Getting Outside the Core SF Neighborhoods

June 12, 2017 by Shreyas Vijaykumar 13 Comments

This past weekend I checked out six homes and many of them were worth a writeup but I wanted to highlight 71 Curtis Street because it presents an interesting case study for the value of a single family home in a San Francisco neighborhood that hasn’t gentrified yet. 71 Curtis Street is listed at $995,000.

The first thing to talk about with this home is the neighborhood. A big reason I’m doing these home tours is because it gets me out to explore parts of the city that I wouldn’t normally go to otherwise. 71 Curtis Street is definitely below some sort of gentrification line, which after driving around for an afternoon I would roughly call everything south of 280 and includes Outer Mission, Excelsior, Visitacion Valley, and Crocker-Amazon. These are mostly residential neighborhoods and some of the less well-maintained homes have an older, faded look to them.

You can see this gentrification line in rent prices – the most recent Zumper rent score map has Outer Mission/Excelsior as the cheapest neighborhood in the city, with a shockingly steep price gradient to each of its four neighbors. These rent prices turn out to be particularly relevant because 71 Curtis has a permitted in-law unit downstairs, one that looks like a true 1 bedroom apartment! Which means that you can use 71 Curtis as a 3 bed 2 bath (2 kitchen) home, or you can use it as a 2 bed 1 bath home, with a rental income generating 1 bed 1 bath apartment that is completely separate and legal. If split up that way, the only downside I could see with this house is that there is only one bathroom on the main level.

Let’s take a look – (more photos here):

And a bonus! I tried my hand at recording a video walkthrough of both the main living area and the in-law level.

I debated whether to treat the in-law unit as regular square footage in one single family home (~1,200 upstairs, ~800 downstairs) or to reflect the most efficient use of the space where the downstairs is rented out. I’m curious what people think about this one. I finally decided to combine all the square footage and then add a 10% premium for the flexibility that you get to use the downstairs as either 1) an extension of the main house 2) a true in-law unit for multi-family living or 3) a rental property, offsetting a good chunk of the monthly mortgage.

The Zumper rent score map also provides an interesting way to estimate the neighborhood score for Crocker-Amazon. I’ve been treating Western Addition as my canonical 1.0 neighborhood and if we compare these rents we get $2,090 / $3,150 = 0.66, which I’m going to use as my neighborhood score. This is imperfect because the rent vs buy ratios might not track exactly for a variety of reasons but I don’t think it’s going to be awful and on the positive side, you get more datapoints from rentals which helps smooth out outliers you might otherwise get in a neighborhood analysis based on completed sales.

Estimated sale price = ($ / square foot) * region score * neighborhood score * square footage * usable square footage score * in-law unit premium

Estimated sale price = ($1000 / square foot) * 1.0 * 0.66 * 2000 square feet * 1.0 * 1.1

Estimated sale price = $1,452,000

How would you value 71 Curtis Street? As with the last home tour, I would love to collect some sale estimates in the comments so that we can see what range the wisdom of the crowds suggests!