What’s The Scoop On Foreign Investment In San Francisco?September 21, 2007
A reader wonders, we republish:
1. Does anyone have or know where to find information about the historical and/or current percentage of residential properties in San Francisco owned by foreign investors?
2.What is the motivation for foreign investors to invest heavily in residential real estate as opposed to other USD based investments (i.e. stocks, business investment, commercial properties, etc.)? Is it more liquid? Do they get tax breaks? Better ROI? A lower barrier to entry?
3. Would these foreign investors primarily interested in buying individual properties or buildings or land for development? In general, what would make the most financial sense for a foreign investor?
And perhaps you’ll be so kind as to answer (or opine).
Comments from Plugged-In Readers
The dollar continues to drop against foreign currencies. To foreigners our local real estate appears to be getting cheaper and cheaper.
As an example about 8 or 10 years ago we looked into buying a condo in the Philippines. The dollar kept getting stronger and stronger (or the Peso weaker and weaker depending on your perspective) and prices seemed to drop for us since after conversion we could afford so much more. A couple of years ago the Philippine Peso hit a bottom of 56 Pesos for every 1 dollar. It was sure nice seeing how much we could buy with our dollars.
Now the opposite is happening in the US compared with other currencies and they can just keep getting more and more for their money.
If one’s perception is that the dollar will keep on dropping – and that’s a fairly widely held perception – why would you want to invest in an illiquid dollar asset right now?
K – in light of the strong dollar did you buy that condo in the Philippines? I’m guessing you didn’t. The same will happen here. It’s fun to fantasize but very few will act.
Most foreigners I know aren’t looking too kindly on either our economy or real estate market and wouldn’t dream of taking both foreign exchange and market risk by buying an investment property in the US. Low cap rates are also a barrier for serious investors.
Hotels and tourism in San Francisco will be the beneficiaries of the weak dollar not the residential real estate market.
I think in general, Europeans have a better choice — buy real estate closer to home, in Eastern European countries like Croatia, Montenegro, Albania, along the Eastern European Riviera, where the countries are not yet part of the EU (so the currencies are not in euros yet) but will be soon…
Real estate in croatia’s Dalmation coast, and Montenegro’s Adriatic coast have been going up for a while with no end in sight…
Even as an American home owner in SF, I was ‘fantasizing’ of buying a vacation home there, and not in the US — why would I put my real estate egg all in one U.S. basket?
However, I do know a few foreigners who are looking to buy in SF. Many are Europeans with good, stable jobs in high tech or biotech because they have specialized PhDs and their employers did their greencards for them. They are settling here so they want to buy a house. Europeans don’t have a ‘rental’ culture or mentality like we do in the US. They generally want to buy rather than rent.
So, I am not sure if the foreigner’s we see in open houses are the ones who are purely buying for investment purposes while they will remain living in Europe, or are buying as primary residences because they have settled their families here.
Considering that SF was already much cheaper than London, Hong Kong, Singapore, Tokyo, Shanghai and Beijing, and now the dollar has taken a nosedive, executives in these places, especially from Asia, can buy prime condos in SF for less than half what they would pay at home.
why stay at the ritz when you can own
“why stay at the ritz when you can own”
Because you can stay at the Ritz for less than half the cost of owning, avoid currency/market risk, and invest the difference in higher yielding assets.
Executives in London, Hong Kong, Singapore, Tokyo, Shanghai and Beijing tend to buy condos in those more expensive markets for a fairly basic reason. That’s where they live.
How many executives do you know in SF that bought cheap condos overseas when the dollar was twice as strong? I know of very few.
persoanlly, i know 6
Brazil, Russia, India, China
All 4 countries are unique, yet have similar circumstances. Because of corruption and a different system, money is being laundered through the Amrican real estate system, because they can and it works. The coutries are having their systems changing and those with undocumented money are afraid that it will be taken away. They channel the funds through real estate, and it is clean.
