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Neighborhood House Prices Hit the Roof, and Condos Soar to $699,000
By Corrie M. Anders
Deborah de Lambert was elated, to say the least, about her family's new home on Day Street. The house was large -- four bedrooms, a living room, formal dining room, an office plus family room. It had some architectural pizazz with crown molding and bay windows. And the big back yard provided plenty of romping room for her twin 3-year-old boys.
Then there was the location. The house was one block from a children's playground, relatively close to a Muni streetcar line, an easy commute from downtown, and in a kid-friendly neighborhood known for having some of the best weather in San Francisco.
"It was just perfect for us. It met all of our needs," said de Lambert.
It also cost de Lambert and her husband, Chandler Visher, a cool $1 million. They moved into the house in April.
Welcome to Noe Valley, which is riding the crest of a real estate tsunami. An endless stream of cash-laden buyers are bidding up residential prices to record heights -- that is, when they can find a home for sale. There are nowhere near enough available properties to meet the demand, according to neighborhood real estate agents.
"There's a yard of demand and an inch of dirt" is how real estate broker B.J. Droubi characterized the current real estate market in Noe Valley.
And that means pay dirt for sellers, who have seen prices jump more than 50 percent in the past two years.
"It's near impossible to buy a house for under $400,000 at this point," said Randall Kostick of Zephyr Realty. "The average price is $500,000 to $700,000 for a house in reasonably good condition in the heart of Noe Valley."
Figures kept by the San Francisco Association of Realtors show that the fourth most expensive region in the city is District 5, a realty designation that includes Noe Valley, Glen Park, Twin Peaks, the Haight-Ashbury, and Mission Dolores. During the first three months of this year, buyers paid an average of $658,000 to live in District 5. The three districts with higher average prices were located in the northern half of the city, and cover such areas as Pacific Heights and Sea Cliff.
The frenzied real estate activity isn't confined to Noe Valley's wonderful Victorians, Edwardians, and bungalows. "It's the same with condos," said real estate agent Bernie Katzmann of Herth Realty.
Buyers undaunted by $500,000 to $700,000 prices descended on luxury condos at three new developments almost as soon as the models were opened last month. At a 12-unit townhouse-style project at 25th and Homestead streets, real estate agents said demand was so strong that original prices were raised to $695,000 from $629,000 for a three-bedroom unit, and to $575,000 from $529,000 for two-bedroom units.
Seven condos on the site of the old St. Paul's Primary School (300 Valley St.) also hit the market with $499,000 to $699,000 prices. Pacific Union, representing the developers, opened bids in late April and sold all but one unit in the first week.
Meanwhile, mouths were dropping along Church Street as Pacific Marketing unveiled prices at St. Paul's Commons, the new condo complex at 323 29th St., in St. Paul's former convent and high school. Four of the 36 units will be sold as BMRs (below market rate) via the Mayor's Housing Office, but the rest were listed at $405,000 to $465,000, for two-bath, two-bedroom units.
Two years ago, it was rare to hear of a single-family home selling for $1 million in Noe Valley. Not anymore. There have been several $1 million sales already this year.
A contemporary home built last year -- one of four new residences at the corner of Sanchez and 21st streets -- sold in March for $1.8 million. That was a brand-new, four-bedroom home with a three-car garage. Another home in the cluster sold last year for just under $1.6 million.
Those were new homes with the finest modern amenities and cityscape views. But older homes also have been million-dollar sellers. Take the elegant 1908 Edwardian (with inlaw) in the 3400 block of 21st Street. The six-bedroom, 3-1/2-bath home previously sold in 1993 for $670,000 and again in 1996 for $779,000. It sold again in March of this year -- for $1,464,000.
There are a number of homes currently on the market in the $800,000 to $900,000 range that could garner more than the asking price, due to the neighborhood's popularity and lack of inventory.
That is what happened in the case of Visher and de Lambert, who are both attorneys (though de Lambert has been a full-time mother since the birth of their twins). The couple, expecting their third child, wanted a home larger than their old one, located in San Francisco's Clarendon Heights neighborhood.
They looked in several neighborhoods, and in January seriously began to concentrate on Noe Valley. The price tag on the Day Street home, nice as it was, shocked them at first.
"I thought it seemed high for that neighborhood. Day Street [at Castro] is practically outer Noe Valley -- and then to have to pay more than the asking price," said de Lambert.
The home was listed at $850,000. The couple upped their offer by $125,000, but that was only good enough to win a backup position. Then the first offer fell apart, and the couple was able to negotiate a deal and call the moving vans.
"We were elated. To not have to look anymore was a big relief," de Lambert said.
Ten years ago, the heart of prime Noe Valley real estate was within two or three blocks of the 24th Street commercial strip, with its array of clothing boutiques, restaurants, bars, and coffeehouses. North of 24th Street was viewed as more desirable than south of 24th Street, and addresses became less exclusive moving toward 30th Street.
"Now there is a blurring of those intra-neighborhood demarcations," said Larry Stebbins, Herth Realty's office manager. "It's true -- we are seeing property on Day Street going for a million dollars."
Despite the out-of-sight prices, buyers still are lined up for homes.
"I sold a house on Elizabeth Street that was listed at $575,000 and it sold for $668,000. There were eight offers on that property, and that's not atypical," said Kostick. "There's a lot of overbidding going on. For every property that goes on the market, there are 10 to 20 potential buyers willing to pay the asking price or more."
Real estate broker Ian Berke agrees there's a rush on Noe Valley properties. "I've made 22 offers for my buyers since the first of the year and only made three sales -- and I consider myself lucky," said Berke.
Berke increased his production after he "got wind" that a 23rd Street homeowner was thinking about selling. Trying to avoid competition, Berke took his buyer directly to the seller and "made him a very good offer," before the four-bedroom, three-bath home was ready to be listed on the open market.
The seller wanted $895,000 for the totally renovated home, constructed by pioneer Noe Valley developer John Anderson. (Anderson erected dozens of low-cost houses for families left homeless after the 1906 earthquake.)
Berke's client, attorney Adam El-sesser, called the two-story Victorian "a perfect house." Elsesser would not divulge the final purchase price, but said it was well over what the seller originally wanted. "We got lucky that we didn't get into a bidding war," said Elsesser, who has lived in Noe Valley for eight years and was buying a new home after a divorce.
Elsesser and de Lambert got their respective homes and were delighted about it. Still, they expressed concerns that fewer people would now be able to make the transition from renter to homeowner in Noe Valley.
"We were fortunate to be able to afford it," said de Lambert. "But what about the other families -- school teachers, janitors, and bus drivers?" she asked.
It's a question that may be around for a long time to come.