Where Are the Tech Zillionaires? San Francisco Faces the I.P.O. Fizzle

Towers rose across San Francisco to house the money. The marble was polished. The bathroom floors were warm. The private pools were being filled.

“The world has changed in a year,” said Herman Chan, a real estate broker with Sotheby’s International. “We expected an upward trajectory at least, and it really kind of deflated. These companies aren’t dying but the cultural zeitgeist, that momentum of I.P.O.s, is gone. You don’t even hear anyone talking about it anymore.”

The developers who had fought the odds of regulation and zoning to build their glass residences in the sky had timed their units to the I.P.O.s. But on a recent visit with the Four Seasons sales team, they acknowledged that techie wealth was not what they were seeing. Interest was mostly coming from overseas buyers, young heirs to foreign fortunes and older executives looking for city pieds-à-terre, they said.

Also in time for the wave that was not a wave are more luxury towers: The Avery, The Harrison, 181 Fremont, The Mira.

“The definition of luxury is scarcity, and there’s so many now,” Mr. Chan said. “Nowadays, my buyers are getting a contingency period and inspectors. Things you would never ask for before. There’s not 10 offers on a house anymore.”

Case in point: A full-floor apartment in San Francisco’s poshest neighborhood of Pacific Heights was listed at $21.6 million and advertised that “a sommelier-worthy wine cellar awaits 1,500 of your most prized bottles.” But more than a year later and after a $5 million price cut, it is still on the market.

Prices for the top 5 percent of San Francisco area real estate listings — the cream of the crop — rose 7 percent between 2017 and 2018. This year, they have fallen more than 1 percent, according to data prepared for The New York Times by the real estate listing service Zillow.

Article source: https://www.nytimes.com/2019/12/19/technology/tech-IPO-san-francisco.html

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Homeless women who took over California home gain support

OAKLAND, Calif. (AP) — Some California lawmakers said they support a group of homeless women who have been illegally living in a vacant three-bedroom house since November, partly to protest real estate speculators who drive up housing costs in the pricey San Francisco Bay Area.

Moms 4 Housing, a collective recently formed to support the Oakland women, interrupted a press conference on legislation to boost housing construction Tuesday at City Hall, shouting “affordable housing now.”

“I want to thank Moms 4 Housing for taking that house and for demonstrating that nowhere, nowhere should there be a vacant house anywhere in California when we have the housing crisis that we have,” said Democratic Sen. Nancy Skinner of Berkeley. “And it was totally legitimate for those homeless moms to take over that house.”

The women took over the home after they said they were unable to find permanent housing in the Bay Area, where high-paying tech jobs have exacerbated income inequality and a housing shortage. They also say they’re protesting real estate developers who snap up distressed homes, then leave them empty.

They are awaiting a final ruling from a judge on whether they can stay, though Alameda County Superior Court Judge Patrick McKinney has tentatively ruled in favor of the property owner, Wedgewood Inc., a Redondo Beach-based real estate investment group that bought the home in a foreclosure auction last year.

Dominique Walker, 34, who has 1- and 5-year-old daughters, said she moved back to her native Oakland from Mississippi last year but could not find a place to live in the pricey market. She said many of the people who used to live in her neighborhood have been forced out by rising prices.

“Housing is a human right. I pay bills there. I pay water, PGE, internet. We live there,” Walker said. “We want to purchase the home … it needs to belong back in the hands of the community. It was stolen through the foreclosure crisis.”

The company bought the home for $501,000 and took possession days after the women moved in, said Sam Singer, a spokesman for Wedgewood. The 1908 house has one bathroom and is about 1,500 square feet (139 square meters).

This “is a straightforward situation of illegal entry and illegal occupation,” Singer said. “They broke into the home … and they have no legal or ethical defense for their action.”

Lawyers for Walker argued in court last week that housing is a right and the court should allow the women to possess the house, particularly because it was vacant for a long time and the alternative would be to send them to the streets.

Assemblyman Ash Kalra, a Democrat from San Jose, said Tuesday that elected officials need to ensure “opportunistic landlords and corporate landlords” don’t “keep our homes vacant.”

Many Oakland residents say they are being pushed to the fringes of the Bay Area as they struggle to keep pace with housing costs.

Federal officials said last month that an uptick in the country’s homeless population was driven entirely by a 16% increase in California, where the median sales price of a home is $500,000. It’s higher in the San Francisco Bay Area.

The situation is so dire that Democratic Gov. Gavin Newsom approved a statewide rent cap on some properties.

