As #1 San Francisco rental/investment agency; I always recommend our investors to invest in the neighborhood that the rental market is hot and will stay hot at least for the next few years.. I think all three areas are a great long term investment; but, if I have to choose one; I would go with SOMA; not further than 5th street; as you get towards Embarcadero; the investment gets nicer & juicier!!
Our rental listings in the area that I just mentioned, are gone like a hot cake! rental appreciation is awesome!!

When you get a chance, give me a call so we can chat in more details!

Manzar D. Azari, MBA, Broker, Realtor
Founder/President
The Azari Group Real Estate, Inc.
http://www.azaripm.com
www,theazarigroup.com

Hello Ajita,

If any Realtor tells you :'buy a property here and you will be rich within 5 years' you should question that person's integrity.

Let's assume for a moment that you already know what you are looking for in terms of price, size, commute time and you are strictly interested in protecting your future real estate investment.

You referred to a very specific area of the city, three neighborhoods which will be no doubt impacted by the economic development that is happening right there within its boundaries. I personally live and own a condo in Potrero Hill and I am very interested in the area's development as you are.


There are few factors I would consider if I were you:

What the local economy will look like:

-High tech- Zynga, Twitter, Salesforce, etc..
-Health Industry: 3 hospitals being built in the Mission Bay
-Transportation: the new TransBay terminal hub
-Entertainment/Sports: America's Cup( 2013)
-Etc..

New residential construction for sale and rent:

- As we speak, the 329 units Madrone is the only new condos development for sale in the Mission Bay.
-MidMarket/SOMA area will offer new rental buildings, which could eventually become condos and could be sold by the developers in the next 5 years. Development plan for SOMA, which is still evolving?
-There are other developments in different stages of planning and approving, but there are all over the city.


Turn-around and inventory/market absorption rate

Which of these 3 neighborhoods has the highest turn-around?
Certainly SOMA and South Beach, where residences tend to be smaller, prices vary from development to development and they attract younger buyers who may be looking to move sooner and buy a larger property. Almost no single family homes in these 2 neighborhoods. There will always be more inventory here giving the very high density.
Potrero Hill has a lot less inventory and higher prices, especially for single family homes. It is also bordered by the public housing project, which is due for a major redevelopment in the next 5 years. The new plan will offer both market rate and affordable housing units.

Look at the market absorption rate: how long does it take for these properties to sell? What is the selling price versus the listing price?

What are the rents?


Compare prices and trends for the last 5-6 years:

-How much a property in a certain area was selling for pre 2008?
-How much was selling for in 2009?
-How much is selling for now?
-Is that room for appreciation?


Few useful sites for you:

http://www.rebuildpotrero.com/

http://www.missionbaydevelopment.com/news.html

http://mbaydevelopment.com/index.html

http://www.sfredevelopment.org/index.aspx?page=61

http://www.sf-planning.org/ftp/general_plan/East_SoMa.htm


Cheers,

Alina

Alina Aeby- Top Producer 2011, San Francisco Office
Broker Associate, Realtor
Short Sale and Foreclosures Specialist (SFR)
ZipRealty, Inc.
Licensed in CA, #01729889
alina.aeby@ziprealty.com
Cell: 415.744.4844
Fax: 866.363.5298
My Profile: http://www.ziprealty.com/agent/aaeby
Like us at http://www.facebook.com/sfhomezone

As a follow up to my earlier post, I agree that no one knows for sure what is going to happen, but you can make some educated guesses. Look where investment money is being spent and/or lesser priced properties are located in the same area. That is a convergence that almost always indicates coming rise in value, and I have done well personally and for clients using this philosophy in San Francisco as well as other areas.

In 1997 I bought a house in Santa Cruz because prices were WAY cheaper than over the hill, it's a beautiful area a short drive from Silicon Valley, and I had just begun to hear Hwy 17 being included in the traffic reports. This told me housing values were about to go up dramatically. I paid $239K for this property and sold it 4 years later for $525K and put hardly any money into it at all.

In 2000 I bought a place in Petaluma because the commute ring from San Francisco was expanding fast and Marin was a lot more expensive than its northern neighbor. Bought a house and sold it 2 years later for over $100K profit.

I have also bought a number of buildings in the city and fixed them up and sold them in the last few years when things were supposed to be so tough. Made money on all of them, but admittedly it's tough to find bargains here.

Back to mid market.... When high end restaurants like AQ open close to 6th & Mission, it shows me that I am not alone in my beliefs. Heaven's Dog opened a block away at the SOMA Grand a few years ago, Twitter is moving here, etc...

And yes, the building matters and so does location as SF is a block by block town, but there is nowhere else close to downtown with values the way they are here - for now.

Last, there have been several comments about lifestyle - this is a different question. If you want a more neighborhood feel places like Potrero may suit you better because SOMA does have a more industrial feel.

I would interview several agents/brokers and find someone whose skills you trust and start looking at places in different areas. This will also help determine what is most important to you.

Best Regards,

Lance King/Owner-Managing Broker
lance@fixedrateproperties.com
415.722.5549
DRE# 01384425

In SOMA & Mission Bay, in addition to everything else my colleagues have mentioned below, the type of condo and square footage will make a dramatic difference in the income and future equity of your investment.

In Potrero the exact location is the driving factor for the quality of your investment in the coming years. There are may details to consider and there is no short answer here.

