MILLENNIUM TOWER LAWSUIT
You knew Millennium Tower residents would end up in court before they ended up in the landfill. A group calling itself the Millennium Towers Litigation Group has filed a class action lawsuit against Millennium Partners, Transbay, and others it holds responsible for losses residents might incur as a result of the by-now-well-reported news that the high-priced residential tower is tilting and sinking. The group writes, “The only potential sales transactions that are likely to occur will be all cash by aggressive speculators at deeply discounted prices. Once one or two such sales occur, a new set of comparable prices will have been established at the Millennium Towers, dropping the value of all owners’ units.” The 58-floor, $350 million Millennium Tower was built in 2008.
Macy’s department store chain announced it is closing nearly 15 percent of its stores — about 100 locations — in 2017, despite the fact that they are almost all profitable. Some of those stores represent valuable real estate. In the words of Motley Fool’s analyst Adam Levine-Weinberg, “In addition to underperforming stores, Macy’s also expects to close a handful of stores that sit on valuable real estate. In some cases, it makes more sense to sell a store building to someone who wants to redevelop it rather than continue to operate it as a retail store.” One of those valuable properties that will close and be sold is the Men’s Store in San Francisco’s Union Square.
HOUSING CHALLENGE INCREASES
Despite lower interest rates, affordability is becoming a bigger housing challenge for California residents, according to an early August report from the California Association of Realtors. Between the first and second quarter of this year, the percentage of buyers who could afford to purchase a median-priced home fell from 34 to 31; it was still up slightly from 30 percent in the second quarter of 2015.
The association defines a median-priced home as one priced at $516,220, and it says that an income of at least $101,217 is needed to make the monthly payments of $2,530.
Affordability is more within reach if the buyers opt for a condominium or townhome, where the median price is $411,390 and a minimum income of $80,663 is needed to make monthly payments of $2,017.
Those are the statewide numbers. Only 13 percent of buyers could afford a median-priced home in San Francisco, 14 percent in San Mateo, and 17 percent in Santa Cruz, which the association said were the three least affordable areas in the state.
HOME PRICES STABLE
The median price for a single-family home in the city of San Francisco was $1.37 million at the end of July, basically unchanged from February, according to a market report by real estate firm Pacific Union. It notes that homes are still typically selling for more than the asking prices — currently about 105.9 percent of asking — but “overbids are substantially smaller than they were last summer.” The speed of sales was steady in the first couple months of the summer at an average of 32 days on market.
Meanwhile, condominium prices have dipped slightly to an average of $1.08 million in July, Pacific Union reports. This is a continuation of a trend affected at least in part by expanding inventory of available condos on the market, especially in the luxury category (see “Property market shifts gear,” Marina Times, August 2016). Overbids have also dropped a bit here, with an average of about 102.7 percent of asking prices paid. The number of days on market was unchanged.
HILL HITS 60
Our friends over at Hill & Co. Real Estate are celebrating the company’s 60th anniversary. We wish their agents — including Marina Times columnist Stephanie Saunders Ahlberg — a very happy 60th.
“Japan has experienced the same ‘return to the city’ wave as other nations. In Minato ward — a desirable 20 square kilometer slice of central Tokyo — the population is up 66 percent over the past 20 years, from 145,000 to 241,000, an increase of about 100,000 residents. In the 121 square kilometers of San Francisco, the population grew by about the same number over 20 years, from 746,000 to 865,000 — a rise of 16 per cent. Yet whereas the price of a home in San Francisco and London has increased 231 percent and 441 percent respectively, Minato ward has absorbed its population boom with price rises of just 45 percent, much of which came after the Bank of Japan launched its big monetary stimulus in 2013.”
—Robin Harding Financial Times, Aug. 3, 2016