Red Bridge Group Gazette

San Francisco Real Estate News and Tips
bargain

Compared to the Worlds most Expensive Cities, is SF a Bargain?

With real estate prices reaching an all time high in San Francisco and the greater Bay Area, this post may come as a shock to some. However – in reality, compared to most of the world’s most expensive cities (think Dubai, Paris, London, etc.), San Francisco is actually quite the bargain. Which is why we are seeing so much money coming in from all over the globe.

Prices for 1 bedroom condos and lofts being over 1 Million is now the norm. If you want to buy a decent condo for yourself in SF, you will spend a pretty penny. And after just moving here from Orlando, Florida last year (working for RE/MAX – yeah, yeah, I know!) if I told you what 1 Million buys you there – you wouldn’t be so thrilled with your 700 square foot loft with no parking! All that being said, there is a price to be paid for living in one of the most desirable cities on planet earth.

Forbes magazine took everyone in SF by surprise when it published it’s list of the world’s most expensive cities – and San Francisco wasn’t even on the list! So when you are ready to buy in SF – consider the top Noe Valley real estate team!

Believe it or not but Luanda, Angola is the most expensive city in the world! 2nd = N’Djamena, Chad, 3rd = Hong Kong, 4th = Singapore. So while you think paying 4-5k for your nice 2 bedroom apartment is a lot – in Hong Kong, you would be paying 7-8k USD. So take a breath and thank your lucky stars that you indeed live in SF.

Even NYC isn’t in the top 10 – it comes in at #16 – but only after London, Beijing, Seoul, and Copenhagen.

Mercer – an employment consulting firm – created this list to help companies determine proper and compensate allowances for their employees abroad. Mercer measured the cost of living in 211 cities across the world to come up with their list.

So where DOES SF rank on the list? It comes in all the way down at #74 – and #3 among cities in the United States (after LA and NYC of course!).

Mercer stated that due to the relative stability of US fiat (money) – San Francisco jumped up 18 spots on the list compared to last year while NYC only jumped 6. So in terms of fast paced growth – you can expect SF to keep climbing. For those thinking about buying – this is good news. For once, you can tell your friends and family that SF isn’t that expensive – compared to worldly cities like London and Paris! Contact the best Noe Valley real estate team today to discuss a purchase in our neighborhood.

San Francisco Most Expensive City for Millennials

For those interested in the most recent news about younger techies in SF, read up!

While tons of young techies and millennials are flocking to SF for jobs and to take advantage of the tech sphere – they are finding it very difficult to pivot from the rental market to purchase a first home. For those who are ready – the best SF real estate team is ready for your business.

RealtyTrac just put out a study that states San Francisco is the least affordable city in the United States for the younger generation hoping to buy a new home. The data suggests that SF saw a 68% population increase between 07 and 2013 for millennials between 18 and 25. As per the statistics, the average techie would have to be wiling to spend 78% of their annual income to purchase a home. Yeah – over 3/4s of their take home would need to be devoted to buying a home. And with properties starting at 1 Million (if you want to be in SF proper and not have to commute hours for work everyday) – this creates a terrible cycle of renting for our youth who are no longer able to go through the incredible steps of buying their first home.

That being said – all hope is not lost. For those who want to commute and like more space to spread out – in Alameda, they can purchase a home by only dedicating half of their annual salary to a purchase.

Pacific Union CEO Mark A. McLaughlin gave the Mercury News his take on rising prices in the Bay Area, pointing to the region’s economy, population growth, and desirability as three key drivers.

NATIONAL HOMEOWNERSHIP RATE LOWEST IN ALMOST TWO DECADES

With younger generations not buying homes, this is leading to the lowest home-ownership rate in nearly 20 years. With student debt rates and joblessness at an all time high – it is no surprise that the younger generation has found renting to be more suitable and practical.

Even in The Bay with employers paying more than the national average – the high cost of living (not just housing) still levels things out enough that it doesn’t make a difference. They pay you more, but you pay more to live. On the other hand, for investors – this has created an incredible rental market. There has never been a better time to contact the best SF real estate team about a multi-unit purchase!

proposition g

Why you must Vote No on Prop G | Red Bridge Group at Pacific Union

Stop the Housing Tax: Vote NO ON G

A punitive new tax on housing is certainly not the answer to San Francisco’s housing challenges. We need thoughtful solutions that create more housing of all types, not a poorly crafted measure that levies a new tax on housing and yet, provides no guarantees that any of the revenue raised will go to new affordable housing or any housing at all.

