The 4,365-square-foot home includes remodeled oak floors, a office, new kitchen, gym and a two-bedroom, one-bath second unit in the expansive yard.
This is not the first time this year that disparity has been seen in the ultra-competitive Bay Area real estate market.
In March, a Berkeley home achieved the same feat. That sale was even more extraordinary as the mid-century home on Harvard Circle in the Berkeley Hills was listed at $1.3 million and nearly doubled its price, selling for $2.3 million after receiving 29 offers in 11 days.
593 Sleeper Ave., Mountain View, Calif.
Compass
While the Berkeley sale was particularly sensational, it’s not uncommon, real estate professionals say.
“People are not surprised when a home goes $1 million over,” Josh Dickinson, the founder of real estate agency Zip Code East Bay told SFGATE. “When my clients see a house for $1.9 million they’re almost conditioned to think it’ll go over $3 million in Piedmont or North Berkeley.”
Further afield in Citrus Heights, 15 minutes outside Sacramento, a home received an incredible 122 offers in one weekend in March.
593 Sleeper Ave., Mountain View, Calif.
Compass
According to Redfin, Mountain View home prices were up 12.8% in April 2021 compared with last year, selling for a median price of $1.9 million. In Berkeley, home prices were up 18.3% compared with last year, selling for a median price of $1.5 million, while inSan Francisco home prices were up 0.9%, selling for a median price of $1.4 million.
Jim and Jimmy Nappo were the listing agents representing the Mountain View sale.
SFGATE local editor Tessa McLean contributed to this story.
By Kara Cox, real estate investor, agent. Observer of Bay Area Real Estate on San Mateo Parley.
Having lived both in the Bay Area during the dotcom explosion and NYC during the MBS explosion, I know a thing or two about financial bubbles. Or at least how they feel in the moment: akin to being at a frat party at 2 am. Everyone is spewing garbage but thinks they are a genius, and the only way to make sense of it all is to drink up or take yourself home.
That’s bubbles.
It is hard to resist the dopamine of collective euphoria. It is only in retrospect in which everyone saw it coming, knew it couldn’t last, etc. We didn’t, for the most part. It is easy to look back with derision about the Dutch and their bout with overpriced tulips, but is that so much different than what happened with Pets.com? Or when folks rushed to own homes in 2005?
Data presented on the major realty sites tends to focus on the gains of the last ten years, more or less. This is handy to their purpose…making a home seem like a great investment, on top of providing other practical and emotional benefits. The last ten years have been great!
However, to fully reap those financial rewards you would have had to buy around 2010, and this was precisely the moment lending was in shambles.
For example, a friend of mine bought a place in San Mateo in late 2010 (3/2, approx. 1300 sq. ft., slightly oversized lot) for a little under 650K. According to Realtor.com it has gone up in value 135% in the last 11 years, and will go up an additional 9% over the next year. She said, at the time, they worried they were overpaying. Despite such potential gains, her non-tech propelled family isn’t going anywhere, short of winning the lottery.
With prices soaring and a constant stream of reasons why prices can’t possibly go down, I start to get nervous. It’s not that I don’t think there is a lot of value in a home in San Mateo. It’s that I can’t shake the feeling there are a lot of outliers in the data which are disguising the facts the overall gains are being distributed in far less democratic manner than they might seem with additional context.
For example, there is an adorable comp on the market in San Mateo which came up pending in the standard two weeks or less (2/2, approx. 1650 sq. ft., oversized lot). The ask price is around $1,200 per sq. ft., for a list of 2 million.
Estimates of the property’s value:
Redfin = $2,274,831
Collateral Analytics = $2,445,000
CoreLogic = $2,420,700
Quantarium = $2,328,339
Zillow = $2,305,555
What is of special interest to me about the comp however is its past sale history. In the summer of 2005, it sold for $1.4 million. It next sold in 2013 for $1.41 million.
It took eight years to recoup the sticker price, to say nothing of the losses of interest, commission and other ownership obligations. Should the house sell for the low side of the projection, $2.3 million, it would be easy to tout this as a miraculous achievement. Having bought in 2013 for $1.41 million, you sell for $2.3 million. Minus the commission only (4.5%) you are walking with approximately $800K.
Assuming you put the standard 20% down this is 285% return on your money over 8 years. Not bad, on paper, but it goes down significantly when you start stripping out other ownership costs.
