Who lives in San Francisco and how can people afford properties in SF?

In the process of understanding the demographics of people in SF, I came across some data that I thought people might be interested.  This data was recently compiled by Info USA, a company that provides consumer databases.  Here is a breakdown in terms of age groups…  Not to my surprise, there are very little seniors living in the city and with the cost of living, it’s probably also more difficult for people under 25 to live here.  However, with all these people, there are over 260,000 people that make less than 60k, 86,000 people that make between 60k to 100k, and only 108,000 people make over 100k a year.  With more than 40% of homes costing more than 500K and how strong the real estate market is in San Francisco, I wonder if the single people out there would try to obtain home ownership by partnering up with friends.  It might be a good strategy for some people so that they can start the process of wealth accumulation.  Thoughts?

Age Group No. of People Percentage
under 25 13915 4%
25-39 118779 30%
40-49 111251 28%
50-64 102275 26%
64+ 45368 12%

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Who’s who in real estate?

It takes many players to put a real estate deal together and take it from contract to closing. As a buyer/seller in real estate, it’s helpful to familiarize yourself with each of these players so that you become more educated regarding the buying or selling process, but also know that many of the roles in a real estate transaction are managed by your Realtor.
A professional who estimates the value of a home to be purchased. In the purchase of a home, the appraiser is usually hired by the mortgage lender to determine whether the price paid is in line with fair market value and therefore justifies the mortgage amount.

Buyer’s Agent
A Realtor who represents the buyer(s) in a real estate transaction and help the buyer purchase a home.

Home Inspector
Most purchase contracts allow a buyer to have a home inspected within five days of signing the purchase contract. A home inspector performs an inspection of the home to be purchased on behalf of the buyers in the transaction. The inspector examines the home for structural soundness and identifies recommended repairs in his or her report. Depending on the area of the country where you sell, common practice may include other types of inspections, including a termite inspection and a radon inspection.

Insurance Agent
A person who sells insurance policies, such as homeowners’ and automobile insurance. Typically, homebuyers need to show proof of homeowners’ insurance before or at the time of closing on the purchased property. Without this, some closings can’t move forward as planned. If you represent buyers, make sure they have secured a homeowners’ policy prior to closing.

Loan Officer
An employee of a mortgage lender who helps borrowers secure financing for a home purchase.

Mortgage Broker
An independent contractor who helps bring borrowers and lenders together by originating residential and/or commercial loans offered by multiple wholesale lenders.

Mortgage Lender
A mortgage loan company that originates, services, and sells loans to investors or purchasers.

Seller’s Agent
The seller’s representative to help sell a home (also often known as “listing agent”).

Title Companies
Once the purchase contract on a property is completed, terms are agreed upon, and financing arrangements have been made, the lender orders a title search of the property to be purchased. Depending on the region, a title company or practicing attorney can conduct this search. A title search is the examination of public records to determine that the person selling the property has the right to sell it and the buyer is getting all the rights to the property. The title search seeks to uncover any liens or other problems with the title. The title company then works to fix any problems with the title before issuing lender’s title insurance, or the loan policy. The loan policy protects the lender’s interests in the property. Buyers also may obtain an owner’s policy to protect their interests.

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Should you buy a home in today’s market?

Before you read further, let us give you one reason to not buy a new home right now.

How long do you intend to live there?

A rule of thumb is that it rarely makes sense to buy if you expect to move within two years. That’s because when you do sell, there are costs associated with selling. We’re not just talking about sales commissions to the buying and selling real estate brokers. Most owners rely on home appreciation to pay those costs and to provide the down payment and closing costs when they buy their next home. So buying a home when you expect to move before too long is a risk, especially in an uncertain market.

However, most buyers live in their new home an average of seven years or more. If that fits you, it almost always makes sense to buy rather than rent, in practically any market.

Why? First, if you are thinking about delaying a purchase because you want to “time the market” to get the very best deal, that is almost impossible to do with precision. Even if you are in an area with declining market prices, the most knowledgeable experts cannot reliably anticipate the “bottom” of a real estate market. Afterwards, they can look back and say, “The market began to turn in 1997,” like it did in some areas of California that had a tough market in the nineties. Before the turn, though, no one knows.

Second, if you aren’t an owner, you’re a renter. Renting is just throwing money away. You don’t get to reduce your income taxes by itemizing deductions like property taxes and mortgage interest.

As a renter, you are limited on what changes you can make to your living quarters. As an owner, you can paint your living room chartreuse if you want or put in an avocado green carpet. You can change light fixtures, garden and landscape. You can do whatever you want that makes your home a comfortable place for you and your family. It’s your home, not a temporary place to sleep and eat until you do buy a home.

Third, interest rates are very low right now. If you wait, interest rates could be higher. That means your monthly payment could be higher, too. No one can predict rates that far in the future, of course, but rates are very low right now.

Plus, the easiest way to accumulate wealth is through home ownership. Three out of four people have more equity in their home than assets in retirement plans, stocks, mutual funds, and savings. Though no one can guarantee your property will appreciate, over time it generally does. Over the long term, you can generally count on it. In the last five years, the median price of homes all across America has increased in value approximately 10% per year. Usually, it’s not quite that high.

Admittedly, there are some areas that had more rapid appreciation in recent years. Those markets may suffer from lower price-growth than the rest of the nation or region over the next couple of years.

How do you minimize the possibility of lower appreciation for your home?

