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Laura Lambert's Advice

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Laura Lambert wrote:

How Far have Prices Really Dropped in San Francisco?
Jan-Jun 2006-Jan-Jun 2009 Single Family Home Trends – San Francisco 94115Real estate trends in the Bay Area and San Francisco do not always reflect local activity. To illustrate, let's look at some data for one San Francisco neighborhood:  94115.  Overall median prices in this area fell 24% (price/square foot fell 21%), from Jan-June 2006 to 2009.   However, there are several problems with this comparison and when we dig deeper, we find some prices actually ROSE during this period.Since 94115 includes several different neighborhoods:  Pacific Heights, Lower Pacific Heights, Anza Vista, Japantown, and the Western Addition, price differences between these areas can distort the overall changes.  Overall median sales prices fell more in Lower Pacific Heights (53%) than in Pacific Heights (43%).We can also look at the types of sales to get a more accurate depiction of the sales activity.  Within particular price ranges, median prices actually went up 20% for $1-2MM properties, while $4-5MM properties are down 13%.  Median prices in the $2-3MM and $3-4MM ranges were fairly stable, with prices up 1% and down 2%, respectively.Property size provides another interesting comparison.  When we compare properties using the number of bedrooms, we see median prices are actually up 12% for 3 bedroom homes, correlating with the increases we see in $1-2MM price range.  While 4 bedroom prices are down 11%, much larger homes with 5+ bedrooms are down 37%, higher than the $4-5MM range (down 13%) since the 5+ bedrooms includes homes selling for over $5MM.
September 21 2009
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deeded parking?

Answer
According to the MLS, the 2171 Grove St. NOPA Edwardian condo is one of three units in a building without a garage so there is no deeded parking with the building.- 2171 (1st floor) sold on 3/3/09 for $707,000 and has no parking.- 2169 (2nd floor) sold 10/2/08 for $815,000 but came with a leased parking space for $250/month.- no data available for 3rd unitGood luck!
September 04 2009
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Are there negative impacts on adjusting the assessed property value?

Best Answer
You raise an interesting question. There are definitely benefits of adjusting the assessed value to lower your property tax if you believe your home has declined in value (see below about the appeal process), but here are a couple of points about the sales value and appraisal process.  - Sales Price: Most homes are priced based on recent comparable sales. Recent means within the last few months. Since it is unlikely for reassessments to occur within a few months of any sale, I doubt this would affect the amount offered. Keep in mind that the price a buyer is willing to offer is usually determined by supply (inventory) and demand (buyers). Regardless of the actual value, buyers will tend to offer less if they feel the home has lingered on the market. Likewise, buyers will tend to overbid for a property that has received multiple offers.  Most buyers will take the advice of their real estate professional who knows the true value of every block in their local area and they would be looking at the recent sales activity, not reassessments of older sales. So even if sites like Zillow or Trulia show lower values, I do not believe this would have a material negative effect. It is always dangerous to generalize because every home is unique and even in buyers' market, properties can still sell over the asking price. I track Pacific Heights 94115 and in Jan-June 2009, 29% of three-bedroom homes sold over their asking price (22% of four-bedrooms sold over their asking price)!  - Appraised Value: The appraisal is extremely important because a low appraisal affects the loan amount. In my experience with residential property, appraisers are using the most recent sales prices from the MLS, usually within the past 3 months.  Appraisers typically check county records to verify MLS data and check for prior sales of subject property (past 36 months) or comparable properties (past 12 months). So I do not believe lower values shown on Zillow or Trulia would negatively affect your appraisal. Here is some information on the two appeal approaches that may be of help if you are eligible for a reduction in your property taxes for declining values on SFR, condos, lofts, co-ops.  - Informal appeals through the Assessor's office for the 2009-10 were being accepted through August 28, 2009. These reviews are free and simple - owners just complete a one-page form found on the Assessor's website www.SFGov.org/assessor. One way to strengthen your case may be to provide comparable sales that support your request (a realtor who has MLS access can easily provide you a nice excel spreadsheet of comparable sales values, which is usually used to determine a home's fair market value).   - Formal appeals through the Assessment Appeals Board are being accepted through September 15 on www.SFGov.org/assessment for multi-unit and commercial properties (SFR, condos, lofts, co-ops can also use this process). These appeals are more involved, require a $30 fee and requests are usually supported with evidence such as: comparable sales of similar properties, replacement cost less depreciation valuation, or income valuation.  What are your chances of being granted a reduction? The Assessor's office received 2,500 requests in 2008 – about half were granted a reduction.   The office stated that "homeowners who purchased their homes prior to 2004 are less likely to qualify for a reassessment because in most cases the property tax value is still well below the actual market value." Earlier this year, the City announced they were doing an analysis to see whether certain areas of the city warranted automatic reductions (this was also done in 2008 and they determined automated reductions were not necessary).  State Law (Proposition 13) limits the assessor's ability to reassess a property. Real Property can only be reassessed when a change of ownership or new construction has occurred.   Otherwise, the property tax rate is about 1% (it may include special assessments or bonds), and it cannot be increased by more than 2%/year (based on California's Consumer Price Index). Note that property transfers between husbands and wives or domestic partners (death, divorce) do not require reassessment. There are also exclusions for refinancing and parent/child transfers. IMPORTANT: an appeal will not relieve you from your obligation to pay your property taxes! Good luck!
September 04 2009
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