All Forum Posts by: Houston Garcia

@Michael Arreola Try Suit Supply in Santana Row! I've gotten a few suits from the SF location in Union Square. Great quality starter suits (Italian Mills, good fabrics & cloths) for $500-800 usually. Can't beat them.  

If you're anticipating a lot of usage out of your suit, I'd highly recommend getting suit separates with two pairs of the same pants (since the pants get worn out much quicker). Get everything tailored in-store too!

@Account Closed Everyone's talking about the potential repeal of Costa Hawkins for the past few weeks. It will be quite interesting to see how it turns out. If it gets repealed, it will put an additional squeeze on inventory levels...

Interestingly enough, I'm hosting a workshop on dispelling myths about Condos & TICs on August 15th haha. Generally speaking, there's usually a 5-7% discount for a TIC vs. a Condo. Since inventory is still quite limited, I've seen a lot of entry-level TICs close in less than a week, with others sitting on the market for over a month. TICs over $1.5m usually sit for 2-3 months - could potentially get more of a discount on those. If you have any questions about how to finance TICs, I can connect you with a TIC specialist lender.

@Hannah Walker Off-market is always a great way to go if you have the opportunity! Apologies for my long-winded two-cents, but this is a question I encounter on an almost daily basis.

I do have to disagree with the idea of waiting for prices to go down to buy, or the general notion that prices will correct to such a degree that market values will significantly drop. The market here is quite unique compared to the rest of the nation, and even to the rest of California for that matter. 

While homes in SF consistently keep getting more expensive, that doesn't necessarily mean we are going to have a major correction. Most corrections in SF happen cyclically or seasonally - particularly for the luxury market (above $2.5m). But anything under that pricepoint is considered a "starter home" (which is crazy in itself, I know). But that means that the buyer pool for properties up to $2.5m is quite large, and extremely competitive. 

Adding to this factor is the fact that real estate development in San Francisco is an uphill battle (politically and economically). Superficially, there is a supply and demand issue that isn't going to be "fixed" anytime soon; especially with local politics being the way they are, and the rising costs of labor and materials. Going deeper, there is a ton of data backing the fact that the SF real estate market performs quite strong, historically speaking.

The 2008 crash was quite abnormal in is scale, and was greater than any other downtown going back to the Great Depression. And while the prices here won't continue to spiral upwards forever, they won't come down to a significant degree - they'll likely plateau for a moment. Since you plan on being here long-term, the best way to beat the cycle is to buy a home with a long-term strategy, where the monthly cost is affordable (never stretch yourself to be "house poor"). Quoting the NY Times: “Renting can make sense as a lifestyle choice... As a means to building wealth, however, there is no practical substitute for homeownership.”

@Doug Dattawalker - I live and breathe SF real estate 24/7 (since it's what I do for a living), and I can confidently say that the overall market isn't really cooling off at all here. While people may be waiting for there to be a "crash" here, it won't happen. We are due for a slight correction, but those generally quite nuanced and they happen on a neighborhood-by-neighborhood basis (example: the prices drop 2%-5% for a quarter or two in a specific neighborhood).

Q2 set a benchmark. 1/3 of all SFH sales were sold for $2m+, and the median sale price for a SFH was $1.62m, which was a 13% YTY increase. The only section of the market which does see regular cool-off periods is the luxury market (which are properties above $2.5m+). This segment of the market is *extremely* seasonal, and is generally is hit the hardest in December and Mid-Summer. But most properties under the $2.5m pricepoint (which is considered a "starter home") are still quite competitive - particularly single-family homes versus condos (which are marginally more plentiful).

Inventory is still at an all-time low, and we've basically accepted that as the new normal for the past few years - especially due to the fact that there is practically no development in the SFH arena - only for new apartments/condos - and those can barely keep up with the demand.

Just to put things into perspective, in July there were approximately 197 homes on the market, which translated to 0.91 month's supply of inventory. For condos, there were 379 on the market, which translated to a 1.43 months supply. Just take a look at the % over list price that properties actually sold at: the extremely limited inventory, combined with the strong demand shows no signs of slowing down. 

@Randall Barrett Nice renovation - love the exterior and the designwork. Congrats on a job well done!

Yep - it's actually at $295k for 473 SqFt, a former colleague of mine has the listing - finally pending now after 300+ days! It's at the Citrino building on S Van Ness. I thought it would be great for a smoke shop - but don't think the HOA would like that!

$200k will get you nothing here sadly (SF Bay Area). I've seen 400-500 SqFt commercial condos (that would be great for a barbershop for maybe 2-3 chairs) going for $350k-400k. Crazy!

@Diana H. I agree with Saj. You can still get 2-4 unit buildings in the Bay for under $1m. There's quite a few cash-flowing buildings in the southern parts of SF/Upper Peninsula under $1.5m. 

If you expand your search to Alameda County (specifically Oakland) - there are TONS of 2-4 unit opportunities (and even a handful of 5+ units) for investors under $1m. But I doubt that will be the case in 5 years time, with the the rapid pace of growth that is occurring in those areas. 

@Zachary P. If you've rented it out the smaller unit/used it as an investment property and used the larger unit as your personal residence, I believe you can exchange the smaller unit, but the % you can exchange will be a bit nuanced. 

If you just want to sell the unit without exchanging, you must pay taxes on the sale. As you probably know by living in SF, condo-converting definitely adds a 5%-7% bump on the value of the unit vs. selling it as a duplex or a TIC.

Look into the Section 121 exclusion as well, but it seems that it may only apply on your owner-occupied larger unit. Either way, I would talk to your accountant/tax specialist and also to 1031 specialist such as Greg Rocca of Pacific Realty Exchange, who is one most well-known 1031 experts in San Francisco. 

@Kell Caro thanks for this valuable information - will be interesting to keep track if the measure passes. How is this news generally being received amongst the local community/your neighbors?