Determine your price range. Then choose a neighborhood where your target price is in the lower tier of prices in that neighborhood. That way, your home has less vulnerability on the down side and the higher-priced homes will help pull you up during hot markets.

Also, try to steer away from homes on busy streets or homes that back to busy streets. Buy a house as close to the center of the tract as possible. Don’t buy houses across the street from a park or a school. Try to buy in a homogeneous area, where all the homes are similar to one another. For example, if you are buying a single family home, you do not want to buy next to an apartment or condominium complex.

Finally, talk to a real estate agent and ask for advice. Ask them what the market is like in your area.

Best of all, there are LOTS of sellers out there right now. Inventory is high. If you make an offer, ask for incentives to buy that particular home.

If you are putting ten percent down or more, you can ask for up to six percent of the purchase price in incentives. These incentives cannot be rebates of cash or help with down payment, but you can ask the seller to pay your closing costs. You can also ask the seller to pay for a temporary interest rate “buydown” that lowers your payment over the first one to three years and still gets you the security of a fixed rate mortgage — and fixed rates are very low right now.

If you’re putting down five percent or less, you can still ask for incentives. The amount you can ask for is limited to three percent of the purchase price. The reason there are limits is because you are going to finance the purchase with a mortgage and lenders have guidelines on how much sellers can provide in incentives. Those guidelines help them limit loan fraud.

Talk to a real estate agent. Have that agent recommend a lender who will talk to you about incentives and explain what you can request.

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How much is Transfer Tax and who pays for it in SF?

The Transfer Tax on Real Property is based on the total value or consideration for the property.

$100 to $250,000: $2.50 per $500 of value.
$250,000 up to $1,000,000: $3.40.
$1,000,000+: $3.75.

Who pays the Transfer Tax?

Most often in San Francisco the seller pays the Transfer Tax. Two exceptions are if you purchase property through probate or in a new development.

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February 2008 Condo Sales Figures in SF

Fast Facts

District 1 February 2007 February 2008
Number of Sales 7 5
Median Selling Price 809,000 990,000
Average DOM 61 50
District 2 February 2007 February 2008
Number of Sales 7 0
Median Selling Price 675,000  
Average DOM 22  
District 3 February 2007 February 2008
Number of Sales 2 1
Median Selling Price 417,500 649,000
Average DOM 31 90
District 4 February 2007 February 2008
Number of Sales 3 6
Median Selling Price 418,000 618,000
Average DOM 55 91
District 5 February 2007 February 2008
Number of Sales 29 23
Median Selling Price 858,000 789,000
Average DOM 46 39
District 6 February 2007 February 2008
Number of Sales 14 14
Median Selling Price 752,000 830,500
Average DOM 44 68
District 7 February 2007 February 2008
Number of Sales 14 17
Median Selling Price 907,000 1,250,000
Average DOM 52 18
District 8 February 2007 February 2008
Number of Sales 22 24
Median Selling Price 797,500 577,000
Average DOM 53 60
District 9 February 2007 February 2008
Number of Sales 44 18
Median Selling Price 724,500 682,000
Average DOM 60 73
District 10 February 2007 February 2008
Number of Sales 5 0
Median Selling Price 565,000  
Average DOM 28  
District 11 February 2007 February 2008
Number of Sales 6 7
Median Selling Price 528,500 340,000
Average DOM 77 103

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Ten Critical Steps in a Green Remodel

  1. Get an energy audit.  You need a base line to understand what is needed for your project.  Most states and utilities offer energy audits.
  2. Fix or upgrade your insulation to keep out heat/cold.
  3. Get better windows that seal out the heat/cold, watch the edges.
  4. Get a highly efficient heating and cooling system to match your needs and ask the utility company to hook you up to the green power.
  5. Plan for a good air exchange system to ensure your home has healthy air.
  6. Make sure your paint, carpets, furniture, and wood is made of sustainable, zero-VOC materials.
  7. Landscape with less grass and use rain gardens that require minimal water.
  8. Use anything that reduces or recycles water, such as low-flow restrictors on faucets.
  9. Come up with a plan/system to recycle within the home.
  10. Work with a professional or organization with experience in green remodeling to keep the costs down and make sure everything works.


  • Recycle or reuse what you deconstruct, if possible.
  • If you replace or install new appliances, make sure they’re the most energy and water efficient appliances you can find.
  • Use locally sourced materials where possible.

Here is a look at the world’s first LEED PLATINUM HOME REMODEL…


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Home owner tax deductions

Buying a home is one of the biggest ways to reduce your tax payment and start your long term savings and investment while enjoying the tangible benefits such as being able to live in it!  Buying a home is usually a person’s biggest investment, and also one that yields the most financial and tangible rewards.  There are good times as well as bad times to buy and sell real estate as pure investment (like stocks or anything else), but to me, it is NEVER a bad time to buy a HOME to live in.

 Here are some details about home owner tax deductions that yield tax saving benefits…

1. mortgage interest on a primary residence is usually fully tax-deductible, unless your mortgage balance exceeds $1 million or you took out a mortgage for reasons other than buying, building or improving a home. 

2. your lender will send you a 1098 that tells you how muchy mortgage interest you paid for the year.  you can record your interest deduction on line 10 in your schedule A, labeled “itemized deductions”.

3. real estate taxes are also fully deductible.  These taxes are approximately 1.14% in San Francisco, and are taxed annually based on the assessed value of your home. 

4. If you (or the seller) had to paid points on your mortgage, then the amount may also be deductible on the year that you purchased the property.

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