After 20 years in San Francisco, John Perry and Rob Picciotto, along with their children, Ben and Louisa, and three dogs, transplanted themselves to Oakland. “I didn’t think we would ever leave San Francisco, but a convergence of things made us consider moving,” said Perry.

In 1998, Perry and Picciotto had stretched to buy their Bernal Heights house and make it work as their family grew. In June it sold for more than triple what they’d paid, a windfall that allowed them to pay cash for a less expensive house in Oakland’s Leona Heights neighborhood in the hills above Mills College.

“We don’t have a mortgage anymore, which is awesome,” Perry said. “We doubled our square footage on more than an acre of land, and have phenomenal neighbors. Oakland is so diverse; it’s a whole new world to learn and explore. There’s more space, more mix.”

For a growing number of San Francisco residents, the math is compelling. Their houses now are worth more than ever. Meanwhile, although homes in the East Bay have had big price run-ups over the past year, they had fallen further during the downturn – meaning they’re still shy of their peaks.

“San Francisco is on the leading edge of the appreciation curve and other places are a step behind,” said Patrick Carlisle, chief market analyst with Paragon Real Estate Group in San Francisco. “The majority of our San Francisco neighborhoods now have met or exceeded their previous peak values reached in 2007 or 2008.”

Huge price differential

The result is that the price differential between San Francisco and other Bay Area counties, especially the East Bay, is greater now than ever, he said. Silicon Valley’s price appreciation has been strong enough that moving there from the city is more of a lateral move.

For David and Tamra Biener, the rising real estate market meant they could finally trade their cramped Dolores Street condo for a bigger place in the East Bay. With children soon to turn 6 and 8, their family outgrew the two-bedroom condo a couple of years ago – they’d converted the dining room to a third bedroom to make do – but were stuck because they were underwater.

“Our kids running up and down the hallway sounded like a herd of elephants to the people above and below,” he said. “We wanted to move in 2011, but at that time the condo was worth maybe $50,000 less than I’d bought it for. I was thinking, it’s another $50,000 in (real estate) commissions, so it will cost us $100,000 to get out of the condo. We can’t do that because we have to come up with 20 percent down on the new house. It’s supposed to work the other way.”

Way over asking price

But now the tide has turned.

“The crazy thing is that two years go by, we list our house for $50,000 more than I paid and get another $125,000 over listing,” he said.

Listed at $875,000, the house went for just a tad over $1 million. As soon as they were in contract, the Bieners made an offer on a five-bedroom Walnut Creek house with lots of room for the kids. It was listed at $1.285 million; their offer was just $15,000 over asking.

“There are two things going on that favor moving from the city to outside the city,” he said. “The prices have gone up way faster in San Francisco than they have outside of it. And the demand is so much higher in the city that you get that extra 10 or 20 percent over listing.”

Agents around the region said they’re seeing a definite increase in San Francisco out-migration.

“There was a time when you could be a move-up buyer in San Francisco, taking the equity out of your home or condo and buying a bigger one in the city, but that’s not the story anymore,” said Steve Dells, an agent for 25 years with Zephyr Real Estate in San Francisco. “The values in San Francisco have escalated so quickly and so much that whatever a move-up buyer can afford likely won’t be enough space to accommodate their reason for moving.”

Ashley Langworthy and Peter Gleason would have liked to be move-up San Francisco buyers, but the financials didn’t pencil out. With twins on the way, the couple needed more space than their one-bedroom Hayes Valley tenancy in common.

‘Cold foggy areas’

“The places in San Francisco where we could afford more space were in cold foggy areas near the edge of Daly City,” said Langworthy, a landscape designer. “We would have stayed in San Francisco if we could have been in neighborhoods we liked.”

Instead, they looked in the East Bay. However, the competition over there meant they got outbid 10 times and ended up paying above asking for a two-bedroom Berkeley house.

Their Hayes Valley TIC went for almost $100,000 more than the $450,000 they paid for it in 2008, not a windfall but enough to help them get a foothold in a stand-alone house in the East Bay. “I think the East Bay is a little more affordable than San Francisco, but it’s still very competitive,” Langworthy said.

Christine Englund and Dean Charlton migrated from the city to the East Bay because she got a dream job in San Ramon.

“Our house in West Portal is in one of the foggiest neighborhoods in town; 2 miles up from the ocean, you’re totally socked in for the summer,” Englund said. “It’s a two-bedroom one-bathroom, with a little yard, just 1,500 square feet.”

Listed at $799,000, the house got 12 offers and sold in late May for $1.025 million. “We hit just the right time,” Englund said. “Interest rates were still a bit lower than now and inventory was so tight in San Francisco.”

Their East Bay house, located in upscale Piedmont, was cheaper at $905,000 but at least 50 percent larger, with a third bedroom, second bathroom, bigger yard, deck and even a wine cellar.

“We got so much more space for the money, and then the weather, the people, the restaurants, everything we value were also great,” she said.

Fewer school-age kids in S.F.

