The Real Estate Report December/January, local market trends San Francisco: How Will the New 3.8% Investment Tax Affect Real Estate by AMSI's Real Estate Broker Robb Fleischer

1. DECEMBER 2012/JANUARY 2013 Robb Fleischer
American Marketing Systems, Inc.
Inside This Issue
2800 Van Ness Avenue
> LOCAL MARKET TRENDS ..................... 1 San Francisco, CA 94109
> MY HOME ISN’T SELLING .................... 2 (415) 447-2009
rfleischer@amsiemail.com
> HOME STATISTICS .............................. 2
http://www.amsires.com/staff/robb
> FORECLOSURE STATS ........................ 3 DRE #01403882
> CONDO STATISTICS ............................ 3
> MOMENTUM CHARTS .......................... 4
The Real Estate Report
local market trends Trends at a Glance
(Single-family Homes)
Nov 12 Oct 12 Nov 11
SAN FRANCISCO
Home Sales: 260 244 225
Median Price: $ 834,500 $ 844,500 $ 698,000
How Will the New 3.8% Investment Tax Affect Real Estate Av erage Price: $1,134,471 $1,322,171 $1,119,288
First, understand that this tax WILL NOT be Gain on Sale of Residence $525,000 Sale/List Price Ratio: 104.8% 103.1% 98.3%
imposed on all real estate transactions, a common Day s on Market: 42 44 57
Taxable Gain (Added to AGI) $25,000 ($525,000 –
misconception. Rather, when the legislation $500,000 home sale exemption) (Lofts/Tow nhomes/TIC)
becomes effective in 2013, it may impose a 3.8% Nov 12 Oct 12 Nov 11
tax on some (but not all) income from interest, New AGI $350,000 ($325,000 + $25,000 taxable gain)
Condo Sales: 258 268 201
dividends, rents (less expenses) and capital gains Excess of AGI over $250,000 $100,000 ($350,000 – Median Price: $ 771,000 $ 760,000 $ 633,000
(less capital losses). The tax will fall only on $250,000)
Av erage Price: $ 957,247 $ 887,124 $ 790,330
individuals with an adjusted gross income (AGI)
above $200,000 and couples filing a joint return Lesser Amount (Taxable) $25,000 (Taxable gain) Sale/List Price Ratio: 101.3% 103.1% 97.5%
with more than $250,000 AGI. Day s on Market: 48 51 83
Tax Due $950 ($25,000 x 0.038)
Also, please note that the new tax applies to the Sales of single-family, re-sale homes were up
For a full analysis from the National Association of 15.6% year-over-year. Year-to-date, home sales
LESSER of: REALTORS®, click here: http://tinyurl.com/cj7hu53. are up 8.6%.
⇒ Investment income amount San Francisco Price Differences
The median price for homes jumped 19.6% year-
⇒ Excess of AGI over the $200,000 or $250,000 amount from January & Peak & Trough
Hom es: detached
over-year. The median price is now up 26% from
As an example, let’s take the sale of a principal YTD Peak % Trough % Peak Trough the bottom of the market, and only down 17% from
residence. 3-month 23% -17% 26% Jun-07 Feb-12 the peak.
John and Mary sold their principal residence and 12-month 7% -18% 8% Apr-08 Mar-12 SALES MOMENTUM…
realized a gain of $525,000. Hom es: attached for homes slipped 0.5 of a point to +10. For
3-month 21% -4% 21% Jul-08 Jan-12 condos, sales momentum gained 0.4 points to +18.
They have $325,000 Adjusted Gross Income
12-month 10% -7% 11% Aug-08 Jan-12
(before adding taxable gain). PRICING MOMENTUM…
The tax applies as follows: continued moving upward in October, rising 2.3
NOVEMBER MARKET STATISTICS points to +5.3. The number for condos rose 2
AGI Before Taxable Gain $325,000 points to +8.2.
San Francisco Homes: Year-Over-Year Median Sales Price Change CONDO/LOFT STATISTICS…
30.0%
The median price for condos gained
21.8% year-over-year. Sales were up
20.0% 28.4% from last November.
10.0% This is an tough market for buyers. Be
0.0% calm and realistic. If you don’t know
0 FMAMJ JASOND0 FMAMJ JASOND0 FMAMJ JASOND1 FMAMJ JASOND1 FMAMJ JASOND1 FMAMJ JASON where to begin, give me a call.
-10.0% 7 8 9 0 1 2
-20.0%
-30.0%
-40.0%
© 2012 rereport.com
Robb Fleischer | rfleischer@amsiemail.com | (415) 447-2009

2. The Real Estate Report
MY HOME ISN’T SELLING
30-Year Fixed Mortgage Rates Even in a market where multiple offers are prevalent, But first, the seller has to prepare themselves, and
where inventory is at record low levels, and the sell- the property, to sell.
10-12 ing price is higher than the asking price for those
07-12 For the seller, remember, you are selling your house,
homes which do sell, there are still properties that are
04-12 not your home. You will be buying a new house and
01-12 not selling.
making it your new home.
