SF Gate readers get it right: proof positive that college towns are good investments

Awhile back, On The Block blogger Jenny Pisillo asked if college towns are better investments than their non-academic neighbors. The general reader consensus was "yes." Well, readers, we now have proof positive that you were right.

ZipRealty recently posted results of its own college town real estate study. This study included Berkeley, CA in comparison to the East Bay in general, Palo Alto in comparison to the South Bay in general(and to the Silicon Valley in specific, and Cambridge, MA in comparison to Boston in general.

In each case, the college town kicked real estate butt.

Berkeley, for instance, home to the hallowed University of California at Berkeley, has doubled the average median price-per-square foot for sold homes in the East Bay as a whole for nearly the last two years.

In market sale distribution, while the East Bay as a whole has suffered a sharp increase in foreclosure, REO and short sale activity, Berkeley again pulls ahead with far more fair market priced sales than distressed ones. See for yourself.

First, the East Bay as whole:

Now, Berkeley proper:

Not to throw fuel on any Cal vs. Stanford rivalry-- or in this case, actually, a fire extinguisher, Palo Alto, in which resides the equally famous Stanford University has performed similarly: a median price-per-square for sold property doubling other parts of the South Bay and a far higher distribution of market priced sales than distress sales. (To see the numbers on Zip's nifty data charts, click here.)

The trend extends past our local markets too: Zip shows Cambridge, MA, home to both Harvard and MIT (among others!) domianting Boston real estate in general.

So readers, congratulations. Guess your studying paid off. College really is a great investment..... or at least college towns are, anyway.

Posted By: Anna Marie Hibble (Email) | August 30 2011 at 09:45 AM

College town properties: Palo Alto

Continuing the back to school theme, we're focusing on another popular Bay Area college town: Palo Alto, the home of Stanford University. Palo Alto, like most surrounding cities, is downright expensive. Redfin's market trend page on Palo Alto notes the July 2011 median list price at $1.297 million. And that is below the median sold price of $1.34 million. Even scarier, their data shows a 101.9% Sale to List percentage, which indicates that many homes are selling above their listing price. Doesn't seem to be any real estate downturn here...

With prices that exuberant, the theory of playing landlord or buying your college housing if you are a student, may not be so viable if you're looking at Stanford undergrad and grad students to fill your quarters. Unless, of course, you have an outlook that prices in Palo Alto will continue to tick up, especially with all the new generation of tech companies (i.e. Facebook) and their employees vying with students for valuable housing.

We'll be creative anyways and take a look at a few properties that may be of interest.

Given the name, owning a property on Stanford Ave should attract student renters. This duplex is composed of a 2 bedroom, 2 bath front unit with a larger 4 bedroom, 3 bath back unit. The duplex is currently listed at just under $1.4 million. The current owner purchased it back in 2009 for $1.45 million and has dropped the asking price twice, from the original listing price of just under $1.6 million back in May. It seems to have been attractive enough to get into contract twice - in July and early this month, but seems to have fallen out of contract both times. Assuming 20% down and a 4.5% rate, the monthly mortgage comes out to $5675 a month, which boils down to almost $950 a room, which is on the upper end of asking room rental rates on Craigslist for Palo Alto.

Further away, but still in the Palo Alto zip is a two bedroom, one bath condo asking $402,500. The listing is just over 2 weeks old, as the condo was foreclosed upon in mid June. A comparable unit with the same address is asking $425,000, though it has been on the market for over 140 days. The complex sits on busy El Camino Real but this seems to be one of the lower priced condos in Palo Alto. Assuming 20% down and a 4.5% rate, the monthly mortgage comes out to $1623 a month. But, don't forget the HOA fees of $481 a month. Will a roommate pay $1000?