Yet there are four vacant homes for every homeless person in Oakland, said Leah Simon-Weisberg, an attorney for Alliance of Californians for Community Empowerment, which is helping the mothers in court.

The empty eyesores are in devastated, predominantly minority neighborhoods, she said, adding that developers like Wedgewood “acquire the property, they kick the people out who are in it, and they sell it.”

Singer said Wedgewood buys distressed properties, hires local workers to fix up the homes and sells them, hopefully to first-time homebuyers.

He said the company will continue with its eviction proceedings against the women if the judge rules in the company’s favor, as expected.

___

Williams reported from San Francisco. Associated Press writer Janie Har in San Francisco also contributed to this story.

Article source: https://www.sfchronicle.com/news/us/article/Homeless-women-who-took-over-California-home-gain-14956779.php

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Editorial: The Bay Area housing market has finally priced everyone out

Has the Bay Area housing market finally priced itself out of reach for, well, everyone?

According to a new survey of more than 100 economists and real estate experts, the answer is yes.

The panelists, who assessed the nation’s housing markets as part of a price expectations survey for the real estate website Zillow, said they expected the nation’s hottest real estate markets in 2020 to be in the South. Austin, Texas, took the top honor — a whopping 83% of experts believe it will outperform the national average of 2.8% housing price growth in 2020.

As for the nation’s worst real estate market in 2020?

The winner of that unfortunate designation is the Bay Area. San Francisco was at the top of the list for expected underperformers — 64% of experts believe it will underperform in 2020. It was closely trailed by San Jose: 61% of experts believe that city’s housing market will underperform.

A large proportion of those experts believed that the Bay Area will not just underperform, but actually see declining home values: 57% expect home values to fall in San Francisco, and about half expect the same for San Jose.

After the last several years of torrential real estate growth, underperforming or even falling home values in the Bay Area wouldn’t necessarily be a bad thing.

High home prices have placed homeownership out of reach for all but the wealthiest in the Bay Area. They also influence the cost of rent, which has grown far faster than the average Bay Area resident’s wages.

They affect construction and development costs, too. The Bay Area experienced 6.7% growth in construction costs in 2018: According to Turner Townsend’s 2019 survey of international construction markets, San Francisco was the world’s most expensive place to build.

Local housing prices flattened out last year, and construction costs slowed, too. The question is, will the Bay Area experience slower growth for the right reasons?

Unfortunately, the answer is no.

In a well-functioning housing market, housing prices would be falling because increases in demand would result in increases in new construction.

In the Bay Area, a major reason for the slowdown is that people are leaving — and taking their need for housing with them.

According to the state Department of Finance, California lost about 197,600 people to net domestic migration during the year that ended July 1. It’s no accident that Texas, one of the states to which California is losing the most residents, has historically had ample housing development at a much lower cost.

Losing these residents means losing their ideas, energy and contributions to the economy. High housing prices have also meant that fewer people can move here, where they’d have access to the Bay Area’s specialized jobs and markets — a situation that has exacerbated income inequality and will eventually eat away at our relative economic advantages.

The Bay Area housing market may also be suffering from the Trump administration’s ill-considered cap on state and local tax deductions, which have disproportionately affected home price appreciation in states with higher property taxes and mortgage interest deductions.

In both instances, flattening or even declining home prices in the Bay Area are the result of flawed public policy and unnecessary restrictions on growth. Without solutions, a pause in home appreciation might give the Bay Area a breather — but we’ll still be stuck with the problems that brought us to this place.

This commentary is from The Chronicle’s editorial board. We invite you to express your views in a letter to the editor. Please submit your letter via our online form: SFChronicle.com/letters.

Article source: https://www.sfchronicle.com/opinion/editorials/article/Editorial-The-Bay-Area-housing-market-has-14950641.php

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Southern California real estate company under scrutiny following legal battle in Oakland


  • 25987 920x920 Southern California real estate company under scrutiny following legal battle in Oakland

    The occupation of this white house, seen at center, is being argued as a public housing issue. A real estate company that purchased the property in July is asking that a group of women illegally living in the home be evicted.

