They say the US real estate market sucks. They say housing is in for more pain. Not everyone is listening.

Here are the top 5 highest priced San Francisco condo sales thus far in 2011, as measured by price per square foot.

765 Market St., #27A
Sold for $7,200,000 or $2,170/sqft on May 10, 2011.
3 beds, 4.5 baths, 3,318sqft
You may have heard of a little hotel chain called the “Four Seasons.” With expansive views and high-end finishes, this 3,000+sqft condo includes custom furniture and the pampered lifestyle one can only find at the Four Seasons. Oh, and the buyer paid cash. No big deal.

765 Market St., #32F
Sold for $4,350,000 or $1,689/sqft on February 16, 2011
2 beds, 2.5baths, 2,576sqft
Another Four Seasons property, this corner unit is smaller than its big brother listed above, but no less spectacular. A “steal” at just under $1,700/sqft

1045 Vallejo St
Sold for $4,100,000 or $1,715/sqft on May 12, 2011
3 beds, 2.5 baths, 2,391sqft
Away from the steep streets and cable car lines, this urban sanctuary is truly unique. Sold for $150,000 above list, this 2-level luxury condo has spectacular city views, an elevator and two fireplaces. Monthly HOA fees are a mere $2,560. Oh, another all-cash transaction.

425 1st St., unit 6004
Sold for $2,427,308 or $1,548/sqft on March 31, 2011
2 beds, 2 baths, 1,568 sqft
You may know it as that eyesore you almost run into coming off the Bay Bridge. Others call it home. One Rincon Hill is a condo before its time, finished at the height of the housing boom in 2008. This top floor, penthouse unit is a mere 1,568sqft but boats truly breathtaking views. But for $1,548 per sqft?

765 Market St., #22D
Sold for $3,700,000 or $1,441/sqft on March 15, 2011
3 beds, 3.5 baths, 2,567sqft
The agent for this property (who represented both buyer and seller for a cool $185,000 commission) must have quite a sense of humor. She noted on the listing: “Price Reduced! Now at affordable $1,539/sqft.) San Francisco: You just can’t make this stuff up.

This post first appeared in the June edition of: Cirios Trends: Finding Real Estate Opportunities.

If there is a theme we at Cirios harp on more than any other, it’s that just because a particular city or neighborhood is considered “more desirable” than another, that does not mean by extension it’s also a better place to buy real estate. The following slides compare four different markets, and we challenge readers to put their preconceived notions aside when evaluating the home price trends in each area. Making sound real estate decisions doesn’t just depend on one’s ability to identify where he or she would like to live (that’s pretty easy), but rather where large groups of people are going to want to live. Demographics drive home price trends, and understanding demographics, population movements and macro culture shifts enables savvy investors to position themselves in front of, rather than behind, trend shifts and market movements.

Albany, what’s not to love? Great schools, good weather and even a decent selection of restaurants. BART makes for an easy commute into San Francisco and the city’s quiet suburban streets attract families young and old. But what about home prices? Since the market peaked in 2005, which notably was well before most high end markets peaked in 2007, prices have been in a steady slide. Even over the past 12 months, a time period when many Bay Area housing markets were actually improving, Albany remained sluggish. And while there are many explanations for the continued declines, if the graph above tells you anything, it’s that just because a town has great schools and a strong community, that doesn’t mean its housing market is immune from factors affecting what most would
consider a significantly less desirable area … like, Pittsburg.

———————————————————————————————————————-

Pittsburg (California, not Pennsylvania) lies about 45 minutes east of San Francisco and is a fairly typical working class community. North of Highway 4, neighborhoods can get fairly rough, but south of the Highway you can find quiet streets and generally affordable homes. Pittsburg schools are not going to win any awards and they are certainly not on par with nearby Brentwood, but then again, home prices are lower too. The price trend here is pretty clear … up up up DOWN DOWN DOWN flat flat up. The drop in late 2007/early 2008 was dramatic, to be sure, but since early last year prices appear to have stabilized. And while much of the rebound can be attributed to government intervention into the market to prevent foreclosed homes from being sold, affordability also played a key role in the recovery. Not only is buying at times cheaper than renting, but investors can also earn solid rental yields. These two factors lead to a stronger housing market, government meddling notwithstanding.

———————————————————————————————————————-

94112 is not the sexiest zip code in San Francisco. Encompassing such neighborhoods as the Excelsior and Ingleside, this suburban, gritty section of San Francisco is far from the city’s most coveted spots. Prices are down to be sure, but demographics and affordability bode well for these fringy areas. Single Family homes remain one of San Francisco real estate’s most prized possessions, and this zip code is chalked full of single family homes. As buyers are forced to move further and further from the city center to find affordable housing, this area should benefit from its relatively low prices. As for demographics, these ethnically mixed neighborhoods are home to populations where the middle class is growing, not shrinking. Think of it like comparing the developed world (Pacific Heights) to the developing world (Excelsior). Developed countries grow more slowly while developing countries expand at a sometimes blistering pace. True, less established areas are often more susceptible to economic headwinds, but remember the bit about wanting to be where the people are going, not where they already area.

———————————————————————————————————————-

Pleasant Hill is a quick 35 minute drive from San Francisco through the Caldecott Tunnel or one stop past Walnut Creek on BART. Not quite as nice as Walnut Creek but a touch better than Concord, Pleasant Hill is a, well, “pleasant”, option for homeowners looking for a desirable area, quiet streets and big lots. Home prices were slow to stabilize last year, likely since Pleasant Hill had a fair number of aspirational homebuyers who moved up too far, too quickly during the boom. But since last summer, prices have popped as investors and regular home buyers have found value. Similar to 94112 in San Francisco, Pleasant Hill could be classified as a place where people are going, not necessarily where they already are.

This post first appeared in the April edition of: Cirios Trends: In Search of Real Estate Opportunities.

Single Family Homes are highly sought after within the city of San Francisco. A look at the chart below helps explain the relationship between average/median home prices and the distribution of high priced sales vs. low priced sales. Median and Average price data is heavily influenced by sales mix, so always make sure you understand what’s going on beneath the trends.