Seattle Dispatch: Investigating A Different Way to Buy & Sell Real Estate

I love the real estate business. Having worked with buyers and sellers for ten years in San Francisco I better love it.
Over the course of a decade I've seen the market change several times and that has kept me on my toes. The most profound change in since Y2K has been the proliferation of online tools and data available to consumers. Not only do people have the benefit of blogs and MLS access but there are real estate brokerages that eschew bricks and mortar offices altogether. These companies offer what could be called an 'a la carte' approach to buying and selling where the consumer does the research and relies on the expertise of a real estate professional during the most critical moments of the transaction. For buyers that's writing and submitting the offer and for sellers its evaluating those offers. The benefits? Getting a substantial portion of the commission rebated back to you.

I'm in Seattle this week to train for my new job as a Field Agent with Redfin. I'm excited to learn more about this company and how they are changing the real estate business. There will always be a place in the market for traditional brokerage but I wanted to take this opportunity when it presented itself.

Don't worry, though. I'm still the Downtown expert and am plugged in to and reporting on the news and events that pertain to high rise and new construction condominiums in Downtown San Francisco. In the coming weeks I will share with you what I learn about Redfin and how it works.

What a Difference a Year Makes: Artani is Back on the Market

It was a little over a year ago that the development team over at Artani condominiums (818 Van Ness Avenue) decided to pull the plug on their sales effort. Facing a challenging marketing and financing environment right after the Wall Street meltdown, they believed that the better part of valor would be to rent the units for a year and see how the market shook out.

Here we are a year later and the market has adapted to a new normal. Developments that continued to sell while Artani called it quits had success in moving product, albeit at prices that were lowered by as much as 30%. A lot of those projects are now sold out or very close to it which allows Artani to hit the market as inventory is narrowing and demand is relatively strong.

That leaves one question, how much? Sales Manager Aaron was gracious enough to give me a sneak peak at pricing.
Here's a sampling:

1-bedroom with parking starting at $489K.

1-bedroom 2-bath with den and parking starting at $549K.

2-bedroom 2-bath with parking starting at $699K.

All Artani homes come with dual pane windows, security systems, hardwood floors in the living areas, granite and s/s kitchens with gas viking ranges, fridge, stacked washer/dryer and built-in humidifiers. Units that face south and west get air conditioning and some second and eighth floor homes get large private terraces. HOA's run from the upper $300's to the lower $400's per month.

I imagine there is some wiggle room in the pricing for the 52 homes and given the quality of the finishes and floor plans these will probably sell at a steady pace. It turns out that some things may be worth waiting for after all.

100%, 99% and 50% at the Sales Centers, High Rise 80's Glamour & One Hawthorne Bats its Eyelashes

Milestones

The Arterra sales center put their last unit into contract about two weeks ago, rendering the Mission Bay development sold out once the remaining ten or so units currently in escrow close. This represents a four year sell out for developer Intracorp's 269 unit property. Construction costs ran just south of $90M USD. Close on their heels, The Infinity is down to nine units in Tower II with list prices starting at $2.7M. Across town in the Mission, 555 Bartlett announced that half of their 58 homes are now in contract after just two weeks of sales. Ladies and Gentlemen, Spring has sprung.

Greed is Good

Crank up the Oingo Boingo and make liberal use of the styling mousse because 80's glamour is now for sale. 611 Washington Street is a mixed use tower built in 1984 with 33 residential units sitting atop class A commercial office space.
Unit 2402 is listed at $3.595M and boasts 2624 square feet and iconic Downtown views. Unfortunately for the 80's purists among you, the kitchens and baths were updated a few years ago and there isn't a hint of glass block or brass to be seen. HOA dues and parking for two DeLorean's runs $2,518 per month.

Voted "Most Flirtatious" Class of 2010

The developer at One Hawthorne is a tease. The first ten units were supposed to have been released already, but developer Jackson Pacific has decided to play it coy. Buyers will have to wait until construction is complete on all 165 units before being able to write a check. ETA is June and methinks there is a wee bit of strategy afoot with both new and resale inventory Downtown shrinking rapidly. Worth the wait? I can take you on a tour to see. Can beggars also be choosers? We'll have to wait until June to find out.

