August 2016 – Summertime in San Francisco


As I listen to the weather news, I hear that it is 105 degrees in Sacramento, and then look at my car’s temp gauge to see it’s 65 degrees in San Francisco. My superior mathematical skills allow me to quickly compute a 40-degree difference. Good Grief, Charlie Brown!

The dollar may be up versus most other currencies, but that doesn’t stop the hordes of tourists dressed in shorts and T-shirts from visiting our shores. They come not only to see the beautiful Bay and Bridge views but to also see the turn-of-the-century architecture (the last century thank you) and to see the birthplace of brands they know well like Facebook, Google, Twitter, Tesla, Yelp, et al. This is ground zero!

And then – the Cost of Housing

“Gee honey, let’s think about living here. But it’s so expensive.” Indeed, it is. I spoke to a woman this past week who now lives in St. Louis. Why? She said she lived in San Francisco for 10 years and left to buy a house with a backyard, etc. (Sounded like my daughter who absconded with my granddaughter and moved to Seattle 10 years ago).

Recently, each year some 70,000 folks move into the city while some 60,000 move away. So there is a net influx of some 10,000 who are part of the reason for increased prices. Jobs are plentiful, and pied-a-terre and empty-nester buyers push prices up as well.

Did you read about the robot-powered burger joint that creates and serves hamburgers with all the trimmings and replaces two or three full time line cooks in the process? If Tesla or Google can create driver-less cars, then……………..

The Housing Crisis

There is indeed a housing crisis for people who work in restaurants, the first responders, nurses, school teachers, and younger tech employees who have not, and maybe never, cash out at the thousands of start-ups that will never make it. Yes, they can rent, but rents are exceedingly expensive as well.

Though my crystal ball tells me that housing (and rent) prices have moderated, in the long-run, San Francisco will continue to remain one of the most expensive cities in the U.S.

The following table speaks volumes. Real annualized house appreciation, 1950 – 2000

Top and bottom 10 metro areas with 1950 population > 500,000

Annualized growth rate, 1950-2000

Top 10 MSAs by Price Growth         Bottom 10 MSAs by Price Growth

San Francisco*              3.53                                San Antonio                  1.13

Oakland                            2.82                                Milwaukee                     1.06

Seattle                                2.74                                Pittsburgh                     1.02

San Diego                          2.61                                Dayton                            0.99

Los Angeles                      2.46                                 Albany, NY                      0.97

Portland                              2.36                                 Cleveland                       0.91                                                                                              Rochester, NY              0.89

Bergen-Passaic, NJ       2.19                              Youngstown-Warren  0.81

Charlotte                            2.18                                 Syracuse                            0.67

New Haven                        2.12                                  Buffalo                              0.54

Note: Average = 1.70

Source: Joseph Gyourko, Christopher Mayer, Todd Sinai

*The rates above are for the San Francisco metro area, which comprises nine Bay Area counties and not for the city of San Francisco itself.

The six cities with the highest appreciation are all on the west coast. With the exception of San Antonio, all of the lowest growth cities are former centers of the industrial age.

The Pulse of the Market book (edited Pulses from 2005 to 2015) is available in paperback and Kindle at It offers insights and perspectives on what has made San Francisco residential real estate tick in the past 10 years. Let me know if you would like a personal autograph.

Pulse Book Image

July 2016 – The Market: What is Going On?


My December, 2015 Pulse was entitled Are We Getting Tired? The title referred to a sense that the market was getting a bit long in the tooth after four straight years of 10+% price appreciation.

Fast-forward six months to present day. Compared to the first six months of 2015, average prices for single-family homes are up just 0.5% and condominium prices are down 1.4%. Yes, the market appears to have lost some steam – average price-wise.

When I look at my 2015 numbers today, I now think that the market started losing steam in June 2015, not in December 2015.

Many agents will tell you that the market has “softened” and price reductions are no longer an infrequent occurrence. How does this square with so many properties going way over list price?