They want one, or only two flights away from their home, less than one hours drive from an international airport, good public transportation for those who don’t drive, and established services and communities where others speak their languages. This is the place.
It’s common sense.
Thanks for all of the interesting insights so far. I never even considered real estate investment as a way to launder money because it requires so much tax documentation for U.S. citizens. I’m starting to recognize that I’ve lived a fairly sheltered life. I can also see the vacation home market, but to Anon8mizer’s point, it seems like eastern Europe would be the better deal for a second home. But what about buying real estate as purely an investment? Also, any ideas of where to find data about the percentage of residential property owned by foreigner in SF? Any actual non-US based foreign property owners out there?
Spencer made a casual statement about SF being much cheaper than Hong Kong. First of all HKD is pegged to USD so they devaluate together. Secondly HK’s real estate is just recovering from a decade long crash. At the bottom of the crash many properties valued only 1/3 from its peak. During the same period SF’s real estate market simply sky rocketed. Good luck for them trying to find bargain in SF.
Just like Stockton looked cheap to Bay Area investors, the US looked cheap to the Japanese after the devaluation of the dollar back in the 80’s.
1995: The mother of all short sales had to be when Mitsubishi gave up 2billion when it handed back the keys to Rockefeller Center.
The Mitsubishi Estate Company of Japan plans to walk away from its almost $2 billion investment in Rockefeller Center, the Hope diamond of world real estate.
Mitsubishi’s sudden decision to exit Rockefeller Center is the most striking in a string of recent retreats from the trophy properties stretching from New York to Honolulu that Japanese companies acquired during a real estate binge in the 1980’s.
It is funny that EVERY single market, people blame the foreigners.
According to Chinese, The Shanghai properties went through the roof because of all the damn foreign investors from US, especially from CA. I am sure the Russians, Brazilians, and Indians say the same about their local markets.
I don’t think anyone is blaming foreigners, just pointing out that since the local wage base cannot support existing housing prices, the capital to support them must come from somewhere else.
Where else could that be? From independently wealthy people who can pay cash or the equivalen for a home, i.e. don’t have to work for it in the local job market.
Investment funds can park their money in SF real estate, collect rents and then cash in later.
Or individuals with high incomes outside the local wage base can invest in local housing. That might come from LA, NYC or, yes, the UK or EU.
The truth is that urban real estate is a good long term investment if done prudently, and the exchange rate differential makes US real estate more attractive to well heeled Europeans than it had been in the past.
I know that I’ve been hearing more europeans talking their languages in SF recently in places like Whole Foods and elsewhere, not exactly on the beaten tourist path.
Of course, Japan managed to work itself into a structural economic funk in the late 1980s from which it has yet to recover while the Eurozone is in general more forward thinking and deliberate.
“In practical terms, the recent drop in the dollar’s value is making Boeing jetliners and Manhattan pieds-à-terre a lot cheaper for Europeans and Canadians, while Americans will have to pay more while on vacation in Paris or when buying snowmobiles made in Quebec.”
“In Washington, the administration and Congress were preoccupied with the problems in the housing economy and there was little talk of the dollar. President Bush expressed confidence in the economy. “The fundamentals of our nation’s economy are strong,” he said at a news conference. “There is no question that there is some unsettling times in the housing market.””
The Europeans are seeing the effects of their own bubble now:
Spain seems to be their Florida.
As I pointed out on a previous thread, Europeans and Asians live in more socialized economies – free education, healthcare, etc. So the average salary in the EU, UK, or Asia is lower than it is here. If the average San Franciscan can’t afford San Francisco, don’t expect the average European or Asian to find it a bargain despite the exchange rate.
As for the truly wealthy, maybe they continue to buy trophy properties regardless of market conditions or nationality…who knows. But don’t they read newspapers like the rest of us? And would their purchases be enough to buoy the entire market? Doubtful.
