Short Sales, Foreclosures and Auctions, Oh My ! Buyers and Sellers alike require guidance in our rapidly evolving market.

I'm working with a buyer right now that is under the impression that every seller is desperate to unload their property at fire sale prices. This (mistaken) belief resulted in a weak offer that was justified with a comparable sale that had been a foreclosure. The fact that there is a much better comparable (right next door) that was not in distress and closed a few months before seems inconsequential to him. Likely due to the 20% differential in sales price I reckon.

We are to lucky to live in an age where consumers have a vast amount of information at their finger tips. Unfortunately, many buyers and sellers are frustrated by information overload. Blogs, online brokers, TV, print media and cocktail party chatter all contribute to fevered speculation about the market and why you are either a sucker or a genius. Although not unique to the real estate industry, this phenomenon can prevent people from attaining their goals unless they exercise good judgement, keep an open mind and...hire an experienced real estate professional.

In other news, The Potrero held a sealed-bid "auction" this weekend for the 20 or so remaining units at the popular development. The available homes represent some less-than-ideal inventory, but also offer an enormous opportunity to purchase in a successful community in a desirable location. Come to think of it, submitting a sealed bid there would appeal to my buyer who is stuck on foreclosure comparables... excuse me while I make a phone call.

Turnberry goes Dutch with Rincon Hill tower; pass the test and you should consider living there.

originally published 11/11/08

Fast on the heels of last week's announcement of the delay/cancellation of the second tower at One Rincon Hill, Turnberry LTD has made details public on the 50% equity sale of their planned 40 story tower located close to the intersection of Harrison and First Street.

The sale to a Miami-based investor should come as happy news amidst the relative gloom we've experienced Downtown. With excavation expected to begin in the first quarter of 2009, Turnberry and One Hawthorne will be the only "shovels-in-the-dirt" high rise residential projects in San Francisco. Will these buildings come on line just in time for the return of strong demand for condos Downtown ? Consult your oracle of choice...

Speaking of oracle's, my colleagues and I came up with a quick and fun way to determine if Downtown living is right for you (assuming you haven't already made this decision which I know some of you have). It's called the Herth Downtown Ten Point Lifestyle Test. If you answer 8 or more of the 10 questions in the affirmative, then you should include downtown properties in your new home search.

Herth Downtown's Ten Point Lifestyle Test:

1. Does condominium living appeal to you ?
2. Would you consider living in a Mid or High Rise development ?
3. Are you considering living in or near the city center?
4. Does new or recent construction interest you?
5. Would you like to live near your business, work or public transit yet not have to drive?
6. Are on-site amenities such as a doorman, concierge services, or fitness facilities important to you?
7. Would you like to live near your daily destinations such as grocery stores, retailers, or restaurants?
8. Is being close to cultural venues such as museums, live music, art galleries or theaters attractive ?
9. Are you interested in a low-maintenance "lock & leave" residence?
10. Is a wide price range and comparative value a priority ?

I hope that was fun and informative. If you are still on the fence, I can help you decide whether or not Downtown is right for you. If you now know that Downtown living is your thing, you can determine which developments will suit you best by contacting me.

I know of two that will be forming interest lists soon...

Elections & Downtown non-erections: Developers bearish on short-term outlook while agents hope post-election relief will get buyers back in the swing

originally published 11/4/08

It hasn't been the most relaxing autumn with the culmination of a 3 year long presidential race and the worlds financial markets dancing an endless mambo. Added to these global and national headlines was last weeks more local announcement from the developer of One Rincon Hill that the much anticipated and delayed Tower 2 (T2) was on 'indefinite hold'. No matter where your opinion falls here it seemed to put the exclamation point on a week that many were waiting for. Several developers pulled their collective heads out of the sand and acknowledged that the San Francisco condominium market has changed for the foreseeable future and that moving product right now is a priority.

Some examples: The Hayes has a fifth floor studio with balcony listed in the mid 300's and a tower-level 1-bedroom at Arterra in Mission Bay was re-priced in the low 500's. Over on Van Ness Avenue, Symphony Towers has a 1-bedroom on offer in the mid-400's. These prices represent reductions of at least $100,000 from their previous highs and what's more compelling is they seem to work. Erin over at Symphony told me they sold 6 units last week after the price drop.

Reductions in inventory and markdowns on stock indicate that developers are retooling strategy for what they see as a prolonged slowing of demand and it seems like if the price is right one can still sell a condominium even in these uncertain times.

The return of confidence to the country and San Francisco will go a long way in allowing home buyers to feel good about getting back in the market. With the impending change in leadership and recent condominium price adjustments this may be a historic moment in more ways than one.

Does 'P' stand for 'Panic' or 'Patient' ? Perplexed prospects ponder proliferation of plum new listings proffered Downtown.

originally published 10/21/08

About 3 weeks ago I was trying to arrange evening cocktails with a good friend whose schedule was suddenly very full. "So your booked every night this week and can't commit to anything next week, what gives ?" I asked in a loving yet annoyed way that I'm told only I can do. He replied, "We are swamped, oiy.... I've haven't been this busy in a year."