The next property may look like one of the best prices you can get for a 3 bedroom and still have Palo Alto as your city. In the southern part of the city, it's not really close to campus, and not really a detached house, but a town house. It's asking price of $648,888 gets you an attached garage and over 1300 square feet of living space. The kitchen looks updated, with granite counter tops and monthly HOA is $380, which is better than the condo above. Assuming 20% down and a 4.5% rate, the monthly mortgage comes out to $2630 a month.

Posted By: Jenny Pisillo (Email) | August 17 2011 at 01:15 PM

Top 10 most expensive real estate markets in the US: Bay Area on the list, again and again

If all we listened to were Meg Whitman, Jerry Brown, and Governor Schwarzenegger, we might forget that actually, California is still a very rich state. In fact, according to a 2010 Coldwell Banker 2010 survey, this state commands five of the top ten priciest real estate markets in the nation-- and the Bay Area takes second and fourth place.

The survey data for "The Home Listing Report" (HLR) provide the average home listing price for four-bedroom, two-bathroom properties on coldwellbanker.com listed between February and August 2010 from nearly 300 U.S. markets. Markets in the HLR had to have at least six properties fitting the above description listed within the relevant time frame.

The HLR found The U.S. average for the surveyed listings was $353,032. But we all know about averages: the average number of legs of a man and a horse is three, yet neither creature has three legs. The same misrepresentation applies in the case of the American average listing, because Coldwell Banker found a $1.7 million difference between the nation's most expensive and most affordable housing markets. As illustration: Newport Beach, CA, led the list with an average home listing price of $1,826,348. Meanwhile, our most affordable market was Detroit, Mich., with an average listing price of $68,007.

It's not news to say that several Bay Area cities enjoy dazzling wealth; neither then should we be surprised that among the top twenty most expensive markets, familiar names crop up again and again: Palo Alto ranked second in the report at $1.48 million; San Francisco was fourth at $1.33 million; San Rafael was 11th at $956,654; the Monterey Peninsula was 12th at $926,616; Pleasanton was 14th at $896,488; San Mateo was 15th at $890,961; and Santa Cruz was 17th at $868,217.

Rick Turley, president of Coldwell Banker Residential Brokerage in the Bay Area commented,

By reviewing the report data, people can truly recognize the local nature of real estate. Here in Northern California, we have seen many of our housing markets bounce back from their recessionary lows over the past year. We remain among the higher priced markets in the nation because of our strong, diversified economic base, relatively good job market and outstanding quality of life in our beautiful communities.

Well, something is working, anyway, for California markets that can still command such prices. Of course, a lot of Californians themselves aren't working: The Bureau of Labor Statistics August 2010 report shows that from last year, the two states showing "statistically significant job losses" were California (-112,800) and Colorado (-28,100). Thus, Coldwell Banker's HLR could have another use. People finding California too expensive could look for a place in the US where housing is cheaper- in some cases, drastically so. Through the Coldwell Banker's comprehensive HLR section consumers can research home listing values around the United States to gather preliminary intelligence about the affordability of homes from one market to another.

Here are the top 10 most expensive, together with top 10 least expensive. The disparity on this scale is striking.

Other highlights from Coldwell Banker's 2010 HLR

* Above $750,000: The survey found 25 markets where the average listing price for the subject home was more than $750,000, including 10 at more than $1 million.

* Homeownership Affordability: In total, there are 85 U.S. markets in the HLR with average reported listing prices less than $200,000 and 183 markets less than $300,000.

* Great Midwest: Michigan had three markets on the most affordable list (Detroit, Grayling and Port Huron); all 10 of the most affordable markets are in the Midwest.

* Low Monthly Payments elsewhere: Put in perspective, a $200,000 30-year-fixed mortgage at a 4.5% rate could cost a buyer a relatively low monthly mortgage payment of just above $1,000. Cheaper still: The average $68,000 four-bedroom, two-bathroom home in Detroit could average less than $350 a month.

