District 5 (Noe, Castro, Haight) Update - February 2012

Paragon Real Estate Group
Paragon Real Estate Group
San Francisco Residential Market Trends in Realtor District 5: Noe/ Castro/ Haight

A statistical market overview by the Paragon Real Estate Group for Noe Valley, Eureka Valley & the Castro, Cole Valley, Mission Dolores, Haight Ashbury, Ashbury Heights, Clarendon Heights, Parnassus Heights, Corona Heights, Glen Park, Twin Peaks & the Duboce Triangle

Below are a variety of charts detailing market conditions and trends in the neighborhoods of San Francisco's central Realtor District 5. District 5 is one of the more homogeneous districts in San Francisco in terms of property values, but still any analysis of an area with so many properties of different type, location, condition and quality can only be a very general overview.

District 5 soared in value between 1996 and 2008 and was one of the last districts to peak in value before the financial markets meltdown in September 2008. Values then fell about 20% very quickly and then stabilized in 2009 and 2010. With the surge in high-tech buyers in 2011, many of whom wish to be close to highways to the peninsula, activity in this district has picked up significantly. It's a very hot market for appealing, well-priced homes, and we are seeing a good number selling very quickly in multiple offer situations. This dynamic is beginning to exert upward pressure on prices.

Generally speaking, short-term fluctuations up and down -- especially of median price and dollar per square foot -- are relatively meaningless unless continuing for an extended period of time. In real estate, the longer term trends, seen across a wide variety of statistical measurements, are the meaningful ones.


Sales Prices to List Prices, Days on Market, Price Reductions & Expired Listings

Most of the homes that sell in District 5 sell quickly for very close (or even a little over) asking price. Those listings that go through one or more price reductions take much longer to sell and sell at a large discount to original list price. And even in a strong market, not everything sells -- a fair percentage of listings expire or are withdrawn without selling, typically due to being perceived as overpriced. Well-priced, well-prepared, comprehensively marketed homes in this area are often accepting offers within 1 or 2 weeks of going on market.

Median House & Condo Sales Prices in District 5

For the past 2 plus years, the median price of houses in District 5 has generally been oscillating between $1,200,000 & $1,350,000 and for condos between $750,000 and $825,000. Median prices of homes of varied location, size and quality will naturally fluctuate without being particularly meaningful as pertaining to changes in value -- until the trend up or down is consistent over the long term (minimally 3 to 4 quarters). In the 4th Quarter of 2011, the median house price hit its highest point since 2008.

Note that in the 3rd quarter the median price for condos in District 5 suddenly fell 12%, which seems odd considering what was said earlier about District 5 being a hot market. But this is a perfect example of why median prices cannot be relied upon as perfect indicators of changes in value -- especially in short-term fluctuations -- because it just so happened that the average size of condos sold in District 5 in the 3rd quarter also dropped 12% from the 2nd quarter.

Percentage of Listings Accepting Offers

An excellent statistical snapshot of supply and demand. These two charts, the first by quarter through 2011, and then the second by WEEK for the 6 months ending 2/5/12 reflect the surging buyer demand vs. a limited supply of homes for sale. The percentage was very high in 2011 and then blasted off with start of 2012.

By Quarter through End of 2011

BY Week for Six Months Ending February 5, 2012 -- Incredible Surge since the Beginning of 2012

Average Dollar per Square Foot for Houses & Condos

Both houses and condos in District 5 have generally been oscillating up and down within a a relatively narrow $50 band of average dollar per square foot value since the beginning of 2009.

Homes for Sale on the Last Day of the Month

The very, very low inventory of homes available to purchase through MLS is clearly illustrated in this chart.

Months Supply of Inventory (MSI)

MSI is at an extremely low level of inventory for houses and condos, a reading that would typically be considered indicative of a strong "Seller's Market." Indeed anything under 3-4 months is usually considered a Seller's Market.

