I had breakfast with a collegaue from Paragon Real Estate this morning, Oggi Kashi. I’ve known Oggi for about 8 years now and he is a Broker Associate these days. We talked about local trends, financing, momentum, etc. He just sent me this chart:
Here’s what it all means: The chart illustrates the difference between an investment made on January 1, 2000 in one of the major U.S. stock indices and one made in either a San Francisco house or condominium. This is simply a sample analysis to show how real estate usually appreciates over the longer term: numbers may change dramatically according to the period used in the calculation.
Since it is based upon an all-cash purchase, it does not adjust for the fact that a home bought all cash could be lived in or rented without any mortgage expense, which is certainly a major added value that does not pertain to stock ownership. If one made the calculation based upon a 20% or 25% down-payment, the return on investment on real estate purchased would soar into the hundreds of percent.
Even in periods when the stock markets generate a good return on investment, one should note that significant capital gains taxes apply to stocks, but primary residences occupied for a minimum period of time, are exempt from capital gains taxes for the first $250,000 – $500,000 of gain depending on whether the purchaser was one or two persons.
San Francisco real estate has usually proven to be an excellent investment over the longer term due to the advantages of leverage, the incredible tax benefits of home-ownership in the United States, and local demographic and appreciation trends.
Thanks for passing this along Oggi.
1967 Clay Street: 3bdr + Library/Office, 2.5ba
1967 Clay Street is a condominium in the Pacific Heights neighborhood of San Francisco and is part of the HOA called 1963-1963a-1965-1967 Clay Street Homeowners Association. There are four (4) condominium units in our association — three (3) are owner-occupied. The dues are $492.61/month for this unit. This includes twice weekly trash/recycling pickup and every other week janitorial services. The HOA fees also include SF City water and a complete package of insurance plus annual bookkeeping and tax preparation services.
The owners purchased the unit in the August 2006 and completely gutted the interior in February 2007. All utilities and services are new including wiring and plumbing. The unit was occupied by the current owners in March 2008.
This condominium is nearly 1900 square feet and is nicely divided in public and private spaces giving a sense of elegance and livability throughout.
• Three Bedrooms (Master Bedroom, 2nd bedroom, 3rd bedroom)
• Library with floor to ceiling custom walnut cabinetry and bookshelves
• Two Full Baths plus Powder Room
• Formal Entry Foyer
• Coat closet + storage in foyer
• Eat-in Kitchen with Seidman custom cabinetry
• Living Room / Dining Room (24 x 15)
• Gas (or wood) Fireplace with Wall Switch
• Granite Fireplace Enclosure + Mantel (see photo)
• Central Hall Closet w/ double doors
• Laundry Closet w/ additional linen closet
• “Tree House” Deck off the master bedroom
• Deeded Garage Parking for one car
• Storage in Garage
• All new copper plumbing and electrical throughout
• New walls and ceilings throughout to Level 5 finish (simulates plaster)
• New double-pane windows in the living room and throughout (but not every window replaced)
• All new custom-designed doors
• All Tile and Stone sourced at Walker Zanger & IRG; fabricated and installed by New Marble
• Custom-designed interior doors and mouldings throughout
• Floors either new or refinished
• Granite Countertop in Kitchen
• Marble Countertop in Library, Master Bath, and Powder Room
• Master Bedroom South-facing “wall of light” with French Doors to deck
• Master Bedroom Walk-in Closet w/ “his and hers” areas
• Additional 64 cu/ft storage in master bedroom closet area above closests
• Master Bath with two Barbara Barry sinks (“hers” model)
• Master Bath Shower Enclosure with two hansGrohe shower heads (one fixed and one hand shower) + Bench + 3 Recesses for Soap/Shampoo.
• Guest Bath has new Porcher porcelain over cast iron tub
• Guest Bath Plumbing Fixtures all new Kohler Pinstripe
• Rinnai on-demand hot water throughout
• Cable Television, Stereo, Telephone, and Internet in every room
• Living room is prepped for “5:1 Home Theater” 6 speakers (Two Front; Two Rear: Center + Subwoofer)
• Lutron Programmable Light Switches throughout
Complete custom kitchen
o Two Sinks/Two ovens + Microwave/Two Dishwashers
o Full height pantry with pull-out shelves
o Butlers Pantry with wine refrigerator and wine storage racks
All New Kitchen Appliances
o DCS 36″ 6-burner Range
o DCS 27″ Wall Oven
o KA Microwave
o KA 36″ Refrigerator w/ Freezer Below
o KA Wine Refrigerator
o KA Main Dishwasher
o KA 1/2 Drawer Dishwasher (Mftr’d by Fisher-Peykel)
o Maytag Front Loading Stacked Washer/Dryer
o Custom Main Sink (Undermount) w/ Insinkerator Disposer
o Prep Sink w/ Insinkerator Disposer
o Insinkerator On-demand Hot Water
o Insinkerator On-demand Filtered Water
There are some design ideas that you may have noticed:
• Counter heights in kitchen and baths are higher than standard
• Door heights are raised to nearly 8’ throughout
• Baseboards are nearly 11″ and are custom throughout
• Floors are espresso w/ semi-gloss finish