While the current exodus is too new to have official statistics, longer-range census data underscore San Francisco’s ongoing family drain. San Francisco has about 8,000 fewer school-age youngsters in 2010 than in 2000. Of the city’s 805,235 residents, just 13.4 percent are younger than 18 – a smaller percentage than any other major U.S. city, including the Manhattan section of New York City, where 15 percent of the population is under 18. In San Jose, 24.8 percent of the residents are children; in Oakland, it’s 21.3 percent.

What will it mean to San Francisco if families continue to flee?

Perry, the 20-year resident who recently moved out with his partner and their children, has some sanguine thoughts.

“San Francisco renews itself on a regular basis,” he said. “A lot of cities don’t sustain the same populations through all the stages of (the residents’) lives. There may be different cities for different times in our life.”

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com Twitter: @csaid

Article source: http://www.sfgate.com/realestate/article/Families-flee-S-F-for-East-Bay-with-cheaper-homes-4796027.php

After 20 years in San Francisco, John Perry and Rob Picciotto, along with their children, Ben and Louisa, and three dogs, transplanted themselves to Oakland. “I didn’t think we would ever leave San Francisco, but a convergence of things made us consider moving,” said Perry.

In 1998, Perry and Picciotto had stretched to buy their Bernal Heights house and make it work as their family grew. In June it sold for more than triple what they’d paid, a windfall that allowed them to pay cash for a less expensive house in Oakland’s Leona Heights neighborhood in the hills above Mills College.

“We don’t have a mortgage anymore, which is awesome,” Perry said. “We doubled our square footage on more than an acre of land, and have phenomenal neighbors. Oakland is so diverse; it’s a whole new world to learn and explore. There’s more space, more mix.”

For a growing number of San Francisco residents, the math is compelling. Their houses now are worth more than ever. Meanwhile, although homes in the East Bay have had big price run-ups over the past year, they had fallen further during the downturn – meaning they’re still shy of their peaks.

“San Francisco is on the leading edge of the appreciation curve and other places are a step behind,” said Patrick Carlisle, chief market analyst with Paragon Real Estate Group in San Francisco. “The majority of our San Francisco neighborhoods now have met or exceeded their previous peak values reached in 2007 or 2008.”

Huge price differential

The result is that the price differential between San Francisco and other Bay Area counties, especially the East Bay, is greater now than ever, he said. Silicon Valley’s price appreciation has been strong enough that moving there from the city is more of a lateral move.

For David and Tamra Biener, the rising real estate market meant they could finally trade their cramped Dolores Street condo for a bigger place in the East Bay. With children soon to turn 6 and 8, their family outgrew the two-bedroom condo a couple of years ago – they’d converted the dining room to a third bedroom to make do – but were stuck because they were underwater.

“Our kids running up and down the hallway sounded like a herd of elephants to the people above and below,” he said. “We wanted to move in 2011, but at that time the condo was worth maybe $50,000 less than I’d bought it for. I was thinking, it’s another $50,000 in (real estate) commissions, so it will cost us $100,000 to get out of the condo. We can’t do that because we have to come up with 20 percent down on the new house. It’s supposed to work the other way.”

Way over asking price

But now the tide has turned.

“The crazy thing is that two years go by, we list our house for $50,000 more than I paid and get another $125,000 over listing,” he said.

Listed at $875,000, the house went for just a tad over $1 million. As soon as they were in contract, the Bieners made an offer on a five-bedroom Walnut Creek house with lots of room for the kids. It was listed at $1.285 million; their offer was just $15,000 over asking.

“There are two things going on that favor moving from the city to outside the city,” he said. “The prices have gone up way faster in San Francisco than they have outside of it. And the demand is so much higher in the city that you get that extra 10 or 20 percent over listing.”

Agents around the region said they’re seeing a definite increase in San Francisco out-migration.

“There was a time when you could be a move-up buyer in San Francisco, taking the equity out of your home or condo and buying a bigger one in the city, but that’s not the story anymore,” said Steve Dells, an agent for 25 years with Zephyr Real Estate in San Francisco. “The values in San Francisco have escalated so quickly and so much that whatever a move-up buyer can afford likely won’t be enough space to accommodate their reason for moving.”

Ashley Langworthy and Peter Gleason would have liked to be move-up San Francisco buyers, but the financials didn’t pencil out. With twins on the way, the couple needed more space than their one-bedroom Hayes Valley tenancy in common.

‘Cold foggy areas’

“The places in San Francisco where we could afford more space were in cold foggy areas near the edge of Daly City,” said Langworthy, a landscape designer. “We would have stayed in San Francisco if we could have been in neighborhoods we liked.”

Instead, they looked in the East Bay. However, the competition over there meant they got outbid 10 times and ended up paying above asking for a two-bedroom Berkeley house.

Their Hayes Valley TIC went for almost $100,000 more than the $450,000 they paid for it in 2008, not a windfall but enough to help them get a foothold in a stand-alone house in the East Bay. “I think the East Bay is a little more affordable than San Francisco, but it’s still very competitive,” Langworthy said.

Christine Englund and Dean Charlton migrated from the city to the East Bay because she got a dream job in San Ramon.

“Our house in West Portal is in one of the foggiest neighborhoods in town; 2 miles up from the ocean, you’re totally socked in for the summer,” Englund said. “It’s a two-bedroom one-bathroom, with a little yard, just 1,500 square feet.”

