I’m currently working with a couple of clients looking for homes in the Potrero Hill District.  Here, we’re talking specifically about subdistrict 9.E under San Francisco’s MLS (Multiple Listing Service).

It’s an area that roughly sits between I-280 and I-101, with Cesar Chavez at its the south end and the tangle of 101/Design District/Division at its north end.  With major arteries at all ends as well as proximity to Caltrain, it’s a favorite for people who need good commute access.  It’s also got some of the best weather in San Francisco.  The crest of Potrero Hill sits at intersection of Carolina and 22nd Street.  Homes on the  “north slope” — ie.  north of 22nd Street — boast spectacular views of downtown SF and the Bay and therefore fetch a premium.   Potrero Hill has a small but upscalish shopping/cafe strip located on 18th between Connecticut and Texas.  The recently opened Whole Foods at Rhode Island and 17th hasn’t hurt either.  Architecture is a mix of broad two-story Victorians and newer modern structures designed to take advantage of the weather and the views, especially on the north slope.

Apparently the denizens of Potrero Hill like their neighborhood because there are very few sales.  In fact, based on my review of sales of single family homes back to 2003, there’s an average of just 4 sales per month.  Sometimes there are none at all.  With so few sales each month, I’ve used averages to look at values rather than medians.  Prices seem to have remained incredibly stable over a long period of time.  This chart shows price on a per square foot basis (click to enlarge).

Potrero Hill SFD sales

Potrero has the reputation of being a relatively affordable area, and perhaps it is if you’re talking about Noe Valley or Pacific Heights.  In June 2010, the average home sales price for the city as a whole (based on 217 sales) was $1,107,000 — about $100,000 over the average for Potrero.   However, the average price per square foot for the city as a whole came in at $523 — substantially below that for Potrero.  With so few monthly sales available in Potrero, I’d be cautious about drawing any conclusions from one month.  As the chart trend line shows, Potrero’s price average price per square foot looks remarkably stable at around $560 currently.  That seems consistent with the idea that Potrero Hill is one of San Francisco’s better, if not poshest, neighborhoods.

Author: Jack French -- Used under Creative Commons Permission 2.0

Back in May 2009, I showed that Noe Valley was not immune from the slump in prices affecting the rest of the city, despite suggestions to the contrary from real estate agents, mavens and media.

Have things gotten any better?  Well, no.  And maybe.

Here’s a chart showing percentage change in single family home prices for the last 14 months, relative to their all-time highs  (click to enlarge).  (All figures are 3 month moving averages.)

After reaching an all time high in March 2008, prices plummeted.  Just a year later, in the midst of fears of a global Depression, home prices were down 30%.  Did things get better?  No, they got substantially worse.  Despite an impressive  city-wide recovery in 2009, with prices going from 30% down to around 18% down for single family homes at  year’s end (see more detail here) , Noe Valley home prices continued to retreat.  In October and November 2009, prices were down 35%.  At year’s end, they’d barely clawed back two percentage points. Not surprisingly, days on market (DOM) remained stubbornly high for all of 2009.

Still, with cherry blossoms busting loose all over Noe Valley’s quiet streets, there certainly seems to be a change in the air.  There are many more listings coming onto the market and there’s even the occasional feeding frenzy over a clean, well-priced home.  These go in a matter of days, not weeks. Maybe that upturn in prices for January and February suggests a continued warming trend.

In the next few posts, I’ll look at Noe Valley in more detail, including how condos have fared.

It’s hard to remember just how close to the brink of catastrophe we seemed to be just a year ago.  Major financial institutions – failed.  Credit – impossible to get. Sales—anemic.

With the benefit of hindsight, not to mention survival, some are now criticizing Paulsen, Bernanke, et al., for their haste in rescuing the financial system, but I, for one, will reserve my scorn for the appalling judgment of the likes of Morgan and Goldman and their obscene bonuses.

How did the San Francisco market do?  Here’s where we are for single-family homes (click to enlarge).

We ended the year still down 18% from our all-time high of June of 2007.  That puts us at around the price levels of the spring of 2005.  Not great, but during those scary first months of the year when there was no bottom in sight, we were down to price levels not seen since early 2004.

It’s also interesting to see how Days on Market (DOM) inversely correlates with price, at least over longer periods.  In addition to the very regular seasonal dips in price every December/January, it’s easy to see that as DOM lengthens over time, prices decline.  While DOM remained less than 40 days, prices stayed high.  The correlation isn’t perfect – and certainly not on month-to-month time-scales — but it looks pretty good to me.

So for the “half-empty” crowd, the bottom line is that we’re still down 18% from our all-time highs.   The story looks much more positive, however, if you look at 2009 in isolation.

Now a 23% gain for the year ought to be making people feel pretty good.  Note that median prices have been in the $700,000 to $800,000 bandwidth for the last three quarters.  The dip in the waning months of the year can be attributed to seasonal factors.

I can already hear the nay-sayers arguing that looking at year end numbers is arbitrary  or, worse, distorts the picture.  (These are the same people who don’t believe in celebrating their birthdays!).

I’m certainly not arguing that happy times are here again.  But , if nothing else, that 23% increase confirms just what a wild ride the last two years have been.

As for 2010, I confess I’m beginning to feel a bit more optimistic than I was a few months ago.  Manufacturing seems to be continuing to expand.  There are some signs of job growth.  Still, Europe is now looking shaky and, closer to home, one should never discount the ability of our politicians to screw up the recovery.

All things considered, though, I’ll take my glass half-full please.

I looked at percentage change from all time highs for condos and single family homes (sfd’s) since January 2003 and here are the results for the city as a whole.

Until June 2008, condo and home prices were in lock-step in terms of price appreciation and decline.   Thereafter, homes fell first and further. (Do I hear a lithp?) In March 2009, the delta between condos and home prices was a whopping 13%.  Since then, however, home prices have recovered smartly:  as of June, homes are about 4.5% further off their all-time highs than condos.

What does this all mean?  First of all, I wouldn’t take too much consolation just yet in the upward spike in both condo and home prices since the beginning of the year.  If you take a look at the chart, this happens every Jan/Feb when people start buying out of the winter doldrums.  I wouldn’t predict a bottom until we see what happens this winter.

Secondly, given the woeful condition of the economy and the credit markets, together with the fact that San Francisco is not a badly overbuilt housing market, it sort of makes sense that condos are holding their value relatively well as people are finding themselves priced out of more expensive single family homes.

Still, the current delta of only $100,000 between median condo and median home prices seems rather small.  If people are just begging to know what the historical average is, let me know and I’ll find out.

This chart, from the lead-in page, shows unit sales and median prices for both homes and condos are up from Jan 09, but down year over year.

But not so fast.  Much as I’d love to believe we’ve hit bottom, it’s hard to know whether this is anything more than the usual seasonal uptick in sales now that we’re coming out of the winter doldrums.  Here’s the chart for single family homes sales.  See those incredibly regular troughs right around Jan/Feb each year?  I’d say it’s way to early to declare a bottom.