| More Renters - Fewer Homeowners | June 27th, 2008 |
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The jump in renter households was not unexpected: it simply happened far faster than anticipated. The Joint Center for Housing at Harvard University projected the number of renters would increase by 1.8 million between 2005 and 2015. Instead, the housing market decline and subsequent dramatic rise in foreclosures pushed 1.5 million additional households into rental housing between 2005 and 2007 alone. Not surprisingly, rents have increased by about 11 percent and vacancy rates have fallen in many urban markets over the same period. |
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The percentage of American households headed by homeowners experienced its most significant decline in two decades at the end of the first quarter of 2008, according to the U.S. Census Bureau. Only 67.9 percent of households were headed by homeowners, down from a record 69.1 percent achieved in 2005. Renter households increased from 30.9 percent to 32.2 percent, erasing gains achieved in recent years. | Unlocking Investment Opportunities In New Homes | November 19th, 2007 |
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There are some sweet benefits to owning and renting a condo in a larger development. When I owned one at The Brannan it was divine to simply call the staff whenever my tenant had a problem. I also enjoyed tremendous pride of ownership and never had to worry about general maintenance issues like a leaky roof or broken window. Many New Homes projects are offering substantial discounts below the advertised prices. My last two deals have been new construction, and I’m delighted with the values my buyers are getting. At Paragon we are continually swapping information about the deals we’re getting in different projects. Please call if you would like more details. |
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With the rental market so healthy, we’re seeing a number of investors making some shrewd buys. One of their vehicles of choice is the condominium, especially the brand new ones in projects with developers eager to strike a deal.| When Prices Drop, Rents Go Up | November 17th, 2007 |
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If you’re a real estate worry-wart who thinks your property is decreasing substantially in value, you can take solace in the fact that rents are going up-up-up! If you’re renting, you may also want to consider the fact that the gap between the cost of owning and cost of renting is narrowing. Since last spring the median rent for a one-bedroom has jumped from $2500 to $2900. The jump for two-bedrooms has jumped from $3200 to $3600. To support these numbers, I offer two fun resources: The first is a nifty site called SFRentStats: Using Craigs List as a resource, this website’s back-end program grinds through rental listings to calculate average rents in San Francisco by neighborhood. The site slices and dices the data a number of different ways –you can check average costs to rent a room as well as an apartment and look at maps to see which neighborhoods are the most expensive for a tenant (as expected, the City’s tonier neighborhoods on the North side command the highest rents.) The second is Paragon’s own rental listings.I’m partial to this site because it’s got nice eye candy– lots of pretty pictures and tons of detailed info on each rental. You’ll note that we have a lot more units rented than available right now– a reflection of the rental market shortage. |
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| Prop H - The Winners and the Losers | December 7th, 2006 |
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The following information is critical for landlords, tenants and anyone thinking of becoming a landlord or tenant in San Francisco. What follows is a rough overview of the new law. More thorough information is available at the San Francisco Rent Board website. The cost according to Prop H is $4,500 per occupant. Additional payments of $3,000 are owed to each minor or occupant over 60 years old. There is a cap (thank God) of $13,500 per unit. Prop H applies to single family homes and condominiums as well as multi-unit dwellings. There’s no wiggle-room on this. I checked with a local landlord/tenant attorney. Virtually any kind of eviction on any kind of residential property (except when the tenant is violating the terms of their lease) is subject to this new law. For Sellers and Buyers, the most obvious and immediate impact this new law will have is on the value and marketability of tenant-occupied properties. Any home buyer looking at a rented property will have to factor in the additional expense and hassle of evicting its occupants. I’m already seeing savvy agents advertise their listings as “vacant” to alleviate this concern. If you area homeowner debating between renting or selling, you might want to keep future marketability in mind. You will also probably have to subtract the cost of evicting your tenants from the value of your property if it is tenant-occupied at the time you sell. If you wait a few years, odds are good that your home will have gone up in value beyond the Prop H costs, but this is still a factor worth considering. Prop H will have a ripple effect on what it’s like to rent and own in San Francisco. The winners are the tenants who are happily ensconced in properties that are appealing to owner-occupants. They can look forward to a windfall if their place ever goes on the market and their current landlords will think harder before even deciding to sell. The losers are those who want to rent in San Francisco, especially families or groups of roommates. Multiple occupants in a home will be less appealing to an owner who is thinking of selling in a few years’ time and the hundreds of landlords who are presently keeping units vacant because of rent control have even more reasons to not rent their units out. |