NO on G | WE NEED MORE HOUSING, NOT LESS
We need to bring more housing onto the market. But this measure creates an immediate incentive for homeowners to take secondary units, commonly known as in-law units, off the market or face a tax that could be $240,000 (or more) when they sell their properties.
NO on G | A MASSIVE NEW CHARGE WILL NOT LOWER HOUSING COSTS
San Francisco is facing a major housing crisis, but imposing an additional tax that makes housing more expensive makes no sense. While current owners will absorb some of these costs, much of it will be passed on to new renters and new owners. In the end, middle-class renters and homebuyers will pay for the 24% housing tax.
NO on G | POORLY CRAFTED OR OVERTLY POLITICAL
We need to bring all parties to the table to protect tenants from eviction. However, because of political backroom deals or simple ignorance, this measure leaves out over 40,000 residents in buildings with 30 or more units. If it is a good idea for some, why not all? We need smart policies, not backroom deals or last minute slip ups.
NO on G | READ THE HISTORY
Proponents say Supervisor Harvey Milk first proposed this idea. That is misleading. The measure Milk proposed only levied a fee on profits gained by owners, not on the sales price. Milk’s measure exempted the up to 50,000 single-family homes with a secondary (in-law) unit. He also exempted any owner over 63, understanding that many seniors use their homes as retirement nest eggs.
NO on G | TENS OF THOUSANDS WILL BE AFFECTED This tax is levied if you sell your home or property within 5 years of purchase. Since the average home turns over every 7 years, this tax will affect tens of thousands of San Franciscans.
NO on G | NO PROTECTIONS FOR EMERGENCIES Prop. G will devastate everyday homeowners who face real-life emergencies and unexpected difficulties. The tax makes no exemptions for circumstances such as job loss, job transfer, death in the family, sale to a family member or financial hardship. In the event of a person who loses their job and is forced to sell their home, this measure will force you to pay up to 2496 in housing taxes.

The Details of Proposition G

San Francisco currently collects a “transfer tax” on sales of most real property in the city. The tax rate is based on the amount for which the property is sold. The lowest to rate is 0.5% of property sold for $270,000 or less. The highest tax rate is 2.5% for property sold for $10,000000 or more.

Prop. G imposes an additional 14-24% tax on residential properties with 2-30 units and single-family homes with in-law units, if they are sold within 5 years of ownership. The tax applies to the entire sale price of the property and is in addition to the existing transfer tax that is applied to residential property.

Prop G. would not apply in the following circumstances: single-family homes with no in-law uni; the property contains more than 30 residential units; the owner of the property has used it as a primary residence for 12 consecutive months immediately before the sale; sale at a loss; sale within one year of property owner’s death; property is deed-restricted affordable housing; property is new construction; property contains no more than two dwelling units and the seller applied on or before July 1st, 2014 for a building permit for a project with a total construction cost of $500,000 or more, and last permit was issued no more than a year before the sale of the property.

1 million over asking

Noe Valley – Property Sells for 1 Million Over Asking

Noe Valley is becoming more and more popular every day. With such an easy commute to the Peninsula – it is quickly becoming the tech industry’s favorite neighborhood! And with tons of great shopping and restaurants on Noe’s 24th Street – it is easy to see why this neighborhood is getting so much attention lately.

Often billed as the family friendly neighborhood – or the more Southern Pacific Heights (see article) – Noe Valley’s Real Estate market is getting a lot of attention in recent years – and the price of homes has skyrocketed, with the first property to ever sell for 1 Million over asking closing last week.

“There’s been a lot of activity in Noe Valley, and some record prices per square foot…More and more, the south side of the city is becoming a magnet for a new wave of buyers, whether it be Noe Valley or the Mission District, primarily because so many people commute down to the Peninsula.” – Patrick Barber, Pacific Union’s SF President.

Between the 24 Divisadero that closes the gap between The Castro and Noe Valley, the 48 Quintara – and the J Church MUNI – there are tons of options here for commuters. Of course – the tech shuttle buses have made a home here as well.

Tons of shopping exists on the 24th Street corridor – which extends from Castro Street all the way to The Mission neighborhood – with plenty of stops and shopping to check out along the way. Included is Whole Foods, Firefly Restaurant, the Noe Valley Bakery, and Toast Eatery – as well as a Starbucks, naturally.