Why San Francisco? If I were looking for a vacation property, and was willing to pay today’s inflated prices, why would I want to buy in a congested city when I probably live in one already? I see more foreign interest in the Palm Springs area (I own in Palm Desert) and in coastal Orange County (Laguna Beach as an example). Most city dwellers are looking for a different type of second home, and please don’t start with the “everyone wants to live here” for our “culture” in the “best place on earth”. Have ANY of you been to Dubai lately. Check out “The World” developement in Dubai to see what some places are building to attract second home buyers. I think I would pick a beach front cottage in Laguna before a condo in Soma for twice the cost.
Clearly Dubai is due for a correction, because local salaries don’t support the price of homes there (isn’t that usually the argument that prices are too high here…)
“I don’t think anyone is blaming foreigners, just pointing out that since the local wage base cannot support existing housing prices, the capital to support them must come from somewhere else.”
I wanted to point out, EVERY SINGLE RE market complains that local wage cannot support housing prices.
So, everyone buy some property in another country instead?
A Shanghainese cannot afford the local property in Shanghai, so he buy in SF. A San Franciscan cannot afford in SF, so he buys in Shanghai.
Is that how it works?
No, people with extra disposable income or resources buy second homes in desirable areas.
Americans with resources purchase second homes in places like San Francisco or Aspen.
One component of the upward pressure on housing prices has to be the relative performance of the USD which makes US real estate more attractive to those spending more muscular currencies.
Real estate tax schemes are different outside the US as well.
Has there ever been a case like we see in SF where housing in an entire city was only affordable to less than 1% of people living in that city?
Hopefully the haters and real estate boosters will allow for a discussion of the back story to impossibly priced housing without being so hateful.
“Has there ever been a case like we see in SF where housing in an entire city was only affordable to less than 1% of people living in that city?”
First, the number is 12% to 13% SF residents can afford median priced house.
Second, let’s do an exercise. Assuming a city with completely affordable housing – meaning all houses are owner occupied and 50% of the households can afford median price. Now, take bottom 70% of all the housing units in that city, and make it rental…guess what happens to the number? Yes, in that ideal city, suddenly only 15% of all households can afford the median price, simply because the bottom 70% of the housing units are out of the market.
This requires a little bit math, so calm down, think through.
The key word is the “bottom 70%”. If the “top 70%” of all housing units went rental, then 85% of all households will afford the median price. Well, you make the judgement whether in SF, the rental units are close to the bottom or top.
And then, use math, arrive your own number what % households SHOULD be able to afford the median price, and compare to that 13%.
Oh, BTW, didn’t the SF average household income just jumped 10% last year? I wonder if the “13%” number was calculated before the income increase or after.
An Oil boom town, in the middle of a barely inhabitable region, location of Halliburton corporate headquarters, known for zany highrise architecture, living the good life as oil trades at a historic high.
Dubai 2007, or Houston 1982?
Time for the big boys to diversify. Load up the fam-i-ly and move to bev-er-ly.
Gulf states buying overseas assets at a record rate – (Bloomberg) – 22 September 2007
DUBAI — The Gulf states, flush with cash from burgeoning oil revenues, are buying overseas assets at a record rate and countering the paucity of acquisitions hampered by the summer’s surge in corporate borrowing costs.
Abu Dhabi agreed yesterday to pay $1.35 billion for 7.5 per cent of Carlyle Group, the world’s second-biggest private equity firm. Dubai and Qatar took competing stakes in Nasdaq Stock Market Inc., London Stock Exchange Group Plc and Nordic bourse OMX AB. Qatar also won approval to examine the financial records of J Sainsbury Plc, the second-largest UK supermarket chain.
All told, the deals are worth $25 billion, according to data compiled by Bloomberg. The pace of international investments by Gulf states, which earn $1.2 billion a day from oil exports, is quickening as they seek to diversify beyond energy. The nations have already spent a record $68 billion on overseas acquisitions this year, the Bloomberg data show.
“They are not just putting their money in bank deposits and government bonds any more,” said Eckart Woertz, chief economist for the Gulf Research Centre in Dubai.
