September 2004 RETURN TO HOME PAGE FEEDBACK

Fears that the era of bargain-basement mortgage rates might be over helped set off a homebuying spree in Noe Valley this summer.

Buyers closed escrow on three dozen houses during June and July, 10 more than during the same period one year ago.

Condominium buyers closed on 17 units, six more than they purchased during the two summer months in 2003, according to sales data Zephyr Real Estate provides monthly to the Voice.

The strong sales activity also extended to small apartment buildings, a favorite of tenancies-in-common (TIC) buyers. Fifteen two- to four-unit buildings exchanged hands in June and July, compared to just six a year earlier.

The lowest mortgage interest rates in four decades have been the driving force behind Noe Valley's blistering real estate market over the past two years. But interest rates have started to increase recently­ making it more expensive for people to buy homes.

"When interest rates start to rise, people are concerned they will end up with unaffordable rates," said Randall Kostick, sales manager at Zephyr's 24th Street office. "People on the [home-buying] fence are saying, I'd better get off and buy before interest rates go up and I can't afford it," Kostick said.

The number of fence jumpers was higher than the inventory of homes for sale. That sparked bidding wars, which pushed the cost of homes an average 10 percent above the original asking price.

Seventeen homes sold for $1 million or more during June and July. The most expensive, which sold in June for just under $2 million, was a four-bedroom, three-bath home in the 700 block of 27th Street.

The sale of a five-year-old condo with a panoramic view also carried an impressive price tag. The three-bedroom, 21/2- bath unit in the1300 block of Noe Street sold in July for $1,115, 000.

Rents May Have Hit Bottom

On the apartment scene, there was good news and bad news for renters during the second quarter of this year (April through June 2004).

A Noe Valley studio cost an average monthly rent of $1,062, an increase of 3.3 percent over the $1,028 landlords charged during the same period last year.

And it cost renters an extra 1.7 percent to pick up keys for a three-bedroom unit, according to Rent Tech, an online listing service. That meant a $2,580 monthly rent, compared to $2,536 a year earlier.

But landlords charged only $1,425 for one-bedroom rentals, a 2.1 percent decline from the $1,456 charged during the second quarter of last year.

Rents for two-bedroom units also fell. But the decline was modest, less than 1 percent, as rents averaged $2,086 versus $2,098 in 2003.

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
July 2004	14	$722,000	$1,250,000	$984,500	34	110%
June 2004	22	$740,000	$1,985,000	$1,092,773	24	110%
May 2004	19	$699,000	$1,805,000	$1,093,158	25	108%
July 2003	9	$615,000	$1,675,000	$992,556	47	101%
June 2003	17	$541,000	$1,980,000	$891,706	35	102%
Condominiums
July 2004	7	$595,000	$1,115,000	$800,300	25	109%
June 2004	10	$575,000	$950,000	$862,331	20	110%
May 2004	6	$430,000	$1,175,000	$812,500	24	114%
July 2003	5	$469,000	$930,000	$601,200	31	104%
June 2003	6	$270,000	$789,000	$585,667	25	103%
2 to 4 unit buildings
July 2004	6	$770,000	$1,600,000	$1,160,000	48	110%
June 2004	9	$755,000	$1,285,000	$1,079,000	27	110%
May 2004	10	$650,000	$1,857,000	$1,210,500	29	107%
July 2003	1	$1,225,000	$1,225,000	$1,225,000	26	107%
June 2003	5	$825,000	$1,050,000	$921,000	104	98%
5+ unit buildings
July 2004	0
June 2004	1	$1,625,000	$1,625,000	$1,625,000	53	102%
May 2004	0
July 2003	0
June 2003	0

Noe Valley Rents**

Size of Apartment	Average Rents April-June 2004	Average Rents one year ago April-June 2003	% increase (+) or decrease (-)
Studio	$1062	$1028	+3.3%
1 bedroom	$1425	$1456	-2.1%
2 bedrooms	$2086	$2098	-0.6%
3+ bedrooms	$2580	$2536	+1.7%

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

**Data courtesy of Rent Tech, Inc (www.renttech.com)