Noe Valley Voice February 2001

Noe's Real Estate Market May Be Returning to 'Normal'

By Sally Smith and Corrie Anders

At long last, Noe Valley's insane housing market is starting to give hints that the irrational exuberance of the past three years is becoming merely exuberant.

The latest statistics reveal that the price to purchase a home or rent an apartment in Noe Valley remained in the stratosphere during November and December. But tucked behind the data is evidence that the dot-com fade and the slowing economy in general may portend a return to sanity in 2001.

Would-be Noe Valleyans paid an average of $883,055 for a single-family home during the last two months of 2000, a 7.8 percent decline from the average $952,086 in September and October, according to data provided to the Voice by Zephyr Real Estate.

Only 18 single-family homes changed hands during the November-December period, nearly a 44 percent drop from the 32 homes sold in the previous two months.

Those numbers are a tipoff that the mania of 1998­2000 might finally be over, said Zephyr manager Randall Kostick.

"We had agents burning the midnight oil for three years in a row. But this year, our agents were relaxing and taking time off during the holidays, because we were having a normal market slowdown," he said. "Now we're having a 'normal' year. The last three years have been abnormal."

Another sign of rationality in the local real estate market was the increase in housing inventory in January.

"We've got a lot more listings right now," Kostick said. "During the holidays, we were listing three to four properties a week. Now we're listing 10 to 12 a week. In a normal market, people list in April and January."

Still, prices remained nauseatingly high. "It's still a heated market," said Kostick. One holiday buyer paid more than $1 million for a condo on 25th Street. In December, a single-family home on Zircon Place sold for $1.8 million.

And buyers continued to pay well over the asking price. "The average was 16 percent above asking for single-family homes in November­December. That is still pretty incredible," Kostick said.

Also, the demand for condos was up. "People realized they couldn't afford a single-family home, so they turned to condos," Kostick explained. There were 13 condo sales in November-December, compared with 10 for the previous two months--and the average price rose 15.6 percent to $703,250 from $608,250.

Kostick admits that the recent stock market decline and dot-com failures have driven some would-be buyers out of the market. However, the good news is mortgage interest rates have fallen to their lowest point in two years (around 7 percent for a 30-year, fixed-rate loan). "That allows greater affordability and allows people back in the market again," he said.

A Shred of Hope for Renters

Meanwhile, apartment hunters in Noe Valley got a bit of a break during the fourth quarter of last year, according to data compiled by Rent Tech Rentals and Roommates.

While studio apartment prices continued to rise--to $1,273 from $1,194 a month in the third quarter--new renters paid less to move into one- and two-bedroom units.

One-bedroom apartments dropped below $2,000, averaging $1,913 a month compared to $2,056 the previous quarter. Two-bedroom apartments cost an average $2,790, down from $2,908.

The difference, $143 for one-bedroom renters, and $118 for two-bedroom renters, may just be enough to cover their higher utility bills this year.

The first two charts below show the average prices for all homes sold in Noe Valley during September­October and November­December 2000. The third gives a comparison of apartment rents, for the third and fourth quarters of last year.

Noe Valley House Sales­September/October 2000*

Total Sales Low High Average Average Days Sale Price as

(Closings During Month) Price ($) Price ($) Price ($) on Market % of List Price

Single-family homes

32 530,000 1,535,000 952,086 29 112%


10 248,000 950,000 608,250 32 108%

2 to 4 unit buildings

10 575,000 1,775,000 925,781 42 108%

5+ unit buildings

3 650,000 1,295,000 887,500 23 96%

Noe Valley House Sales­November/December 2000*

Total Sales Low High Average Average Days Sale Price As

(Closings During Month) Price ($) Price ($) Price ($) on Market % of List Price

Single-family homes

18 500,000 1,800,001 883,055 34 116%


13 345,000 1,110,000 703,250 35 107%

2 to 4 unit buildings

4 750,000 951,000 844,500 20 116%

5+ unit buildings

0 -- -- -- -- --

Noe Valley Rentals**

Average Rents Average Rents % Increase (+)

Apartment Size (July ­ September 2000) (October­December 2000) or Decrease (­)

Studio $ 1,194 / mo. $ 1,273 / mo. + 6.6%

1 bedroom 2,056 / mo. 1,913 / mo. ­ 7.0%

2 bedrooms 2,908 / mo. 2,790 / mo. ­ 4.1%

3 or more bedrooms 3,857 / mo. 4,085 / mo. + 5.9%

*Information provided to the Noe Valley Voice courtesy of Zephyr Real Estate ( and based on all Noe Valley home sales (closings) recorded during two-month period. "Noe Valley" in this survey is defined loosely as the area bordered by Grand View, 22nd, Guerrero, and 30th streets.

**Data based on Noe Valley rentals listed by Rent Tech Rentals and Roommates (