Longer-Term Trends

The following sample analyses delineate average sales price (which is different from median sales price) and average dollar per square foot by year since 1995. When neighborhoods are grouped together below, it is because they generally share similar market values in particular property types. Sometimes it's valuable to step back for a longer term view of market trends. Annual statistics, because of the much greater amount of data, are typically much more reliable than (fluctuating) quarterly or monthly stats.

Noe & Eureka Valleys: Higher-End House Sales, Values over Time

This is just a snapshot of a particular segment of the market in two of the biggest neighborhoods of District 5: Noe Valley and Eureka Valley. It should be noted that many houses do also sell for higher prices here than in price parameters set in the chart below.


MEDIAN SALES PRICE is that price at which half the sales occur for more and half for less. It can be, and often is, affected by other factors besides changes in market values, such as short-term or seasonal changes in inventory or buying trends. Though often quoted in the media as such, the median sales price is NOT like the price for a share of stock, i.e. a definitive reflection of value and changes in value, and monthly fluctuations are generally meaningless. If market values are truly changing, the median price will consistently rise or sink over a longer term than just 2 or 3 months, and also be supported by other supply and demand statistical trends.

AVERAGE SALES PRICE is calculated by adding up all the sales prices and dividing by the number of sales. It is different from median sales price, but like medians, averages can be affected by other factors besides changes in value. For example, averages may be distorted by a few sales that are abnormally high or low, especially when the number of sales is low.

DAYS ON MARKET (DOM) are the number of days between a listing going on market and accepting an offer. The lower the average days on market figure, typically the stronger the buyer demand and the hotter the market.

MONTHS SUPPLY OF INVENTORY (MSI) reflects the number of months it would take to sell the existing inventory of homes for sale at current market conditions. The lower the MSI, the stronger the demand as compared to the supply and the hotter the market. Typically, below 3-4 months of inventory is considered a "Seller's market", 4-6 months a relatively balanced market, and 7 months and above, a "Buyer's market."

DOLLAR PER SQUARE FOOT ($/sqft) is based upon the home's interior living space and does not include garages, unfinished attics and basements, rooms built without permit, lot size, or patios and decks -- though all these can still add value to a home. These figures are usually derived from appraisals or tax records, but are sometimes unreliable or unreported altogether. All things being equal, a house will sell for a higher dollar per square foot than a condo (due to land value), a condo higher than a TIC (quality of title), and a TIC higher than a multi-unit building (quality of use). Everything being equal, a smaller home will sell for a higher $/sqft than a larger one. (However, things are rarely equal in real estate.) There are often surprisingly wide variations of value within neighborhoods and averages may be distorted by one or two sales substantially higher or lower than the norm, especially when the total number of sales is small. Location, condition, amenities, parking, views, lot size & outdoor space all affect $/sqft home values. Typically, the highest dollar per square foot figures in San Francisco are achieved by penthouse condos with utterly spectacular views in prestige buildings.

District 5: includes the following neighborhoods: Noe Valley, Eureka Valley (Castro, Liberty Hill), Cole Valley, Glen Park, Corona Heights, Clarendon Heights, Ashbury Heights, Buena Vista Park, Haight Ashbury, Duboce Triangle, Twin Peaks, Mission Dolores, Parnassus Heights

Median and average statistics are generalities subject to fluctuation due to a variety of reasons (besides changes in value): how they apply to any specific property is unknown. Averages may be distorted by one or two sales substantially higher or lower than the norm, especially when sample size is small. Sales not reported to MLS are not included in this analysis. All figures should be considered approximate and are derived from sources deemed reliable, but may contain errors and omissions, and not warranted. We are happy to provide or direct you to the original data upon which each chart is based. 

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Paragon Real Estate Group (415)738-7000 | (415)565-0500 | www.paragon-re.com
Simone Koga DRE# 01897985 1400 Van Ness Avenue San Francisco, CA 94109 Direct (415) 738-7209 Fax (415) 738-7259 Simone@SimoneKoga.com http://simonekoga.com/