From the listing for 398 Vienna a little over a year ago (eight months after being purchased for $549,000):
Gem of a property on the inside. Large one bedroom and bath and an additional oversized room and bath with own private separate entrance on Brazil. Laminate floors, updated bathroom, and spacious living room/dining room combo.
Asking $499,000 at the time and perhaps banking on a bidding war. Subsequently reduced to $425,000. Then to $349,000. And then to $330,000. Bought back by the bank in January for $289,960 and now on the market and asking an unemotional $251,750.
It’s funny what happens with real estate when emotions don’t get in the way.
∙ Listing: 398 Vienna (1/2) – $251,750 [MLS]
THAT was expected to sell for $500k??
Yuck.
[Editor’s Note: Well, it did sell for $549,000 in June of 2007…]
The MLS says:
> Style: Traditional
It should say Style: Retail Store converted to Residential Use…
Someone on another thread was complaining San Francisco is becoming as exclusive and unaffordable as Monte Carlo…
Well, this one really puts a bull like me in my place. Unless this property is in a neighborhood that one could somehow classify as a little bit of Stockton or Bakersfield plopped down in SF County. Out in the valley, everything that sold for 549 in 07 is in the 200’s, or less, today. The lending spree hit that 500k range hard, maybe it did the same thing in isolated spots and among isolated groups here.
the thought of coming home to this place makes me pretty emotional
Or it could have been a fraud – my buddy David Crisp down in Bakersfield was buying houses in the 200k range and then selling them to his employees for 500k, with the assistance of a friendly appraiser. The conspirators walk away with the money, and the only downside is the employee gets a mean note on his credit report.
So what could this place rent for? Are we at all approaching some rational prices on a buy vs. rent basis? I’ve long believed the math to be way out of line in that regard in the entire city, especially at current interest rates where the cost of capital is quite high.
I actually know someone who lives in a place a lot like this in this neighborhood and they’ve done a really nice job with it making it very modern and homey. And seeing any SFR in this city in the $200k range makes my little renter’s heart sing….maybe someday I can actually buy something here.
“So what could this place rent for?”
I would think about $1500 a month in it’s current condition. A few cosmetic changes and some greenery would make this house much more appealing. Location is not great (not a war zone either) but what realistically can you expect for that price?
$549,000 in 2007…now that is a perfect example of what was wrong with this market. How much crack does one have to smoke before paying that much money for that place in that neighborhood?
How much crack does one have to smoke before paying that much money for that place in that neighborhood?
I actually think less than you would have had to smoke before committing your hard-earned cash to little $1.4M+ Noe Valley places in 2007. Remember, many of the places in Excelsior and Oceanview and places like that were purchased 100% no money down. No risk. Heads I win, tails you lose. The worst that happens is that you get to live rent free for a 6-12 months while the foreclosure rolls along, which I am sure exactly what happened in many cases.
The NV buyers in 2007? They’re going to have to keep hitting that pipe, especially as they discover they can’t sell without facing the huge losses they have already absorbed.
Place should be re-zoned NC1 and turned into a convenience store.
And seeing any SFR in this city in the $200k range makes my little renter’s heart sing….maybe someday I can actually buy something here.
Ditto that. It isn’t pretty, but it’s better than the places a lot of people I know rent. And the location isn’t terrible. As someone who feels like she’ll never get the chance to move out of the renter’s market this is encouraging.
Well, in practically any US city other than SF, I would expect a fairly average 1800 sq. ft. 3BR house on a small plot of land in a solidly middle-class neighborhood for around $250k.
I agree with Unwarrantedinlaw that the $549 sale was likely a case of fraud. There are similar examples in Arizona where investor groups were selling the same properties over and over for large inflated jumps in the prices (with a friendly appraiser of course). The investors cash out on each sale knowing that the end game would be they’d walk away with a ton of cash and only one person getting a credit ding. Consequently, I don’t think this is a good indication of the overall market AT ALL.
This place is commercial space that was converted at some point. The real story here is that the Excelsior district is on fire! Total sellers market and which 33 active listed SFR, of which 23 are in various stages of the sales process, either active contingent or pending. Excelsior is the entry point ($$) to to SF proper with many homes priced under $500K. This creates an opportunity for first time buyers and investors alike to get in. The absorption of the REOs and short sales is happening here and someoen should be extolling the promising outlook of this segment of the SF RE market. Eg: 470 Naples and 17 offer last week with 5 over $450K when the asking price was $399K. 123 Edinburgh (short sale) had 15 offers with the sales price over $500K! These tranactions are not yet closed but you heard it here first.
funniest post today. thanks.