Transactions – the Other Number

 It is worth looking at the number of transactions. To keep things simple, I will discuss only single-family homes and forget about condominiums. In 2008, as the recession was gathering steam, 2,161 single-family homes sold in the city. This compares to an average of 2,967 for the previous five years (2003 – 2007) and average annual sales of 2,457 in the five years after 2008 (2009 – 2013).

For 2016, I estimate that there will be a total of 2,125 sales, 7.0% fewer single-family transactions than in 2015, and a whopping 28% fewer than the average number of sales for the period 2003 – 2007.

Some Theories

July 2016 Pulse - Theories

For the 19 years between 1987 and 2005,  transactions averaged 3,084. Now we are running closer to 2,100. Why such a drop? I can only speculate. Maybe it is because single-family owners are living longer, or maybe they are able to make their homes more senior-compatible so they can stay longer, or maybe their homes have appreciated so much that they don’t want to sell and take a substantial capital gains hit. In any event, though the market maybe cooling, enough buyers are willing to compete and spend what it takes to buy the home that they want. Averages can mask all sorts of anomalies.

A Contradiction of Sorts?

Is there really a softening in the market? While average year-to-year price comparisons may show minimal or no percentage growth for the city, the numbers are only averages, and buried in the averages are an awful lot of properties whose final sale price exceeded list price; often by 20% to 40%!

My Conclusion

 While we are not likely to see year-over-year price growth of 10+% in 2016, there are fewer single-family home properties coming to market and competition remains intense. My crystal ball predicts a 4.6% average price increase over 2015 versus the 13.3% appreciation in 2015 over 2014. A cool down in year-over-year price growth is also the story with condominiums (estimate – 2.8% price growth), though new construction adds to supply. Then there is Brexit, which is likely to have an impact on both buyer and seller psychology. Hmmmmm.

Pulse Book Image

The Pulse of the Market book (edited Pulses from 2005 to 2015) is available in paperback and Kindle at It offers insights and perspectives on what has made San Francisco residential real estate tick in the past 10 years. Let me know if you would like a personal autograph.

Please feel free to email or ring me at 415-730-7772 when you need real estate expertise.

June 2016 – 181 Fremont Residences

What’s different?

This is a relatively small residential development on top of a big commercial office building. I am sure there are other large commercial buildings with residences in the city, but they do not readily come to mind.

181 #1

On top of 50+ floors of commercial space, there are 55 condominiums and 12 “accessory suites” on the 54th floor (think nanny or guest quarters). Owner units start on the 55th floor and go up to the 70th floor penthouse: only 2 to 4 units per floor from 55 to 69, and a full-floor unit on 70.

The 52nd floor has a fitness center, owners’ lounge, catering kitchen, conference room, etc.: no swimming pool or media room. (Mechanical on 53). Unlike other high-end developments, my sense is that potential buyers are likely transient and will not be using the property as a primary residence. Of course, I could be wrong.

The developer, Jay Paul, hired top interior designer, Orlando Diaz-Azcuy, to design unit interiors and the residential lobby. His recommended finishes and wall/floor/window coverings/recessed lighting will be installed by the developer, which is one of the reasons for lofty prices, not to mention views, location, and a limited offering.  Kudos to Heller Manus Architects for contributing a beautiful building to the skyline. BTW, the current sales center is at 101 California, 42nd floor, rather than at or near the property.



For quite some time, I have been pontificating the benefits of the Transbay Terminal (scheduled to open late 2017). The 181 Fremont development adjoins Transbay and has direct access on its 7th floor to the 5.4-acre park atop the Terminal. It’s a great location; walking distance to Moscone Center, SFMOMA, the Embarcadero and Ferry Terminal, etc.  The Terminal will include 100,000+ sq. ft. of retail space, a benefit to the neighborhood.


