Your Autumn 2014 Bernal Heights Real Estate Summary: Historically Bonkers, with a Chance of Maybe Somewhat Less Bonkers

downingnov20142

Let’s review some fresh-squeezed real estate data, shall we? We begin with a summary of recent Bernal Heights home sales, compiled by Downing & Company:

October proved to be the busiest month of 2014 (so far) for home sales in Bernal Heights. Last month 20 homes traded hands, which was a spike compared to most months, where the number of transactions often register in the low to mid teens.

With cheap debt available (mortgage interest rates are hovering around 4%) home prices remain elevated. During October the average price in Bernal Heights clocked in at a $1,251,550 relatively close to the record high recorded in July at $1.3 million.

The market remains hot, yielding very quick transactions. The homes that sold last month in Bernal Heights were on the market for an average of only 20 days before going under contract.

Visit the Downing website for more smutty detail on each of the homes in the stylish October 2014 Bernal Sales Mix mosaic, shown above.

Meanwhile, the number-crunchers at Paragon have been thinking about how sparkly Bernal Heights looks right now, in the context of the overall San Francisco residential market. Paragon’s exceptionally smutty San Francisco Home Price Appreciation report reveals that Bernal has experienced the City’s third-highest rate of home appreciation since the crash, up 24% since its previous 2008 peak:

Appreciation-Percentages_by-Neighborhood

Paragon’s analysis:

Bernal Heights: Up 57% since market bottom; up 24% from its previous market peak in 2007. Bernal Heights has become one of the most popular, more affordable, go-to neighborhoods for house buyers who like the neighborhood ambiance of the general Noe Valley area, but were priced out there by its rocketing prices. Bernal Heights’ houses – with a median price about 45% lower than Noe Valley’s – have looked likeextremely good values in comparison. Buyer competition for new listings became particularly fierce in the past year or so.

That quest for the  “ambiance of Noe Valley” thing seems rather suspect, but your motivations may vary.

Our bloggy journo-friends at Mission Local pulled together some data from Redfin that puts Bernal real estate in neighborly context. Overall, Bernal has moved in line with overall trends, though we do appear to have gained a little bit of mojo relative to Potrero Hill:

Screen Shot 2014-12-01 at 10.53.18 PM

Screen Shot 2014-12-01 at 10.53.53 PM

In another recent Paragon report, we spotted this longer-term snapshot of contemporary Bernal Heights real estate history:

Bernal_Non-Dist_SFD_Avgs_Numbers

Though no visualization was provided, some of the budding data scientists among us may notice a rather pronounced up-and-to-the-right trend in the historical data.

Yesterday, however, the SF Chronicle reported that things may be settling down somewhat. Maybe:

Listen up, beleaguered buyers. According to Paragon Real Estate, rationality may be returning to the San Francisco property market. “The San Francisco market definitely cooled after the overheated feeding frenzy of the first half of the year,” according to the real-estate firm’s November report. “The competition between buyers for new listings declined to more rational levels: Homes that might have received 5 to 10 offers earlier in the year received 1 or 2 or 3.”

While getting three offers is still something sellers in most other marketplaces can only dream of, in San Francisco it could be a sign that pricing has finally reached its peak.

IMAGE: Top. October 2014 Bernal homes sold, via Downing & Company

13 thoughts on “Your Autumn 2014 Bernal Heights Real Estate Summary: Historically Bonkers, with a Chance of Maybe Somewhat Less Bonkers

  1. Word on the street is that housing prices in SF have reached their peak. Tech companies have capped the salaries they’ll pay, and people are beginning to burn out from programming. I’m reminded of the old Steve Jobs quote when was about to hire former Pepsi CEO John Sculley. Sculley asked, “What kind of retirement plan do you have?” Jobs laughed and said, “We don’t. We burn out our people before they’re old enough to retire.” Well, the first wave of programmers in Dotcom 2.0 are burning out. I know many people who have left the business for less stressful jobs and quieter pastures.

    Notice that everybody and their uncle are teaching programming. Even ghetto programs run by non-profit agencies are teaching programming. The emphasis is to teach programming as a second language. What this will mean is that there will soon be a flood of programmers who will settle for lower and lower pay, just like the nurses and clerk typists of the past.