Listed at $799,000, the house got 12 offers and sold in late May for $1.025 million. “We hit just the right time,” Englund said. “Interest rates were still a bit lower than now and inventory was so tight in San Francisco.”

Their East Bay house, located in upscale Piedmont, was cheaper at $905,000 but at least 50 percent larger, with a third bedroom, second bathroom, bigger yard, deck and even a wine cellar.

“We got so much more space for the money, and then the weather, the people, the restaurants, everything we value were also great,” she said.

Fewer school-age kids in S.F.

While the current exodus is too new to have official statistics, longer-range census data underscore San Francisco’s ongoing family drain. San Francisco has about 8,000 fewer school-age youngsters in 2010 than in 2000. Of the city’s 805,235 residents, just 13.4 percent are younger than 18 – a smaller percentage than any other major U.S. city, including the Manhattan section of New York City, where 15 percent of the population is under 18. In San Jose, 24.8 percent of the residents are children; in Oakland, it’s 21.3 percent.

What will it mean to San Francisco if families continue to flee?

Perry, the 20-year resident who recently moved out with his partner and their children, has some sanguine thoughts.

“San Francisco renews itself on a regular basis,” he said. “A lot of cities don’t sustain the same populations through all the stages of (the residents’) lives. There may be different cities for different times in our life.”

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com Twitter: @csaid

Article source: http://www.sfgate.com/realestate/article/Families-flee-S-F-for-East-Bay-with-cheaper-homes-4796027.php

The Paragon Real Estate Group is offering an August 2012 market update on the cycles in the homes market in San Francisco since 1983.

San Francisco, CA (PRWEB) August 18, 2012

The Paragon Real Estate Group is announcing the release of its August 2012 market report. The update from the real estate investment and brokerage company discusses the historical dynamics of the San Francisco home market from a longer term perspective with an eye to what lessons the past may hold regarding future trends.

“Financial market and housing market cycles have been around for hundreds of years. While future cycles will vary in their details, the causes, effects and trend lines are often quite similar, and may offer useful perspective and hold lessons for the future,” Patrick Carlisle, chief market analyst for Paragon Real Estate Group, said.

“Over the past 30 years, there have been two full housing market cycles, and we are now on the cusp of a third. The first cycle starts with the country coming out of the late 1970s, early 1980s recession. As the economy recovered, the housing market started to appreciate in 1984 and this surge in values began to accelerate deeper into the decade. Over six years, the market appreciated almost 100 percent. Finally, the 1980s version of irrational exuberance, as well as the late 1989 earthquake here in the Bay Area, ended the party. A new recession arrived, home prices sank, sales activity plunged and the market stayed flat for four years. Still, even after the decline, home values were 70 percent higher than when the boom began in 1984.”

Carlisle continued, “The second cycle looks similar but elongated. In 1996, after years of recession, the homes market suddenly took off and became frenzied — similar to what we’re experiencing today. The dotcom bubble pop and the September 2001 attacks created a market hiccup, but then the subprime and refinance insanity, CDOs and derivatives, and Ponzi schemes super-charged a housing bubble. From 1996 to 2006/2008, the market went through an astounding period of appreciation. (Different areas hit peak values at different times from 2006 to early 2008.) Then, in September 2008 came the market crash.”

Across the country, home values fell 15 percent to 60 percent, peak to bottom, depending on the area and how badly it was affected by foreclosures — most of San Francisco got off comparatively lightly with declines in the 15-percent to 25-percent range. The least affluent areas got hammered hardest by distressed sales and price declines; the most affluent were typically least affected. Then the market stayed flat for more than three years, albeit with a few short-term fluctuations.

Paragon’s chief market analyst continued, “In 2011, San Francisco began to show signs of perking up. An improving economy and growing buyer demand coupled with a low inventory of listings began to put upward pressure on prices. In 2012, as in 1996, the market abruptly grew frenzied with competitive bidding. The city’s affluent neighborhoods led the recovery, and those considered particularly desirable by newly wealthy, high-tech workers showed the largest gains. However, virtually the entire city is now experiencing a high demand-low supply dynamic. The SF median house sales price has increased dramatically in 2012, though varying widely by neighborhood. But it’s still an early recovery — though seemingly a strong, healthy one — and the economy remains susceptible to big financial/political crises. However, the greater Bay Area, the state and the country are all beginning to show signs of a housing recovery. New home construction is rising, distressed sales are declining, the rent vs. buy equation has turned favorable to buying, and values are ticking up again.”

“Absent another financial crisis, we expect this positive trend in the San Francisco homes market to continue,” Carlisle said.

For more information about Paragon Real Estate Group, its real estate agents or its homes for sale, please view its website at http://www.paragon-re.com or visit 1160 Battery St. in San Francisco. For additional market analytics, visit http://www.paragon-re.com/MarketDynamics/.

About Paragon Real Estate Group

Article source: http://www.virtual-strategy.com/2012/08/18/san-francisco-real-estate-company-paragon-real-estate-group-releases-30-year-overview-san