Be Prepared For Your New Developments "Breaking In" Period

There is a dream a lot of new construction buyers have. It first takes shape in the flawless presentation of the model home with its professionally selected decor and costly upgrades. It continues to thrive with the idea of 'new' being something that is perfect and flawless, fresh off the assembly line like a car or a flat screen TV. The draw of the 'new' is sometimes culturally based and other times just seems like the 'smart' choice. Who wouldn't assume that everything will work effortlessly when there is no wear and tear?

Luckily, new construction condominiums have one year 'fit and finish' warranties that cover the inevitable settlement cracks, shrinkage gaps and the like. But what of the common areas? The parking garage? The building staff?

Just like any collaborative effort, a new development takes time to hit its stride. When you have a new building, new staff and hundreds of new residents all under the same roof things can go south quickly unless homeowners and management are on top of things. Patience is a prerequisite no matter how swanky the development. Even the architect doesn't know exactly how the building and its systems are going to perform until they are subject to daily use and the environment. Window systems sometimes fail, balcony railings 'whistle' in the wind and garage gates close on your trunk because the timer hasn't been adjusted. Frustrating? Yes. Curable? Absolutely.

The dream of a low-maintenance lifestyle is attainable with condominium living. You just have to give the building, its staff and your neighbors time to get with the program. You all had the same dream in that model home after all, didn't you?

Where The Heck Is 555 Bartlett?

Seven Hills Properties had several choices when deciding on a name for their new 60 unit development at the corner of Mission and Cesar Chavez Streets. The address for the previous building on the lot (a pretty cool Art Moderne paint store) was 3400 Cesar Chavez. Somewhat of a mouth full which doesn't flow off the tongue that well. How about a Mission Street address? Could work, but touting a Mission Street location when the neighborhood itself is still somewhat "gritty" may put potential buyers off. They could have gone with a 'named' development. Perhaps "The Crossroads" in reference to the bustling intersection it sits at. Or maybe "Revolution", a subtle homage to Cesar Chavez himself?

In the end, Seven Hills went with 555 Bartlett, which is the alley-like street that borders the rear of the parcel. It has a nice ring to it I suppose, and at least its not some banal attempt at branding the building to evoke something its not.

I toured the development a few weeks ago and was not expecting a lot given that there is a 24 hour Walgreens in the commercial space below the units, and the transit and traffic heavy locale. Color me surprised by the spacious, well thought out floor plans, upscale finishes and pleasant views of Bernal Hill to the south. With prices starting in the low 400's for 1-bedrooms and BART and 101 blocks away, this development offers great bang for the buck in a neighborhood that is stocked with bars and restaurants.

Sales start this weekend for these surprisingly appealing Mission condominiums. Just be prepared to tell people coming to visit you that although located at the corner of Mission and Cesar Chavez, the address is 555 Bartlett.

"Revolution" would have been so much easier : )

Downtown Inventory Sampler: Ladies & Gentlemen, Start Your Engines!

It was November 10th when we last looked at the sampler. With the holidays behind us and the late winter/early spring bump in inventory and sales, there are some interesting changes to the Downtown sales landscape. Arterra is rumored to be sold out within the week and The Infinity has but 15 units remaining. The impending sellout at the Main and Spear Street complex has motivated some owners to list their homes; and at aggressive prices. Time will tell what the market will bear, but the fact remains that overall inventory is low and buyer interest is high. Off to the races...

The Beacon

Six 1-bedrooms, two 2-bedrooms. Available units: 8. Total units: 595.

The Metropolitan

One 1-bedroom, two 2-bedrooms. Available units: 3. Total units: 342.

Watermark

No resale activity. Total units: 136.

200 Brannan

One 2-bedroom. Available units: 1. Total units: 191.

The Brannan

Four 1-bedrooms, Five 2-bedrooms. Available units: 9. Total units: 339.

The Potrero

One 1-bedroom. Available units: 1. Total units: 155

The Hayes

No resale inventory. Total units: 128

Arterra *

No resale inventory. Total units: 269

The Infinity *

Four 2-bedrooms. Available units: 4. Total units: 650

One Rincon Hill *

Three 1-bedrooms and Six 2-bedrooms. Available units: 9. Total units overall: 376.

* New inventory still available from the developer.

Earthquake Insurance: Expensive? Yes. Necessary...?

When I'm working with buyers that are new to condominiums, one of the most common questions asked is "What do the HOA dues cover and why are they so expensive ?" Typically dues will pay for water, garbage service, common amenities and fire and hazard insurance. In some buildings, an earthquake insurance premium is also part of the dues. Its easy to guess if earthquake coverage is included without knowing for sure since the monthly assessment for a unit in a building with it can be double the equivalent unit would be without.