“They are after strategic assets.”
So, lots of examples of what foreign investors buy.
What hasn’t been mentioned is how the average overseas middle-class investor can diversify into US real estate or other investments. It can be done via REITs and the mutual funds that love them. It’s not just the big boys, or the second home buyers, anyone with a couple thousand dollars can participate in the fun. Some attribute this worldwide middle-class liquidity as a contributing factor to a global asset bubble. One thing is clear, though, Now is a Great Time to Buy or Sell a Dubai Home.
This is the last gasp of the real estate industrial complex. “Rich Foreigners” will buy up our SOMA condos because they are a “bargain” due to the decline of the dollar.
I beg to differ. Those with lots of cash abroad are buying Euros and flats in London and Geneva. When will San Francisco learn that it is almost invisible on the world stage? Just because we are pretty does not mean we are important. Sorry, but that knock on the door is not some Saudi Prince wanting to enjoy Peets Coffee in your unit, but instead the realtor telling you to lower your asking price.
“I think I would pick a beach front cottage in Laguna before a condo in Soma for twice the cost.”
Except you couldn’t get a beach front cottage in Laguna for half the cost of a SOMA condo.
The median price home of a house in Laguna Beach is over $1.8 million (the average price is over $2.3 million)– and I’m sure beach front property commands a premium.
When will San Francisco learn that it is almost invisible on the world stage?
As soon as real estate becomes as cheap as many of you think it will. As long as SF has some of the most expensive real estate in the US, many people will assume that that might have something to do with, you know, “demand” for people to want to buy here.
Not specifically about SF, but this article was on MSN:
first, foreigners clearly DO INVEST in SF- the question is what percent do so, and how it impacts the market for local homeowners and investors. i don’t know what source would have hard data, but anecdotally one could surmise:
1. globally, there was an RE boom- mostly due to 2+ billion people getting introduced to capitalism (think BRIC- Brazil, Russia, India, China.) the RE boom hit BRIC, UK, spain, australia, south africa, etc. etc. so RE investing got a whole lot of media attention and became the new hip investment, (after dot.com faded.)
2. the weak dollar does impact wealthy foreigner’s interest in USA RE. remember, RE in most major cities world-wide (the good districts) is way more expensive than most american RE (especially compared to the average local salaries.)
3. pieds-à-terre are another popular acquisition of wealthy foreigners. manhattan and possibly florida get the lions share, but SF gets plenty too. mostly high end condos in secure bldgs.
4. as for investors, i know there are foreign investors who partner with family or biz partners in SF to buy and hold property in SF. this is popular in the various asian communites in SF and i bet is also practiced almong the wealthier latino and russians w/contacts in SF. RE is like a family business to many of them, and if they are doing well in SF, extended family and friends may want to get in as well.
except for the early 90’s, RE has been a killer investmet in SF. as many of these family operations think long term (pass it down to the kids, etc.) they are less concerned with a correction. what they are concerned about is putting alot of assets in places like russia (if the shit hits the fan, would you trust the kremlin to respect property rights?); or mexico (try getting secured title w/o bribing officals or having connections- not likely for any sizeable investment there.) or how about china- would you trust having equivalent of $1 mil in the yuan? or in RE where the government gives new meaning to the word eminent domain?!? remember, these families are putting their life savings on the line, and from their perspective, having at least some assets in the usa (as well as europe) is a lot safer than local RE/currency. this especially impacts a place like SF which has high populations of different cultures, as well as a historically successful RE market.
