Last month, we reported on attempts by some local politicians to make it more difficult to flip homes — buying and reselling them within a year at sometimes significant profits. The pols believe the practice is a culprit in the spiralling house prices in San Francisco. Redfin has some data that they might welcome to support their worries.
Nationally, flipping a house in 2013 brought an average gain to the seller of $90,200. But in San Francisco, that was an average of $194,000. Some flippers are just buying a property, sitting on it for a short time, and then selling to reap the market appreciation without having invested anything in it in the interim. But many others are buying, remodeling, and then reselling the upgraded property, so that $194,000 isn’t all profit, Redfin notes. And in the land of the $50,000–$90,000 kitchen remodel, the costs can add up fast.
CITY’S HOMELESS PLAN UPDATE
Any walk downtown or through many of the city’s neighborhoods will convince people that San Francisco’s 10-Year Plan to End Homelessness hasn’t lived up to its name. But city leaders nonetheless heralded the achievements of the 2004–14 effort this summer. Mayor Edwin Lee and District 2 Supervisor Mark Farrell announced a new Inter-Agency Council on Homelessness that will coordinate local homeless policy implementation.
“We must do even more to help our most vulnerable residents by taking a ‘housing-first’ model and build on the effective strategies, policies, and programs that have brought our city so far already,” said the mayor. “Through housing or family reunification, the city has already helped more than 19,000 people leave the streets in the past decade, despite dealing with one of the worst recessions in a generation.”
Farrell, calling it “imperative” for the city to continue its work, added that “there are still far too many living on our streets and in shelters with no place to call home.”
Though homelessness has not “ended,” the city does boast about reducing the numbers of chronically homeless here by 51 percent between 2009 and 2013; creating 2,699 units of permanent supportive housing for the chronically homeless, with an additional 407 units planned by 2017; placing 11,362 people in the city’s permanent supportive housing programs; helping 8,000 homeless persons reunite with family members who can help provide support; and decreasing by 30 percent the population of homeless veterans between 2011 and 2013.
Home prices across the state and the country have rebounded from their levels at the depth of the Great Recession, but they are not yet at new heights, according to research by Paragon Real Estate Group. One obvious exception, to no one’s surprise, is San Francisco.
California’s median home price as of May 2014 was $466,000, still below the high of $560,000 seen in 2007; nationally, the median of $213,400 is still a bit below the high of $230,000. But in San Fran-
cisco, the median home price for the first half of 2014 is $1,050,000, up not only from the $695,000 of the nadir in the recession but even over the previous peak of $895,000 in 2007.
When neighborhoods are broken down, there’s another not-surprising result: neighborhoods in San Francisco’s Northside are performing very strongly. In the category that includes Pac Heights, Presidio Heights, Cow Hollow, and the Marina, Paragon found the following activity for the first half of the year: 51 homes sold at a median price of $4 million (at an average of $1,272 per square foot); 138 condos or co-ops at a median of $1.32 million and $968 per square foot; and 13 TICs at a median of $1.16 million (square foot price not given).
In the category that includes Russian Hill, Nob Hill, Telegraph Hill, and North Beach, there were 12 home sales at a median of $3.46 million and $1,279 per square foot, and 111 condo or co-op sales at a median of $1.16 million and $1,032 per square foot.
STILL NOT ENOUGH
San Francisco’s available housing inventory crisis continues, according to online real estate firm Redfin. Despite a national increase in home listings of 6.5 percent in May 2014 compared to a year earlier, San Francisco had fewer listings, declining by 7.2 percent, making it the worst-performing city out of the 30 markets surveyed by Redfin. Not surprisingly, continued constrained for-sale homes pushes up pricing, with San Francisco’s median sale price rising 10.2 percent from a year earlier.
“Unless we can make measurable progress in building more housing, we will continue to see residents priced out and forced out of this region, and we will quickly see our economic growth come to a grinding halt.” — Jim Wunderman, CEO of the Bay Area Council, in the San Francisco Business Times