| Pied A Terre Anyone? | May 6th, 2006 |
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Are pied-a-terres good Investments?? Between 2000 and 2004, the annual number of second homes purchased in the United States doubled. Vacation homes and pied-a-terres now represent 14% of the total housing market. Second homes have also enjoyed an average 55% appreciation over that same period. There are some fine tax advantages to second home ownership. Provided you spend enough time there each year, the mortgage interest is tax deductible. The property can also become your principle residence and qualify for your $250,000 ($500,000 for married couples) capital gain exclusion when it comes time to sell. And second homes can diversify your portfolio if you need to round it out with more real estate. I’m not a tax expert, but I can send you some links to a few great articles about the tax benefits of second home ownership. One article, “Playing the Gain Exclusion Game” is a fun read, if you want to fantasize about owning several second homes and then selling them off at a handsome, nearly tax-free profit. What about a pied-a-terre in San Francisco? In San Francisco the demand for pied a terres has grown significantly over the past few years. Small condos in premium neighborhoods used to be the ideal first home. Now these units are more often sold to empty nesters or professionals who are in and out of the City for business. It’s an interesting market transition to watch as people sell the place they call home over to Buyers who plan to live there only part-time. For those of you interested in San Francisco pied-a-terres, here is a handful of building that offer good values and an ease of living. These options represents just a fraction of buildings that serve the pied a terre market. If you’re in the market for something special, let me know and I ‘ll tell you what else is available. This list only includes full service buildings with 60+ units. My experience with pied a terre buyers is that they generally want something “turnkey” that they don’t have to worry about when they’re out of town. The links will take you to information about actual units available in the buildings now. Please note: When I emailed this information to my Buzz subscribers, they got direct links to online presentations of these properties. If you want more in-depth info it’s always better to sign up for The Buzz.Some pied-a-terre options in San Francisco The Hamilton Apartments - 631 O’Farrell. Studios and 1-Brs starting at $325,000. This downtown location near Union Square used to be considered pretty scrappy. Now it’s best known for its great proximity to theater, shopping and transportation. The Hamilton has elegant 1920s styling with an ornate lobby that makes you feel like you’ve walked right into a Dashiell Hammett novel. Since The Hamilton used to be a hotel, most of the units are small efficiency studios, with plaster walls, high ceilings, arched doorways and clever built-ins. You can’t beat the prices or the association fees. Studio sales have been in the $325-375K price range over the last six months. Prices are view dependent—the higher priced units offer spectacular views to the west and south. One of the most recent listings available at the Hamilton was #1104, listed by Paragon. Please email me if you would like more information. Alas, the Hamilton offers no parking. *********************************************************** The Brannan 219-229-239 Brannan – 1-brs starting at $625,000. I like to say that people who live at the Brannan in South Beach think they’re really smart and people who buy at The Brannan think they’re really lucky. There are buyers who think this development is so special that they refuse to look at anything else in the City. It’s easy to see why— a gracious rotary entrance, quality finishings, fantastic staff, and a swimming pool in a setting that evokes shades of a tropical resort. Again, prices at The Brannan are view-dependent– some units offer dramatic vistas of downtown, the Bridge, and/or the Bay. No view and the prices for a 1-br can hover in the low to mid-$600’s. Some view and they jump into the high $600’s. Lots of view and they top $700K. If you want more than one bedroom, the price jumps again into the $900’s and moves all the way up to nearly $2M. I have a jewel of a pied-a-terre at The Brannan listed for $729,000—this is an amazing value for a place with some a-m-a-z-i-n-g views. Email me and I’ll send you more information. The average price per square foot for view units at the Brannan right now is $1,150.00. We’re coming in a good notch below that, at about $1,000/sf. *********************************************************** Opera Plaza - 601 Van Ness - Studios starting at $355,000. Opera Plaza is so big (455 units) that there’s always plenty to choose from here. People buy here because of its easy freeway access and good public transit. Many of the second home buyers here are using their places as landing pads for when business brings them to the City and they don’t want the hassle of staying in a hotel. One of the best things about Opera Plaza is that it’s self-contained with lots of goodies to enjoy right on site. Max’s Diner is here, along with a great independent movie theater. You can also grab a Peet’s coffee or hang out at A Clean Well-Lighted Place, one of the City’s best book stores. Opera Plaza also benefits from its proximity to the San Francisco Ballet and the San Francisco Opera, as well as the burgeoning Hayes Valley neighborhood with all of its cool little boutiques and restaurants. Built in 1982, Opera Plaza is not what I’d call a ‘sexy building’ but it does give you great bang for your buck. A 522-sf studio just closed in February for $355,000 and 1-brs are for sale under $500,000. Email me about Opera Plaza and I can send you info on what’s available with interior and exterior shots. Opera Plaza homeowner’s dues run from about $450-$575/month depending on your square footage. Some of the units are lovely, large town homes with 1200+ sf). Parking is leased at $250/month (if you’re only here part-time you might want to consider renting by the day). *********************************************************** The Bellaire Tower 1101 Green – 1-brs starting at $650,000 (when they come up). The Bellaire is an Art Deco wedding cake building set high atop Russian Hill at the corner of Green and Jones. I always get a lump in my throat when I stand at this intersection. Sometimes I even go park there just to play my Tony Bennett CD and hear him sing about the “cable cars climbing halfway to the stars” (shhh! Don’t tell anybody). Each of the building’s 17 stories has 4 apartments on each floor (except the penthouse floor which is presently occupied by our startlingly attractive mayor, Gavin Newsom.) The apartments all have roughly the same lay-out – about 925 square feet with corner windows, one bedroom, one bath, and a formal dining room. Lots of lovely 1930s trim—tile, hardwood, mullioned windows. People love it so much here that stuff rarely becomes available. According to MLS, there have only been 3 sales in this 65-unit building in the past year. Right now there is just one for sale, #303 listed for $749,000. It has some decent water views. Email me and I’ll send you more info. *********************************************************** Show me more! This is just a taste of what’s available to the pied-a-terre buyer. There are tons of other locations to consider— The MLS reveals over 60 different addresses when you search one-bedrooms under $1M in better neighborhoods (north side and South Beach). Each place is a little different and I can tell you about every one of them. So call if you have questions about a particular building or location. I plan on doing quick reviews of another dozen or so pied-a-terre buildings in future “Buzz Exclusives” available only by email. Let me know if you would like to see specific buildings covered. See you next week! |
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This posting covers the topic of San Francisco pied-a-terres and talks about a handful of buildings that I think offer good pied-a-terre options.