10-11
07-11 The main reason for this phenomenon is sellers who
Next, lay out your strategy. In this market, you want
04-11 are not ready to sell.
01-11 to maximize your exposure and generate interest in
10-10 O.K., then why do they put there homes on the mar- the property.
07-10 ket, you ask.
04-10 Prepare it for sale by fixing all the little niggling things
01-10 Simple, if I could get an obscenely inflated price for that are wrong. Create a video tour. Set the price a
10-09
07-09 my home, I would take it. point or two BELOW market value. Set a date for a
04-09 massive open house spanning four days: Friday
01-09 The next question is how does one know when a
through Monday. Put the property into the MLS and
10-08 seller is not serious?
07-08 blast the listing onto the internet. You are generating
04-08 First, the house is priced over the market. buzz and interest.
01-08
10-07 Second, it’s difficult to even get in to see the house. State you will be excepting offers on Tuesday. After
07-07 There is no lock-box and an appointment has to be reviewing the offers, make counter-offers on
04-07
01-07 made to see it. Wednesday. Pick the best offer on Thursday, then
10-06 open escrow on Friday.
07-06 And the seller wonders why his/her home isn’t sell-
04-06 ing? Really? The question is, are you ready to sell your house?
01-06
3.0% 4.0% 5.0% 6.0% 7.0% 8.0% In today’s super-sellers’ market, it is quite easy to sell
a property quickly and for more than market price.
San Francisco Homes: Sold Prices & Unit Sales
The chart above shows the Na- (3-month moving average — $000's)
tional monthly average for 30-
year fixed rate mortgages as $1,500 300
compiled by HSH.com. The av- $1,300 250
erage includes mortgages of all
sizes, including conforming, $1,100 200
"expanded conforming," and $900 150
jumbo.
$700 100
$500 50
$300 0
0 FMAMJ JASOND0 FMAMJ JASOND0 FMAMJ JASOND1 FMAMJ JASOND1 FMAMJ JASOND1 FMAMJ JASON
7 8 9 0 1 2
Ave Med Units © 2012 rereport.com
November Sales Statistics
(Single-family Homes)
Prices Unit Yearly Change Monthly Change
Median Average Sales DOM SP/LP Median Average Sales Median Average Sales
San Francisco $ 834,500 $1,134,471 260 42 104.8% 19.6% 1.4% 15.6% -1.2% -14.2% 6.6%
D1: Northw est $1,167,944 $1,448,947 22 46 103.0% 36.6% 30.0% 57.1% 9.9% -15.4% -8.3%
D2: Central West $ 806,500 $ 832,405 40 41 105.0% 24.1% 12.8% 5.3% 7.5% 4.6% -11.1%
D3: Southw est $ 698,000 $ 704,684 19 41 103.0% 33.6% 27.9% 18.8% 9.9% -7.5% 111.1%
D4: Tw in Peaks $ 950,000 $1,090,190 46 39 104.1% 20.3% 21.2% 100.0% 2.7% 9.0% 58.6%
D5: Central $1,510,000 $1,609,154 39 39 108.0% 5.6% 18.0% -4.9% 11.9% 8.2% 8.3%
D6: Central North $1,245,000 $1,245,000 2 35 99.8% -38.7% -38.7% 0.0% -19.7% -29.2% -81.8%
D7: North $2,981,250 $4,106,875 12 72 100.7% -11.8% -23.5% -14.3% -21.2% -11.2% -33.3%
D8: Northeast $1,874,000 $1,874,000 2 42 104.4% -25.8% -25.8% 0.0% 44.7% 28.0% -75.0%
D9: Central East $ 790,500 $ 887,800 20 31 108.7% 24.5% 27.8% 5.3% -1.2% -17.5% 33.3%
Page 2 D10: Southeast $ 520,000 $ 521,002 58 45 106.8% 18.2% 16.1% 7.4% -3.7% -1.2% 18.4%

3. San Francisco Condos/Lofts: Year-Over-Year Median Sales Price Change
30.0%
20.0%
10.0%
0.0%
0 FMAMJ JASOND0 FMAMJ JASOND0 FMAMJ JASOND1 FMAMJ JASOND1 FMAMJ JASOND1 FMAMJ JASON
-10.0% 7 8 9 0 1 2
-20.0%
-30.0%
© 2011 rereport.com
FORECLOSURE STATISTICS
Notices of default, the first step in the foreclosure pro- investor, bids more than the bank's opening bid, the
cess, in San Francisco inched up 2.3% in October from property will be sold to the third party; if not, it will go
September. Year-over-year, notices were down 56.5%. back to the bank.
Notices of sale, which set the date and time of an auc- In September, cancellations were up 90.6% from Sep-
tion, and serve as the homeowner's final notice before tember, and up 25.8% year-over-year. The banks are
sale, rose 5.9% from September, but were down 19.6% obviously more amenable to working out solutions to
year-over-year. avoid foreclosure. What took them so long?
