The San Francisco Association of Realtors overreacted somewhat when they reported previously that the City was considering a moratorium on garage additions to existing buildings. Here’s what was reported today.

“Reports that the Planning Commission was planning to impose a moratorium on the issuance of all permits to add a new garage to an existing residential structure, reported in last week’s REALTOR® Advantage Online, proved to be somewhat exaggerated. Here’s the story:

During the public comment portion of a recent Planning Commission meeting, questions were raised regarding the standards the department uses in reviewing permit applications for the construction of new garages in existing structures, both in structures identified as potential historic resources and structures not so identified. Concern was expressed that permit applications for new garages were typically being approved over-the-counter by the planning staff when a more thoroughgoing review was appropriate.

“As a result of these concerns, two Draft Zoning Administrator Bulletins have been prepared. If and when these bulletins are issued, they will formalize the review process for new garages in existing structures—historic and otherwise. In the coming weeks, the draft bulletins will be the subject of discussion at future meetings of the Planning Commission.

“For the present, there is an unofficial policy in effect which will allow permit applications for garages in building 50 years old or less to be approved over-the-counter. Garages in older buildings will require a more thorough review.”

- San Francisco Association of Realtors

According to Mortgage Specialist, Foster Weeks, the Fed may raise rates again on fears of inflation. Ideally the target rate of inflation is between 1-2%, however, a week ago last Friday they reported inflation was at 2.8%; higher than the Fed wants. This could indicate that we are in for more interest rate hikes. Even so, rates are still relatively low, historically speaking.

Read the entire article here.

- Mick Orton

Avram Goldman, President and COO of Coldwell Banker, San Francisco Bay Area said in his latest weekly report:

“The housing market is still in holiday siesta mode. Listing inventory increased as sellers begin to put their homes on the market for the fall. The buyers are out there as evidenced by their attendance at open homes. First time open houses attract the majority of buyers looking for the “right home” (meaning priced well and in perfect shape). A new Berkeley listing under $700.000 was visited by 42 groups of buyers.

“The media still continues to hammer the housing market—trying to look for every negative shred of evidence that the housing market has tanked. In spite of their efforts—many smart buyers know this is an excellent time to buy—more choice, a break in interest rates as they continue to come done and a environment conducive to negotiations. Still 30 % of our offices received multiple offers—20% at the 30% plus level. Down a bit from previous weeks, but still indicating good homes go quickly. With that said, there are still a majority of sellers who have not adjusted to the new reality—homes are not going up with double digit appreciation. Homes in today’s market are either flat from last year or slightly lower (10% or less). Sellers need to remember that prices went up 50% plus from 2003-2005. A small reduction from the highs of last year still leaves outstanding returns, as real estate is a leveraged investment. The gains are substantial and well beyond any other asset class.

“We are seeing an increase among buyers wanting to renegotiate offers during the escrow period, especially after inspections. This is why it is important for sellers to have pre-sale reports so that buyers can make offers based on the condition of the home. This can prevent unnecessary fall out. Sellers should also take care of any deferred maintenance which also helps prevent reasons for renegotiation.

“Believe it or not aggressively priced properties are attracting buyers in droves. A Parkside listing in San Francisco received 42 offers—sounds like 2005. What it means is that buyers are ready to leap when they see an outstanding value. Some buyers have a challenging time of it understanding that properties can receive multiple offers—they believe everything they read in the media about the bubble bursting. This is not the case in markets that have smaller inventories—-like the buyer who lost in a multiple offer presentation in Burlingame found out the hard way.. He couldn’t understand why his offer was outbid. The reason is that the SF/Bay Area is a highly attractive place to live and certain areas, no matter what is happening in the general market, their desirability increases value of properties in spite of the transitional market.

“Here are the numbers for the week: 12 offices saw increasing inventories, 13 steady and 6 decreasing—-4 offices reported increasing sales activity, 19 steady and 8 decreasing.”

- Avram Goldman

* For an e-mail alert when this report is updated, send a note to info@SFResidence.com with “weekly market report” in the subject line.

