Median Rent for 1BR Apartment in Bernal Hits $2800 (What a Bargain!)

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Time for a quick check-in on the state of Bernal Heights apartment rentals. The data geeks at Zumper just pulled together an overview of 1-bedroom apartment rental costs across town. Citywide, the rent is too damn high:

The San Francisco rental market continued to be the most expensive rental market in the country, reaching an all-time high of $3,460 for a 1-bedroom apartment. While prices in New York City remained largely flat at $3,000 last month, SF continued upwards, increasing 1.5% month over month and 3.3% over the last quarter.

That said, rental prices in Bernal are on the low-crazy side of totally insane, relative to many neighborhoods around us.

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Of course, the thing about Bernal is that it doesn’t have a lot of 1BR inventory. Here’s Zumper’s map of 1 BR rental listings in the neighborhood right now:

bernalrentalsfeb15

MAPS: by Zumper

Bernal Architect Designs Affordable Housing That’s Beautiful

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San Francisco needs more affordable housing. Much more.

But affordable architecture gets a bad rap. It’s ugly. It’s too institutional. It’s too homogeneous. It’s visual blight.

Often, those generalizations are true… which has the very unfortunate effect of making San Franciscans (even more) resistant to new affordable housing projects. That’s super extra-bad, because San Francisco really needs more affordable housing. Much more.

Architect Owen Kennerly is a resident of Holly Park, and he was the co-designer of a new affordable housing project in Mission Bay that’s so gorgeous it makes San Francisco Chronicle architecture critic John King swoon.

The building is 1180 Fourth Street, and here’s as taste of what The John King has to say about it:

Architecturally, the six-story wedge of 150 apartments adds an assertive spark in a young district with too many boilerplate buildings. At ground level it’s engaging, a pleasure even before the generous retail spaces are filled. There’s a social payoff as well: The units are reserved for low-income families, adding youth to the neighborhood scene.

None of this is by chance, and it shows how planning priorities can translate to good city building — especially when determination and creativity are added to the mix.

The first step was the decision long ago to reserve the site for affordable housing. It’s a prime location fronting a park where Mission Creek is crossed by Fourth Street, the entryway to the 200-acre-plus southern part of the Mission Bay redevelopment district established in 1998. Setting it aside for lower-income residents was a symbolic reminder that economic integration should be pursued when and where it makes sense. But a well-meaning gesture isn’t the same as a well-done piece of architecture. That’s where smart design comes in.

The architectural effort was led by Daniel Solomon and Owen Kennerly, whose relationship goes back to the 1990s when the latter was a UC Berkeley student and an employee of the former. Kennerly now has one of the most visually inventive small firms in the city.

This is not Neighbor Owen’s first rodeo. He’s created several cool buildings around San Francisco, including a gorgeous house that got the sexy treatment from The New York Times. Neighbor Owen’s design for the affordable housing at 1180 Fourth takes his work in a wonderful new direction, and it shows that his architectural kung-fu is extremely versatile.

Great work, Neighbor Owen, and thank you. Oh, if you have some spare time, could you please pull together some sketches for a mixed-use housing and supermarket retail project to go on the site of our managerially blighted Bernal Safeway? Mmmkay? That’d be great.

PHOTO: San Francisco Chronicle

Bernal Contractor Explains How to Remodel Your Home Without Going Broke or Insane

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Bernal neighbor Brian Streiffer is a former general contractor (and current construction supervisor) who lives on Winfield.

FULL DISCLOSURE: Neighbor Brian and your Bernalwood editor are old friends, and we played a lot of hacky-sack together during the 1980s.

Anyway, fast-forward three decades and several economic cycles, and Neighbor Brian now has many moons of experience building and remodeling homes in San Francisco under his belt. His talent and professionalism has been affirmed for us by his former clients, several of whom also now consider him a friend.

So when Neighbor Brian said he wanted to write something for Bernalwood, we suggested he share some precious wisdom on how to work with a contractor to do a home remodel without going broke, or insane, or both. Herewith are Neighbor Brian’s Pro Tips for would-be Bernal home improvers:

I’ve been remodeling homes since the early 1990’s. One of the things I love most about residential work is the unique insight it offers me into how people relate to their homes and the people who work on them.