Top Five Global Cities for Real Estate Investment – 2006
4) Washington DC
Top Five US Cities for Real Estate Investment – 2006
2) Washington DC
5) Seattle (distant fifth, see links)
…In summary, it appears that foreign investors have a preference for coastal cities in a bi-coastal strategy. Two on the East Coast (New York City and Washington, DC) and two on the West Coast (Los Angeles and San Francisco)…
and another quote to re-inforce what AmInSF posted:
International investors are adopting new strategies to invest capital and maximize yields. While spreading the wealth more widely, the US continues to be the safest and most secure country for their investments. However, in the race for capital appreciation, the US is being challenged by a growing number of real estate markets around the world. More traditional international real estate investors can take comfort in the fact, however, that the favorite global cities for real estate investment are still London, New York City, Paris and Washington, DC, and not yet Shanghai, Mumbai, or Dubai.
link to Association of Foreign Investors in Real Estate (AFIRE) chart
link to writeup
Note: Data for Commercial and Multi-Family Residential, not Single Family Residential.
on Dubai buying a stake in Carlyle…
When some Dubai business wanted to buy an US sea port, our Republican congress was up in arms and they stopped the purchase because of concerns for “national security”. Now, when Abu Dubai wanted to buy 7.5% of Carlyle Group, nobody cares about the fact that Carlyle was primarily funded by the CIA and its principals have strong ties there. Where is the concern for “national security” there? Go figure.
On the gulf states investing in strategic US assets — I have to point out that Saudi Arabia central bank did not lower its interest rates in sync with the Fed last week. See article below:
Why would they go down with a sinking ship? This means it’s getting closer the day oil will stop being dollar denominated…
Regarding Laguna Beach Cottage prices I can only write about what I know which is our own vacation property. Our cottage is one house away from the beach, with direct views to sand and surf from both downstairs and upstairs. The home is small at 1,700 sq. ft. and we paid 1.6m in 2005. Our adjacent neighbor to the north is from Hamburg Germany, and to the south from Palo Alto. Our Victoria Beach (neighborhood in Laguna) Homeowner’s booklet is like a United Nations with about 1/5 of the owners are from the Bay Area. On my street in the Marina (Prado), everyone seems to have purchased property here not for investment reasons, but because they WORK here. Still, our home in the Marina has gained much more value than our property in Laguna Beach.
You stated before that you could find beachfront property in Laguna Beach for half the price of SOMA condos. Now you state that your property is not beachfront and cost nearly a grand per sqft two years ago. Were there SOMA condos selling for $2000/sqft a couple years ago that I missed?
Sorry, My point was not that Laguna Beach was less expensive psf, but rather why would foreign investors choose a second home in SOMA vs. other areas including resort communities? I admit that investors from other regions, especially Asia, do buy in S.F. (eg. two apt. buildings on 3800 block of Scott St. in the Marina are owned by a family in Asia), but I am doubtful that foreign investors are going to save those who bought condos at the top of the market in neighborhoods such as SOMA. There are many cottages for sale in Laguna Beach which are around $900,000 that are within two blocks of the beach. I see many more foreign investors in Southern California AND THE PENINSULA than I do here in the city. I would suspect that the low value of the dollar will help those in Hillsbourgh and Menlo Park more than Potrero Hill.
With all the discussion about foreign investments…. does anyone actually know a foreign family owning in SF in your neighborhood? Owning apartment building for rent doesn’t count since the building stays rental. I am talking about “foreign investments” which compete against local SF residents, whether it is for condo unit, TIC, or SFR, as either a second home, or move the unit into rental.
Investors chase returns. If returns are high (e.g. SF RE in the past few years) then investors (foreign or domestic) will flood the market. As prices rise, demand rises in lockstep. Suppy in demand are linked in a virtuous cycle of positive feedback.
At some point, that cycle is broken and prices stop rising.
No one really knows what precipitates the change in psychology but it does happen and that drives fluctuations in the business cycle.
One question worth discussing is: does the sudden devaluation of the dollar affect the psychology of overseas buyers positively or negatively?
I would say continued devaluation of the dollar coupled with stagnant price growth would be viewed as strong negatives from the perspective of overseas investors. But that’s a rational response, and investing (on a retail level) is anything but rational.
