The average ‘fixer-upper’ in S.F. is now $920,000
In San Francisco, homes labeled “fixer-uppers” sold at an average of 15 percent above the list price in 2016, with a median sale price of $920,000, according to a new year-end report from Paragon Real Estate. Though the price is high, it is a substantial discount from the 2016 median sales price of all S.F. single-families: $1,325,000.
Paragon looked at several other “special circumstances” in 2016 home sales, including the median home price for a home wth an elevator ($4,869,000), a view of the Golden Gate Bridge ($2,569,000) and a wine cellar ($3,050,000). It also looked at factors that could lower home prices, including a lack of parking ($1,150,000) and probate sales ($952,500). The only factor that lowered prices more than the “fixer-upper” designation was marketing a home as “tenant-occupied,” which sold at “a big discount” of $838,000, due to tenant protection measures, among other things, according to Paragon.
Two of the most affordable neighborhoods in the city had almost 40 percent of the home sales in 2016. District 10 (Bayview, Excelsior, Portola, Visitacion Valley) had 19 percent of sales and District 2 (Sunset and Parkside) was just behind with 18 percent of sales. Only 5 percent of sales occurred in tony District 7 (Marina, Pacific Heights, Cow Hollow). The homes that did sell there went for a median price of $3,110,000.
By far the largest percentage of condos were sold in District 9 (South Beach, SoMa, Mission Bay), which had 35 percent of the market, and this does not include hundreds of new-project condo sales which were not reported on the MLS. According to Paragon, most of these sales were also clustered in District 9, as well as the Van Ness Corridor and Hayes Valley. These new condo projects added a slew of new supply to the condo market, where units also tend to turn over more frequently than single-family homes, leading to a cooling condo market.
Paragon notes that the single-family sector has lost some heat as well. But there are numerous factors keeping prices high for the foreseeable future, including almost no new homes being built and a median nine-year hold on existing homes. This is up from an average of six years between 1987 and 2008, with more owners choosing to rent rather than sell, Baby Boomers “aging in place” and fewer job changes.
“It all boils down to a continuing strong demand for houses meeting a steadily declining supply: Even with a market that cooled somewhat in 2016, competition between buyers continues to push house prices up, especially in more affordable neighborhoods,” the report summarized. “The equation is different for condos, which has become the dominant property-sales type in the city: A cooling market is meeting increased supply. There has been no crash in condo prices, but areas with the greatest quantity of new condo construction have seen small declines.”