Noe Valley Voice February 2008

The Cost of Living in Noe

By Corrie M. Anders

The real estate malaise that has festered throughout much of the nation spread to seemingly immune Noe Valley in November and December, as the volume of home sales dropped to its lowest level in nearly a decade.

Buyers purchased only 11 single-family detached homes during the last two months of 2007--a decline of more than 40 percent from the 19 residential properties sold during the same period the previous year.

The data, which Zephyr Real Estate's 24th Street office provides monthly to the Voice, showed that condominium sales suffered a comparable falloff at the end of last year. Nine condos changed hands during November and December, a 44 percent drop from the 16 sales recorded in the same two-month period of 2006.

"The buyers and sellers took their winter vacation this year," said Randall Kostick, Zephyr's general sales manager. "It's the first time in a long time that we've seen a noticeable seasonal slowdown."

In addition, the shock waves from last spring's subprime mortgage industry collapse finally reached the neighborhood.

The constant news "about the mortgage crisis around the rest of the country" undermined local confidence, Kostick said, and gave "pause to buyers." Economic uncertainty also made sellers think twice about putting their houses on the market, he said, "because they were not confident they were going to get the prices they wanted."

Despite the faltering pace of sales, Noe Valley homes sold for an average of $1.5 million in November and December, about $60,000 more per house than a year ago. Also, the 11 homes--especially the more desirable properties--sold close to the asking price or higher.

The highest-priced house sold in December (for $1.7 million) was a 2,100-square-foot property located in the 4200 block of 24th Street, between Diamond and Douglass streets. The three-bedroom, two-bath house was snapped up in six days.

Kostick noted, however, that a few homes tended to languish in the changing marketplace. In those cases, owners were forced to adjust their prices.

A beautiful yellow Victorian on 24th Street next door to Barney's Restaurant had an initial asking price of $3,495,000. After 110 days on the market, the property sold in November for $2,350,000, over a million less than the original price. Still, the home, which has four bedrooms, two baths, and almost 3,000 square feet of space, tied for the most expensive residential building sold in Noe Valley in November­December combined.

Angela Lam, a real estate agent with Pacific Union, agrees home shoppers have become more cautious. "I think a lot of buyers out there are waiting to see if the prices will be getting lower," she said.

Last summer, two newly constructed homes hit the market at the corner of Valley and Castro streets--and Lam listed one at $2,485,000 and a second, smaller one at $1,950,000.

The more expensive property didn't attract any significant attention until the asking price was slashed $590,000 to $1,895,000, she said. It sold recently for an undisclosed price.

"When we got down to below the $2 million mark, we had a lot of interest," Lam said.

The second property went into escrow in December after the asking price was dropped $200,000 to $1,750,000.

Rents Steadily Increasing

Though home prices may be facing a "correction," rents in Noe Valley are still heading skyward.

A survey of rentals listed last month on Craigslist showed that property owners in the neighborhood were asking an average of $4,088 for a three-bedroom rental. That's 24.9 percent higher than landlords sought for a similar size unit in January of 2006.

The average for a two-bedroom rental was $2,809, or 12.8 percent above the $2,491 asking rents of one year earlier. Prices rose 7.2 percent for one-bedroom units, to $1,865 from $1,740.

Local experts attribute the rent increases to supply and demand--lots of people can't afford to buy a home in San Francisco these days, so renting is the only alternative. Also, potential homebuyers are staying put in their apartments while they wait for an end to the subprime mortgage meltdown.

Noe Valley Home Sales*
Total Sales Low Price ($) High Price ($) Average Price ($) Average Days
on Market
Sale Price as
% of List Price
Single-family homes
December 2007 4 $1,450,000 $1,700,000 $1,536,500 35 103%
November 2007 7 $900,000 $2,350,000 $1,572,157 42 99%
December 2006 8 $1,000,000 $2,125,000 $1,477,813 48 99%
November 2006 11 $870,000 $2,900,000 $1,495,455 33 100%
December 2007 4 $725,000 $1,150,000 $974,500 38 100%
November 2007 5 $642,500 $1,987,500 $1,100,900 32 106%
December 2006 6 $397,000 $1,688,000 $889,250 54 102%
November 2006 10 $695,000 $1,510,000 $1,051,000 38 102%
2 to 4 unit buildings
December 2007 4 $899,900 $1,501,000 $1,239,275 39 99%
November 2007 4 $899,000 $2,350,000 $1,437,250 29 95%
December 2006 4 $1,075,000 $1,775,000 $1,333,750 53 99%
November 2006 9 $925,000 $2,685,000 $1,414,731 65 99%
5+ unit buildings
December 2007 0 - - - - -
November 2007 0 - - - - -
December 2006 0 - - - - -
November 2006 1 $1,565,000 $1,565,000 $1,565,000 82 95%

*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 ( for supplying the data.

Noe Valley Rents**
Type of Unit Number in Sample Range of Rents, Dec-Jan 2008 Average Rent, Dec-Jan 2008 Average Rent, One Year Ago
Studio 6 $825-$1975 $1375 $1175
1 bedroom 14 $1300-$2295 $1865 $1740
2 bedrooms 26 $1795-$4850 $2809 $2491
3 bedrooms 10 $2700-$5500 $4088 $3274
4+ bedrooms 7 $4250-$9000 $7106 $7034

**These rent averages are based on a sample of 63 Noe Valley rental listings appearing on December 27, 2007 - January 17, 2008.