Noe Valley Voice November 2005

The Cost of Living in Noe:
Is Market Cooling? Hard to Tell

By Corrie M. Anders

The number of homes sold in Noe Valley dropped to a modest half dozen in September, raising the question of whether the neighborhood's sizzling housing market is starting to cool.

Not since the sale of five homes in February and six in January have fewer than 10 Noe Valley homes closed escrow in a single month this year. The September sales also were in stark contrast to the 20 homes sold in the same month one year ago.

Six condominiums changed hands in September, according to sales data provided to the Voice by Zephyr Real Estate on 24th Street. Buyers purchased nine condos in the same month last year.

However, the sales data contains mixed messages about which way the housing market is going. Houses took longer to sell in September, and the average price was considerably lower than in the recent past, general indications of a moderating market. But as they've been doing throughout the boom, buyers continued to pay well over the asking price for homes.

Randall Kostick, Zephyr's general sales manager, thinks the summer vacation and a dearth of homes on the market likely contributed to the one-month decline in residential sales.

"This [drop] is not a reflection of anything except for closings in September" that were initiated during August when many home sellers and buyers alike were focused on family vacations and travels rather than real estate, he says.

The elevated sales in September of 2004--and 16 in September of 2003--were atypical, and there was a buying frenzy in those years, he notes. "Last year, we didn't have the slowdown in August that we normally do. This year we did."

Also, in the summer of 2005, buyers didn't have a lot of homes to choose from. Kostick expects next month's Cost of Living column (the October stats) to show a rebound in home sales, because the number of Noe Valley properties hitting the market increased threefold after Labor Day, he says.

Another indication that the Noe Valley housing market remains strong is the premium price buyers continue to offer. In September, buyers on average paid 15 percent more than the asking price to get the detached home they wanted. In a normal market, the asking price and the sales price tend to be much closer.

Homes remained on the market an average of 41 days before they were sold, according to the data for September. In August, homes typically closed escrow in less than one month--a trend of several months' standing.

If lengthier closings start to approach 45 days and last more than "several months, it would suggest things are normalizing," says Kostick. "But for one month, we can't say that."

Single-family homes in four of the six transactions sold for at least $1 million. The most expensive was a three-bedroom, two-bath house in the 300 block of 28th Street, which sold for $1,325,000.

The costliest condo was a two-bedroom, two-bath condo in the 800 block of Clipper Street. Buyers paid $1,079,000 for the unit.

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
September 2005 6 $825,000 $1,325,000 $1,103,501 41 115%
August 2005 15 $800,000 $2,115,000 $1,247,533 27 116%
September 2004 20 $719,000 $1,700,000 $1,113,450 37 105%
September 2005 6 $750,000 $1,179,000 $924,167 15 111%
August 2005 9 $610,000 $1,395,000 $903,333 25 117%
September 2004 9 $525,000 $1,285,000 $892,556 23 108%
2 to 4 unit buildings
September 2005 2 $1,100,000 $1,200,007 $1,150,004 23 119%
August 2005 4 $950,000 $1,501,600 $1,264,150 33 116%
September 2004 7 $1,140,000 $2,010,000 $1,336,000 20 106%
5+ unit buildings
September 2005 0 - - - - -
August 2005 0 - - - - -
September 2004 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.

A Snapshot of Noe Valley Rents**
Type of Unit Number in Sample Range of Rents, October 2005 Average Rent, October 2005 Average Rent, September 2005
Studio 3 $795-$1400 $1082 $1200
1 bedroom 17 $1200-$2500 $1692 $1575
2 bedrooms 18 $1600-$3375 $2213 $2502
3 bedrooms 13 $2150-$3995 $3269 $3545
4+ bedrooms 0 - - $4613

**These rent averages are based on a sample of 51 Noe Valley rental listings appearing on on October 5-12, 2005. The previous sample of 58 listings was collected September 9-14.