By Nina Hatvany
SALE PRICES of real estate in San Francisco’s southern neighborhoods have taken off dramatically in recent months. Noe Valley, Potrero Hill and South Beach are especially sought after by people who commute to the Peninsula, but still want to live in the city, or couples in which one person commutes south or to the East Bay. The south side generally offers better weather, proximity to the burgeoning restaurant scene in the Mission District, and often better access to muni or bart for commuters.
In contrast, the more established northern neighborhoods are still desirable, but aren’t experiencing the same surge in popularity, despite the views, the bustling retail streets and easy commuting to downtown and to Marin.
Areas like Pacific Heights, Presidio Heights, Cow Hollow and Russian Hill will always retain their allure. They are what I consider to be “blue chip” quality in the long term. But at the moment, while attention is focused southward, the properties coming up for sale in the northern neighborhoods are often a comparatively better deal — either by dollars per square foot, or because there are fewer people bidding on them and buyers therefore don’t encounter quite the same kind of bidding frenzy.
One could argue that now might be the time to buck the trend and revisit the traditionally more expensive neighborhoods, considering the southern craze.
But gut feelings on the real estate market have to be backed up with evidence, and in this case the evidence speaks volumes about how the southern neighborhoods are quickly catching up to — and in some cases surpassing — northern values, at least in certain price ranges.
For example, consider a typical search by a younger couple interested in both Pacific Heights and Noe Valley — arguably the most expensive neighborhoods in each of their geographies. Looking at recent sales results, I found that one- and two-bedroom condominiums with parking priced under $2 million were selling in the last three months in Noe Valley at an average of 13.2 percent above asking price and roughly $879.16 per square foot.
That’s hundreds of dollars per square foot more than prices in these up and coming areas just a few years ago. On average, the homes were on the market from the start of marketing to closing for only 22 days, meaning there was a high percentage of all-cash and preemptive offers.
In contrast, similar Pacific Heights home sales were averaging only 8.9 percent over asking price (indicating less competition) and $880 per square foot.
That’s a difference of only 84 cents per square foot between the neighborhoods — despite the fact that historically Pacific Heights has been San Francisco’s most expensive neighborhood.
This evidence speaks volumes. The competition for first-time or mid-range home buyers has soared in the southern neighborhoods, and there may well be some competitively priced deals to be had by turning one’s gaze back toward the bay. I will be encouraging clients to join me in living on the north side
Nina Hatvany is a real estate agent with Pacific Union.