The two-bedroom Noe Valley house had an unorthodox layout and looked like a 1980s Tahoe cabin.
Taking those flaws into consideration, Realtor Bernard Katzmann listed it for $1.1 million at the inauspicious sales time of Thanksgiving. Then he watched in amazement as 22 offers came in – many for all cash – and it ended up selling for $1.54 million.
“Lots of tech companies were represented” among the bidders, he said. “I heard that many buyers want to get in now before Facebook goes public (and spawns scores of new millionaires), which is pushing demand.”
In a still-moribund real estate market, Noe Valley stands out as a neighborhood buoyed by positive fiscal forces.
All the money flowing into tech firms, and all the tech jobs being created in Silicon Valley and San Francisco, have been a boon for Noe Valley because of its fortuitous location for Peninsula, South Bay and downtown commutes, along with its walkable, small-town feel, family-friendly vibe (it’s called “stroller valley”), and charming, albeit pricey, Victorians.
“It’s like a little village within the city,” said Sally Smith, co-publisher and editor of the Noe Valley Voice, the monthly neighborhood newspaper. “It has that community feeling that everybody wants.”
“Noe Valley is a favorite neighborhood for techies because it’s so close to 101 and 280,” said Tim Gullicksen, an agent with Zephyr Real Estate. “It’s a pain to live on the north side of San Francisco because they have to get all the way through town to get to the freeways.”
Tech firms’ buses a plus
The private bus routes sponsored by tech firms are a draw, said Zephyr agent Danielle Lazier. “We see a lot of first-time buyers from tech companies who still want to have a city lifestyle; they don’t want to live in the suburbs, but they work down south. What I notice is when people from Google, Apple, Yahoo and Genentech come in for a first meeting, we literally draw a line in the city because of the commute. Noe Valley is at the top of the list, then Bernal, Mission, Dolores, Cole Valley.”
The numbers tell the story. The median sales price in San Francisco has tumbled to $653,000, down 22 percent from its 2007 peak of $840,000, according to real estate information service Dataquick. That’s a far less dramatic slide than most other California cities. But in ZIP code 94114, which includes Noe Valley and the Castro, the median sales price for single-family homes now stands at $1.332 million, only 5 percent below its 2007 peak of $1.406 million. The median condo price is $820,000, down 8.5 percent from its 2007 peak of $896,000.
“It’s not completely bulletproof, but it’s more stable than other areas,” Lazier said. “Not everything sells over asking price the way it used to.”
Noe isn’t the only San Francisco neighborhood whose cachet has insulated it from the real estate downturn. ZIP codes 94117 (Haight-Ashbury/Cole Valley) and 94123 (Marina/Cow Hollow), for instance, have seen even less pricing impact.
Tight inventory is one factor that keeps Noe Valley prices up. Last year, 163 existing single-family homes, 143 existing condos and 10 new residences changed hands in the ZIP code, Dataquick reported.
Location, location, location
“Noe Valley has several things going for it,” said Jed Kolko, chief economist at real estate site Trulia.com. “Being closer to the Silicon Valley commute than other desirable parts of the city is a big plus. It’s also convenient to downtown. And it’s a neighborhood where there’s not a lot of new construction to relieve price pressure as more people go after pretty much the same number of homes.”
Brendan Collins, owner of Collins Construction, buys “fixer” houses, remodels and expands them, and then sells them. Noe Valley, where the older Victorians and Edwardians are modest in size because they were built for working-class families, is particularly fertile ground because it is such a desirable neighborhood for families, he said.
Vaishnavi Bodanapu, who is creating a social enterprise around food, and her husband, Sundeep Peechu, a venture capitalist in Palo Alto, are hunting for a two- or three-bedroom house in Noe Valley, where they hope to start a family.
“If you’re working in the South Bay, it is one of the best spots to be in the city, other than SoMa, which doesn’t have the same neighborhood feel,” she said.
“I certainly think it’s a little more expensive than it should be,” she said. “But Noe has its own charm. You get more for your money in Bernal Heights, but Noe feels like more part of the city.”
A dearth of for-sale properties means they haven’t made an offer yet. According to Realtor.com, ZIP code 94114 had 36 single-family homes for sale in January, half the number of listings a year earlier.
“There are lots of people in the market to buy, but there’s not a whole lot of inventory,” Bodanapu said.
Pete Brannigan, an agent with Brown & Co. Real Estate, said more than 100 people streamed through a recent open house. “It was a good price point for the neighborhood, just under a million dollars, meaning it was a, quote-unquote, starter home for Noe,” he said.
Many longtime residents say the neighborhood has maintained its character throughout the influx of new inhabitants.
The current tech-powered surge of house hunters is nothing new, said Smith, the Noe Valley Voice editor. She’s seen similar dynamics several times before.
“I moved here in the wave in the 1970s when lots of young people came here from Haight-Ashbury. Once they started meeting and having kids, they spilled into Noe Valley,” she said. “About 10 years later, as the tech industry boom was just starting, people who worked in Silicon Valley wanted to live here. The (private corporate) buses definitely created another wave. Now there are new businesses that are accelerating people’s desires to live here. We’ve been seeing higher demand, and rents and home prices going up.”
A sense of community
“There has always been a really big sense of community here, and there still is,” said Carol Yenne, owner of Small Frys, a children’s store on 24th Street – “downtown Noe Valley.” She and her husband have lived in Noe Valley for 36 years. Their two grown daughters now live in the neighborhood with their own families.
“There aren’t fancy cars or huge McMansions here the way there are in places like Menlo Park, where people tear down houses and build ones three times bigger,” Yenne said. “Here they might gut the interior and build an addition on the back, but there isn’t the kind of ostentatiousness that you see in other areas (touched by) the technology boom. When I meet people on the street here, I don’t know if they’re a fireman or a Facebook millionaire; they all look the same.”
While prices continue to climb, it helps to remember that affordability is always relative, she said.
“When we bought our (Noe Valley) house in 1975, it cost nothing compared to nowadays,” Yenne said. “But my mother back in Montana cried because we could have bought 10 acres and a ranch house there for the same price, and here we got a 25-foot-by-100-foot lot with an old, crummy house.”