 HOA dues, which include earthquake insurance like the St. Regis and Four Seasons, will be a rich $2.00+/square foot/month, similar to the hotel units. Purchase contracts are available now and occupancy is scheduled for Q 3 2017. Accessory units can be purchased only by original owners but can then be resold to anyone.

My sense is that the target market for these units is the wealthy home collector who would like a special San Francisco home when he/she is in town. The location, views and finishes are quite special, and although overall market appreciation has slowed, the developer has only 55 units to sell.

Pulse of the Market – The Book

Pulse Book Image

The Pulse of the Market book (edited Pulses from 2005 to 2015) is available in paperback and Kindle at It offers insights and perspectives on what has made San Francisco residential real estate tick in the past 10 years. Let me know if you would like a personal autograph.

 Please feel free to email or ring me at 415-730-7772 when you need real estate expertise.

May 2016 – If President Trump – Expected SF Changes

The Story Behind the Story

With the political season in over drive, I started thinking about possible changes that we might see were Donald J. Trump to become president.

This was going to be the April Pulse, but my daughter told me that I might insult some people. Then my good buddy and lifetime CPA called me a wuss for not publishing it (that hurt). So here we are.

Bike Lanes Re-imagined

Move over, bikers, limos only. Yes, we are due a respite from the ever-increasing number of green bike lanes throughout the city.  The green lanes will remain green. However, they will be for limousines only. Bikers will receive a $200.00 ticket if they use them.  There will be no cost to repaint lanes, and the $200.00 per ticket revenue will generate ample funds for street maintenance. Expect limo sales to soar generating even more tax revenue for city coffers. This is a win, win, win!

SFMOMA renamed

Trump Art Collection

Who needs fancy smancy art? The Trump Art Collection will be installed and SFMOMA will be renamed SFTAC. Did you know that a trademark application was filed in 2006 for the Trump Art Collection? The trademark appears to cover a slew of art-related products including, note booklets, check booklets, autograph booklets, and totally-not-out-of-date telephone booklets.

 Coit Tower Renamed

 Henceforth, Coit Tower (also known as the Lillian Coit Memorial Tower) will be renamed Trump Tower. Lillian Hitchcock Coit was a wealthy socialite who loved to chase fires in the early days of the city’s history (think 1860s). Lillian’s fortune funded the monument after her death in 1929, and one apocryphal story claims that the tower was designed to resemble a fire hose nozzle. Another more recent apocryphal story claims that Trump thought the renaming was appropriate because the tower resembled a part of his anatomy.

Palace of Fine Arts Re-imagined

 Welcome to the Mar-a-Lago Club of San Francisco. The Donald plans to buy the Palace from the City for $10 million (same as what he paid for Mar-a-Lago Palm Beach), but this being San Francisco, instead of creating a private club, it will be a public club for everyone (don’t sweat the details as to how exactly that will work). He will lease the club to the City for $1.00 a year. Think of it! Located next door to Crissy Field and the Marina Green, it will become a perfect setting for special events, holiday celebrations, weddings and galas, just like Mar-a-Lago in Palm Beach! Of course, the fees will skyrocket, but since all the public owns and belongs, who cares?

Other Expected Changes

Charlotte Schultz, long time Chief of the Mayor’s Office of Protocol will be fired. Her replacement will be Aaron Peskin. SFO International well be renamed Trump International with a special gate for Air Force One, Dogpatch will become Trump Patch, Pacific Heights will be Trump Heights, ATT Park will become Trump Park, and Twin Peaks will become Trump Peaks. Real estate values will soar!

Pulse of the Market – The Book

Pulse Book Image

The Pulse of the Market book (edited Pulses from 2005 to 2015)

is available in paperback (Kindle version a few days off) at It offers some perspectives on what has made San Francisco residential real estate tick in the past 10 years. Stay tuned.