HURRY!!! It won’t last at this price!!!
I couldn’t find the info for the Naples house, but 123 Edinburgh last sold for $715K in November of 2006. So if it sells for $500K today, that’s a 30% loss in less than 3 years.
Excelsior sales may be on fire, but only because prices are TANKING!
The Excelsior is so far out of Real SF(TM) it isn’t even funny. For those of you keeping track at home, 94 foreclosures (NOD, NOTS, bank owned) to around 30 homes currently for sale.
Property Shark lists the buyer as a UC doctor and the seller as an insurance company VP (or at least those were the only people with matching names in SF I could find). Doubt it was fraud.
That zip code’s median price was 550 psft, and the property is 1152 square feet. So this came in at under the median per square foot price at the time.
Doesn’t look like fraud. Looks like a market tanking, on fire like Stockton is on fire and has been for awhile, falling in price all the way.
Based on the posting of the realtor above, it looks like the realtors in the area have convinced the sellers to dramatically underprice their properties in order to claim the area is on fire, got 17 offers, went way over, etc.
So in all likelihood, this sells for much higher than its asking price.
All real estate is theater: this is the perfect example. The market is not on fire, nor did it really fall this much overnight. What is happening is a group of realtors is maniplating the buyers. That’s what many realtors try to do. 17 offers means almost all were at or under the artificially low asking price. 15 of the 17 offers were a complete waste of time by the offerors, but served the realtors mislading purpose of being able to claim a market is “on fire”.
If people are so stupid as to fall for these amateur tricks, they get what they deserve. All the emotional energy that went into being one of those 15 preposterously low offers served no other purpose other than the realtor’s. Those 15 offers were the stooges.
[Editor’s Note: Speaking of the Excelsior, multiple offers and even Edinburgh: The SocketSite Reality Check For CBS’s Infamous “42 Offer” Home.]
There goes the dream of opening People’s Clinic… By the way, if the property sold at $251K, it actually retains 47% of its value which is better than the majority of homes in Pittsburg or Vallejo and far better than a 4 year old Mercedes !
the excelsior is on fire with people over paying in my opinion. example http://home-sanfrancisco.com/realestate-listing.cfm?id=12322 330 vienna sells for $555k. i looked at this place and it was pretty much crap. i think buyers have it in their heads that places like this are a good deal because someone paid over $700k a couple of years ago.
also interesting 320 london sells for $460k, very similar to 330 vienna but almost $100k less. i think people don’t really know what to pay for houses in this neighborhood. there is just some sort of $200k off previous sale price frenzy.
and 123 edinburgh for over $500k as mentioned in dalowdown’s post really blows my mind because it was super super crappy.
I may be mistaken, but looking at the Redfin listing, it seems that the structure occupies the entirety of its 25′ x 49′ lot. That seems to remove much of the benefit of being a SFH – no place to exercise the dog or grow carrots. And no parking, right?
On another note, what are the public transit options at this location? I’ve visited friends in Excelsior who were much closer to the Glen Park bart, but this seems to be a bit of a hike to that.
“So what could this place rent for?”
I would think about $1500 a month in it’s current condition.
You must be joking. I’d be shocked if you could rent this for over $1000 a month. It’s an ugly 1 BR in a completely undesirable neighborhood. Here’s an example of what you can get for $1500/month: http://sfbay.craigslist.org/sfc/apa/1156900757.html
Muni buses are the only public transit options for this house. Glen Park is the closest BART station but it’s 1.15 miles away. Not exactly walking distance. Street parking I expect to be OK in this hood.
“on fire like Stockton is on fire and has been for awhile, falling in price all the way.”
Speaking of Stockton fires.. interesting story. When Stockton started tanking I began to look at CList out of curiosity, check for cheap rental props, estate sales, etc. and randomly crossed over a posting for interior firm selling furniture at good prices but nothing out of the ordinary to question motive of the sellers. It was the first and last time I ventured to Stockton. Bought two chairs and the designer provided her info and her contractor husbands info in case we decided we would like to buy additional items. We were told the couple was closing shop (liquidating) and moving due to Stockton tanking. Again thought nothing of it; made sense. Called back a few weeks later thinking we may help them clear the shop of a few more items and was told the shop had caught on fire and was no longer.. owners were no longer around. That was the day I realized people in the dark were finally realizing what we were in deep headed for strange times.