Liberty Hill – on the north end of Noe Valley offers some of the most spectacular views of Mission Dolores Park – and these homes certainly sell at a higher price point. A famous Christmas display on 21st Street provides an attraction for San Francisco’s tourists every December. While Noe Valley may share the same warm climate as neighboring Inner Mission and Mission Dolores, the more Southern portion of Noe – which climbs up to Diamond Heights and Twin Peaks, experiences significant fog during some parts of the year.

The median sale price increased to $1.5 million in July in Noe for Single Family Homes – an increase of 37 percent from $1.1 million last year – and, condominium prices have been raised 55% in the same time period.

As with most SF neighborhoods – supply is shrinking and demand for housing is rising. The tale of multiple competing offers has become the norm – with List Price to Sale Price ratios reaching national and all-time highs. In July homes for sale decreased 17% from last year’s July – yet the number of homes sold has increased over 30%.

15 Fountain Street – a 24th Street property, was listed by David Bellings, Coldwell Banker for 3.98M. The property just sold last week for a whopping 5.15 Million. To clarify – this is NOT a typo. The house very literally sold for 1 Million+ OVER ASKING. This is statistically significant – and the fact is, that young tech money wants young tech houses. These new remodels will have no trouble selling and this particular property really paints the best picture of Noe Valley in Fall 2014.

ity and a very diverse housing stock with everything from old Victorians to modern homes to condominiums to apartment houses,” Barber said. “It’s really become one of the top neighborhoods.” – Patrick Barber, PU President, San Francisco Area.

luxury

The Luxury Market Report

All signs point to a robust market for luxury homes in 2013, according to a new report from Christie’s International Real Estate that analyzed sales trends in San Francisco and nine other cities worldwide.
Global economic and political trends have a minor impact on luxury sales, the report concluded. Pacific Union is a partner with Christie’s, and we’re proud to have contributed to the report.
Analysis of luxury sales worldwide also found:
Among the 10 cities that were part of the survey, residential sales continue to set records – with out-of-town buyers accounting for many of the top sales.
Prestige property values are more likely to follow growth trends of luxury goods, such as fine art, rather than growth trends in the general housing market.
Recent tax law changes in many markets are expected to impact 2013 market activity.
High-net-worth individuals see real estate as an essential part of their investment strategy.
Read the full report for more details on the luxury real estate market, including a comparison of what $5 million buys in San Francisco and other top destinations.

Alive and still Kicking – Brokers in SF

OK. Everyone needs to hold their horses because clearly, RedFin and Zillow haven’t completely annihilated our Real Estate Market – and yes, there is still a need for agents and brokers. Why? This post should clarify why and how our duty as Realtors won’t be compromised by Online portals – or brokerages like Redfin.

So yes – although the gossip drama queen/king of your office may have a different side to this story, we as Realtors haven’t been totally annihilated or kicked to the curb by our clients due to the success of Redfin, Trulia, or Zillow. They still want and need our services. But at Pacific Union – we don’t view this as some mystery yet to be solved – but rather a logical response to these services entering our marketplace. Real Estate professionals are not dinosaurs – see blog post about this – and will not be as easily kicked out of the career positions they for so long and hard.

Pacific Union blogger discusses where Brad Stone, author of Businessweek.com post about Redfin and Trulia killing the role of the agent, falls short. In the end of the day, these websites are just websites – and unless they provide some additional benefit to the consumer – they will remain, regardless of their impressive web traffic, just websites. Consumers are intelligent and motivated – they can move around a keyboard with the same skill as any of us – and we cannot fail to recognize this. So – if they can do something on their own – and save money while doing so – you can bet your bottom dollar, they sure will. “That’s why Expedia.com has supplanted travel agents, online banking and ATMs have reduced banks’ physical footprints, and Amazon.com has become a behemoth in the book industry. Consumers saw the benefits and jumped aboard in droves.”

