In San Francisco’s Outer Sunset neighborhood, the sidewalks stretch a dozen feet wide, thanks to residents who have paved over their entire front yards – and city agencies that do little to cite them, though the practice has been outlawed since 2002.

“It’s illegal to pave over your yard, but it’s pretty widely ignored, and people do it with impunity,” said Jonathan Frank, 56, a retired teacher who has lived on 33rd Avenue for 10 years. “The two main reasons are that they want an extra parking spot, and it’s a pain to take care of the garden area.”

Under city law, at least 20 percent of a front yard must consist of permeable surfaces with vegetation, mostly to allow for proper drainage and to keep the neighborhood looking green. Homes can be reviewed for compliance every time an owner does construction on the driveway or property.

The Board of Supervisors passed the ordinance in 2002, but the law didn’t have much bite until 2008, when lawmakers gave the city the power to fine homeowners $500 if they ignored a 90-day warning to add greenery.

But even that wasn’t enough to break up the concrete – many residents thought that if they paid the fines, they could keep their front yards as is. Supervisor Carmen Chu got the penalties stiffened to $250 for each day beyond 30 days’ notice.

The fines may be steep, but the Planning Department doesn’t have the staffing to monitor for compliance, said spokeswoman Joanna Linsangan. Enforcement is 100 percent complaint-driven, she said.

“As it stands right now, we do have a very high backlog, and so there are a number of cases that we still have to review and complaints we have to look into,” Linsangan said.

The department has received 163 complaints citywide related to paved-over front yards since 2002, 88 of which came from Chu’s district. As of December, 95 targets of complaints had brought their front yards into compliance.

The Planning Department is allowed to be lenient if residents have extenuating circumstances, such as financial hardship, Chu said.

“I can tell you, just taking a look at some of my neighbors who have paved portions of their yard, a lot has to do with the fact they’re getting older in age, their kids are no longer in the household, or they don’t have the physical ability to maintain it,” Chu said. “But the rules are there to help with the curbside appeal issues and primarily the environmental issues.”

If rainwater can’t flow into the ground, it drains into the sewer system. Heavy, sudden rains can overwhelm the system and lead to sewage spills, such as one near Ocean Beach in November that forced the closure of a stretch of sand for cleanup.

The concrete-coated front yards also make tempting parking spots, but it’s illegal to put a car there – the planning code forbids blocking any part of the sidewalk or driveway in front of the house.

Parking control officers will ticket cars that violate the law, said Paul Rose, a spokesman for the Municipal Transportation Agency. Enforcement for blocked sidewalks is also largely complaint-driven, Rose said.

Courtesy of SF Chronicle

Limited Inventory of Homes Stirs San Francisco Housing Market

The fundamental law of supply and demand is one that can be found operating in the current San Francisco housing market. With a limited inventory of homes for sale in the city, sellers are encountering a wave of all-cash buyers, multiple offers and competitive bidding wars. The median price for a single-family home has now reached $800,000, which is the same level it hit when it last peaked exactly two years ago in June of 2010.

Single-Family Home Sales

Since June of 2011, the inventory of single-family homes for sale in the city has fallen by 40.2 percent, while the number of homes under contract has risen by 1.4 percent. At the end of last month, the total number of homes sold was 255 properties, a 3.4 percent decline from last year. Nonetheless, at month’s end, 6 out of the 10 residential San Francisco districts experienced increases in the total number of homes sold.

For homes that were priced below $700,000, the months of supply inventory fell by 72.6 percent to a reading of 0.9. For higher-priced homes between $700,000 and $1.2 million, the months of supply inventory also dropped, by 50.1 percent to 1.3 months. These exceptionally short time frames further illustrate the effects of a limited supply of inventory in San Francisco’s fast-paced real estate market.