For developments that have a large percentage of commercial or retail space as part of the same structure, earthquake coverage is usually mandatory. Like The Beacon with its Safeway, Borders and commercial condominiums or The Four Seasons and St Regis with their hotels on the lower floors under the residential units.

Buildings like Arterra or The Infinity have a choice in the matter. Do you raise dues to cover earthquake insurance, protecting your investment while potentially lowering values by making the units less affordable? Or do you carry on as-is and hope that The Big One won't be so big.

Living in a seismically active area like San Francisco requires the ability to reconcile knowing that the ground beneath us can start to shake at anytime with potential major results. Gauging the value and benefits of earthquake insurance is a very personal decision that involves the instinct to manage risk with the need to preserve value and desirability.

Do you have a question about Downtown real estate? All you need to do is ask.

Must See TV: Blueprint America

There is a new PBS series airing and its timing couldn't be better. Blueprint America takes an in-depth look at our countries crumbling transit and infrastructure and what's being done to drag our fossil fuel gorging culture into the 21st century. Far from your typical didactic PBS fare, this series explores our checkered transit history (tearing out urban streetcar systems in favor of cars and highways) and current efforts to jump start high-speed rail projects around the country. We hear so much about "transit orientated development" but it doesn't have much resonance unless your a city planner or property developer. This show will change that and show how efficiency and prosperity can go hand in hand.

If you live Downtown, your already transit orientated by nature of being in a city. What's exciting in San Francisco is that construction on our high-speed rail line will begin soon with the impending demolition of the TransBay Terminal. Once clear, the site will be excavated for construction of the "train box" that will sit below the eventual TransBay Tower.

While I'm geeking out on planning things, I should also tell you about an organization called America 2050. From their website:

"A national initiative to meet the infrastructure, economic development and environmental challenges of the nation as we prepare to add about 130 million additional Americans by the year 2050."

By 2035, two million of those Americans will be living in the Bay Area. The Downtown skyline may fill in faster than we thought.

Inventory & Anticipation Rise as the Market Starts to Come Alive in 2010

I wrote a few week ago about how the real estate market is typically slow up until the Superbowl and then it takes off. Bearing this out is an almost 30% rise in listings since the beginning of the year. A lot of factors will have an impact on the health of the market and its impossible to estimate what that is until we start to see some measurable sales volume.

Some of these factors include the extended and expanded home buyer tax credits, low interest rates, low overall inventory and potential short sales and foreclosures. The most important factor in my opinion? Confidence. How do you feel about your job security? How about the government ? Are things in general getting better, worse or staying the same? The answers to these questions can help people determine if the time is right for them to buy or sell.

There are also those times when none of them can. Someone once told me that the easiest way to make God laugh was to make plans. Sometimes life makes the most carefully laid plans obsolete and this can be positive, negative, or a bit of both. Not just for mere mortals like us, but for the real estate market, too.

I'm confident there won't be too much laughter from above this year.

San Francisco Can Learn Something From Los Angeles.

This past weekend I went to LA to celebrate my college roommates 40th birthday. He works in the entertainment industry and has quite the outsize personality. The entire weekend consisted of glamorous brunches, shows and dinners at classic Los Angeles locales like The Polo Lounge and newer hot spots like L.A. Live and Voyeur (don't ask).

I had heard about L.A. Live a few years ago when a former colleague was selling condominiums at The Ritz Carlton Residences there, but had never seen it in person. Our Leopard Limo (another LA invention) hurtled toward Downtown and as we pulled up to the main entrance on Olympic Boulevard I was completely floored. Adjacent to Staples Center, L.A. Live is a combination of crass commercialism and performing arts spaces rendered in Blade Runner style. It's the southern California version of Times Square with all the giant neon and LED lighting that one would expect.

It was mobbed, too. Old and young, Angeleno and tourist, black tie and open fly. This was the place to be.

One wonders what it would be like to have a fantastic new 21st century entertainment complex like that here in San Francisco. The truth is that it can't be done. With most vacant land Downtown already spoken for and a stunningly complex and developer unfriendly planning process, we will have to settle for... The Metreon.

Thankfully, we have the views, the bridges, the hills and the bay to console us. I had a great time down south and when I drove over The Bay Bridge back into my favorite city in the world a smile crept over my face. I was home.

One Hawthorne Sales Center Now Open!