That being said, RedFin has yet to take over the Real Estate industry – despite it’s recent expansion and move to places like Orlando, Florida. With all the marketing and branding of RedFin – at this point, it is clear that RedFin simply isn’t a good value proposition to the consumer. The Real Estate industry remains to be the last true vestige of commission based sales for one reason – because not all homes are created equal. Real Estate is not a security – or a future rate that can be bought and sold – like the stock market, or a hotel room rate. Real Estate is emotional – and not every house makes a “home” for different people. That is why our job is so much fun! We see the reactions of our clients – and adjust on the fly – to ensure we are showing them property best suited to their given needs and wants. A travel agent doesn’t have the same responsibility – because selecting a hotel room, or plane seat – doesn’t require the same due diligence as buying or selling a home. Generally speaking – an isle seat costs more because out of the 3 options – most people would prefer the extra leg room – simple as that. But when discussing a home – especially in a market like San Francisco – a home (for example) up in Twin Peaks with a view of Treasure Island through Market Street might be worth a whole lot more to someone who grew up on Treasure Island than someone who did not. They might be willing to offer more – while someone else who doesn’t care about that small detail – might not. No computer algorithm can ever take away the Realtors ability to price accordingly.

Simply put – consumers want information – and they will get it, with you – or without you. In the end of the day, complete transparency is where the Real Estate market is heading – but not in a direction that will eliminate the role of Realtors. Rather, it will change the role of Realtors – from gatekeepers to an encyclopedia. It will only make for better, more educated Reatlors. Customers are smart – and they think Realtors are trying to get “one-up” on them.

For agents – we simply need to plant our foot and show the value we bring to our clients. In the end of the day – we want to close as many deals as possible – and from those deals, generate the greatest possible referral network. With bidding wars and a hyper-competative market here in SF, why would any agent worth their grain in salt ever purposely steer a client in any direction. We want to help them find exactly what they want. “In 2011, 88 percent of home buyers used the Internet as a source of information in their home searches. Good luck trying to keep a client from stumbling on a home you want to hide!” And as much poor sentiment we as Realtors feel from the public at large – we are still only as good as our next referral – and the information sources we can give to our clients.

There is a reason why For Sale By Owners aren’t the norm – and that is because the time and energy it takes to list a property is hard enough – but try doing so without the backing of a top-tier Real Estate firm. To do a FSBO without hiring an attorney is simply foolish. And the costs associated with this could wind up costing more than just paying a commission. In a city like San Francisco – which is experiencing an all time high LP/SP ratio, you want to ensure that your listing gets all the attention it deserves.

“Let’s take a look at the real world instead. According to the National Association of Realtors, homes for sale by owner netted an average sales price of $150,000 in 2012. For home sales assisted by a real estate professional, the price spiked to $215,000. That’s a whopping 43 percent difference.
We’re betting that most consumers are savvy enough to use the Internet and to understand the real FSBO numbers. So, sorry, we don’t buy the argument that hapless consumers are just being misled and misinformed and THAT is why they aren’t flocking to Internet brokers.”

top growing

Pacific Union – Named to List of Top Growing Bay Area Companies

Honored again with more awards (see we were named to Inc’s 5000 list) – Pacific Union is eager to share with our readers that we have been named as 1 of the Bay Area’s 100 fastest growing companies for 2013 by the San Francisco Business Times. This growth award is calculated using the revenue growth between 2010 and 2012.

Placing 96th on the list, with a 70.7% growth from 2010-2012 – Pacific Union is pleased to say that we are 1 of only 2 Real Estate firms to make the cut for this prestigious list.

Mark A. McLaughlin – now CEO of Pacific Union is largely responsible for helping us make the cut – by growing PU’s revenue to 92.4 Million by the end of 2012 alone.

Coming as no surprise after the March award by the San Francisco Business Times calling for Pacific Union as the 3rd largest residential real estate firm in Northern California – we can expect that this will be one of many awards Pacific Union can expect under it’s new and improved management. This Spring, PU also made REAL Trends and RISMedia’s PowerBroker list for ranking 3rd in the nation for average home sales price!

affiliate of the year

Christie’s International Real Estate Affiliate of 2013

Christie’s International Real Estate has officially named Pacific Union International as it’s “Affiliate of the Year” for 2013.” While this may come as no surprise – keep in mind that Pacific Union is just 1 of 139 Christie’s global network of affiliates. This award is a great honor.

With Pacific Union’s effective and creative marketing, branding, and innovation – the top honor of “Affiliate of the Year” is remarkable and meaningful for everyone with an interest in PU here in the Bay Area. The award was presented to PU CEO Mark McLaughlin – who called the award a great honor -in Barcelona, Spain earlier this year. “A true industry leader, Pacific Union has long been known for its innovative programs and quality services, and we are proud to award the company with this prestigious distinction,” said Bonnie Stone Sellers – Christie’s CEO.Bonnie Stone Sellers, CEO of Christie’s International Real Estate said in a statement.

