While, as a whole, San Francisco hasn’t been dramatically impacted by short sales, there are a few neighborhoods where you are more likely to see them. South Beach, SOMA, and Mission Bay happen to be three of those neighborhoods.
At the height of the market (2006 – 2007), a one bedroom condominium in these neighborhoods would easily fetch in the $500,000 range, with prices climbing into the $600,000 and $700,000 range depending on size, amenities, location, and other features of the property. In fact, the median sales price of one bedroom condos in these south of market neighborhoods for the years 2005 – 2007 was $615,000 while the maximum sales price was $1,200,000 (residence 22B at the Four Seasons, selling for just shy of $1,500 per square foot – it has resold since then for $1,750,000).
To say that there has been a “market correction” in the neighborhood is a bit of an understatement, though. In the past 6 months, there have been just shy of 100 sales of one bedroom homes in South Beach, SOMA, and Mission Bay. Of these sales, the median sales price is just over $500,000, showing a neighborhood decrease of about 20%.
While the range of sales price is pretty broad, there have been a significant number of resales that have been for under $400,000. Given that the rental market is booming right now, if you are an investor these one bedroom homes can represent a phenomenal investment opportunity, particularly given that interest rates are at historic lows right now. Given the uncertainty in the stock market and other investments and the lack of new housing being built in San Francisco, I think one bedroom homes can make a really smart investment right now.
If you’d like a list of what’s available, or just to talk further about investment opportunities in San Francisco, don’t hesitate to leave a comment or get in touch. I’d be happy to walk you through the numbers at your convenience.