January 2024: Q4 ‘23 Sea Cliff - Lake Street Insider
Happy New Year! Hopefully you and your family had time to decompress and relax over the past two weeks. I’m excited and bullish for 2024; I hope you feel the same for your endeavors’ as well.
Looking at the state of the overall market in San Francisco, the first half of the fall market was somewhat of an underperformer compared to typical fall markets. For reference, the chart below shows deal flow (single family & condo) in San Francisco, it was down about 13% from the same period the prior year. Shockingly, deal flow was down over 50% from the same period in 2021. Keep in mind that money was cheap in 2021; about half the cost of today’s rates.
From Thanksgiving onwards there was an uptick in buyer activity in terms of open house traffic, requests for disclosure packages and offers. This uptick covers all price-points and was a common observation among other agents in many different offices. This uptick included a big demand in the luxury category. Aside from strong luxury activity in our neighborhood, other luxury neighborhoods actually need a spike (in demand) as inventory levels are still very high. I expect a significant percent of the existing $5M and up homes to get sold in the first half of 2024.
One of the driving factors in the uptick in activity was definitely the softening of interest rates. Some buyers see this as the end of upward movement in rates and they want to jump in before the competition returns. Others are happy saving a half to two-thirds percent in rate.
Speaking of interest rates, the 2024 conforming loan limits have been set. The base amount in the US is $766,550. San Francisco County gets the high balance limit of $1,149,825. For reference, the conforming loan limit is the maximum amount that can be guaranteed by Fannie Mae / Freddie Mac (the government-sponsored enterprises or GSEs). That guarantee has advantages in terms of the loan approval process and interest rates.
Looking at the top sales of 2023, luxury has very different price-points in four regional Bay Area markets (SF, Peninsula, East Bay & Marin). The Peninsula market was the strongest for top end sales in 2023. Enclaves like Woodside, Atherton and Palo Alto held their value and luxury sales were down only ~5% from 2022 numbers. Here are the top sales of 2023:
In San Francisco, the top single family sale was 3450 Washington Street. The home sold for $34.5M. The home is a 9,865 foot French Normandy style home built by Albert Farr.
The top condo sale of the year was 2121 Webster Street, PH 17. The condo sold for $17.5M and is actually two condos combined for a 5,310 foot, five bedroom, five and a half bathroom unit.
On the Peninsula, 485 Whiskey Hill Road in Woodside was the top sale. The home was just over 7,000 feet on 11 acres. It sold for $44.5M.
In the East Bay, the biggest sale was 3947 Happy Valley Road in Lafayette. The 8,960 foot home on 1.5 acres sold for $13.69M.
In Marin, the biggest sale was on the Belvedere waterfront. 210 Beach Road, a 6,000 foot home at sold for $23.4M in an off-market sale.
Looking at your property taxes, it’s tax appeal season. Property owners who don’t agree with their assessed value can ask the assessor for a free informal review. You must request the review (of 2024-25 taxes) between Jan. 2 and March 31, 2024. The assessor’s office has been slammed with appeals from commercial property owners (hotel, office, retail, apartment, etc.), but all owners are eligible.
On to our corner of the City.
Activity was up, way up, buyers were writing offers and market performance in Sea Cliff and the Corridor was well above other north side neighborhood markets. At the start of the fall market, I said that we had eight homes available in the Lake Street Corridor and four homes available in Sea Cliff. Lake Street had eight sales with one property (currently) in contract. Sea Cliff had three sales with three properties (currently) in contract. The demand was very high; this is a solid testament to the strong appeal of the northwest corner of the City.
Looking at the Lake Street numbers, the median price per foot number is low for the quarter due to several “fixer” properties that sold. But, the median list price vs. sales price finished at a solid 98% and the days on the market was a very low 15 days. Additionally, four north of Lake Street homes traded hands (with one more in contract to close). The median numbers on those four sales was an impressively low 10 days on the market and just over $4,325,000. In Sea Cliff, we had some great homes trade hands, but I see a lot more demand that could be satisfied if the inventory was available.
The numbers for the quarter.
Here are the top sales of the quarter.
In the long and arduous tale known as 224 Sea Cliff, I have an update. Last quarter I reported that the property was heading to a foreclosure auction on October 19th. That date was delayed (again) and then on October 30th the property went live on the MLS listed at $9,995,000 with the disclaimer that any accepted offer was subject to bankruptcy court approval. After a few weeks the property was showing as “in contract.” I don’t have any information as to the contract price yet (there was an offer date), but considering it was in contract in early 2022 for ~13M - which was prior to the BCDC (Bay Conservation and Development Commission) enforcement action, I‘d expect the sale price to be lower (assuming it closes). As for the enforcement action, based on the BCDC cease and desist order I reviewed and it appears the new owner would have 30 days (after taking ownership) to submit plans that detail a remedy to the violations. As to the fines, the current owners (i.e. the lender(s)) are likely responsible.
As far as new inventory for Q1, I expect levels to be low, but I have a great Sea Cliff home that will seek a new owner. Its a "legacy" 3BR/3BA home on the 100 block of 25th Avenue. This will be ready in early March.
If you or any of your friends are in the market, don’t wait for the competition and please reach out for specifics.
That is it for now. If you are ready to move up, trade down or simply out; let’s put a plan in place to make the most of your asset. Likewise, if you have friends or colleagues looking to get into the neighborhood market, feel free to pass my name along.
Call or email, anytime.