Then, keep in mind, if you do the math for the guy who bought and held in 2005, had he continued to hold, the return on the property is sliced in half. As it was, he lost a great deal of money. Such are the numbers showing how long it took for a top-notch trophy property located in San Mateo to rebound after the last dip.
I came across another property which tells a story of much greater financial woe and heartache stemming from that period which, for a while, burst with enthusiasm. This one is located in the outskirts of Hayward. Way, way out…I passed a yak.
The house was built in 2003 (4/3, approx. 2700 sq. ft., large lot with Bay view). Its stats are as follow:
Early 2003 – sold for a hair over $800K
Mid 2005 – sold for $1.19 million
Late summer 2012 – sold for a hair under $700K
Current estimate on Realtor – a hair over $1.4
Realtor points out that the house has appreciated 90% over the last 11 years. However, the bulk of this benefit goes to the most recent buyer. The previous one lost $500K of value between the years of 2005 and 2012. Let’s assume the sale price estimate is correct. If you calculate the return of the asset itself over the span of its first sale and today the overall return looks, to me, a lot more like 75% over the last 18 years. Individual investor results may vary. By Kara Cox.
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Drone footage of roofs with aluminum and steel shingles. Take in the details of each installation from a bird’s eye view.
The long-term leases will be converted into nonfungible tokens, or NFTs, and the highest bidders will receive exclusive digital rights to the space for 75 years. Around 20 rooms are available, though none include their own bathroom or kitchen.
“I’m going to auction off the NFT and whatever it sells for it sells for,” Kenna told the Business Times. “Is it going to be a million dollars? I doubt it. Is it going to be hundreds of thousands of dollars? I would assume so.”
Kenna said tenants are essentially owners under this new agreement. One of the touted benefits to NFTs is their transferability with accounting from the blockchain, which would allow lease holders to transfer their rooms like a sublet if need be.
While Kenna was an early investor in Bitcoin and even once owned a Bitcoin exchange, he had a rough year in 2016 when his identity was stolen and hackers allegedly took off with all his Bitcoin, robbing him of millions. He hopes to use the proceeds from the NFT auction to pay off debt on the building.
The shared living space, dubbed 20Mission, has 41 rooms and is located at the corner of Mission and 20th Street. Kenna converted the former single-room-occupancy hotel in 2012 to create the space aimed at techies and artists. The single rooms typically rent for around $2,000 per month.
While $300,000 isn’t cheap for a room without its own kitchen or bathroom, Kenna still thinks it’s a deal. “Show me what else you can get for 300 grand in San Francisco,” he told the Business Times.
Jered Kenna did not respond to request for comment from SFGATE.
This is just a narrow slice of the vision laid out in a series of 26 reports by the urban think tank SPUR, set to be released Thursday. The 50-year “regional strategy,” Bay Area 2070, attempts to redesign the region by looking at housing, transportation, growth, racial equity and climate. It includes 175 policy recommendations on everything from rent control to rapid bus lines to protecting against sea level rise.
The ambitious SPUR project, the result of three years of work by the San Francisco group, starts with the premise that over the next 50 years the nine-county Bay Area will grow by 4 million residents and need 2.2 million new housing units. Under the current land-use approaches taken by the cities and counties in the region, it’s likely that about 1.4 million homes would be produced, and much of that would be put in the wrong places — farmland and open areas that are far from transit, SPUR said.
The SPUR reports compare two scenarios: “business as usual,” based on current zoning and land-use patterns; and a “new civic vision,” which imagines a more equitable and sustainable region with reformed land-use regulations.
“The motivation for the project was recognizing that all of the things we experience as challenges are the result of systems we created,” said Alicia John-Baptiste, SPUR’s CEO. “If we want a different future we need to be intentional about designing that future. We wanted to be as aspirational as possible and set aside current political constraints.”
According to SPUR, the “business as usual” approach would result in 358,000 new housing units and office space for 646,000 workers being plopped down in hazardous and protected areas — such as farmland and low-lying waterfront areas. But the SPUR scenario would add almost no new jobs or housing in these zones. SPUR estimates that 500,000 new homes could be built in transit-oriented downtowns and another 543,000 units could be built along major commercial corridors such as El Camino Real on the Peninsula, Geary Boulevard in San Francisco and San Pablo Avenue and International Boulevard in the East Bay.
The “business as usual” planning would result in about 850,000 jobs in transit-friendly, walkable neighborhoods while the SPUR approach would add about 2 million jobs in those areas. SPUR calculates that about 523,000 units could be added in smaller buildings — two- to six-unit constructs — in areas currently zoned for single-family homes.
