Noe Valley Voice October 2008

The Cost of Living in Noe: Tight Money Slows Home Sales

By Corrie M. Anders

Well-heeled but savvy homebuyers purchased 15 residential properties in Noe Valley in August, matching the highest number of sales in nearly one and a half years. All of the single-family detached homes sold for at least $1 million, according to sales data that Zephyr Real Estate provides monthly to the Voice. The average sales price of just under $1.4 million, however, was considerably less than the price buyers typically paid in recent months to live in the neighborhood.

The sales price was one of several indications that Noe's housing market has become more balanced and no longer favors sellers over buyers.

The last time at least 15 homes were sold in one month--March 2007--buyers closed escrow in just 20 days. In August, buyers had to wait 52 days to pick up their front-door keys.

Randall Kostick, 22-year manager of the Zephyr office on 24th Street and the company's current COO (chief operating officer), attributed the longer closing times to mortgage lenders giving increased scrutiny to buyer applications in the wake of the nation's mortgage crisis.

"Lenders are being very picky. There are fewer of them, and they have less staff and less people reviewing files," he said. "They're being very careful that everything is being documented, which they should have been doing three years ago."

Homebuyers in August paid an average of 2 percent over the seller's original asking price. But there were a number of high-priced homes on the market that failed to move as quickly as owners had anticipated. Shrewd buyers used the time to negotiate more aggressively. "For a very desirable property, we still have three to five buyers," Kostick said. "For a property that's priced okay or a little too high, nobody is showing up. Some sellers are late to acknowledge that the market isn't as crazy as six months or a year ago."

Homes priced at $2 million or more were especially sensitive to the changing market. Consider the two most expensive properties that sold in August. After 77 days, a four-bedroom, four-bath home sold for $2,190,000, or $400,000 under the seller's original price of $2,595,000. The home is located in the 700 block of Elizabeth Street, between Diamond and Douglass streets.

The second most expensive home took 167 days before the buyers could move into the property in the 600 block of Douglass Street, between 22nd and 23rd streets. The six-bedroom, 5-1/2-bath home (the figures include a legal second unit) sold for $2,120,000, or $275,000 below its initial asking price of $2,395,000.

The condominium market also was less robust than in previous months. A total of eight condos changed hands in August, compared with 13 in July and nine in August one year ago. August buyers on average paid 96 percent of the asking price, and the deals typically took about two months to close.

Buyers paid an average of $780,000 for a condo in the neighborhood. The most expensive unit was a three-bedroom, 2-1/2-bath unit in the 4100 block of Cesar Chavez Street, between Castro and Noe streets. The condo, originally priced at $2,275,000, sold for $2 million and closed escrow in 79 days.

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
August 2008 15 $1,000,000 $2,195,000 $1,396,200 52 102%
July 2008 12 $975,000 $2,950,000 $1,847,417 29 99%
August 2007 11 $850,000 $2,700,000 $1,692,273 35 105%
August 2008 8 $399,000 $2,000,000 $780,375 57 96%
July 2008 13 $563,000 $1,300,000 $894,538 59 100%
August 2007 9 $790,000 $1,465,000 $1,157,778 28 106%
2 to 4 unit buildings
August 2008 3 $1,299,000 $2,100,000 $1,608,000 74 101%
July 2008 3 $947,000 $1,575,000 $1,234,333 74 100%
August 2007 6 $950,000 $1,989,000 $1,348,908 58 101%
5+ unit buildings
August 2008 0 - - - - -
July 2008 0 - - - - -
August 2007 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 ( for supplying the data.

Noe Valley Rents**
Type of Unit Number in Sample Range of Rents, August-September 2008 Average Rent, August-September 2008 Average Rent, August-September 2007
Studio 4 $1395-$1600 $1474 $1375
1 bedroom 30 $1200-$3000 $1966 $1901
2 bedrooms 18 $2200-$3800 $2793 $2972
3 bedrooms 14 $3880-$6500 $4837 $4078
4+ bedrooms 7 $3700-$9500 $6336 N/A

**These rent averages are based on a sample of 73 Noe Valley rental listings appearing on from August 27 to September 16, 2008.