Best,

Oggi Kashi - 415.690.3792 direct
Broker Associate, Paragon Real Estate Group CA DRE 01844627
All data from sources deemed reliable but subject to errors and omissions, and not warranted.

Ajita,

Here is a link to a recent blog I wrote about areas below market street:

http://www.sfnewdevelopments.com/9199/south-of-market-%E2%80…

I hope it adds to the already great comments posted to your question.

Good luck!

Gabriel

If you're looking at condos in those 3 areas I'd focus more on the buildings themselves, and on the immediate area. Get to know the building, and the few blocks around it, very, very well.

Then watch the building and see every new unit that hits the market. You want to try to "buy your profit". That is, make sure you get a deal now, so that you don't have to rely on future appreciation as much as the next guy. Easier said than done, but far easier then hoping an entire area will outperform other areas.

Here's the honest answer; if anyone knew which of those markets was going to be the best investment five years from now they would be buying up every piece of real estate there is to buy.

You have to buy for what best meets your needs for now. It 's impossible to know what is going to be happening five years from now, if anyone tells you otherwise I would ask them if they suggested to previous clients to sell at the peak of the market last go around.

I hope that answers your question, let me know if you need anything else.

Jack McLaughlin
Jack@mybrokerdonates.com
415.302.7787

Hi,
the best approach is when you are ready to buy get a buyer's Broker/agent who will represent your interests only to help you look at and evaluate specific properties you are interested in...you should begin developing a relationship with your Broker now. Good luck

Buyer 50%-60% Cash Rebate / Seller 50% Commission Discount
Quality Full Service! Work directly with the Broker.

Flavio Tejada, Owner/Broker, Realtor, MBA-Finance
(415)305-2958

The answers so far say it depends on factors that are unknown. I'll say that the difference between the three choices is so small that all would be pretty much equal as an investment. All are located near the area with the greatest planned growth in job opportunities is San Francisco.
That said there are nuances within the neighborhoods and between the areas mentioned.

Let's assume this is going to be your residence. The way that we work would be to talk with you and find out more of what you like, how you spend your free time, where you work, how you would like to commute, etc.

Call one of us and set up a meeting to see who you'd like to work with.

It really depends on what part of these neighborhoods you are talking about as there is a wide variety in each of these neighborhoods. My opinion is the best place for investment is probably the SOMA mid-market area - 7th St and west - as this area has already had a huge transition, lots of money is coming in to the neighborhood, restaurants and bars are popping up left and right, and values are still lower here.

However, this is not a marquis neighborhood now and if you are not ready for that you may want to look at other areas.

We are going to be bringing a 1900+ sq ft, 3 Level 2BR 2.5BA loft with lots of cool and style and 2 car parking to market in the next couple of weeks. If you'd like to see it or get some info on other available properties our contact info is below.

Best Regards,

Lance King/Owner-Managing Broker
lance@fixedrateproperties.com
415.722.5549
DRE# 01384425

You may want to find out more about these neighborhoods and how they would fit your lifestyle. If you already know the neighborhoods perhaps take a look at current property offerings in those neighborhoods and decide on the kinds of buildings you prefer - as well as amenities, if that is important to you.

As far as what represents the best investment for you that depends on a number of factors, including the financing for the condo, how long you intend to live there, the actual building you settle on, etc. There is no crystal ball to predict the market, e.g. values.

Feel free to call me at 415-200-7202.

Hi Ajita,
Are you thinking to buy a condo as an investment property or as a primary residence? If as an investment property- you should know that people like to be close to CalTrain, Bart or HWYs. Have a Realtor to help you to find a good deal. We have several off-market listing @ Berry St. Let me know if you want some extra info. Feel free to contact me. I'd be happy to help.
Ellie Kravets
415.948.1601
Ellie@ClimbSF.com

Hello,

It's quite difficult to predict what will occur in the future. Currently SoMa and Mission Bay are very good areas for a condo investment more so than Potrero Hill. The former are also very strong rental areas so in the event you are contemplating selling in 5-7 years and the market is not were you expect it to be you'll have options.
I recommend you sit down with an agent and discuss what your investment horizon and prerequisites are in your purchase then he/she can provide more specific recommendations pertaining to your individual investment requirements.

Regards,
Lizete

That's a very hard question to answer, all the areas you mentioned should do well. In general, the the market is really showing signs that we are now on the up swing. If the market picks up 20-25% over the next 5 years, it wont matter which area you chose.

It's not just where you are going to buy, it's how long to you plan to hold. Lock into a 30 year fixed rate and in 5-10 years down the road it will look like a stroke of genius.

If you are going to purchase and know for " SURE" that you are going to sell in 5-7 years, then maybe take a look at a 5 or 7 year fixed.

Cheers.

Tap

Hello-

they're very different areas. One big question is: what kind of neighborhood are you looking for? No agent can predict or guarantee value. We've seen values go up and down in Sf over the years.

Potrero is a beautiful old beighborhood where SOMA is more industrial and dense. Mission Bay is contemporary. Does convenience to mass transit or the highway play a role in your decision?

I'd be happy to talk to you more about what exactly you're trying to archieve.

Thanks!

Rich
415.305.4911

Rich Bennett, Realtor in SF since 2002

Zephyr Real Estate
DRE#01358540