Posted By: Anna Marie Hibble (Email) | September 28 2010 at 12:00 PM

What the median looks like in 2010: Palo Alto

Tuesday we looked at San Francisco's median priced homes, based on both condo and single-family home data. Now we head south to the land of rolling hills, sunny skies, and Stanford University to see what the median buys in Palo Alto.

In January, the median list price in Palo Alto was healthy indeed: $1,424,000. Meanwhile, the selling median was $1,162,000 (both numbers are almost twice that of SF's!!). To get an idea of the homes available in this area, we did a search of single family homes and condos up to $1.25 million.

In fact, at this cap you can have any condo on the MLS in Palo Alto, since the most expensive listed now is this one at 555 Byron, #205. Almost $650 per square foot, this 2 bed, 2 bath unit asks $995K.

To be fair, we should point out the unit is in a swank retirement community (The Hamilton) that includes a pool, spa, tennis, 24-hour security, plenty of common areas and separate apartments for out-of-town-guests.

Less expensive condos do exist, but only a handful fall under $500K. The least expensive condo listed now is 1982 W Bayshore #12, which is a 1 bed, 1 bath in a complex that also offers a pool and spa. The price: $369K.

When we turn to look at the single-family homes we can get for up to $1.25 million, we find one listed for exactly that. 642 S California is listed as a 5 bed, 2 bath but is actually two homes on one lot, each 2 bedroom, 1 bath (1 has a studio in it, but since a bathroom is not mentioned with this studio, think of it as inclusive, not separate quarters, bringing the possible bedcount for that house to 3).

The majority of single-family homes on the MLS now are over $1 million. Some can be had for less than $900K, fewer for less than $800K. For "deals" that still include the words "Palo" and "Alto" in the address, we have to go to a new county. This county was included in calucating the median you see here, so even though East Palo Alto is very different from Palo Alto, the numbers are still as high as you see here. The least expensive single family home then is this 3 bed, 1 bath at 127 Wisteria Dr.

At $330K, the East Palo Alto home inspired the realtor to produce no longer a write up than: "Nice quiet area. 3 Bedroom 1 bathroom."

So, yes: The upshot of all this MLS surfing is that Palo Alto has a lot of homes under that median range. But for the most part, looks like the sunny weather, decent job market, plus proximity to the Silicon Valley and one of America's best colleges makes every tiny square foot worth a pretty huge penny.

Note: The median number here, as high as it is, also calculates East Palo Alto.

Posted By: Anna Marie Hibble (Email) | February 11 2010 at 09:00 AM

Buyers become sharks when blood's in the water

According to common real estate knowledge, the holidays are a bad time to sell a house: the weather is crap, so houses all look dark and cold; people don't have time or desire to check out open houses; buying a home takes a back seat from Thanksgiving through New Year's; and then tax season is fast upon us.

Yet houses come on the market in December anyway. And lots of these listings you find on the MLS now have been on the market since way before November. So in the traditionally slowest selling time, we should be not be surprised to see houses lingering on the market, nor that their prices have been reduced-- sometimes more than once.

Price reductions are like blood in the water to buyers. Whether this is a correct assessment or not, we see a slashed price as a sign of a weakened seller- an easier mark for negotiating prices down yet further, or for help with closing costs, or to buy down an interest point. With that shark mentality in mind, here are a few of the bloodiest (oft-reduced and/or most deeply cut) properties in various parts of San Francisco and her southerly neighbors.

1. 274 Red Rock Way, Unit B: this is a 4 bed, 2.5 bath condo in Diamond Heights. Its price history is a series of slashes:

Dec 11, 2009 Price Changed $675,000

Oct 23, 2009 Price Changed $699,000

Sep 21, 2009 Price Changed $725,000

Jun 23, 2009 Listed $750,000

2.1446 44th Ave: a 4 bed, 3 bath single-family home in the Outer-Sunset that's suffered numerous cuts:

Dec 08, 2009 Price Changed $750,000

Dec 08, 2009 Price Changed $750,000

Nov 25, 2009 Price Changed $768,888

Nov 25, 2009 Price Changed $768,888

Nov 11, 2009 Listed $779,000

Oct 29, 2009 Listed $779,000

3. 2216 Amherst St., Palo Alto: proximity to Stanford ostensibly makes this 1 bedroom, 1 bath condo worth $799,000 now.

