April 28, 2012

BMR Coming to Menlo Park?

Some cities are more compliant than others in providing BMR (Below Market Rate) housing.  Perhaps Menlo Park will be getting off the “But we don’t have any below market residents” excuse pot.

Menlo Park eyes below-market rental housing

HIP Housing proposes deal with Menlo Park

120426-willow-pierceby Sandy Brundage, Almanac Staff

The city of Menlo Park has its eye on a Willow Road apartment complex that might be purchased for use as below-market-rate rental housing — something that currently doesn’t exist in Menlo Park.

The 12-unit complex, located at 1157-1161 Willow Road, comes with a price tag of around $2 million, according to a representative from HIP Housing, a nonprofit organization that specializes in finding below-market-rate housing and hopes to partner with Menlo Park on the deal.HIP currently operates 13 rental properties in San Mateo County.

120426-willow-backThe Willow Road complex would rent nine units to people earning less than 50 percent of the regional median income of $81,300, and three units to those making less than 30 percent. Rent at the complex would fall in the range of $610 to $1,016, according to a staff presentation.

A real estate listing described the property as vacant and partially renovated; it also said the complex had won a renewable energy award for upgrades such as solar panels and efficient lighting. Laundry and parking are available on site.

The apartment buildings are not currently for sale (the first is pending, the second is merely delisted).  They were built in 1958.  If you want to dig deep into the offering memorandum for the two buildings, have a look at this PDF.  And check out the pictures.  Solar panels!  Sweet!

120426-willow-offerpix

Assuming the rental numbers are correct, that would give this complex a rent ratio of 10.26.  BUY!!!!!!!!  Then again, I’m not sure I trust these numbers.  Notice something hinky here?

120426-willow-math

While Burbed has yet to amass a huge portfolio of investment property, even we can tell the difference between a 5 and a 50% vacancy rate.  This is another great reminder of how Real Estate Professionals deserve those hefty commissions, whether commercial or residential.

Discuss this neighborhood, older apartment homes like these, BMR housing, any Open Houses you visited, or anything else you can think of. Yes, this is your weekend open thread.

Comments (9) -- Posted by: madhaus @ 5:08 am






November 16, 2011

A Thousand Dollars per Square Foot? That’s *All*?

Here’s a house that will give the entire la-di-da zip code of 94301 the “You’re not wearing THAT cheap thing?” glare it so rarely gets.  Yes, today’s featured listing is asking more than double the $1000 a square foot altitude we’ve come to love near University Avenue.

Thanks very much to Redfin Bay Area Forums reader tarazet for this find.

 

86 Stanton St, San Francisco, CA 94114
$1,150,000

image

BEDS: 1
BATHS: 1
SQ. FT.: 435
$/SQ. FT.: $2,644
LOT SIZE: –
PROPERTY TYPE: Single-Family Home
STYLE: Cottage
YEAR BUILT: 1918
COMMUNITY: Eureka Valley/Dolore
COUNTY: San Francisco
MLS#: 382947
SOURCE: San Francisco MLS
STATUS: Active
ON REDFIN: 202 days

Two Buildable Lots and One Updated Cottage that sits in a little dell, down flagstone steps, with a terraced stone-paved front yard and grassy side yard. Two skylights, bleached hardwood floors, peaked beamed roof, bathroom with glassblock. Pedini Kitchen: Viking range, Carrera marble countertops. Great development plans available for viewing or develop your own.

imageHave we ever had a house listed for this much a foot?  This one cleared $2000 a foot, but isn’t anywhere as awesome because its high price is due to being on half an acre in Los Gatos.  Today’s house breaks the $2600 a foot barrier on a whopping 2347 square foot lot.  Now that takes some doing.

That’s right.  TWO buildable lots on the 2347 square feet.  I bet this house is perfect for two families as well.

Speaking of $2600, that’s exactly what this place rents for per month.  That means the price rent ratio is a delightfully buyer-friendly 36.86. Wowzers, you’d best jump on this place, because that hanging Ikea lamp probably adds at least an extra $75,000 to the kitchen.

Update: Price reduced to a million even last Friday.  It’s now a bargain at $2,299 a foot!

Comments (9) -- Posted by: madhaus @ 5:10 am

June 13, 2010

San Francisco: America’s Smartest City? At These Prices?

Blogger Economist Rob Pitingolo measured which metro area was the “smartest,” and used the density of higher education degrees as his metric.  His essay has gotten recent notice from USA Today, the San Francisco Chronicle, and my good buddy Greg Fielding.  Fielding asks if San Franciscans are so smart, then “why do they accept such painfully-high price-to-rent ratios?”  That’s pretty much the old “If you’re so smart, why ain’t you rich,” saw isn’t it?  I’m going to demonstrate that Fielding asked the wrong question.

On a per-large-city basis, San Francisco blew the rest away with a whopping 7,031 degrees per square mile.  San Jose, the supposed “Capital of Silicon Valley,” lags fifteen places behind with an unimpressive 1,259.

It’s becoming increasingly accepted that there is real economic value to bringing a lot of smart and entrepreneurial people together in the same place. This can be tough to measure, unfortunately.

Yup, Math class is hard.  Pitingolo wondered whether the surrounding areas benefit from a core city’s degree concentration, and repeated the same measurements on a county level.  But many of his comparison cities are either contiguous with their counties, or are strongly linked with unmentioned surrounding counties, resulting in a lovely display of apples and orangutans.  And for some reason, the City and County of San Francisco was merged with contiguous San Mateo in the county section, dropping to fifth place with an anemic 1,105.  San Jose’s results also collapsed when amalgamated with Santa Clara County (413).  Obviously counties with huge swaths of farmland will pull these numbers down no matter how many Ph.Ds are sipping lattes on University Avenue.  What the density metric implies, and whether the county data make anything clearer is still up for discussion in the blog’s comments.

