyer profile at Marlow was the strongest I have ever seen," said Jason Chapin, a retail sales supervisor for Wells Fargo Home Mortgage, who supervised loans on the project. "People with plenty of cash, excellent income and great credit."

Cash buyers "set the tone for the market, even in a retail market, because they are hard to compete with," Chapin said.

"There is a lot of cash in the Bay Area," he added. "The IPOs in tech and biotech are back. We see a lot of young people with more liquidity than we have seen in the past."

But it can be a frustrating time to be a buyer. Some would-be buyers end up scoffing at the going rate of $800,000 for an 800-square-foot condo, even if they can afford to buy it.

"You are starting to hear about more people getting buyer's remorse and falling out of contract after deciding the market is overpriced," Bauer said.

But the alternative - the rental market - is no picnic. Rents in the city's more fashionable neighborhoods have topped $4.50 a square foot.
Trying to add housing

Builders like Sean Sullivan, president of JS Sullivan Development, are doing what they can to add housing. Sullivan just completed Blanc and has two projects under construction: 1515, a 45-unit project at 15th Street and South Van Ness Avenue, and 870 Harrison St., a 26-unit building to open in October. Sullivan said Blanc exceeded expectations and, surprisingly, attracted a fair number of families with children to a somewhat edgy location.

Sullivan said he sees the market leveling off but not falling. "It will cool off - this rate of increase in valuation is unsustainable," he said.

"The current pipeline is all under construction - what is going to happen in 36 months when all those high-rises under construction are sold out? We are going to have inventory issues for years to come."

The likelihood that interest rates will jump this year is creating an additional incentive for buyers and sellers alike. The current rate of 4.30 percent on a 30-year fixed loan means that monthly payment on a $500,000 loan is about $2,500 a month - compared with $3,000 a month in December 2007, when rates were at 6.10 percent.

Original Article and Photos Sourced From:  http://www.sfgate.com/realestate/article/S-F-condo-market-passes-precrash-peak-5361934.php?cmpid=hp-hc-realestate#photo-6097964