Every client is unique in some way. Some people hate the mess and inconvenience. One of my clients was so distraught when demolition began that her partner forbade her from visiting the house until the drywall went back in. Other people think construction is cool, and can anticipate the finished product long before the work takes shape  My favorite client ever — when forced to live in half of her house with her husband and 2 small kids while we worked on the other half — said, “camping on a futon in the living room reminds me of being back in college. So cool!” What a client! She never uttered a sour word to me or my crew and we ultimately became good friends.

I’ve always found it fascinating to see how people react to construction, and how the Contractor/Owner relationship plays out. Working in people’s homes is very personal stuff. Some people cope well, and other people don’t really understand what they are getting into.

Amid all of the current real estate hubbub, I thought it might be interesting to share some remodeling advice for homeowners, from a contractor’s perspective. Here  are a few observations to keep in mind when planning a construction project.

The Golden Rule of Construction
There is a saying in construction that really rings true: “There are three types of construction: Fast, High Quality, and Inexpensive. You can pick any two.”

The point here is that you have to understand the fundamental trade-offs between quality, speed, and price. Remember this, always, and if you know which is most important to you, you can more easily select a contractor who fits best with your needs. I cannot count the number of times clients have asked me if I would consider an incentive to expedite their project. I always defer, explaining that fair payment is motivation enough. If they push the issue, I explain further that it typically doesn’t make financial sense to trade money for speed on a construction project. Construction is simple in many ways, but it is not easily done in less time than normal without risking quality or significant cost increases.Unless money is no object — and I have yet to find a client for whom that was true — it is ALWAYS cheaper to rent an apartment or take a vacation to get away from the mess, rather than to pay the contractor to knock a few weeks off of the schedule.

What to Look for When Looking for a Contractor
In slower economic periods ( such as from 2008 to 2013), homeowners can expect to get multiple bids and cherrypick the best deal from multiple contractors. But in hotter markets like we see today, you have to court your contractor as much as they need to sell you.

If you are at the beginning of the planning process for a larger project, defer to professionals for how and when to seek bids. It is fine to ask contractors for their impressions of a project early in the planning phase – contractors are generally happy to suggest potential budget ranges for you – but don’t ask seven companies to provide proper bids on a set of preliminary plans if the project is six months or more down the road. Preliminary numbers are not generally useful when making hiring decisions, so tread lightly when asking people to provide estimates. The point of early preliminary interviews should be to glean information about what lies ahead, and to begin to develop a rapport with people you might want to work with. But don’t ask too much of contractors too soon. Contractors don’t like putting bids together for no reason.

Indeed, anything you can do to save the contractor time and hassle while preparing your bid will be repaid tenfold when it comes time to work collaboratively during the project. If you don’t have a set of plans you can provide, write up a bullet-point list of everything you think the project entails. If you know what fixtures you want to have installed, don’t ask contractors to go through the trouble of estimating the same thing on their own. Contractors really appreciate simple steps like that, and they can pave the way for a more successful working relationship.

It’s About the Relationship
Just showing you are motivated and organized can be quite appealing to potential bidders. The flip-side, however, is that you don’t want to look compulsive about your project, or you will likely scare good people away.

Ultimately, you have to decide who to hire. I cannot say enough about the importance of getting along with your contractor. Construction is an inherently messy, invasive process that often takes longer than you or your contractor would prefer. So you might as well like the people you are working with! If you get a bad vibe from someone, heading in another direction might be wise. If someone seems a little too busy to you, hiring someone with more availability could be better. Signing a contract to remodel your kitchen or build out your basement might seem like a business or financial decision, but residential construction is ultimately a very personal process. Working with someone you like can make all the difference. Keep this in mind and don’t focus on costs alone when comparing bids.

Expect the Unexpected
“Life is Change” they say, and construction is no different. Residential remodeling projects of almost any size can change for any number of reasons. And they will. Termites, code changes, horrors hidden inside walls, neighbor complaints, even simple human error can send your project off in unforeseen directions. You can’t always know what to expect in the way of surprises, but you can prepare for them financially by including a contingency for additional costs in your personal budget. Especially when you need to stay within a specific overall cost, setting extra money aside is a wise thing to do. How much is right? Read on.