Yes, I know several foreign families who own in SF. It’s generally richer foreigners who buy a house with the intention of moving here permanently or sending their kids to live here. I know two Russian families that live in a house their parents bought several years ago – partially as an investment, and partially for them to live while starting out in a new country. (Both are single family homes in the Central Richmond)
I used to rent a SOMA condo owned by a Taiwanese investor. I never met the landlord; everything was handled through a local agent. I believe a group of Taiwanese investors owned quite a few condos in the same building.
I suspect well-off Taiwanese like the safety of owning US real estate. The real estate market in Taiwan could change very drastically should China invade…
Multi-family household occupancy and lack of understanding the local RE market is what I generally see.
You’ll have 3-8 families (who may or may not be actually related –who can actually check birth certificate records in a foreign country?) go in to buy a property that one American family would occupy. They then put locks on all the bedroom doors, which each have their own mini-fridge, microwave, large screen TV, and the whole family (including children) sleeps on one bed, just like the old country. They basically are converting SFHs to apartment houses, and their neighbors have little luck enforcing occupancy standards.
They’re real easy to spot, too: They’re the house with 8 cars out front, and the front yard has been poured over with concrete to provide even more parking spaces.
Whether from Turkey, Mexico or China, all conversations are done between residents at a scream day and night, and the showers run 24 hours a day. I know one school child who is woken and thrust into the shower at their household scheduled time of 2am Mondays and Thursdays by whichever parent isn’t working night shift. No, they don’t use soap. That would be expensive.
Sometimes you’ll find the one person who actually got a crazy loan to buy it, and now they’re subletting all the rooms to “relatives” to make the mortgage payment each month. (“In Italy, you can only borrow 50% of the money to buy a house, and everyone lives with their parents until age 40. Here in America it is so much easier to borrow for a house!”) So they screw their tenants with high rents, and the tenants don’t have any other choices since they can’t even read a newspaper, much less shop around for better living conditions.
Other times the money comes from overseas investors and are bought in cash, and again the house is subdivided between mysterious people who suddenly appear and start working two minimum wage jobs who are all “relatives” but still have huge locks on each bedroom door. These foreign investors are not happy right now, even with their captive tenants.
Or sometimes you’ll just have the English speaker who rents the expensive house and then makes money on the margin subleasing one family per bedroom. Particularly for owners of luxury homes that then turn to a rental service while they’re on foreign assignment for a year, returning to your home after 20 people have lived in it for a year –it’s stunning the amount of damage. The house gets 40 years of wear in two years, and is a shambles afterwards. I still remember one woman crying about the ruined carpeting floors, the broken fixtures, the urine and shit smells they couldn’t get out of the places that were used as improvised chamber pot areas… sure, we could pull the drywall and the floor, but if she had that kind of money she wouldn’t have had to rent her dream home out in the first place!
“If one’s perception is that the dollar will keep on dropping – and that’s a fairly widely held perception – why would you want to invest in an illiquid dollar asset right now?”
Only Santa Claus knows if the dollar will keep on dropping. If he happened to tell you, save yourself the exposure to real estate factors and make your billions directly on FOREX. A lot of great money managers are doing just that, but guess what- they’re often wrong too. Without having to pretend you know a rat’s ass about the complexities of foreign exchange markets, you can say you know the USD is down significantly right now. For those prudent foreigners who limit their pretense of understanding to the complexities of real estate markets, this fact can make US real estate a good investment right now.
“Sorry, but that knock on the door is not some Saudi Prince wanting to enjoy Peets Coffee in your unit, but instead the realtor telling you to lower your asking price.”
LOL kudos to the anon poster for that one 🙂
As a Londoner with business interests (not RE) in SF, I see it from a slightly different perspective. RE can either be a pure investment, or can be for own use. That own use might be now, or might be a future possibility.
I doubt too many people who have no connections with SF would wish to have pure RE investments here, unless it’s part of a globally diversified strategy – it’s easier buying a REIT unless you are a billionaire. As a property investor, you want to go for the best market and, in the US, that’s Manhattan.