    Don’t believe it? Used to be that a tech support person working for a major company could expect to make $50 an hour as an employee. Today, Geek Squad starts their tech support people out at $18 an hour. The market is flooded with college graduates who learned tech support in school.

    I predict about 9 months more appreciation in housing prices, but a gradual appreciation, then a plateau, and then a fairly steep drop. I previously predicted the fall of Dotcom 1.0 in 2000 as well as the re-emergence of PG&E’s stock price one week after bankruptcy. So, I think I have a decent track record on this kind of stuff.

    • Nah 🙂 Your obviously-an-industry-outsider anecdotes don’t really ring true.

      Whether supply / demand for skills waxes or wanes year to year, the factors you have mentioned are completely unrelated. Your comment reads like far-from-the-source opinionating, nothing real.

      Sorry, no disrespect intended. But this is kind of just your idle conjecture.

  2. “The market is flooded with college graduates who learned tech support in school.“

    You can get a bachelors in tech support now?

    • Nearly every community college in the country now offers an AA or an AS in computer tech support. This wasn’t true 10 years ago. So, the flooding of the market has driven down the wages of tech support people. Same thing has begun to happen with programmers. Used to be that a programmer commanded about $100 to $150k depending on language and expertise. Today, I know of recent graduates working for less than $60k doing fulltime programming.

      • Nothing new here. There is a perpetual goal to drive down US wages across the board. The company I work for uses India labor to undercut US wages. I got my decent IT job nearly 20 years ago, and I’ve been holding onto it for dear life, knowing most other job opportunities will not pay nearly as well.

      • As long as people such as Ed Lee kowtow to big businesses this will always be the way. (Not to sound racist, but the very term “kowtow” is a Chinese expression meaning to be subservient and servile toward an overloard.)

        Thankfully, people who work in service industries such as hotels and restaurants have awakened and begun to organize unions. When I was a kid people working in restaurants, hotels, and other service industries made enough money to afford to buy homes! They worked “honest” jobs which were not considered “entry level”.

        As for me and tech, I’ve moved away from serving individuals, since Geek Squad has taken most of that business away. I’m now specializing in businesses such as hotels and cafes, but the next level of tech support businesses will be taking that business away in the next 5 years.

        So, I go back to what my dad used to say. He said two things: You’ll always have work if you can do something where you use your hands, and you’ll always have work if you can do something that rich people want. For the latter, I’ve moved into event promotions since rich people, after buying their homes and boats, spend a lot of money on partying. I’ve already put on shows for Oracle, Apple, and various smaller companies nobody’s ever heard of.

        But back to the main topic: Mark me word that housing prices will start sliding sooner rather than later.

      • People working in IT / tech support aren’t the ones driving this at the margins. That’s like imagining that car mechanics / fix-it guys built Detroit.

  3. Broadly speaking, SF home prices plateau occasionally, but rarely fall, and only for a minute when they do. If prices take a “fairly steep drop,” that would be news indeed. Sub-prime debacle didn’t do it. Recession didn’t do it. Dotcom bust didn’t. Loma Prieta. Zombie Apocalypse… “up” seems to be the only trajectory. I’d gladly give up a lot of appreciation in my house in exchange for less cashing out of neighbors I like, and rent attacks on friends. But supply/demand, blah blah blah…

    sigh….

    • The rapid rise in real estate prices has exaggerated the degree to which normal transitions take place. That’s what is frustrating for some people, besides the difficulty buying something.

      • Yup. In other parts of the country, you buy a house, live in it your whole life, sell it when you retire to Florida for double what you paid for it. Here, 600% appreciation is normal-ish. I never take it for granted that I stumbled and lucked into my little Bernal house many moons ago, when a blue-collar worker could struggle and scrimp and sneak into what was then considered by some to be “kind of a sketchy, shoot ’em up neighborhood.” The rest didn’t even know it existed.

        And now it is apparently trendy and glamorous and spiffy. (I wish I could claim I knew this was going to happen and had a master plan.)

        I wouldn’t be able to afford a planter box or a bird house within 100 miles of here now…

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