I'll admit that I may be jumping the gun a bit, but its exciting for a real estate geek like myself to lay hands on the 24 different floor plans available at the newly opened One Hawthorne sales center. That's pretty much all you can do at this point, anyway. The building won't be ready for hard hat tours for another three weeks and brochures, virtual reality tours and all the usual sales center accessories have yet to arrive.

What you will find are a delightful sales team, some of whom you will recognize from The Infinity a few blocks east. Since walking through a home is the best way to judge its merits, we will have to make do with what the team is sharing right now about the 165 condominiums. The 24 different layouts range from junior 1-bedrooms through 3-bedroom penthouses and I was pleasantly surprised by the large-ish, well-designed units offering plenty of closets and windows.

Pricing has not been established so we can't judge the relative value, but a few things to keep in mind are that parking is available with about 75% of the homes and that it is valet only. The first phase to hit the market in February will be on the 2nd though 8th floors only of the 25 story tower. A strategy surely meant to determine value on the upper floors but more likely to stymie buyers that want views and light.

This will be the last new tower Downtown for quite some time, so the One Hawthorne team is pretty much guaranteed a lot of traffic to the sales center. Whether or not that traffic results in raining deposit checks remains to be seen but it looks promising.

For expert guidance on this and all other Downtown developments you know who to call.

What's Up? New Developments at New Developments

January is typically a slow month in real estate. People are busy working on their resolutions (or breaking them). Once the Superbowl has been played, business starts to pick up with homes hitting the MLS and buyers starting to write offers.

Some new developments have gotten a jump on activity for early 2010 and made some fun and/or interesting changes. Lets take a look...

829 Folsom: You say Goodbye and I say Hello.

Sotheby's New Marketing Group has handed over the sales and marketing reigns to The Polaris Group as of the new year.
Since opening in mid-2009 few of these Folsom Street condominiums have gone into contract, perhaps the new blood (and new pricing) will be just the trick. Pay them a visit and say "Hi" to the new team; maybe they will show you one of the killer Penthouses.

Hang out with some hot models at BLU.

Not those kind of models. Although that wouldn't hurt. Anyway, these 16th floor beauties showcase the stunning finishes and views available at what one wag had dubbed "The Millennium Junior". The A plan is especially sweet with no units adjacent and views on three sides. The Ladies of BLU await you (that would be the lovely sales team).

She's a Brick House: Union unveils the brick and timber building!

They call it Union North. It's the "old" portion of Union's new construction/historic rehab combo and you are now allowed to tour and perhaps buy. One of only two developments currently marketing (Esprit Park being the other) that gives you that elusive and desirable combination of new systems and finishes with the beauty and character of vintage brick and timber. Bonus points for the cool neighborhood already stocked with shops, bars and restaurants.

Do you have colleagues, friends or family searching for a San Francisco condominium? Your referrals have been greatly appreciated and I look forward to exceeding expectations again in 2010.

Worlds Tallest Building Opens For Business: Welcome to The Burj Khalifa.

Yesterday marked the official grand opening of the worlds tallest building in Dubai, the Burj Khalifa. Originally named The Burj Dubai ('Dubai Tower' in Arabic); construction started on September 21, 2004 and was completed October 1, 2009.

"So what?" one may ask. "Dubai has been building high rises like crazy for years". While that is true, I'll let the facts and figures for the highest man-made structure in the world speak for themselves:

Height: 2,684 feet. 1,000 feet taller than the next highest building, Taipei 101 completed in 2004.

Floors: 160.

Cost: $1.5 billion USD or $9 million USD per floor.

Elevators: 57.

Capacity: 25,000 people.

Usable square footage: 5.67 million.

Residential units: 1,044.

Residential square footage: 1.85 million.

Office square footage: 300,000.

How many appliances? Miele manufactured 7,650 for the residential units.

How many toilets and bidets? Duravit made 4,000 for the building.

Observation Deck? Highest in the world on the 124th floor.

So for now, The Burj Khalifa wins the age old "Whose is bigger?" contest.

The unanswered question is how are the condo closings going? With the sales office claiming to have sold 95% of the 1,044 units within eight hours of hitting the market back in 2006, it will be interesting to see how many of these contracts close amid economic uncertainty both in Dubai and abroad. Prices per square foot are reported to have topped out at $2600 USD.

Thinking about selling your 'shaq' and moving up? I'm happy to provide you with a complimentary marketing analysis and opinion of value.