Instead, it’s more likely to be foreigners with interests in NCal who want to protect their position should they want / need to move here in the future. SF has limited extra supply and is the cultural capital (sorry, San Jose is unlikely ever to supplant), so it’s likely that SF will appreciate at least as quickly as anywhere else in NCal. By buying here now, they hedge against a future purchase throughout NCal when they need to move. This would apply to people with Silicon Valley connections as well as those who lean towards Wine Country or in any of NCal’s world class income generators.
It’s not so much a question of the affordability of local property to people with local jobs (after all, it’s ages since British people could afford sensible property in London – it’s overrun by foreign millionaires, with the top addresses over 50% foreign): it is much more a question of whether NCal will maintain its world class status in certain key industries. If it can, then it will remain on those investors’ radars.
Given that some of the world’s most significant wealth generation is here, that a striking proportion of the world’s richest people live here and that we enjoy fantastic stability with limited supply, it’s no surprise that RE is expensive, particularly at the top end. I do suspect that, after we have worked through the current issues, we will resume our upward climb. And, yes, foreigners will be represented as owners because local industry draws them in.
great post norman. i love those new developments along the thames. they remind me of some of the places over here in south beach. i especially love the fact that they go for 2 million pounds each. i suspect we will eventually see those prices here too.
i can’t wait.
Merry Christmas Jamie,
Great post Norman,
Our waterfront could take a lesson form several of the world’s cities that have recognized how popular waterfront locations are.
The Thames has wonderful waterfront developments for miles, from Richmond (Mick Jagger’s home) to the Docklands. New subways, parks and vistas. A great jog or 1/2 day walks with many sites from the Tate to the London Bridge. The various waterfront residences and boat docks are very appealing.
Vancouver has invested in its shore line with entire new residential communities, restaurants and shops.
Shanghais has redeveloped its waterfront with entire new business and residential neighbors, be sure to have dinner at the M on the Bund, great City and water views.
Our Port is about to develop or sell to developers our waterfront. We should require the Port to have a master plan for the “Sea Wall lots (Pier 35 to AT& T Park)” as once they are sold off, we will not be able to change the uses. We have an opportunity to plan for the long term and not just the Ports financial needs in 2007.
What should our waterfront look like and how should it be used for the next 100 years?
The moment is now to encourage use for open space, parks, recreation and housing, not after the Port has sold off these parcels.
With that said on my birthday, I wish Adam and all of his readers and Prosperous and Joyful New Year.
i think one thing is guaranteed frederick. the port will take the highest bidders for any project. look at the twin kuletto’s going up in 1/3 of that open space we had along the waterfront. i am not bashing pat, he is a magician with concepts and restaurants but i am not happy we developed that land at all.
merry christmas to you too.
I know that SF properties are being listed abroad, in London I saw a listing for a condo on the Presidio/Pac Heights border area that was for a substantial higher price than the MLS listing.
While there may be more attractive real estate and prices in places like eastern europe, one of the big attractions of the US for foreign buyers from both the developed and the developing world is the political stability and very little need to pay bribes. It is a nice place to have a condo when things get too hot in Pakistan, Bolivia, or the Balkans (I grew up in New York and our co-op had a resident who only showed up when Bolivia was unstable– that was often enough that the board could ignore the “primary residence” requirement).
I think US, western European, ANZ, and certain asian countries are really the only markets that offer a real guarantee of liberty, stability, and good government (no need to learn to bribe locals) and that your property will not be seized or nationalized as a result of political instability There is a big premium for that, though perhaps too few Americans and Western Europeans realize that when they shop internationally. Certainly buyers from places like Pakistan, the middle east, eastern europe, and south america are looking for the security US real estate offers.
joe, when was the last time you did an extensive remodel around here? 😉
i paid 10k to fast track my application at city hall back in 2000.
that is pure bribery in my books.
people are greedy and crooked everywhere.