As it started at $885K, it's been reduced almost 100K.

4. 1500 Broadway, #305, Burlingame: call is delusions of grandeur, but Burlingame enjoyed quite the status report before real estate took a nose dive. This 2 bed, 2 bath condo was unprepared for such a reveral of fortune.

Dec 09, 2009 Price Changed $499,999 -- MLSListings #80941581

Nov 03, 2009 Price Changed $534,999 -- MLSListings #80941581

Aug 29, 2009 Listed $559,000 -- MLSListings #80941581

In summary, the holiday slump can be an advantage to the ruthless buyer circling those cold waters of Bay Area real estate. Bon Appetit!

Posted By: Anna Marie Hibble (Email) | December 15 2009 at 09:00 AM

Commercial real estate crash hits hotels hard. Does this mean holiday deals for travelers?

With declines in travel, business conventions, and property values, no one should be overly surprised to discover hotels are struggling in California. The extent to which they are losing the struggle, however, is dramatic. Bloomberg writer Nadja Brant reports that "Hotel foreclosures in California more than tripled in the first nine months of this year as business travelers and vacationers cut spending."

Hotels are also victim to the shady real estate loans that are also such a headache for the housing market, though in this case the loans that are defaulting are tied to construction and remodelling.

Lodging owners are struggling after adding rooms and properties from 2004 to 2007, when financing was easy to come by because banks could bundle loans into commercial mortgage-backed securities and sell them on to investors. About $83.4 billion in hotel-backed securities were issued in those years, according to Realpoint.

San Francisco, a city with much dependence on tourist and business travel economies, is feeling the pinch. The San Francisco Business Times reported in early October that "San Francisco and Bay Area hotels continued to post double-digit declines in July 2009." The Silicon Valley, despite being a business and technology hub, is also down: "Hotel occupancy in July [2009] was 53.85 percent, up from the previous month but down 13.68 percent from the same month last year, according to the San Jose Convention & Visitors Bureau." Palo Alto is no better off, says the Mercury News: "Hotel occupancy rates have dropped almost 14 percent in Palo Alto this year despite a new tourism push."

Well, we're all struggling; otherwise we'd all be traveling and staying in lots of hotels. Can we find a silver lining in this latest doom cloud?

Indeed. If it doesn't make you feel too much like a vulture circling the wounded beast, now is a really good time to get a deal at a hotel, even one you'd usually think too dear. The Business Times found that "The most expensive hotels in San Francisco saw the biggest drop in room rates. Hotels with rooms over $200 saw their average rates plummet 26 percent in July 2009, to $251.73 from $340.00 in July 2008" and that "For the first seven months of the year, San Francisco average room rates are down 16.9 percent to $158.08." Meanwhile, the Silicon Valley/San Jose Business Journal found that "The average daily rate in July was $115.87, down $14.94 cents from July 2008."

Maybe this means we won't need the Kung Fu powers of William Shatner or Priceline.com to negotiate better deals for hotel stays. Better hurry though, before your favorite hotel forecloses.

Posted By: Anna Marie Hibble (Email) | November 02 2009 at 10:33 AM

Most expensive homes in the nation here? Surely not

Oh to live in Grayling, Michigan, known as the "canoe capital of the world" apparently, where the average home price is just $112,675.

On second thoughts, maybe not, given the state of the economy in that sadly blighted state.

Coldwell Banker has released its fun table of "Most Expensive" and "Most Affordable" places to live in the United States. As you can see, we in the Bay Area have the dubious honor of taking three of the top ten places in the "Most Expensive" ranks. Homes in Palo Alto, San Francisco and San Mateo are all very costly it seems -- but I guess you knew that already.