The Truth About “Change Orders”
Much has been said about the dreaded Change Order, those bills for additional work that goes beyond the scope of the original project bid. But Change Orders are a part of construction that you have to be prepared for, and they go hand in hand with remodeling.  In my years as a contractor, I never once had a project of more than $20,000 that didn’t involve a cost increase of one kind or another. Stuff happens. I think most contractors price Change Orders fairly.  Yes, they can be costly. And yes, there are unscrupulous souls among our lot who generate too many of them. (I have no doubt that there is probably is a contractor out there somewhere with a boat named Change Order and a dingy named Contract.)  But as a rule, contractors don’t get rich off changes in the scope of work.

If you can’t avoid extra costs, what can be done to avoid the stress associated with them? First, ask your contractor or architect to estimate a reasonable contingency budget  for your project. A kitchen might require a 5% contingency, but a lateral addition might merit 10% or more.  Whatever the case, budget this amount and consider the money spent.  You’ll sleep better. Much better.

Second, look beyond the construction contract cost and develop an overall project budget. What costs are excluded from the contractor’s scope of work? Will you have landscaping to do when the contractor leaves? Engineering or Special Inspection costs to incur during the project? And don’t forget about owner-supplied fixtures or furniture. Those things can really add up, and you need to be thorough and realistic about your project budget.

A Caution on Contractor References
If you think that checking your contractor’s references is a form of due diligence, think again. References are cherrypicked by the person you are checking up on, so take what you hear from them with a grain of salt. I don’t believe checking reference is particularly helpful, unless you want someone to help nudge you in a particular direction. If your decision comes down to two bidders, it might be more helpful to ask which contractor can start (or finish) sooner, or consider who has more experience with projects similar to yours, or which contractor might be willing to shave a few thousand dollars off the cost in order to win your business. (OMG, did I just say that!?!) Out-of-the-box questions along those lines might be more insightful than what you hear from references.

To Permit or Not to Permit… Is That Your Question?
I generally advise homeowners to get permits for as much work as possible, as it tends to pay off in terms of market value when it comes time to sell your house. Especially if you are plan to do work outside of your four walls, where just about anyone could call you in for doing work without a permit, paying permit fees makes good sense. However, it’s also worth noting that the SF Building Department has changed its policy concerning unpermitted work. Long gone are the days when inspectors were paid to snoop around on Saturdays looking for unpermitted work. If your budget is tight, and you trust your neighbors, and the work is all inside of the house, you have options.

Beware of the Lowball
If you receive bids which are vastly different, be careful before accepting the low bidder. If you know what you are doing and follow some of the advice I have given here, you should end up with an apples-to-apples set of bids where one bid stands out as a clear value. This IS possible! However, it’s also possible to get into trouble by hiring based on numbers alone. Carefully review bids to understand WHY the numbers are different. Talk to your contractor before signing on the dotted line as to his/her expectations for how changes to the price might unfold. No matter what the contract says, what’s not stated can be equally important. So understand where the low bidder is coming from by generating such a tantalizing price. One of the absolute worst things that can happen is for your contractor to get in hot water because of an under-pricing mistake made when bidding the project. What can seem like a great deal when work begins can easily unravel if your contractor gets into financial trouble because of it. (EDITOR’S NOTE. This is exactly what happened to me. See the photo notes below.)

Little Guys vs. Bigger Guys
Another thing to be wary of is very small contracting firms. Whether an unlicensed “Jack of All Trades” or a licensed contractor who performs many trades by him/herself, going with a very small company comes with very real risks you should understand. Yes, there are diamonds in the rough who do great work time and time again, but they are the exception to the rule when it comes to small construction companies. Most people who excel in construction tend to gravitate toward larger operations, where efficiencies of scale come into play and specialization can be leveraged. People who work alone have fewer resources to bring to bear on your project, which can be especially frustrating toward the end of the project, when you just want them to be done and gone. That said, the prices of smaller firms are sometimes unbeatable, so just make sure you understand exactly what is being promised in terms of time and cost before signing up with a smaller independent. Even if they come highly recommended from someone you know, they have to be the right person for YOUR job.