One area of the city which has experienced an increase in sales activity is the southwestern section, known as Lake Merced. As of June 2011, the number of homes sold in this area increased by 71.4 percent to a total of 24 properties sold. Real estate in this area is generally more affordable, compared to other parts of the city, yet there are neighborhoods such as Pine Lake Park and Merced Manor which offer larger and more upscale homes. The neighborhoods around Lake Merced offer an array of recreational activities for outdoors enthusiasts and people looking to stay or get into shape. The median price for a home here is $597,500, which is up by 10.6 percent from 2011.

Another area of the city which has experienced healthy sales activity is the central-eastern section, widely known as South of Market, or SOMA for short. Compared to this time last year, the number of homes sold in this area increased by 40 percent to a total of 21 properties. The central-eastern section is not limited to the confines of SOMA’s commercial and condominium corridor, but also extends to such neighborhoods as Bernal Heights and Potrero Hill, which both offer more laid-back, cozy and family-friendly communities. Bernal Heights and Potrero Hill are ideal for home buyers who want to be close to the city but also yearn for amenities such as a small garden or yard. The median price for a home in this location is $835,000, up by .6 percent from 2011.

Condominium Sales

While the inventory of condominiums for sale in the city also dropped in the same manner as single-family homes, the number of condominiums under contract increased by 34.9 percent, while the number of condominiums sold rose by an encouraging 37.6 percent.By the end of the month, 8 out of the 10 San Francisco residential districts experienced increases in the total number of condominiums sold.

One area which saw a robust increase in condominium sales activity is the Marina and Pacific Heights neighborhoods in the northernmost section of the city. Compared to one year ago, the number of condominiums under contract has risen by 85 percent, while the number of condominiums sold has increased by 35.7 percent to a total of 38 units. Successful professionals, both young and old, who prefer to live in what many consider to be “old San Francisco,” will find satisfaction in the Marina and Pacific Heights neighborhoods, where luxury condominiums reside next to posh shopping destinations and unique restaurants. The median price for a condominium here is around $1,802,500, which is up by 32.1 percent from 2011.

Outlook

A new survey published by Fannie Mae reports that confidence in the U.S. housing market is increasing among Americans at the same time that most believe the country’s economy is on the wrong track. The survey found that 48 percent of respondents believe that home prices will stay the same over the next year, while 35 percent of respondents believe that home prices will rise. Respondents who said they believe mortgage rates will rise in the next year decreased from 41 percent in May to 37 percent in June.

The consumer confidence index, which had declined slightly in May, fell further in June. The index now stands at 62, down from a reading of 64.4 in May. Lynn Franco, director of the Conference Board Consumer Research Center, says that, “Consumers were somewhat more positive about current conditions, but slightly more pessimistic about the short-term outlook. Income expectations, which had improved last month, declined in June. If this trend continues, spending may be restrained in the short-term. The improvement in the Present Situation Index, coupled with a moderate softening in consumer expectations, suggests there will be little change in the pace of economic activity in the near-term.”

Governor Jerry Brown recently signed into law legislation aimed at increasing protections for California home owners facing the possibility of foreclosure. As reported in The Sacramento Bee, “The legislation seeks to curb ‘dual tracking’ by prohibiting lenders from starting the foreclosure process while a loan modification is being negotiated, expands notice requirements as part of the foreclosure process and requires large institutions to give borrowers a single point of contact for dealing with their loan issues. It also gives borrowers opportunities to go to court if they are wrongly foreclosed upon and the bank does not correct its mistakes.”

The San Francisco Chronicle reports that, “Since early 2010, San Francisco’s number of tech sector workers has grown by 13,000, hitting 44,000, according to an analysis of State Employment Development Department data, said Colin Yasukochi, director of research and analysis at CNRE, a commercial real estate firm.” The article goes on to report that, “In the same time frame, 150 tech firms have set up shop in the city, bringing the total number of such enterprises to 1,850.”

The number of homes offered for sale in April in each Bay Area county was significantly smaller than at the same time last year. That has led to much quicker sales, as shown by the median number of days on the market, which is also down compared with a year ago.

