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By Corrie M. Anders
Renters looking for an apartment or house in Noe Valley are finding that the cost to live in the neighborhood has risen, dramatically in some cases, over the past few months. And it may only be the beginning of an expensive new reality.
A survey of rental prices listed on the Craigslist web site in early September showed that Noe Valley landlords were asking an average $1,396 for a studio apartment and $1,756 for a one-bedroom unit--each about $200 a month more than the average rents one year ago.
The price hike was even more telling for larger units. Two- and three-bedroom rentals, at $2,804 and $3,830 respectively, were about $300 more than a year ago. And a four-bedroom unit was up about $900, to an average $5,533.
The Craigslist survey involves a small sampling, which can skew averages from month to month. But the survey backs up reports from local property professionals-- and anecdotal evidence from apartment hunters--that renters are no longer in the driver's seat.
The demand for apartments, flats, and rental houses in Noe Valley has taken off at a time when the for-sale housing market is slowing from its once-hyper pace.
It's a situation that has flustered Rebecca Perry, a technology consultant in her mid-30s who wants to trade in her Russian Hill studio for sunshine and a yard in Noe Valley. She has been searching for a reasonably priced one-bedroom apartment--only to find the neighborhood oversaturated with renters looking for affordable rent.
Instead, she has found rents "extremely high," which she blames on a stagnant real estate market.
"Those who can afford to buy homes are currently holding out for the market to drop and have turned to rentals," and they can pay substantially higher rental rates, she says. "However, this makes it nearly impossible for someone like me, who is looking for affordable housing" in the $1,300 per month price range.
Joel Panzer, who heads up Real Management Co., a property management firm on Castro Street, agrees that there is a "much stronger demand" for Noe Valley rentals.
In the past six months, he says prices have jumped 5 to 10 percent for apartments and 10 to 15 percent for houses. The most expensive rental houses often involve owners facing job relocation--in many cases after they have made costly renovations.
They don't want to sell their homes out of fear that they could not afford to return, says Panzer. "Everyone wants to keep one foot in Noe Valley," he says.
Then there are the potential homebuyers who are opting to sit on the fence to see whether housing prices take a nosedive, says Larry Souza, chief real estate economist for Global Real Analytics, a San Francisco firm that analyzes commercial real estate markets in the city and around the country.
"They're looking to rent--and rent longer--until they get a better picture of what the housing market is going to do," says Souza, who can view the Noe Valley goings-on up close from his Jersey Street residence.
Souza predicts neighborhood rents will jump another 5 to 7 percent over the next year, as job growth brings in a crowd of new workers--many of whom will gravitate to Noe Valley because of its cachet and prime location for commuting to downtown San Francisco or Silicon Valley.
The housing market, meanwhile, remains strong--just not as crazed as it once was.
Fifteen single-family homes closed escrow in August, the same as a year earlier. But the homes took longer to sell, and buyers no longer paid significantly over the asking price.
All but one of the homes sold for at least $1 million. Buyers paid $2.8 million for the most expensive residence: a four-bedroom, 31/2-bath home in the 3700 block of 22nd Street between Noe and Sanchez streets.
A four-bedroom, two-bath condominium in the 100 block of 28th Street, between Church and Dolores streets, was the priciest single-family home in August. It was one of 12 condo sales for the month, three more than one year ago.
Noe Valley Home Sales*
Total Sales Low Price ($) High Price ($) Average Price ($) Average Days
Sale Price as
% of List Price
Single-family homes August 2006 15 $657,000 $2,800,000 $1,597,000 40 102% July 2006 16 $764,000 $2,450,000 $1,230,250 27 107% August 2005 15 $800,000 $2,115,000 $1,247,533 27 116% Condominiums August 2006 12 $635,000 $1,200,000 $866,258 44 103% July 2006 14 $635,000 $1,400,000 $888,206 34 103% August 2005 9 $610,000 $1,395,000 $903,333 25 117% 2 to 4 unit buildings August 2006 7 $865,000 $1,750,000 $1,401,143 52 105% July 2006 6 $1,050,000 $2,450,000 $1,381,667 40 94% August 2005 4 $950,000 $1,501,600 $1,264,150 33 116% 5+ unit buildings August 2006 1 $1,530,000 $1,530,000 $1,530,000 84 97% July 2006 0 - - - - - August 2005 0 - - - - -
*Sales figures include all Noe Valley home sales completed during the month. In this survey, Noe Valley is defined as the area bordered by Grand View, 22nd, Guerrero, and 30th streets. The Voice thanks Zephyr Real Estate (www.zephyrsf.com) for supplying the data.
Noe Valley Rents**
Type of Unit Number in Sample Range of Rents, September 2006 Average Rent, September 2006 Average Rent, One Year Ago Studio 4 $975-$2000 $1396 $1200 1 bedroom 16 $1300-$2400 $1756 $1575 2 bedrooms 18 $1650-$4500 $2804 $2502 3 bedrooms 11 $2795-$6995 $3830 $3545 4+ bedrooms 3 $3600-$6500 $5533 $4613
**These rent averages are based on a sample of 52 Noe Valley rental listings appearing on www.craigslist.com September 7-15, 2006.