PHOTO: Your Bernalwood editor’s home on July 24, 2004, a few days after our lowball contractor announced that he planned to abandon our remodeling project to instead divorce his wife and begin a new career in marijuana cultivation. Photo by Telstar Logistics.

$3 Million Ripley Home Sale Sets New Bernal Price Record

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It’s official: The rather dashing home at 171 Ripley just sold for $3 million, instantly setting a new Bernal Heights sale price record — just a week after 152 Elsie had set a new record at $2.3 million .

SocketSite brings the gobsmacking news:

As we wrote when we first reported the record breaking sale of 152 Elsie last week, “the quiet sale of another Bernal Heights home which was never officially on the market is poised to blow away the $2.3 million record.”

And this afternoon, the sale of 171 Ripley was officially added to the MLS, “for comp purposes only,” with a record setting sale price of $3 million.  Measuring 2,313 square feet, that’s roughly $1,350 per square foot for the architect’s home which is faced in recycled copper and known to some as “the copper house.”

For whatever it’s worth, SocketSite adds “The seller was an architect at Gensler for over 30 years, and the firm’s President and CEO for over a decade.  And no, the buyers aren’t ‘techies’ nor are they from overseas.”

PHOTO: 171 Ripley

Extremely Graphic Infographic Visualizes 2014 Bernal Heights Microhood Real Estate Trends

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As you no doubt recall, Bernalwood’s 2014 Official Guide to the Subdistricts of Bernal Heights (shown above) was created to map the cultural and topographical geography of our neighborhood in a way that’s both tongue-in-cheek and also kind of somehow vaguely true. What you may not recall, however, is that the Official Subdistricts were specifically created as a playful response to a realtor who had attempted to create her own (less homegrown) sub-map of Bernal Heights.

Well, now that concept has come full-circle.

Neighbors Michael Minson and Danielle Lazier live in Bernal Heights, and they work as realtors. So when Neighbors Michael and Danielle approached Bernalwood seeking permission to use Bernalwood’s Official Subdistrict Map as a framework to analyze 2014 Bernal Heights real estate trends, we had to say yes. Because they are certified Bernalese. Because data. Because economics. Because morbid curiosity.

And what are the results? Well, when Neighbors Michael and Danielle mapped 2014 residential sales against the Official Microhoods of Bernal Heights, they got a year-in-review infographic that looks like this:

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They also offer this executive summary:

2014 was another banner year of double digit appreciation and record high prices for Bernal Heights. The median increase in sale price for single family houses in Bernal increased 21% from 2014 over 2013.

This followed a 23% median increase from the year prior.
The median sales price for a house was $1.16M this year.

Your intrepid real estate agents and data junkies analyzed the Bernal market using the infamous Bernalwood Microhood map as a way to further understand the market. Microhood names and designations are courtesy of our friends at Bernalwood.

Click here for the full Bernal Heights 2014 Market Recap Report. For the hardcore, you can also check out our raw data set.

Outlook–The view from the hill
> Bernal market is very strong–sellers remain in a great position
> As more inventory comes on market, prices are expecting to stabilize
> Expect $900+/sq. ft. or more to become the new median PPSF
> List prices will increase but overbidding will remain prevalent

Bernal Insights Overall – What did we see?
> Market is still very strong but may be cooling ever so slightly (21% increase in median price vs. 23% last year)
> Less inventory is keeping house prices high–10% fewer houses traded; median price is at an all-time high of $1.16M
> An increase in condo supply in 2014 may be the cause for the relatively more modest 10% median price appreciation in Bernal’s condo market
> Demand is still very high– 83% of houses and 73% of condos sold over asking, with an average of 18% and 11% over list price, respectively
> Median price per square foot for houses is $811/sq. ft., condos is $786/sq. ft.
> Overbidding is the norm: 83% of houses sold over the list price, at an average of 18% over. 73% of condos sold over asking, at an average of 11% over.

Real Estate Graphic: via MichaelMinson.com

Neighbor Meets Uber Driver Who Lives in Bernal Heights, Worries About Rent

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Neighbor Jen lives in the La Lengua Autonomous Zone, and she shares this story about how she recently met another neighbor who drives for Uber to make ends meet:

The Uber driver who picked me up today turned out to be my neighbor. He lives literally 3 doors down from me on Mission and has lived there for nearly 35 years. I’d never met him before today, but he told me he pays $900 for a 3-bedroom apartment thanks to rent-control. However, the building just next to him sold, so he is nervous he will be pushed out by “Silicon Valley guy” who is buying a lot of properties on Mission St.