You must be joking. I’d be shocked if you could rent this for over $1000 a month. It’s an ugly 1 BR in a completely undesirable neighborhood. Here’s an example of what you can get for $1500/month: http://sfbay.craigslist.org/sfc/apa/1156900757.htmls
Perhaps, but it is 1152 Square Feet according to the listing with an extra room and closet, so it’s more like a 2/2 than a true 1 bedroom.
Denver, circa 1982, oil shale boom response to 70’s energy crisis comes to a crashing halt. Residential real estate values in some (middle-class) neighborhoods falls as much as 30%.
Know someone who is still suffering?
Even remember it happening?
Guess what? It happens. Grow up.
@flaneur.
“Someone on another thread was complaining San Francisco is becoming as exclusive and unaffordable as Monte Carlo…”
Yeah.. that was me.
Well played. 😉
Who knew that as soon as you took away the crazy loans you would achieve affordable housing?
diemos,
That’s the paradox of creative financing. You create new products to help priced out people buy homes. The effect is increasing prices. Then you have people paying 540K for what they would pay 250K with normal financing 5 years before. The rub is: it’s the same people buying with the same 60K/Y income who get in way over their heads as usual.
Of course you can scale this up with 250K/Y folks buying 2M homes. They can actually afford ~1M but no-one in the industry is gonna break the news to them as long as a bankster is ready to lend.
If everyone stopped buying today, I promise you every potential buyer will be much better off 2 years from now. Wait. People already stopped buying!
The sale of 398 Vienna closed escrow today with a reported contract price of $350,000. That’s 39% “over asking” but 36% under its previous purchase price of $549,000 in June 2007.
Trulia reports that this Single-Family Home located at 398 Vienna Street, San Francisco CA sold for $350,000 on Jul 14, 2009.
Trulia reports that for zip code 94112, the averge for this zip code is $516,000 which is $412/sq, and the average for San Francisco is $517. The median household income is 82,500 for Excelsior — zip code 94112.
The heart of 94112 is Ocean Ave & Otsego Ave; the neighborhood is 44% asian, sometimes called “acculturated asian”, meaning foreign born and successful here in the US; thus this area might be thought of as Little Asia.
Dr. Housing Bubble in article ‘California Housing Prices Then and Now’ relates: Option ARMs are largely a California problem but also to drill down further, a problem attached to many of the overpriced counties. Many of the lower priced counties (the bulk of current sales) have washed out a tremendous amount of subprime mortgages. Yet these financially engineered housing products, the Alt-A and option ARMs, are linked to higher priced homes and carry higher average balances.
The more expensive areas? Ah yes. This is where the next round is bound to go off. The most expensive county based on local area household incomes is hands down San Francisco. With a price/income number of 9.3 there is no justifying the current price. This area is flooded with Alt-A loans and will have much explaining to do in the next few years. The next 4 counties are Marin, San Mateo, Los Angeles, and Orange. These areas will be the next rung on the housing correction. They all have price/income metrics that are above 5.5. This is incredibly unhealthy.
Dr. HousingBubble in article ‘Shadow inventory in 10 Prime Southern California Cities’ relates that for a state like California the real question in 2010 will be how exotic mortgages like Alt-A and option ARMs react to recast dates and a slumping economy. It may be the case that some other states may be finding bottoms quicker financially but California will be wrestling with another $21 billion budget deficit in a matter of months promising additional gridlock. California lived and fell by the housing sword. We have one of the highest unemployment and underemployment rates at 23 percent. This hasn’t changed even though the stock market has been raging. Some states have already washed out a large portion of subprime mortgages but California holds 58 percent of all option ARMs. This is a uniquely California problem.
So Yes, Excelsior will be leading the way down in the San Francisco Real Estate Market.
SF has a very specific demographic composition. It is overwhelmingly a city of renters with a bulk of them in rent-controlled units. This means that it doesn’t really matter if a family in the median makes 70K and houses cost 600K: the family in the median has probably been renting the same cheap place for a while now. They’re not going to leave a cushy situation. Laws also make sure landlords have a strong disincentive to evict them.