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    The occupation of this white house, seen at center, is being argued as a public housing issue. A real estate company that purchased the property in July is asking that a group of women illegally living in the

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    Photo: Google Maps

  •  Southern California real estate company under scrutiny following legal battle in Oakland

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The occupation of this white house, seen at center, is being argued as a public housing issue. A real estate company that purchased the property in July is asking that a group of women illegally living in the home be evicted.

less

The occupation of this white house, seen at center, is being argued as a public housing issue. A real estate company that purchased the property in July is asking that a group of women illegally living in the

… more



Photo: Google Maps


The Oakland property at the center of a legal tug-of-war between a group of homeless mothers and a Southern California-based real estate company has revealed an extensive network of homes owned by the business, according to an investigation by NBC Bay Area.

Wedgewood Inc is the owner of the vacant West Oakland three-bedroom home that was illegally occupied by the homeless women back in November; the group was served an eviction notice by the company, but is currently fighting the eviction in court, arguing that housing is a human right. The women have since organized as the group “Moms4Housing” and they are looking to call attention to the housing crisis in the Bay Area.

In its investigation of the company, NBC Bay Area identified at least 98 LLCs owned by Wedgewood that operate in the Bay Area. It “owns at least 125 properties across eight Bay Area counties” — not including Solano County — with 31 of its LLCs owning property in the Bay Area since 2015. The company specializes in buying homes on the cheap, renovating and flipping them. The 125 homes only reflects the number of houses currently owned by the business, not the number of properties it has taken on in total over the years.


READ ALSO: Bay Area population growth rate lowest in 15 years

Moms4Housing called Wedgewood a “displacement machine” and that “investor-owned properties should be given back to communities who have been displaced by soaring rents,” Mother Jones reported.

“[Moving into the vacant property] was an answer to a desperate need,” Dominique Walker, one of the occupants of the West Oakland home, told the magazine. “It should be illegal to have vacant houses and have people sleeping on the streets. I feel like there’s a moral crisis. There’s a profiteering crisis … I think that’s where the crime lies.”

According to the magazine, the West Oakland property had been unoccupied for two years before Wedgewood snapped up the property in July. The property remained vacant until Walker and another mother began squatting at the home. By the magazine’s estimation, there are 4,000 “vacant parcels” in Oakland, about the same reported number of homeless individuals living in the city.

“We feel like we have a right to this space and this home,” Walker said to Mother Jones. “This home belongs back in the hands of the community from which it was taken.”


RELATED: Owners of occupied house tell Oakland councilmembers to encourage women to leave

Alameda County Superior Court Judge Patrick McKinney said at a Monday hearing that he would rule on the eviction case at an unspecified later date, saying, “I want to carefully consider the issues that have been raised.”

Wedgewood has rejected all suggestions that the company should negotiate to sell or give the property to the two women, stating in a letter issued Sunday that, “We will not meet or negotiate with the squatter’s organization that broke into our house and is illegally occupying it.”

To read more about Wedgewood and its Bay Area properties, along with other states the company operates in — and lawsuits filed against the company — head over to NBC Bay Area.

Dianne de Guzman is a Digital Editor at SFGATE. Email: dianne.deguzman@sfgate.com

Article source: https://www.sfgate.com/bayareahousingcrisis/article/Moms-4-Housing-Wedgewood-real-estate-Bay-Area-14942655.php

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Home Prices Expected to Decline in Bay Area This Year: Experts

Good news for anyone hoping to a buy a home in the Bay Area this year: Prices are expected to come down.

Real estate tracker Zillow asked experts to predict where the market will go, and as a whole, the group thinks prices will rise slightly across the country.

In the Bay Area, experts believe the market will soften, especially in San Jose and San Francisco. Specifically, 64% think the San Francisco housing market will underperform, and 61% think San Jose will move lower, largely because of already high prices but also because people are cashing in and moving to other cities.

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“We want to sell this house in San Jose because for the same price we can have multi-residential, with six units here or there in the U.S.,” said Sophia Delacotte of Compass Real Estate, explaining the homeowners presumed thought process. “That is the trend.”

Among the cities expected to outperform the national average: Austin, Texas, which is one of the most popular destinations Bay Area residents are moving to.

Meanwhile, home prices in San Francisco dipped slightly in October, compared with a year ago, according to the SP CoreLogic Case-Shiller Index released Tuesday.

San Francisco home prices slipped 0.4 percent compared with October 2018. Prices in Los Angeles and San Diego rose 2 percent and 2.9 percent.

Nationwide prices rose 3.3 percent in October. The highest gain among 20 cities in a composite index was 5.8 percent in Phoenix.

San Francisco was the only one of 20 cities in the composite index to see an annual decline in prices in October.

Article source: https://www.nbcbayarea.com/news/local/home-prices-expected-to-decline-in-bay-area-this-year-experts/2209685/

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