I recently attended the Luxury Marketing Council of San Francisco’s event hosted by Gaul Searson showroom in the Design Center. There the Harrison Group presented their Annual Survey of Affluence and Wealth in America and summarized highlights from their recently published book, The New Elite…Inside the Minds of the Truly Wealthy.
It was an extremely informative presentation which I captured some of for your viewing. I hope you enjoy it.
[youtube=http://www.youtube.com/watch?v=YSemV5HOz0E]
The iconic San Francisco neighborhood at the very, very top of Clarendon Heights built in the late 1950’s and early 1960’s with street names like St. Germain Avenue, Mt. Spring Avenue and Palo Alto Avenue with panoramic bridge-to-bridge views and made famous in the 1962 film, Experiment in Terror, one of the first ’stalker’ films staring Lee Remick who’s character lived at 100 St. Germain Avenue will soon have a number of new listings hit the market practically all at once.
50 Palo Alto Avenue, San Francisco, California
My source tells me that both houses at #20 and #30 Palo Alto will be coming on the market as well as two other homes in the neighborhood. And the price range of the homes will be between $2.8million to over $4million. The most recent sales were two homes that sold in December. #50 Palo Alto was remodeled and asked $1.75mil and sold for over $1.87mil. And a custom 1950’s home belonging to the former owner of Hearth Real Estate on Castro Street was asking $1.595mil and sold for $1.7mil.
166 Palo Alto Avenue, San Francisco, California
The new prices are a far cry from those ‘bargins’. And with such an increase in supply, we’ll see what the overall effect will be. Is it just a Spring market increase or are some residents needing to ‘readjust their financial position’ in light of the ‘new reality’? Only time will tell. But, I’ll keep you posted.
All the Best,
Lance
415-793-6140
Cheif Economist for the California Association of Realtors, Leslie Appleton-Young, presented up-to-date San Francisco, Bay Area and California real estate market data yesterday at a meeting in Marin which I attended. Her data was intriguing to me because of my earlier column in The Castro Courier (see earlier posting). Ms. Appleton-Young went into great detail on the segmented market. She referred to the huge hit the lower end of the market has taken and so far the luxury market (defined as approximately $1million or more) has stayed flat. The forecast according to Ms. Appleton-Young for the luxury end of the market is that it is just now starting a correction which will take up to 1.5 – 2 years before reaching its trough (see my earlier remarks). And, this correction is anticipated to be in the range of 15% – 20%.
My “on-the-street” experience bares out a correction on the luxury end of the market in San Francisco of around 10% – 15% already. Ms. Appleton-Young makes the point of saying that you cannot have two disjointed segments of the market where the lower end has taken a hit of around 50% statewide without there being some pain felt in the upper luxury end of the market, especially given all the other aspects of the current economy that she detailed quite well, i.e. unemployment, state budget issues, federal stimulus issues, you name it…
So as I had mentioned in my column, this downward pressure is creating a tremendous buying opportunity for those seeking luxury properties. The low end of the market (i.e. $500k and less) in most sub-markets around the Bay Area is sitting with around a 3 month supply of housing which is considered “below normal” due to the huge correction in pricing which has brought out investors and buyers alike. Watch out for something similar is coming for the luxury end of the San Francisco, Bay Area and statewide real estate market too because it is sitting with a 13 month inventory. Wow! That really puts it into perspective considering a normal market is thought to have about a 6 month supply of housing. As Ms. Appleton-Young stated, “prices are sticky on the way down, however, more luxury end homes will be sold because the owners will no longer be able to carry them.”
Internationally, this appears to be the same thing I witnessed while on the island of Bonaire, N. V. in the Caribbean. I spoke to Mark Van Hooten at REMax Paradise Homes (www.bonairehomes.com) in Kralendijk, Bonaire who was helpful with information on the local market. He comfirmed that the low end of the market is strong and while he didn’t admit the luxury real estate market is suffering internationally on Bonaire it appears from our driving tour of the island that the greatest number of listings are luxury homes. This small Caribbean real estate market is mirroring our San Francisco market. I’ll have more on San Francisco’s market and other national and international destinations in upcoming postings. Hope you enjoy the video.
All the Best,
Lance[wpvideo BsTPLaLE]
