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The Cost of Living in Noe: Rents Leveling Off
By Corrie M. Anders
Apartment rents in Noe Valley are still falling, but they now appear to be floating down under a parachute.
That's the latest word from Rent Tech, a listing service that keeps track of the city's apartment prices.
During the second quarter of this year, from April through June, landlords asked new tenants to pay an average of $2,536 for a three-bedroom rental. That's 4.8 percent less than the $2,665 asked a year earlier. Rents for two-bedroom apartments declined 4 percent to an average of $2,098, about $90 less than in the same quarter of 2002, according to Rent Tech.
Overall, with studios and one-bedrooms included in the mix, second-quarter rents were 5.8 percent cheaper than one year ago. However, that's a slowdown from the first three months of 2003, when average rents dropped 7.9 percent.
The bottoming-out trend has been confirmed by at least one local rental property manager. "The market is stabilizing," says Joel Panzer, president of Real Management Company on Castro Street. Apartments are being rented more quickly, landlords are less likely to negotiate over price, and owners are giving fewer concessions to new tenants.
For example, Panzer says, he is "making concessions more to in-place tenants who are good tenants and are paying close to market rents." Those renters typically get one month's free rent when they renew their lease, he says.
In the wake of the dot-com bust, renters who would have preferred their own space in studios or one-bedroom apartments have opted to share larger units. That has helped fill three- and four-bedroom units in Noe Valley--and their rents have held up better than those for smaller apartments, says Panzer.
Indeed, Rent Tech's data shows that second-quarter rents for a studio fell 7.6 percent, while a one-bedroom unit dropped 6.7 percent from a year ago.
"For Sale" Signs Scarce
House prices, however, represent the polar opposite of rents in Noe Valley. In July, buyers paid an average of just under $1 million to buy a Noe Valley home. And they paid almost that much--nearly $900,000--in June.
Only nine single-family homes sold in July, the lowest monthly total since February. However, buyers consistently paid above the sellers' asking price. That shows that the modest number of sales was caused by a shortage of homes rather than a lack of buyers, says Randall Kostick, 24th Street office manager for Zephyr Real Estate. His company supplies monthly real estate data to the Voice.
July's condominium tally (five sold) also indicates a lack of available homes, as buyers paid 9 percent over asking price. The 9 percent premium was the highest since March.
"It'd be nice if we had more properties for sale," says Kostick, speaking from the buyer's perspective.
The most recent data also proves that Noe Valley, like it or not, remains one of San Francisco's more exclusive communities. Five homes sold for $1 million or higher during June and July.
A brand-new home in the 700 block of Duncan Street, featuring a commanding view of downtown, was the most expensive home sold in June. Buyers paid $1,982,000 for the home, which has five bedrooms and three-and-one-half baths.
If you're wondering about the least expensive home sold in Noe Valley during June and July, look in the 1400 block of Diamond Street. That's where buyers purchased a two-bedroom, one-bath house for $541,000.
Noe Valley Home Sales*
Total Sales Low Price ($) High Price ($) Average Price ($) Average Days
Sale Price as
% of List Price
Single-family homes July 2003 9 $615,000 $1,675,000 $992,556 47 101% June 2003 17 $541,000 $1,980,000 $891,706 35 102% May 2003 14 $615,000 $1,720,000 $986,464 33 103% July 2002 15 $525,000 $1,375,000 $865,267 26 102% Condominiums July 2003 5 $469,000 $930,000 $601,200 31 104% June 2003 6 $270,000 $789,000 $585,667 25 103% May 2003 3 $645,000 $900,000 $793,333 47 102% July 2002 5 $340,000 $925,000 $563,200 10 109% 2 to 4 unit buildings July 2003 1 $1,225,000 $1,225,000 $1,225,000 26 107% June 2003 5 $825,000 $1,050,000 $921,000 104 98% May 2003 6 $549,000 $1,720,000 $1,060,333 48 99% July 2002 8 $660,000 $1,420,000 $1,046,875 64 101% 5+ unit buildings July 2003 0 June 2003 0 May 2003 0 July 2002 0
Noe Valley Rents**
Size of Apartment Average Rents
one year ago
% increase (+)
or decrease (-)
Studio $1028 $1112 -7.6% 1 bedroom $1456 $1561 -6.7% 2 bedrooms $2098 $2185 -4.0% 3+ bedrooms $2536 $2665 -4.8%
*Information provided to the Noe Valley Voice courtesy of Zephyr Real Estate (www.zephyr-re.com) and based on all Noe Valley home sales (escrow closings) recorded during the month. "Noe Valley" in this survey is defined as the area bordered by Grand View, 22nd, Guerrero, and 30th streets.
**Data courtesy of Rent Tech, Inc (www.renttech.com)