“Affordability is extremely high and there is pent-up demand,” said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange. “Buyers who were sitting on the fence are now noticing that prices are firming up, which is bringing a significant number to the marketplace.”

But the biggest factor of all, he said, is employment. Despite disappointing national figures released Friday, showing that only 69,000 jobs had been created across the nation in May, Bay Area job growth remains strong, fueled by the technology sector, analysts say.

“What is helping the Bay Area is that San Francisco and Silicon Valley are showing the strongest job creation of any area of California,” he said. “Job growth basically translates into housing demand.”

Buying a home may never get any cheaper than this. Several housing experts are predicting that this year will be the last chance for bargain hunters to cash in on the best deals of the weak housing market.

With home prices down 34% nationally since 2006 and mortgage rates at historic lows, homes have never been more affordable — but it won’t stay this way for much longer.

A number of factors will help bolster the housing market including a decline in the number of foreclosures and continued job growth. In addition, homebuyers will have better access to mortgages as they get their finances in order and improve their credit scores.

Some economists, like Trulia’s Jed Kolko, expect home prices to pick up even more quickly. Trulia’s data shows that the national average for asking prices already increased 1.4% in the first quarter of 2012, compared with the last three months of 2011.

“This is a strong indicator that we will start seeing home price indexes, like the S&P/Case-Shiller, start to report home price increases this summer,” he said.

Foreclosures start to fade. One major factor that will drive the trend is the cooling of the foreclosure crisis. Stan Humphries, chief economist for Zillow, said that the percentage of mortgage loans 90 days or more late, a good predictor of future foreclosures, is “falling fast.”

That percentage dropped 15% year-over-year to 3.1% through the end of 2011, according to the Mortgage Bankers Association. And the decline is accelerating: More than 70% of the decline came in the last three months of the year.

Many of the bank-owned properties currently coming out of the foreclosure pipeline are being snapped up by investors who are fixing them up and renting them out — often to those who were displaced by the foreclosure of their own home. That has helped to lift prices on foreclosed properties, according to Alex Villacorte, the director of analytics for Clear Capital, which specializes in housing market valuations.

“That could have a significant impact on the market overall in terms of providing a rising floor to home values,” he said.

Goodbye 3.8% mortgage. In addition to home prices, mortgages could also move higher.

Mortgage rates have been at or near historic lows for much of the past six months. The average interest rate for a 30-year, fixed-rate mortgage has not topped 4.5% since July 2011 and this week, it hit 3.84%, a new low.

But rates aren’t expected to remain at these record-low levels much longer. As the economy continues to recover, rates will move higher, said Doug Lebda, CEO of LendingTree, the online lending site. Although, he said, they will “stay very reasonable.”

The Mortgage Bankers Association is forecasting that the 30-year fixed will hit 4.5% by the end of the year.

Greater demand for loans will help fuel the increase, according to Lebda.

“People can now see the light at the end of the tunnel,” he said. “And that can be enough to get them off the fence.”

Even with inventory (listings) down compared with the same period last year, buyer demand drove an increase in the number of homes sold in Q1 in all our regions. If this trend continues, the total number of homes sold this year could reach 20,850 – and exceed the 10-year average in the Bay Area for the first time since 2005.

As of the final day of the first quarter, 7,703 existing detached homes were listed for sale across the entire Bay Area, down a staggering 54 percent from 16,669 homes on the market on the same date a year ago.

Even with the lack of homes on the market, it looks like buyers are out of the gates.  In my local Marin neighborhood, newly listed homes that had a hard time selling a year or two ago, where they lingered for over 100+ days and were finally pulled, are getting snatched up within 2-3 weeks.  With the traditional buying season just beginning and the Facebook IPO on its way, this sets the stage for an interesting summer.

Please call me today to see what your home is worth.  415-613-3581