I had an amazing ride with him, and got to hear about how he put 3 kids through college (and good schools too) and worked 16-hour days at a bank downtown and now drives an Uber a few hours a day because it isn’t “trabajo duro;” it’s fun for him and he only drives in Bernal/Noe/Mission. Even if he gets a fare that takes him downtown (like I did) he just turns around and heads back to the hood because that’s where he likes to drive.

Who knew Uber, or all companies, would help me meet my neighbor? I’ll be looking for him on the street to say hello, or snag a ride, and am glad to know that there still are *some* rent-controlled units around, especially on a block where every other storefront has turned over in the past year. For context, the people on the floor below me are paying $4300/month for a 1000sqft 3bed 2bath.

Yours in real estate tales,

Neighbor Jen down in La Lengua

Illustration: Bernalwood

Your Autumn 2014 Bernal Heights Real Estate Summary: Historically Bonkers, with a Chance of Maybe Somewhat Less Bonkers

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Let’s review some fresh-squeezed real estate data, shall we? We begin with a summary of recent Bernal Heights home sales, compiled by Downing & Company:

October proved to be the busiest month of 2014 (so far) for home sales in Bernal Heights. Last month 20 homes traded hands, which was a spike compared to most months, where the number of transactions often register in the low to mid teens.

With cheap debt available (mortgage interest rates are hovering around 4%) home prices remain elevated. During October the average price in Bernal Heights clocked in at a $1,251,550 relatively close to the record high recorded in July at $1.3 million.

The market remains hot, yielding very quick transactions. The homes that sold last month in Bernal Heights were on the market for an average of only 20 days before going under contract.

Visit the Downing website for more smutty detail on each of the homes in the stylish October 2014 Bernal Sales Mix mosaic, shown above.

Meanwhile, the number-crunchers at Paragon have been thinking about how sparkly Bernal Heights looks right now, in the context of the overall San Francisco residential market. Paragon’s exceptionally smutty San Francisco Home Price Appreciation report reveals that Bernal has experienced the City’s third-highest rate of home appreciation since the crash, up 24% since its previous 2008 peak:

Appreciation-Percentages_by-Neighborhood

Paragon’s analysis:

Bernal Heights: Up 57% since market bottom; up 24% from its previous market peak in 2007. Bernal Heights has become one of the most popular, more affordable, go-to neighborhoods for house buyers who like the neighborhood ambiance of the general Noe Valley area, but were priced out there by its rocketing prices. Bernal Heights’ houses – with a median price about 45% lower than Noe Valley’s – have looked likeextremely good values in comparison. Buyer competition for new listings became particularly fierce in the past year or so.

That quest for the  “ambiance of Noe Valley” thing seems rather suspect, but your motivations may vary.

Our bloggy journo-friends at Mission Local pulled together some data from Redfin that puts Bernal real estate in neighborly context. Overall, Bernal has moved in line with overall trends, though we do appear to have gained a little bit of mojo relative to Potrero Hill:

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In another recent Paragon report, we spotted this longer-term snapshot of contemporary Bernal Heights real estate history:

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Though no visualization was provided, some of the budding data scientists among us may notice a rather pronounced up-and-to-the-right trend in the historical data.

Yesterday, however, the SF Chronicle reported that things may be settling down somewhat. Maybe:

Listen up, beleaguered buyers. According to Paragon Real Estate, rationality may be returning to the San Francisco property market. “The San Francisco market definitely cooled after the overheated feeding frenzy of the first half of the year,” according to the real-estate firm’s November report. “The competition between buyers for new listings declined to more rational levels: Homes that might have received 5 to 10 offers earlier in the year received 1 or 2 or 3.”

While getting three offers is still something sellers in most other marketplaces can only dream of, in San Francisco it could be a sign that pricing has finally reached its peak.

IMAGE: Top. October 2014 Bernal homes sold, via Downing & Company