Meanwhile, Research Triangle Park, North Carolina scored first on The Daily Beast’s completely arbitrary measure of Metro IQ.  This alternative intelligence ranking was based on each million plus metro area’s ratio of degrees, colleges in the region, nonfiction book sales, and percent of eligible voters voting.  San Francisco-Oakland-San Jose came in second, scoring first with education but losing out to Raleigh-Durham due to relative voter apathy.  I will leave it as an exercise to the Real Bay Area reader exactly how valuable a measure of regional IQ can be that equates Duke, UCNC, and Chapel Hill with Stanford, Cal, USF, SF, Hayward and SJ States, and (in your face, Tar Heels!) Foothill.

We can argue whether completing a college degree is any indication of intelligence.  We can debate whether Pitingolo’s study erred by emphasizing population density over percentage of degree-holders, thus boosting teeming multistory cities such as San Francisco over low-profile megaburbs such as San Jose.  We can present various ways to measure what is a city, what is a metro area, and what is a region.  We can ask to what degree “human capital sprawl” limits a city’s economic engine (as in Oklahoma City) as opposed to revving it in Silicon Valley.

But there is no escaping real estate.  And here’s a better article that also says we’re #1, by one of my favorite authors, Richard Florida.  Florida noticed Pitingolo’s study too, although he didn’t have much to add to it.

Florida began with the perennial question of whether to rent or buy.  He studied 133 metropolitan regions,  noted the places with high versus low housing price to rent ratios (HPRs), and found that areas with higher HPRs have higher housing prices and lower percentages of people who are homeowners.  As Florida put it, “the costs of owning are relatively lower in places where more people already own their own homes.”  When prices are relatively higher, fewer own because fewer can afford to.

Then Florida looked at economic data for the regions: output, income, and wages.  Those with higher HPRs tend to be more productive, have more wealth, and higher wages.  And he already showed earlier that week that high HPRs are correlated with lower unemployment rates.  Hmm, high housing cost, high wages, high income, high productivity… does that sound like anywhere you know?

Previously, we’ve seen how smart regions have higher levels of income, economic output, and overall well-being. It costs relatively more to own in smarter, more advanced regional economies. We measure smart regions in terms of the level of human capital; the percentage of the workforce in creative, knowledge-based, and professional occupations; and the level of technology-based industry. The HPR ratio is positively related to all three. The correlation between the HPR ratio and human capital (measured as the share of metro population with a bachelor’s degree or higher) is .4.

Ah, there’s that college degree metric again that made all the headlines, measured it in percentage instead of density.  Florida says San Francisco is a smart region, and therefore an expensive one.  So, San Franciscans don’t pay high rent ratios because they aren’t smart.  They pay high rent ratios because they are.  The smarter a region is, the higher those ratios should be.

Florida concludes that the conventional wisdom of buying at a low HPR (15 or even 20) isn’t that wise.  Instead, he suggests you buy where skilled people want to work, where there are good economic prospects, and where homeownership isn’t routine. Buy where there are plenty of people who want to buy but haven’t yet.  When it’s time to sell, you’ll have plenty of potential customers.

It’s counterintuitive, but rent in Pittsburgh, but buy in San Francisco.  That’s the smart thing to do.

Comments (50) -- Posted by: madhaus @ 5:03 am

April 5, 2010

Any mobile home experts can explain this rent-buy ratio?

Beds: 1
Baths: 1
Sq. Ft.: 576
$/Sq. Ft.: $64
Lot Size: -
Property Type: Single-Family Home
Community: Brisbane
County: San Mateo
MLS#: 368217
Source: San Francisco MLS
Status: Active This listing is for sale and the sellers are accepting offers.
On Redfin: 4 days
MOBILE HOME attractive clean pleasant w/ newer appliances, near 101, airport, and near Brisbane school district.
image

Thanks to Burbed reader Jeff for this find.

OK all you finance and MBA types out there… what’s up with this? How can this be on sale for $37k, but rent for $775?

Shouldn’t it be the other way around? Rent for $37 a month, sell for $775k?

Any ideas?

Comments (19) -- Posted by: burbed @ 5:52 am

August 13, 2007

We’re #1! Highest Mortgage/Rent Ratio!

I noticed that HousingTracker finally refreshed to show 2007 Q1 stats:

HousingTracker.net: Affordabilty Measures
Mortgage to Rent: The ratio of the mortgage payment on a median (sale) priced single family (again assuming 20% down and a 30-year fixed rate loan) to the local median rent for a 3 bedroom apartment.

mortgagerent.png

Sweet! We’re #1!

I love being #1. Next year, our Mortgage/Rent ratio will be 3! You heard it here first!

Comments (4) -- Posted by: burbed @ 4:52 am

April 6, 2006

Orange County tops Bay Area in price-rent ratios

charles hugh smith-Weblog and wEssays

# The ratio between rents and prices–what a house rents for compared to what it fetches when sold–is at historically unsustainable levels. This graph says it all: a hockey-stick rise in values which far outstrips the income potential of the property. At these levels, housing makes no sense as an investment; it only makes sense as a speculation if the mania continues.

I think the real problem is that the OC beat the SF!

Comments (2) -- Posted by: burbed @ 5:00 am