Gas prices are killing us, and you thought $5 bridge toll to go over the Golden Gate Bridge was high enough; think again. The Golden Gate Bridge District is about to try and raise the toll, not once, but twice. So not only will people coming from Marin County have to pay an additional $1 to cross the Golden Gate, but if they do so during what they are calling peak hours in the morning and afternoon commutes, there will be an additional charge of $1! This is their way to get a double increase without calling it such.

The San Francisco Chronicle has a story from today that explains it better than I can, but what the geniuses at the bridge district didn’t take into account… afternoon traffic is LEAVING the City and that is the FREE direction! So is this toll to pay for the extra wear and tear on the bridge? I don’t think so, and this plan proves it. Once they realize that they are not getting nearly enough in revenue from the afternoon traffic, I wouldn’t be surprised if we see another toll increase. After all, those Bridge District Supervisors who make an awful lot of money already need raises!

The photo above was taken by a talented photographer, Garry Heather, from his flickr photo album.

- Mick Orton

Not only is Alcatraz one of our San Francisco attractions, but it is also a historical site; first as a military fort to protect the bay 1853, then as a federal prison when the fort was demolished and the cellhouse built between 1908-1911. The prison was closed in 1963 and was briefly occupied by American Indians in 1969-1971 after which it became part of the Golden Gate National Recreation Area in 1972. 

The SFGenealogy website has some interesting information about escapes from the prison that supposedly was inescapable!

- Mick Orton

Usually the post office does not raise rates in an election year, but apparently they are feeling pretty confident that it won’t affect the outcome of the election. Therefore, the Post Office has published its new rates on their website effective May 12, 2008.

First-Class Mail letter (1 oz.) $0.42 First-Class Mail letter (2 oz.) $0.59 Postcard $0.27 First-Class Mail large envelope (2 oz.) $1.00 Certified Mail $2.70 First-Class Mail International to Canada and Mexico (1 oz.) $0.72 First-Class Mail International to all other countries (1 oz.) $0.94

- Mick Orton

SFResidence is part of the TRI Coldwell Banker office at 1699 Van Ness in San Francisco which is one of the premier offices in the City and has the market share numbers to prove it. We have some of the top agents selling real estate in the San Francisco Bay Area. As a result, our office posts some impressive numbers.

We have to repeat ourselves; what we said last week, holds this week. We ratifiying a large number of the deals in our office, even if we are not on the listing side. Sellers seem to be cautious about selling in what they see as a “down” market. But this is not so in San Francisco. Multiple offer situations are still very common, even on multi-million dollar properties. There are buyers out there. The financing may just cause the escrow period to be a little longer than we’re used to.

Here are the numbers posted this week: 5/7/08:

• 8 new listings (average price $821,250 - low $339,000, high $1,800,000)
• 12 ratified sales (pending) (average price $1,928,750 - low $395,000, high $14,000,000)
• 9 closed sales (sold) (average price $1,649,556 - low $405,000, high $4,625,000)
• 1 reduced $699,000

- Mick Orton

The California legislature is out of control. As if the housing industry isn’t hurting enough, Fabien Nunez, who apparently has too much time on his hands, is trying to pass legislation that would completely cripple any comeback for real estate in California.

With number of homes sold way off for the state as are median home prices, this bill is aimed to ADD to the cost of homes by mandating an energy audit as well as that energy efficiency investments be made. I’m sure it is aimed to stop the effects of man-made global warming, but at what cost?

If this bill passes, the unintended consequences will result in buyers putting off that home purchase because these additional costs will most certainly make it impossible for them to buy the home they want. People want to buy as much house as they can afford not buy unnecessary improvements that the government deems are best for energy savings. We’re doing enough of that already, and we feel the state is overstepping its bounds.

We urge you to contact your state representatives and insist they oppose this potentially damaging legislation. Remember, if it passes, the real estate slump is likely to continue for much longer that it needs to.

- Mick Orton

This election has provisions for changing rent control statewide. Think about that. Cities like San Francisco, Berkeley, Oakland, Los Angeles have unintentionally hurt the rental market by oppressive rent control laws. These laws were passed in response to the citizens who, not understanding economics, were concerned about the rising rental costs. Originally intended to help the people, this legislation has hurt the same people it is trying to protect by causing people to drop out of the rental business.

Economist,  Thomas Sowell, has written a great book called Basic Economics which mentions the negative impacts of rent control no less than 6 times. Pages 22-30, in particular, discuss in detail price controls as they relate to these laws.

As a property investor, I would not go into the rental business in a rent controlled environment and choose to invest in areas of Sonoma and Marin Counties for this reason. In San Francisco, it seems the renters have the upper hand in every situation and usually end up getting huge financial considerations, even when state laws are followed to terminate tenancy.

So if you have time before the election, this would be a great book to read, especially the chapters on rent control, and read what it has to say with an open mind.

- Mick Orton

Here is an article spawned by a letter I wrote to Sam Taliaferro, a Panama Developer, who runs a blog called the Panama Investor Blog.

The Red Frog Beach project in Bocas Del Toro is an important one for that area as well as Panama. It is an ambitious project built on an island in one of the more difficult areas of the country in which to take on such a project. The challenges range from material acquisition and logistics to labor and financing. As a developer I sympathize with the difficulties these folks have faced. I have visited the property on several occasions and some of the property buyers receive my blogs and write to me regularly. Everyone wants to know, “When will this project get back on its feet and start building again?”