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| SF Real Estate Buzz - Prop B Info for Sellers of 2 units and up | July 19th, 2006 |
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This text comes from a recent SF Associationi of Realtors (SFAR) newsletter: As REALTORS® will remember, Proposition B makes it unlawful for a landlord when offering a property for sale that includes two or more residential units to knowingly fail to disclose in writing to any prospective purchaser: The specific legal ground(s) for the termination of the tenancy of each residential unit to be delivered vacant at the close of escrow; and… Whether the unit was occupied by an elderly or disabled tenant at the time the tenancy was terminated. The drafters of Proposition B originally contemplated that the disclosure required by the proposition would be required in all marketing material and advertising. But in view of the myriad of ways properties can be marketed today and the practical problems associated with making the disclosure to any prospective purchaser, the text of the proposition was changed before it was placed on the ballot to create a “safe harbor” for compliance. The “safe harbor” language reads as follows: “Any disclosure that is made on a flier or other document describing the property which is made available to prospective purchasers at each open house and at any tour through the property will constitute compliance with the disclosure requirements of the ordinance.” Proposition B does not provide any guidance as to how the disclosure is to be made “available” or which individuals are to be considered “prospective purchasers.” But, given this uncertainty, here’s how the Association believes REALTORS® representing sellers should comply with the Proposition B disclosure requirement: Use the attached multi-purpose disclosure note- make sure your Realtor has this to comply with San Francisco’s two eviction disclosure laws. The two laws provide as follows: Prior to entering into a contract for the sale of any property consisting of two or more residential units, it shall be unlawful for a landlord to knowingly fail to disclose in writing to the buyer the specific legal ground(s) for the termination of the tenancy of each residential unit to be delivered vacant at the close of escrow. The attached multi-purpose disclosure has three parts: (1) The landlord’s disclosure; (2) The text of Proposition B, as well as the text of the vacant unit disclosure ordinance passed in 2002; (3) An agent’s acknowledgement for use in documenting that the form was made available at all open houses and property tours. Use a separate disclosure for each residential unit to be delivered vacant at the close of escrow. To address the vagueness of the proposition’s “made available” language, and out of an abundance of caution, either: Post the required disclosure in a conspicuous location in the property for sale at each open house and any property tour; or Place the required disclosure in a disclosure binder in a conspicuous location in the property for sale at each open house and any property tour. By proceeding in this manner, the disclosure will be made available to everyone who enters the property, hence to any “prospective purchaser.” Members seeking specific advice regarding Proposition B should consult with a qualified attorney. |
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Unless you are selling a building with 2 units or more, I suggest you skip this post. What follows is dry as toast.| The High Rent Districts | December 3rd, 2005 |
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Second in demand are the north side neighborhoods—Telegraph Hill, Nob Hill, Russian Hill and Pacific Heights. In these areas high-end renters go for the heavy charm of older buildings like 1800 Broadway with its big bedrooms and “quaint” old kitchens and baths. Buildings in premium locations, like 1610 Sacramento (right next to the Polk Street shops) are also popular. Rents in these neighborhoods are a notch lower than SOMA, topping out at $3500/month for a two-bedroom. Another neighborhood where Laura has no trouble renting is Hayes Valley. The new appeal of this area is mostly due to the revamped Octavia Boulevard, which makes getting out of the city a breeze for commuters. Since larger apartments in Hayes Valley are rare, those lucky enough to rent here generally wind up with one of the lofts that line Gough or Hayes. Laura’s tenants tend to be “DINKS”—‘double income no kids.” Surprisingly, many of them are former homeowners who cashed in their chips and are looking for a lifestyle change. This new market means an increased demand and Landlords are finding that they can comfortably raise their rents by 10% or even more if they own a trophy building or showcase condominium. Laura’s exceptionally good at what she does. If you have a vacancy, she can make re-renting your place hassle-free. Feel free to call her at 738-7075 with questions about how she works and what she can do for you. See you next week. By the way, I heard you guys liked the singing turkey. Phew! |
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So which San Francisco neighborhood is most expensive for a renter? According to Laura Gray, Paragon’s super-duper rental agent, SOMA and South Beach take the prize for commanding the highest rents. The hot properties in this neighborhood are two-bedrooms close to downtown, in buildings like the Metropolitan (at 1st and Folsom) and 246 2nd Street. These units go quickly for $3300-3500/month, often with multiple applications. Other units in SOMA/South Beach with views and luxury finishings go for as much as $4,000/month.