April 2016 – Flying O Ranch


 Frank Wylie, founder of Wyle Laboratories, a leading aerospace company based in Los Angeles, created Flying O Ranch in the early 1990s. The Ranch is a gated community and encompasses some 1,400 acres, subdivided into 33 parcels, each about 40 acres.

The Ranch is about six miles from Coarsegold (the closest market and shops),

30 miles north of Fresno (closest airport), 65 miles southeast of UC Merced, 12 miles south of the fairytale Chateau du Sureau Inn, and 30 miles from the southern entrance to Yosemite National Park.

The original buyers were mostly from southern and northern California. They wanted a refuge from the hectic urban experience. In some instances, they were horse people and had a desire to ride throughout the entire 1,400-acre ranch. Some constructed homes; others have kept their land unimproved.

Views of the surrounding mountains and bluffs are spectacular.

Flying O View with Mtns

Special Property Now Available

The property, 30332 Flying O Ranch Road (Parcel #7), is approximately 40 acres of natural land with great vistas and rugged, usable terrain. There are two wells on the property, along with a 600-gallon tank that holds water for the property and home. Our client purchased the land in 1998 and in 2006 built a two-bedroom/three-bath “smart” home (about 1,800+ sq. ft.). There are two attached garages.

Below is the vista from the second level dining area.

Flying O DR with view

 The Flying O Ranch parcels are quite special. When someone buys a property they are really getting use of the entire 1,400 acres of the Flying O Ranch with equestrian facilities, miles of trails, and all while living on a working cattle ranch, not to mention magical vistas and the serenity of open space.

For information on either property, please send Malcolm Kaufman at email or give him a ring (415) 730-7772, or email  Beth Carver, who resides in Bass Lakes (a lot closer than San Francisco). Beth’s phone number is (559) 658-1784.




April 2016 – The Harrison

A Little History

One-Rincon-BofA-TowerOnce upon a time in 1995, Bank of America bought the Union 76 clock tower. It had a Union 76 logo for some 50 years and stood at the foot of the Bay Bridge. After purchase, B of A installed its own logo.

Fast forward to 2003 when Mike Kriozere (Urban West Associates) purchased the property from B of A for approximately $16 million. Construction of Rincon Tower One (the South Tower) started in 2005, and initial occupancy occurred in February 2008, just in time for the Great Recession. The South Tower stands 60 stories tall, with 376 units and has a 50,000 gallon water tank on top to mitigate sway during high winds and earthquakes (just in case you are interested).

The Harrison (aka North Tower)

 Construction of The Harrison (298 units) started in October 2012 as a rental building, and the developers had the foresight to overlay a condominium map, which is something developers do quite regularly. The first residents (renters) moved into the building in August 2014. The property was sold to a new partnership in the summer of 2015.

Subsequently, the California Department of Real Estate approved the sale of the units as condominiums. As of today, all but a handful of the original renters have vacated the building, some having exercised a right-of-first-refusal to purchase.

The new developer, (Maximus Real Estate Partners- the same folks who purchased the huge Parkmerced complex) has retained Ken Fulk, interior designer and celebrity party-planner to add his special touch.

Harrison lobby

He has enhanced the interiors of the 298 units, designed a 49th floor owners-only sky lounge to be known as Uncle Harry’s, and created a two-story library (rendering shown here) that will serve as the building lobby. Uncle Harry’s and the lobby will be completed sometime in Q 3 or earlier.

While The Harrison has its own HOA, there are reciprocal agreements between it and the Tower One HOA. This means that the owners in each building can share amenities – valet parking, swimming pool, fitness center, Uncle Harry’s, etc.

In essence The Harrison is an upscale version of Rincon Hill Tower One, having a higher level of unit finishes/appliances, special concierge services, Uncle Harry’s, special library lobby, etc. and higher pricing.


As I mentioned last month, my Pulse of the Market book (edited Pulses from 2005 to 2015) is in the works: paperback and Kindle versions, and I expect publication and availability on in early May. It is interesting, at least to me, to see what has happened in San Francisco in the past 10 years. Stay tuned.

