Hunting More Welcoming Home Prices For SF’s “Forgotten Middles”

Having left their hearts in San Francisco during the depths of Covid, people are returning to the City by the Bay. Lots of them have been drawn by the rebounding sense of normalcy afforded by the city’s comparatively high rates of inoculation. Many have also been lured by a renewed focus on what might be called the “forgotten middles,” as real estate owners and operators work to accommodate bargain hunters and the leading edge of returnees to one of the highest-priced markets in the U.S.

“With the high vaccination rates in San Francisco enabling the city to open up more safely, we’re seeing people returning in greater numbers,” says Veritas Investments’ Jeff Jerden. The company is among the city’s largest property managers supervising hundreds of rent-controlled, pre-1970 apartment buildings.

“We met the market during the temporary downturn with competitive rents, and a lot of people are very happy now that they locked into a great value. [That includes] many of our existing residents, who moved up to something bigger, or chose a different neighborhood they wanted.

“Everyone’s been sharing the pain to get through it. And we tried to ease the burden with an unprecedented moratorium on Covid-related evictions through the end of the year. We granted millions of dollars in rent forgiveness to residents who needed help.”

Comparative bargains

Housing options that are a bit friendlier to buyer and renter pocketbooks can be found in the new condominium market, as well as in rent-controlled apartment buildings.

Median San Francisco home prices stand at $1.8 million. By comparison, condos priced at or under $1 million are obtainable in the D10 District, a transitioning one-time industrial district on the southeast side. Lennar’s San Francisco Shipyard, a 750-acre master-planned community located directly on the San Francisco Bay, offers a three-bed, two-bath condo at $939,000, against the backdrop of similarly-sized San Francisco condos at $2 million.

A two-bed, two-bath condominium there can be had for $849,000, versus a like-sized condominium residence in Dogpatch for much more. Examples might include condos at 2177 Third Street, such as a two-bedroom, two-bath at $1.4 million, according to Compass, or a two-bedroom, two-bath at $1.46 million, according to Redfin. Similarly sized condos at 977 Third Street are priced at $1.75, per SFCondo.

Also in San Francisco Shipyard, a Palisades three-bedroom, 2.5-bath townhouse with bay views recently bore a price tag of $1.2 million. By comparison, townhouse buyers might note three-bedroom, two-bath condos elsewhere fetching around $2 million.

“We’re finding the Shipyard community really appeals to Bay Area home shoppers who want new construction in a thoughtfully-planned community setting,” says Garrett Chan, sales director for Lennar at The Shipyard project, in the city’s south end. He added competitive pricing is the key element in an evolving market like San Francisco.

“Our new homes have sold pretty steadily without much fanfare. And now some people are surprised to hear that over 700 residents call the Shipyard their home,” he says.

Hundreds less

In a city where rents currently average $4,400 per month for two-bedroom apartments, according to Apartment List, renters can find apartments priced hundreds of dollars less. According to Veritas’ rental leasing subsidiary RentSFNow, which is offering an incentive of a zero-dollar deposit, a two-bedroom rental in the upscale Mission District is going for $4,295 per month.

A two-bedroom apartment downtown at 540 Leavenworth was recently asking $2,695 per month. Leases that are signed now — or were at the pandemic trough — offer renters bargains they can count on enduring as long as they stay in the residences.