Wednesday, October 26, 2011

TICs in the Current Market

Periodically we look at the overall condo market in San Francisco (it makes up a little more than 50% of the total residential real estate market in the City) and also that peculiarly San Francisco subset of the market -- TICs.

At the end of September, sales of TICs made up 13% of sales in the combined condo/TIC market.  That's about the same as all of last year but down from 19% in 2009 and the high of 24% reached in 2007.  TICs made up 16% of the active listings.

Looking at the first nine months of the year, TICs have averaged about 85 days on market which is not much more than the 79 DOM of condos.

Our survey looks at three specific configurations of units:  1bd/1ba, 2bd/1ba, and 2bd/2ba.  These three configuration make up about 60% of the total market for condos and TICs in San Francisco.  The average difference in selling prices between condos and TICs for those three configurations range from $76,000 for the 1bd/1ba units, $127,000 for 2bd/1ba units, and $68,000 for 2bd/2ba units.  These numbers represent the premium buyers have been paying for a condo (or the discount you get when buying a TIC). 

Of course there are other considerations when considering the TIC/condo decision -- too many to get into here.  Nevertheless, the TIC market remains a significant, active part of overall real estate sales activity in San Francisco.  You can see the entire report on our web site here.

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