Please feel free to email or give me a ring (415-730-7772) when you need real estate expertise.

March 2016 – A Cold or the Flu ?

 My Question

The San Francisco residential market is not immune to what is going on in the rest of the world. The plunge in oil prices, slowdown in the Chinese economy, deflation in Japan, and strength of the U.S. dollar, to name a few issues affecting economies worldwide, have me wondering whether San Francisco residential is in the process of catching a cold or the flu.

We caught a cold in 2001 – 2003 and a bad flu in 2008 – 2011.

What I do Know

Pulse 150 - Bochy

I held an open house about a week ago, and one of the visitors started to quiz me about what was going to happen in 2016. I politely told him that I really did not know (the truth). What I wanted to say was that his questions were dumb because no one knows; not the Federal Reserve, not Wall Street’s biggest banks, not the Administration, not even Bruce Bochy (yes, I am looking forward to opening day).

Here’s what I do know. Assuming that the U.S. and California economies take a hard one to the solar plexus (a bad flu), San Francisco will suffer as well. There is no place to hide.

During the last flu, we saw prices decline by 15% to 20% over a 3 to 4 year period. This flu could be worse, or not.

On the Bright Side

If you are young and footloose like me, you might think about selling, take some profit, pay some capital gains tax, and buy another home. Interest rates are certainly attractive.

Another option – ride out the storm. While the multiple buyer types that abound in San Francisco may pull in their horns while the economy goes to the hospital, once the fever breaks, and the next up-cycle starts, all things positive about San Francisco will re-emerge and prices will again rise.

Two Announcements

First, my favorite son John Henry is moving soon to San Francisco from Newport Beach. He is a talented interior designer and has come to understand the merits of the Bay Area. Yes, another buyer in the wings.

Second, A Pulse of the Market book is in the works: paperback and Kindle versions. I spent a couple of weeks during December organizing 10 years of Pulses into four topics (what drives the SF market, the newer neighborhoods, top-end condominium buildings, and other residential issues). Then I talked to Amazon’s self-publishing arm. Stay tuned – probably ready in May.

Please feel free to or give me a ring (415-730-7772).

February 2016 – Central SOMA


As successful tech companies continue to grow and prosper, their office space needs to grow, not to mention their residential needs.
The City and major developers recognized this need several years ago and started laying plans for a new neighborhood (Central SOMA), one close to where these companies exist today. The soon-to-be-completed Central Subway on 4th Street will provide an important transit link.

The new neighborhood, known as Central SOMA, is taking shape at the southern/western end of the existing SOMA neighborhood.

Key Developers

There are four major developers:

 Tishman Speyer (Infinity/Lumina) has two projects. One is at 4th and Townsend where the Creamery now stands. The other is at 5th and Brannan

Kilroy Realty (333 Brannan/The Exchange) plans to develop five acres in and around the current Flower Mart – 640 Brannan at 6th

Boston Properties (Salesforce Tower) is planning a 1 million+ sq. ft. office complex at 4th & Harrison

TMG (Soma Grand/One Market) is developing 505 Brannan (the Bank of America site across from Marlowe Restaurant)

While the primary focus of these developments is new office space, some will have residential, market rate and/or affordable.

Architecturally, there is a desire is to retain the industrial/warehouse character of the neighborhood, rather than build tall glass towers, that we see in the Financial District and south of Market St. near the Transbay Terminal.


The development/build process takes time, what with EIR, Prop M limitations, entitlements, Planning Department reviews/approvals, permits, construction, etc.

Delays are inevitable, so think 2020 and later when we will see new buildings, parks, pedestrian walkways, etc.

Central SOMA is underway and its impact will be felt in neighborhoods throughout the city, just like the newer neighborhoods of Dogpatch, Shipyard, Mission Bay, South Beach, Yerba Buena are affecting residential economics across the City.
Check out for previous Pulses. Please feel free to email or give me a ring (415-730-7772).