My dear friend you see, is a very talented and currently in-demand stager. At first I thought it was odd timing given that if a sale occurred within 60 days these sellers would presumably be moving during the holidays. Not much thought went into this seemingly off timing again until I went on tour downtown today and was surprised by how many new listings there were and by the eye-popping asking prices.

Some examples:

A freshly listed corner 2-bedroom at The Brannan on a higher floor with a spectacular view, approximately 1300 square feet. 1.8M. Hm.

A top floor view 2/2 with a large balcony in a mid-rise on Rincon Hill clocking in at 1200 square feet. 1.425M. Oog.

An impressive and new-to-the-market 3-bedroom 3.5 bath corner loft at 200 Brannan. At least 1700 square feet. 3.388M. Whoa.

What put my visit to these lovely homes in perspective was my first stop that day at The Beacon. A friend and former colleague has the listing for a corner 2/2 on the top floor with a balcony. It's a lovely spot with forever views that was sold 2 years ago by the developer for 1.25M. A price that was considered a good value at the time.
It's 3 days away from foreclosure unless the seller gets it in contract as a short sale. 1250 square feet and asking... 999K

That leaves us with 4 high-end condominiums being marketed against a backdrop where potential buyers are looking for value and opportunity and sellers seem to want to cash out or just get out. Even if the sellers are 'testing the market' one has to wonder about the motivation and timing of that decision.

What's important to understand for agents and buyers navigating this market is that these mixed messages are a symptom of the general confusion and apprehension about what the future holds for our economy. As with all situations where the outcome isn't predictable there are great opportunities for those that are confident and maybe a little fearless.

Now about that cocktail...

You can hear a pin drop: Downtown condo sales centers quiet in wake of roller coaster global markets.

originally published 10/15/08

Escorting a client Downtown to tour models and sales centers is always a pleasure for me. It gives me the chance to get to know my client better, browse available inventory and catch up with friends and colleagues. During recent tours it was clear that my client was the only potential customer in the store which made for lots of attention from the staff and a slightly eerie feeling.
It doesn't look like the number of visitors to sales offices will increase any time soon unless developers and marketing companies get creative.

Traffic has slowed to a trickle in most new construction sales offices in San Francisco. A trend that began about a year and a half ago has gained momentum with roiling global markets giving even well-heeled buyers reason to wonder if now is the best time to buy. A colleague told me earlier this week that she had 4 visitors to her Downtown sales office in the past 10 days.

So what can be done to get more people up into the model homes ooohing and aaahing over the view ?

Signature cocktails, themed events, and 'Meet the Architect' wine and cheese soiree's have culminated more recently with one very nice Downtown development allowing potential buyers to spend the night in a model home to get the full living experience. Including, it would seem, putting your feet up on the Eileen Gray coffee table, having the concierge arrange
a night on the town and testing that fancy shower head from Waterworks.
There are some developers that have gone so far as to increase commissions to 4% and even lower prices. Yes, hell has frozen over.

While we all hold our collective breath in anticipation of election results and if the funds being pumped into our financial system have a positive impact; buyers have never had developers as motivated to move product as they do now. These are strange times indeed and even stranger are the fantastic opportunities for buyers and sellers right now.

The trick is convincing my client that being the only one in the sales center is a good thing.

Downtown inventory absorbing at a slow yet steady pace. Developers hustle to move product with the outlook uncertain.

Originally published 10/7/08 

Monday brought a new client and a new mandate: a 1-bedroom condominium with a view that's also within walking distance of the CalTrans station on 4th. As I put our tour together for the morning I realized that something I didn't anticipate had happened in Mission Bay. Inventory that was piling up until about a month ago was, for the most part, gone. The Beacon had only 14 listings, about 2.5% of the building's units, were active on the MLS. Six months ago, that number was almost double. The Beacon sold out in 2006 as a condominium conversion. After checking in with the sales team at 170 Off Third, I was told that they are sold out of studio and 1-beds and have but a handful of 2-beds left. Jessica at the Potrero had a similar story: Just two 1-bedrooms available out of only 11 left overall.

A little far from the train station but under consideration was The Metropolitan. It is great place to find value and competition among sellers for nicely finished units with views. Bonus points for the building since it still looks fresh and appealing 4 years after completion. There I found only one 1-bedroom; a high floor with a nice view. One 1-bedroom available out of 342 units. Hm. Given the above there was only one place to go for new product that shows well and is reasonably priced: Arterra.

My client and I looked at a handful of 1-bedroom's and the sales team seemed open to writing creative deals. With a reported 40% of the building yet to be sold, we had a wide selection of homes and developer incentives to consider. A perfect storm for today's selective and value-conscious buyer.

It will be interesting to see where these numbers move in light of all the drama we've endured in the past few weeks. There are many challenges in the business of real estate in late 2008 yet there are still people making deals, getting loans and closing escrow in San Francisco.