How easy we forget: the public buys when prices are going up, not going down. The Public. They buy when they think they spot a value *within* a rising trend. The Public are not value investors. If they were, there would be no edge to value investing. And, there would be no such thing as bubbles.
“Foreigners” are members of the public, just like Americans. They have been buying real estate all over the place just like we have, the past 7 years. Tuscany, Scotland, New Zealand, Mexico, Costa de Sol….must I name them all?
Bagholders are those who tell you that the public will soon rush in, and take the merchandise off their hands. Not gonna happen.
The global buyers of real estate, as a group, are leveraged long real estate. Just like we Americans.
My last remodel was in 2005, though it involved no exterior changes to the building. No trouble with permitting or final inspections. One bathroom totally redone, major changes in plumbing, electric, & gas lines, water heater location and chimneying, some kitchen changes, re-engineering of deficient framing we discovered (using a licensed structural engineer), new hardwood floors. No trouble getting inspectors to come out in a reasonably timely fashion. Don’t know what to tell you about your $10G payment. Tell us more.
how long did it take you to get your permits from start to finish? mine was a full demolition and remodel to the studs.
Permits were pretty much summarily issued, matter of a day or two. Only permit that took a little more work was the bathroom remodel– the tub is under eaves and questionable, but I had all ready pulled up the full permit history where the bathtub had previously been permitted and signed off on so neither the issuer nor the inspector felt it would be their problem since they were not the first to issue or approve. In the bathroom we did go all the way to the studs and found troubles that needed an engineer to fix. There was some trouble of the final plumbing inspection because different contractors did the shower pan and the rest of the plumbing so he wanted both to sign some papers to make clear who did what. Otherwise the inspectors came out quickly– within 48hrs of the contractors being ready.
I did not pull the permits myself, I left that up to the contractors. We also put in a flash water heater before their code was finalized so they made us put in a tank heater too (which is a good reserve water supply in an emergency, so I am happy to have it). I will say that what gets approved seems to vary from contractor to contractor and I think reflects the inspectors’ familiarity and comfort level with their work. I know there are plumbers that would not get signed off on work of similar configuration (two gas appliances sharing same chimney) because the inspector knows they don’t have the skill to make it draft properly.
[I think we did position as much of permitting as possible as fixing things that were broken like the leaky shower pan that led to the remodel of the bathroom and room beneath it].
All told, from pulling permits to finals was about seven months and most of the time was delays caused materials shortages and structural deficiencies we discovered along the way.
What were you doing at City Hall for planning and inspection? They are in a different building unless you need a hearing and variance? Of course, you got your permits in the days of Da Mayor and I got mine during the Newsom era, so there may have been changes in the way things are done. I am not saying we are free of corruption (I recall some inspectors being indicted in the past few years), but compared to many foreign markets this is breeze.
good for you joe. as you know, we’ve had a few scandals in that department since then so you are lucky. back in 2000 you had to pony up at least 10k to get a response from them.
I am sorry you went through that. It will be interesting to see what the “re-engineering” of the department brings about.
The contractors I have talked to suggest that things vary by district (I am in 5) and that there are some districts where they don’t work because they have run into senseless trouble (district 7 in particular is supposed to have a very limited set of contractors who can get a response from the inspectors). I have also heard that contractors are strongly advised to donate to an annual charity drive run by the inspectors. Of course, DIYers are unaware of this, but an inspector would be doubly careful with signing off on the work because DIYers don’t carry professional liability insurance or take licensing exams.
There are things individuals can do to expedite matters– if you have a structural engineer working for you, if he or she signs off that things were built to spec the inspectors are very unlikely to give you a problem on final inspections because the engineer has taken on the liability by signing. SFRs are always easier than condos or TICs because there are no other parties involved if things go wrong.
No doubt there will always be corrupt individuals in every profession, but I have yet to run into that at planning, building, or inspection. [Or I hired contractors who know how to work the system and just never mentioned it to me].
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