We thought you might be interested to know about the Mills Act. It is a program that could help you lower property taxes if your home becomes designated as a historical site. Of course, there are always drawbacks. Once designated, you may have limitations on what you and the people you sell to can do with the property with regards to remodels later on. But the property tax savings can be significant. Here’s what the Office of Historic Preservation says:
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The Purpose of the Mills Act Program

Economic incentives foster the preservation of residential neighborhoods and the revitalization of downtown commercial districts. The Mills Act is the single most important economic incentive program in California for the restoration and preservation of qualified historic buildings by private property owners.

Enacted in 1972, the Mills Act legislation grants participating local governments (cities and counties) the authority to enter into contracts with owners of qualified historic properties who actively participate in the restoration and maintenance of their historic properties while receiving property tax relief.”

Read more here.

- Mick Orton

This article is a week old from NewMax. There is some truth in what is being said here, though it only applies to some of the more stubborn sellers. After the long run up of real estate in the San Francisco market, people have become accustomed to multiple offers over the asking price. We are still seeing some multiple offers in our office on a few very select properties, but nothing like in the past. Here is what the article says.

- Mick Orton
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Realtors Blame Sellers for Housing Woes

9/8/06 – Realtors pointed their collective finger at home sellers for the slumping housing market. They say that sellers are refusing to cut prices to attract prospective buyers. As a result, the National Association of Realtors dropped its sales forecast for the year.

“Sellers are more stubborn than I expected,” said David Lereah, the NAR’s chief economist. “For five years in a row, it was a seller’s market. They were calling all the shots, and they got accustomed to it.”

The NAR now says sales of existing homes will fall 7.6 percent this year. That’s much worse than the 4.4 percent drop it called for in January. Sales of new homes will plunge 16 percent, predicts the NAR. In January, the NAR said new home sales would fall 6 percent.

Because sellers are holding out, the NAR expects that prices will rise above last year’s highs. However, the NAR expects prices to start falling within months as sellers become more anxious. It points to the record 3.86 million homes on the market or a 7.3-month supply.

The national median existing-home price for all housing types is expected to grow 2.8 percent this year to $225,900, with the median new-home price rising only 0.2 percent to $241,400, says the NAR.

“Folks are still thinking they can get top dollar for their homes,” says Tom Rath, an agent at Re/Max Premier in Ocala, Fla., to USA Today. “I don’t think reality has set in.”

Prices for new homes aren’t rising as much because builders are offering incentives to reduce inventory, according to the NAR. Yesterday, three builders acknowledged that they are giving away free upgrades such as granite counter tops, pools and vacations to lure buyers.

The NAR does say that home prices should level out after they correct. According to Lereah, “Home prices should return to positive territory within a few months and annual appreciation will be slower than historic norms.”

“Keep in mind that over time, home prices rise at the rate of inflation plus one-to-two percentage points – buyers in most of the country who plan to stay in their home for a normal period of homeownership can pretty well bank on those historic averages, but people who purchased last year with the intent of flipping are likely to get burned,” he (concluded).

- NewsMax

Golden Gate Park as described on the San Francisco Chronicle neighborhood guide:

“Though the Golden Gate Park has seen changes over the years, what remains today is a testament to the will of the city to preserve a place to play, relax and grow culturally. The new de Young museum is sure to bring a new wave of visitors, as the re-opening of the Conservatory of Flowers did in 2003. The music concourse is being improved and should open in early- to mid-2006, perhaps around the same time the Murphy Windmill returns from repairs in the Netherlands. The California Academy of Sciences is due to re-open in 2008. The old horse stables, closed in 2001, may be renovated starting in 2007. And a new, temporary disc golf course is being evaluated in late 2005 for long-term feasibility,” says the San Francisco Chronicle in their neighborhood guide.

Other highlights on this page include:

• Museums & Gardens
• Sports & Recreation
• Other Sights & Activities

- San Francisco Chronicle

For more information on other neighborhoods and street maps visit our website.

- Mick Orton

Previous Neighborhoods:

Castro – Cow Hollow – Diamond Heights – Golden Gate Park – Lake Street – Laurel Heights – The Marina – Nob Hill – Noe Valley – Outer Richmond – Pacific Heights – Russian Hill – Sacramento Street – St. Francis Wood – Sea Cliff – Telegraph Hill

The director of the Department of City Planning is scheduled to make an informational presentation to the City Planning Commission at its meeting on Thursday, September 14, 2006 at 1:30 p.m. in Room 400, City Hall, in which a segment of the REALTOR® community may be interested. The presentation will describe the Department’s draft policy for review of new garages in existing structures. Interested REALTORS® are encouraged to attend this meeting and to pick up a copy of the draft policy which will not be available in advance of the meeting.