After the filing of a Notice of Trustee Sale, there are Properties going back to the bank were up 10% in Oc-
only three possible outcomes. First, the sale can be tober from September. Year-over-year, the number of
cancelled for reasons that include a successful loan properties going back to the back was down 56.9%.
modification or short sale, a filing error, or a legal re-
The total number of properties that have had a notice of
quirement to re-file the notice after extended postpone-
default filed fell by 34.6% compared to October 2011.
ments.
Alternatively, if the property is taken to sale, the bank
(Continued on page 4)
will place the opening bid. If a third party, typically an
San Francisco Condos: Sold Prices & Unit Sales
(3-month moving average — $000's)
$1,000 350
Table Definitions
$900 300 _______________
$800 250
$700 200 Median Price
The price at which 50% of pric-
$600 150
es were higher and 50%were
$500 100 lower.
$400 50
$300 0 Average Price
0 FMAMJ JASOND0 FMAMJ JASOND0 FMAMJ JASOND1 FMAMJ JASOND1 FMAMJ JASOND1 FMAMJ JASON Add all prices and divide by the
7 8 9 0 1 2 number of sales.
Ave Med Units © 2012 rereport.com
SP/LP
November Sales Statistics Sales price to list price ratio or
the price paid for the property
(Condos/TICs/Co-ops/Lofts) divided by the asking price.
Prices Unit Yearly Change Monthly Change
Median Average Sales DOM SP/LP Median Average Sales Median Average Sales DOI
San Francisco $ 771,000 $ 957,247 258 48 101.3% 21.8% 21.1% 28.4% 1.4% 7.9% -3.7% Days of Inventory, or how many
D1: Northw est $ 825,000 $ 835,747 17 36 100.9% 23.5% 31.0% 30.8% -13.8% -15.5% 112.5% days it would take to sell all the
property for sale at the current
D2: Central West $ 725,000 $ 740,000 5 21 103.3% 93.3% 97.3% 400.0% 3.2% 1.9% -37.5% rate of sales.
D3: Southw est $ 335,500 $ 335,500 2 34 105.2% 39.0% 18.8% -33.3% -17.2% -17.2% 0.0%
D4: Tw in Peaks $ 487,000 $ 461,500 3 47 106.7% 19.7% 13.4% 50.0% 8.2% -5.2% -57.1% Pend
D5: Central $ 822,000 $ 900,012 40 43 107.5% 6.1% 15.1% -7.0% -6.1% -0.8% -13.0% Property under contract to sell
that hasn’t closed escrow.
D6: Central North $ 701,000 $ 811,317 23 39 105.1% 3.9% 13.4% 53.3% 26.6% 41.9% -36.1%
D7: North $1,041,250 $1,362,775 34 47 100.4% 11.4% 10.0% 61.9% -1.9% 9.4% 41.7% Inven
D8: Northeast $ 745,000 $ 997,304 42 55 99.1% 33.0% 13.7% 5.0% -9.9% -17.6% -8.7% Number of properties actively
D9: Central East $ 729,500 $ 936,040 88 53 99.3% 31.4% 36.9% 39.7% -3.8% 15.0% 2.3% for sale as of the last day of the
month.
D10: Southeast $ 413,000 $ 413,000 2 82 108.1% n/a n/a n/a 50.2% 54.3% -33.3%

4. THE REAL ESTATE REPORT
San Francisco
Robb Fleischer
American Marketing Systems, Inc.
2800 Van Ness Avenue
San Francisco, CA 94109
Go online to see the full report
with the district by district breakdown:
HTTP://WWW.AMSIRES.COM/STAFF/ROBB
San Francisco Homes: Sales Momentum
(Continued from page 3)
25.0
The total number of properties sched- 20.0
uled for sale declined by 27% year- 15.0
over-year 10.0
5.0
The total number of properties owned 0.0
by the bank was down 26.7% year- -5.0 0 FMAMJ JASOND0 FMAMJ JASOND0 FMAMJ JASOND1 FMAMJ JASOND1 FMAMJ JASOND1 FMAMJ JASON
over-year. The banks now own approxi- -10.0
7 8 9 0 1 2
mately 476 properties in the city. -15.0
For further details and a city-by-city -20.0
breakdown of foreclosure statistics, go -25.0
Sales Pricing © 2012 rereport.com
to http://foreclosureradar.com.
San Francisco Condos/Lofts: Sales Momentum
40.0
30.0
20.0
10.0
0.0
0 FMAMJ JASOND0 FMAMJ JASOND0 FMAMJ JASOND1 FMAMJ JASOND1 FMAMJ JASOND1 FMAMJ JASON
-10.0
7 8 9 0 1 2
-20.0
-30.0
-40.0
-50.0
Sales Pricing © 2012 rereport.com
The Real Estate Market Trends Report is published and copyrighted by http://rereport.com.