January 2016 – No Protection


So we end the year with average prices having appreciated some 13+% over 2014. That’s on top of an average appreciation of 13+% for each of the three years from 2012 – 2014 (+40% for 3-year total). Some folks have started talking about another bubble.

Real estate prices, like the economy, are cyclical, i.e. prices go up and down, as you know. I guess the definition of a bubble is when prices get too frothy on the upside and then trigger a (dramatic) “correction” as happened in the Great Recession.

Have you seen the movie, the Big Short, based on the Michael Lewis book by the same name? I recommend you do, but be prepared to walk out somewhat depressed. There is no Hollywood happy ending here.

It is likely to happen again, as Paul Krugman points out in his recent New York Times op-ed column “The Big Short, Housing Bubbles and Retold Lies.”

The essence of his article is that many of the “runaway bankers” who reaped millions/billions by leveraging the mortgage market are at it again! They are powerful people with powerful friends in high places.

Bottom line, there is no way we can protect ourselves. While you and I may be conservative in our personal mortgage decisions, when the proverbial hits the fan, as it did in 2008, everyone gets hurt: lost homes, lost jobs, lost income, etc. you, me et al.

Yeah, we should be so be lucky!

Pulse 148 - Guardian Angel

The thesis of the book/movie and Krugman’s article is that that it will happen again!

They maintain that it has already started.

Happy New Year!

December 2015 – Are We Getting Tired?


I’ve started to see a number of price reductions: more than in previous months, and the chatter among my fellow agents is that the market is weakening. A recent article about Square’s IPO and the valuation of other unicorns got me thinking.

Is the Market Getting Tired?

Pulse 147 - Tired

We have been in an up-cycle since 2011. This is the fourth year of robust appreciation (better than 10% a year). The up-cycle from 1994 to 2000 lasted seven years and ended with the dotcom bust. The next up leg was 2004 to 2008, which ended with the Great Recession (down three+ years). We are probably closer to the end of this up-cycle than the beginning, but no one knows how close.

While the current up-leg may be getting a bit long in the tooth, my crystal ball says that it is not headed south; probably slower growth in the year ahead rather than a continuation of the double digit growth that we have seen for these last four years.

Blessed with Multiple, Diverse Buyers

San Francisco is blessed with multiple buyer groups that sustain a long-term upward trend, which is the important consideration in my real estate book.

Primary residence buyers who want to live and work in San Francisco,
Pied a terre buyers who want to partake of the City’s dining, shopping, and entertainment and are not yet ready to give up the old homestead, but do want a place in the City where they can spend weekends, etc.,
Empty-nesters who live within 100+ miles of the City, and want to enjoy the City’s vibrancy on a full time basis now that the kids are out of the house,
Investors who understand the long-term economics of San Francisco residential real estate and want to benefit financially,
Home collectors who want a place in San Francisco, Chicago, New York, etc.

We are indeed blessed.


Even though our residential real estate benefits from multiple buyer groups (read five legs to the stool) and sustains a vibrant market over the long-term, changing market psychology also plays a role, and contributes to mini cycles within the long term upward trend.

Square had its IPO on November 19 at an offer price of $9.00 a share, which was 50% less than its most recent private financing a year ago. I’ve read that major mutual funds, ones who have been investors in start-ups over the past decade, have started to mark down valuations of some of their private company holdings.

Question – is the bloom off high tech stocks? Is this issue contributing to changing (short-term) real estate psychology? My monthly numbers don’t indicate any drop-off in appreciation (we are up some 13.5% over last year through the end of November). Given where we are in the cycle, it would seem that an easing of the heady 10%+/year appreciation rate is coming to an end, though I know not when.

But, as I have said many times, it doesn’t matter, since it’s about the long game that makes San Francisco residential real estate attractive.

Check out for previous Pulses. Please feel free to email or give me a ring (415-730-7772).