The survey, which compares similar 2,200 sq ft homes in 310 US housing markets, reveals that La Jolla is the most expensive real-estate market in the country with an average home price of $2,125,000.

Other nuggets from the data? There are 84 US markets in which the sample home price averages under $200,000. The monthly mortgage cost for homes in this price range could average less than $600 (sigh), and down payments could amount to less than $4,000 (double sigh).

In total, 11 markets exceeded an average price of $1 million. (Manhattan was not included in the study because of the lack of comparable single-family homes.) And the overall national average price of homes was $363,401.

The full study can be seen here.

Posted By: Tracey Taylor (Email) | October 02 2009 at 08:34 AM

Facebook ruffles feathers of new neighbors

It didn't take long for Facebook employees to rile up its new neighbors. After leaving its downtown Palo Alto offices for a massive 137,000-square-foot office at Stanford Research Park, nearby neighbors complain that Facebook employees are hogging all their parking spots.

The problem, according to the Palo Alto Weekly, is that although Facebook has a pretty fat -- and empty -- parking lot eight blocks away from the office, it's more convenient for Facebookers to park on the street in College Terrace, a residential neighborhood near the office. As one angry neighbor put it, "This is an organization dedicated to creating social networks and here they are (messing) over the social community in their back yard," the neighbor reportedly said.

One solution under consideration: A permit parking program is reportedly in the works which would impose two-hour limits on many over-parked streets. The company is also supposedly considering offering a shuttle bus to transport San Francisco residents to and from the office. (At the moment, Facebook runs shuttles to and from the Caltrain station. Also, they've got a couple Zipcars outside the office.)

Posted By: Betsy Schiffman (Email) | September 04 2009 at 12:00 PM

Bay Area's expensive zip codes in the limelight

More than a handful of Bay Area neighborhoods made it into Forbes' newly released league table of America's Most Expensive Zip Codes.

In fact Atherton 94027 was listed at the number two spot in the Top 100 table, beaten only by Alpine 07620 in New Jersey. Atherton's median home price was $3,849,133, compared to Alpine's $4,139,041. The 4-bedroom home at 35 Barry Lane in Atherton 94027 has recently been relisted for $4.5m.

However, not surprisingly, both these zips -- as well as the majority in the table -- showed significant year on year decreases in prices. Atherton recorded a 26% drop and Alpine was down 23%.

Other Bay Area zips to make the list include Diablo 94528 (ranked 23rd), Hillsborough 94910 (25th), Tiburon 94920 (26th) and Woodside 94062 (35th). Palo Alto 94301 came in at the 71st spot with a median home price of $1,846,870, down 14% from the previous period. Belvedere 94920 (ranked 53rd with a median of $2,170,833) witnessed a 22% drop.

Some Bay Area communities, such as Piedmont and Los Altos, made it into the league table more than once with different zips.

See the full Top 100 and analysis on the Forbes website here.

Posted By: Tracey Taylor (Email) | September 01 2009 at 09:59 AM

Palo Alto old folks home gets the boot

Casa Olga, one of the last non-yuppie pieces of real estate in downtown Palo Alto, is set to close in a few weeks. The government subsidized health care facility -- home to senior citizens and the disabled -- couldn't get enough cash from the state to stay alive.

The problem started in July 2008 when the state slashed payments to Care Centers Inc., Casa Olga's parent company. The upshot? The company is no longer willing to absorb the loss of running the center. (All 88 residents are reportedly being transferred to other health care centers or are moving back in with their families.)

The timing couldn't be worse given that Palo Alto is already facing a record-high vacancy rate in the downtown area. Care Centers is apparently considering introducing more retail space at the ground floor of the building, and since supply is already out of whack with demand, that won't likely improve rental rates in the area.

Posted By: Betsy Schiffman (Email) | August 24 2009 at 08:51 AM