“We are deeply honored to receive this award and look forward to continuing our fantastic collaboration with Christie’s for many years to come…our exclusivity with this prestigious brand undoubtedly helps us deliver the very best in Northern California luxury real estate to clients from around the globe.” – CEO Mark A. McLaughlin

pacific union

Pacific Union ranked in Inc. 5000 2 years Running

For the 2nd year running, Pacific Union is at the top again – and happy to share with our friends and family that our firm has secured it’s place in the Inc. 5000 list – a prestigious list that ranks the 5,000 fastest-growing companies in the United States based on revenue growth between 2010 and 2013. Moving up in the rankings substantially – Pacific Union is pleased to share this growth and success with our cohorts.

For the fiscal year 2013, Pacific Union closed a whopping 5.5 Billion Dollars in sales – proving a 3 year growth rate of 141%. And not to brag – but for the 2nd year running – Pacific Union is the only Bay Area real estate brokerage to make this rank. Moving 800+ spots in # rank all the way to the 2,663 spot, Pacific Union also focused on growing our Real Estate family – bringing in 179 of Northern California’s best top-producing agents. Leading to a grand total of 646 real estate professionals – Pacific Union officially has more successful Realtors than any competing California based real estate firm on the list of 5,000 – and this is just 1 of many awards and accolades that PU can claim so far for 2014.

Both The Wall Street Journal and REAL Trends ranked 7 of our Realtors in the top 250 in the entire United States for closed sales volume in 2013. The numbers really do speak for themselves – this past Spring quarter, REAL Trends 500 Report showed PU as the top #3 firm in the entire country for average home sales price.

For many reasons – Pacific Union is having another great year. It goes without saying, PU is “on a roll” and growing more quickly than anyone imagined. With new office opening – (see new PU office in Noe Valley – location in San Francisco’s equally expanding Noe Valley neighborhood) – and top producing agents being brought on, 2014 will be another incredible year for PU and our extended real estate family.

J.D. Power

Pacific Union’s Response to J.D. Power Survey – Proud to be PU!

According to a recent survey by respected research firm J.D. Power and Associates, first time homebuyers and sellers are more influenced by a real estate firms reputation and financial standing than by referrals and recommendations by family and friends. Among repeat customers – a higher level of satisfaction was also shown. Specifically, satisfaction levels among repeat homebuyers and sellers were measured at 817 and 803 – in that order – on a scale to 1,000 points. The average satisfaction-level number for both first-time buyers and sellers is 797.

35+ percent of first-time homebuyers and 27+ percent of first-time sellers disclosed that their choice in selecting a real estate firm was based primarily on the goodwill and reputation of the company. Meanwhile, 28 percent of first-time homebuyers and 27 percent of first-time sellers made their choice because of recommendations. Not a huge difference – but certainly statistically significant and worth reporting. For new agents or top producers in San Francisco looking to hang their license – this information is valuable – especially as discount brokerages like Redfin saturate the Bay Area marketplace. It is good to know that PU’s goodwill is still stronger than ever.

The most interesting aspect of the survey is this: “Customer loyalty is first to the company and second to the agent,” said J.D. Power spokeswoman Christina Cooley. “Interestingly, less than 20 percent of customers say they ‘definitely will’ switch real estate companies if the sales agent moves to another company…In the end, it is the combination of the company’s standards, processes, and approach to addressing customer needs, combined with outstanding execution by the sales agent, that will truly differentiate the customer experience.”

This survey served to confirm our belief at PU that it is our agent’s neighborhood knowledge, local expertise, and talented agents that generate our brand’s respect from consumers and general goodwill. For this reason, it is important to recognize that numbers are only part of our story. What makes our brand so great is our dedicated real estate professionals and our customers unwavering brand loyalty. Which is why – in San Francisco, everyone wants to work with the top SF real estate team when selling their home in Noe Valley or in any neighborhood.

The fact that PU’s Realtors have an above average sales volume than agents at other firms is no small feat – in fact, it serves to unite our family and bolster support from our clients and their larger sphere of influence. Thus creating our tight knit family and allowing our agents to close more deals with us than they could at any other firm. PU is more than just a real estate firm – we are an institution that we are all extremely proud to represent.

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