Another range in the median are folks who settled down more than 15 years ago and have a mortgage in proportion to what prices were at the time. If they bought in 1985, they would have paid a miser for a house and would be still paying the ~$1000/month they paid when they bought. In addition, prop 13 makes sure they will think twice before moving. Yet another class riveted to their cheap homes and it’s a big one. I know so many 60+ y.o. who say they’ll die in their homes. Come on, hasn’t anyone heard about scaling down? Nope.Reason: prop 13!
Now comes the third and fourth category: recent transplants and young natives who decide to stick around. Tough luck for them. They came too late for affordable housing. Only the biggest earners can stay, the rest is B&T. This is the crowd that fights for outrageously expensive rentals, and when they think about putting down roots, fight for a very limited pool of decent homes for sale. The BA has welcome a great number of new jobs in tech, finance, law that thrive in our region. These families earn more than 4 times median salary, many have windfall money (daddy’s, stock options, bonuses) and can afford a decent house except there’s nothing available because there’s no turnover!
Sorry to be the bearer of bad news: the game is fixed. Be a debt slave or live somewhere else.
This area is flooded with Alt-A loans and will have much explaining to do in the next few years. The next 4 counties are Marin, San Mateo, Los Angeles, and Orange
Well why does the leading offender trail the next rung in depreciation, Dr. Housingbubble?
nope, your arguments are full of fallacies and raise more questions than they answer.
In the mid 90s before the recent world-wide housing bubble, San Francisco was “overwhelmingly” (your term) a city of renters. Rent control was also on the books. Just previously, there had been a pretty good sized (by pre-2000 standards, anyways) boom and bust in the local real estate market. Yet, housing prices were more logically correlated with income levels. As is the norm in real estate markets historically speaking (no matter which particular inefficiencies plague any particular market).
An overwhelming majority of Bay Ares communities don’t have rent control or an “overwhelming” renter population.
Why, then, did the price-income ratios in these places get way out of whack?
People of all income levels bought houses in 1985 in SF and all over the country. Prop 13 is a state tax law that affects people of all income levels.
Then how, exactly, do you reach the conclusion that these types of homeowners are in the “median range”?
What exactly is a “median range”?
And whatever it is, why would your “median range” long-term homeowners distort the price-income ratio in San Francisco only and not in the rest of California and the country?
In general, your argument re the price-income ratio and the “median family” makes absolutely no sense. What is your point? How does this “median family” affect or not affect this ratio, mathematically or statistically speaking?
The rest of your argument is the typical and topical rant of a certain ilk of transplant who comes to SF, tries to act like they’re more native than the natives, and thinks they are entitled to “affordable housing” (and sneer at B&Ts and the very pleasant suburbs of the Bay Area when, in fact, they come from places like Arsewype, New Jersey).
A young native would just go live at home with Mom and Dad (or Mom and Mom or Dad and Dad around here) like people of that generation are doing in greater and greater numbers all around the country. Unless your parents are cheap and charge you rent, that is the ultimate “affordable housing”.
Very valid arguments.
Mid 90s was exactly at the beginning of the tech bubble. A chunk of that bubble popped, but a lot of the wealth stayed and thrived. Many many people came to the BA after 95. Remember the early 90s? The end of the military involvement in the region? That had helped depress LA and the BA. Which is why the ratios were still in check. That was PRE-BUBBLE. My point still holds.
“Medians” We shouldn’t mix medians with averages. If the SF population has 80% of people making less than 100K, then that median will be in less than 100K (I believe it is around 70K). If the 20% left are very very well off (Web 2.0, Biotech, Lawyers, entrepreneurs etc…) and the pool of houses that they will accept to buy is very limited (due to Prop 13 and rent control/protection) then this minority will compete harshly for whatever is available for sale. With 60%+ renters, this leaves less 40% of the housing stock available for purchase, most of it frozen due to Prop 13.
This is math, pure and simple. Yes there is a number of wealthy earners that compete for a very limited supply and everyone else fights for the crumbs. Yes, our social/moral choices led to this Frankenstein market.
Is prop 13 going to disappear? Nope. Is rent control going to disappear? Nope. The imbalance is permanent. It is correcting, but it won’t go away.