I recently asked the developer to give me an update and he has promised to do so in the near future, but I wanted to share some information with my readers that is from one of the homeowners. Mick Orton loves the project and the area and still looks forward to one day spending a lot of time there. Mick sent me the following information and asked me to share it with you.

Construction at Red Frog Beach on Bastimentos in Bocas del Toro has been silent for over a year. As an investor this made me very nervous that our home on the Caribbean would never be built. After all, we had dreams of keeping our boat at the boat slip, dining in the fine restaurant that they promised would be built, cooling off in our own private pool, waking up to the gentle crashing of waves of the ocean, lounging on the beach and maybe even surfing or waterskiing. Before construction stopped, several homes were finished, and many were under construction. When we got our call to pick our options and colors we thought we were nearing the finish line. Then came word of a strike and pending financing problems. Months went by with no resolution to the problems that plagued Red Frog, and we got concerned.

During that time, not a lot of news was coming from the developers other than the 1 hour monthly conference calls. As a result, several owners started blogs like our Red Frog Blog and Red Frog Beach Forum to keep the buzz going, to stay informed and keep the dream alive. Some chose to use it as a negative forum, but mostly the comments were pleasant and upbeat. The general consensus was (and still is) that we owners wanted this project to succeed, and felt that the developers had the best of intentions to complete it.

Much has changed since we first invested in Red Frog. The government has made several revisions to the tourist visa and property tax exemption laws, not necessarily for the better. (Thanks to the Prima Panama Newsletter and Blog we are keeping a close eye on those changes.) We also found that with the housing and mortgage chaos in the United States, the Panamanian banks and lenders were also affected negatively. And though we were originally told the developers had funding sources for construction on rights of possession land, as money tightened up, these sources disappeared.

The situation has been very complicated with so many rights of possession lots and contracts coming due, it was time for the developers to begin looking for alternatives. Most recently we have seen a major push to move much of the equity from later phases into phase 1 with the introduction of fractional ownerships. Many of the people who were in the project early have seen their financial situations change and were very happy to participate. Money is getting tighter, and fractional ownerships are a great solution for many of the people involved. Another move by the developers to get this project back on track has been to make concessions to owners in order to get around problems with rights of possession land. I feel Red Frog has been exceedingly creative in working with the owners to turn this thing around and get back on course.

Since the beginning I have been bullish on Red Frog. The project will bring much needed money back to the business people of the area and to construction workers as well as their families. I am told the area has been hurt by the work stoppage, and starting construction again will be a boom to the local economy as it was in the past. There is hope that complications will be worked out soon and construction could begin again within a very short time.

Mick Orton – Red Frog Beach lot owner

Foster Weeks publishes a weekly mortgage report which is updated every Monday morning. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Here’s what Mr. Weeks says about last week’s activity:

“KNOWLEDGE IS POWER.” It’s a phrase used by many, and last week was an important one to be in the know, as Bonds and home loan rates were affected by many big newsmakers and market shakers. Bonds and home loan rates found some improvement in the early part of the week, leading into the Fed’s big announcement on Wednesday of another .25% cut to the Fed Funds Rate. Typically, Bonds and home loan rates react poorly to Fed cuts, due to the increase in economic activity that lower Fed rates can cause, which turns into higher inflation. However, the Fed’s Policy Statement hinted that the present rate-cutting cycle may be nearing an end. As a result, Bonds and home loan rates reacted favorably to the Fed’s action.

However, speaking of inflation, the Fed’s most favored measure of it - the Core Personal Consumption Expenditure Index - arrived on Thursday, showing core inflation at 2.1%, just a whisker above the Fed’s desired range for inflation of 1 to 2%. This read wasn’t great news for inflation-sensitive Bonds…but the resulting market action was nothing, compared to what happened when the Jobs Report arrived on Friday morning.

Talk about a real mover and shaker…the Jobs Report brought word of 20,000 jobs lost in April, which was better than market expectations of 75,000 jobs lost. Initially, Stocks rallied higher and Bonds worsened dramatically, as the headlines were so much better than had been anticipated. But when the details of the report were unpacked, showing prior months worsening revisions - as well as a sobering realization that 20,000 jobs lost is still lousy news - the markets quickly reversed direction, helping Bonds and home loan rates improve once again. Another ultra volatile week - and when the dust settled, home loan rates improved by about .125% overall.

Read the entire report here.

- Foster Weeks

Don’t miss your chance to win pair of FREE Giants Tickets next Tuesday, May 6th. We are holding 1011 23rd St. #5 open for public viewing, and everyone who leaves a card will be entered into a drawing for a pair of tickets.

We sent this notice out to San Francisco Realtors so they could give their clients a chance at the drawing. If you haven’t heard about it, ask your real estate professional why they didn’t let you know!

This is a chic, contemporary, loft style condominium with dramatic high ceilings, a fireplace and sliding doors that lead to a private patio. There is a gourmet kitchen, one and one-half baths, in-unit laundry, and parking for one car.

- Janis Stone

Now that we’ve moved, there is a lot of housekeeping that needs to be done. After the imort of the old blog into our new site, everything must now be categorized which I am working on slowly but surely. You may notice that some of the fonts and some of the formatting are not quite right. Also, many of the links point back to the old blog which I am trying to update. Please bear with us while we are under “construction”.

- Mick Orton