- San Francisco Association of Realtors

Our understanding is that this would halt construction of any more garages in existing buildings, something the City needs badly! If you are concerned, you should be at this meeting!

- Mick Orton

A reader asks:

What are some questions I should ask when interviewing agents to sell my home?

Our reply:

You want to know your agent’s experience, strategy and resources to get the job done. Here are some sample questions to ask an agent:

• What is your “list to sell” ratio? This is the number of properties the agent sells that he/she takes on as a listing. You want a high percentage of sales.
• What experience do you have selling homes in my neighborhood? You want to know the quantity of properties sold, similarity to your home and how long ago was he/she working in your area.
• What would be your marketing plan to sell my home? You’re looking for the advertising plan, Open House schedule, availability to conduct private showings, etc.
• What resources does your brokerage firm have to help you market and sell my home?
• Does the brokerage firm have easy to read signs for the front yard?
• Is there a sales meeting where the agent can market the property to other agents in their office?
• Does the agent have access to an e-mail list of top agents to send an announcement to?

Ask your agent to stay in close communication with you throughout the sale. Tell him or her how you like to receive information: e-mail, phone, in-person meetings. The best scenario includes a strong partnership between you and your listing agent.

- Kathleen Macdonald

Avram Goldman, President and COO of Coldwell Banker, San Francisco Bay Area said in his latest weekly report:

“The buyers are out there. Open houses overall showed impressive activity for the Labor Day weekend. In spite of this activity buyers are still taking their time in making offers. However, buyers do understand value and when they see the well priced and presented home they will move quickly.

“The good news is that 40% of our offices had multiple offers with 25% of the offices having multiple offer percentages of greater than 30%. Price reductions are generating offers, a few are even receiving multiple offers. We are no longer seeing prices on multiple offers going over asking price. In some cases these listings are going under list price.

“Sellers have become more realistic. An expression that is heard when the market changes is ”sellers tend to be 6 months behind the market and buyers are 6 months ahead of the market’. We are now at that point where sellers are now beginning to understand what they need to do the sell their homes. Experience is a good teacher as a seller found out in San Francisco. After 3 weeks on the market the seller received 2 offers. They decided to counter the offers over asking price. Both buyers declined. The listing agent tried to revive the offers, but was unsuccessful. If the seller had initially accepted one of the offers their house would have been in escrow.

“As stated in last week’s report inventories in the majority of counties are beginning to slowly decrease. This is due to increasing number of expired listings and fewer listings coming on the market. Seasonally, as fall approaches we normally experience a second wave of new listings hitting the market. So far we haven’t seen this surge.

“Seasonally we experience an increase in activity as both buyers and sellers return from vacations. Buyers would like to make their moves before the holiday season begins. It is important during this opportunistic period that sellers understand the need to price properly and invest in presenting their homes in the best light possible. That means taking care of any deferred maintenance, staging, and having reports done before going on the market. This will increase their chances of having a successful sale.

“Here are the numbers for the week: 6 offices reported increasing inventories, 18 steady and 5 declining—3 offices showed increasing sales activity, 21 steady and 5 decreasing.”

- Avram Goldman

* For an e-mail alert when this report is updated, send a note to info@SFResidence.com with “weekly market report” in the subject line.

A reader asks:

I am a tenant in a building for sale in San Francisco. What are some of my rights and am I entitled to notification of when the building has been sold? What happens to my lease when we have a new landlord?

Our reply:

The San Francisco Rent Board is very helpful and has a web site that can answer many of your questions. You may also check with the Tenants Union and see what rights you have. Review your rental agreement you will also see what rights you have. San Francisco may give you even more rights that your lease does so it is best to check with all three sources.

If you have a lease and your building is sold the new owner must honor all of the terms of your lease. If you are on a month to month agreement the new owner still must honor your agreement, but if the new owner wants to occupy your unit they may be able to give you notice to move.

It is very complicated in San Francisco and tenants have a lot of rights. Sometimes an owner can buy a property and not be able to live in his property without invoking the “Ellis Act” which allows an owner to go out of the rental business.

- Janis Stone