SPUR board member Robert A. Wilkins Sr., a management consultant and former longtime CEO of the YMCA of the East Bay, said the strategy’s goals on housing — increased density near jobs and transit — is not breaking new ground. But the difference is that the strategy is “people centered.”
The report delves into how to stop evictions, how to build less expensive affordable housing and how to strengthen tenant protections. It explores creating a real-estate transfer tax that penalizes short-term “flipping,” expanding homeownership opportunities for low- and moderate-income families and reforming construction defect laws that make many builders reluctant to construct condos.
“I always start with the question — who are we doing this for? Cities are for people, and the notion is to create an environment in which everybody can flourish,” Wilkins said. “We have some of the greatest prosperity in the world and on the other hand we have some of the greatest poverty. Let’s start out by looking at the gaps. Historically, how did we get here and who has been left behind?”
Nothing in the SPUR vision will come easy — many of its goals have long been crusades for Bay Area housing and tenant advocates but have faced severe backlash from voters and elected officials. For example, SPUR calls for the reform of the state’s environmental review process — a set of laws that opponents regularly use to delay or kill new housing — that multiple lawmakers have failed to get done over the past two decades. It advocates for cheaper modular housing to become the norm, something that building trade unions are battling against.
The SPUR report is careful not to call for the overdevelopment of “communities of concern” — traditionally working-class, Black and brown neighborhoods vulnerable to displacement and gentrification. The “new civic vision” would add slightly less overall housing within these communities compared to continuing business as usual.
Tomiquia Moss, a SPUR board member and CEO of All Home, said the 50-year plan imagines a “more equitable and just Bay Area” where homelessness is eradicated and “housing is seen as a right.” The lengthy horizon makes sense given that the crises facing the region — housing, homelessness, traffic gridlock — took at least that long to develop, she said.
One of the report’s authors, Stephen Engblom, executive vice president of the architecture and engineering firm AECOM, said he and his fellow researchers challenged themselves to reimagine suburban places like shopping centers and office parks, many of which have high vacancies, as well as downtown areas that suffered as retail moved into malls and big box stores on the edge of town.
“A lot of time when you think about urban growth, you think of downtown San Francisco, downtown Oakland and downtown San Jose,” Engblom said. “But those make up a very small portion of our land in the Bay Area. We asked how every place type can fulfill its responsibility, to evolve into their best self. There is so much land that is inefficiently used right now.”
J.K. Dineen is a San Francisco Chronicle staff writer. Email: jdineen@sfchronicle.com Twitter: @sfjkdineen
Mr. Dehner works in finance and Ms. Dehner works part-time in e-commerce. They briefly considered moving to Southern California, but decided after last year’s ferocious wildfire season that it wasn’t worth the risk. Life in Texas, she said, will offer a lower cost of living, and hence, more peace of mind.
“Finances won’t be a driving factor in every decision we make,” she said. “It gives us a cushion to enjoy life.
In April 2021, the median sales price for a single-family home in San Francisco County was $1,800,000. In Sacramento, 100 miles northeast, where home prices have jumped 22.5 percent since last year, it was $490,000.
“In the last 10 months the market has caught fire, and migration is absolutely up,” said Ryan Lundquist, a real estate appraiser in Sacramento who also maintains a blog about the Central Valley housing market. “We have increased migration from the Bay Area, and there are also so many local buyers on the prowl for whom Covid has been the catalyst to make that decision to live in outlying areas.”
While San Francisco and Los Angeles both saw their population dip in 2020, California Policy Lab found “no evidence of a pronounced exodus from the state,” adding that “the pandemic has not so much propelled people out of California as it has shifted them around within it.”
It has also shifted where those people do business.
Ryan Swehla, co-founder of the Modesto, Calif.-based commercial real estate firm Graceada Partners, has seen a swift uptick in low-rise office leases throughout the pandemic. California’s Central Valley — which includes the state capital, Sacramento, as well as cities like Fresno and Stockton, has been steadily growing for decades, and now, he said, is benefiting from a brain drain of tech workers fed up with the congestion and inflated prices of Silicon Valley.
The gears were already in motion before the pandemic — Zennify, a computer-software company, tripled its Sacramento work force in 2019; Intel’s campus in nearby Folsom was established in 1984. But now that many Bay Area tech companies have embraced remote or hybrid work, tech workers are increasingly looking to cities like Sacramento, which is 90 minutes by car from San Francisco, and local tech companies are moving in a bid to attract them.
