Purchased for $950,000 in June of 2007 ($18,900 under asking at the time), 235 Berry #413 returned to the market this past April asking $789,000.
Yesterday, the sale of the 1,235 square foot condo closed escrow with a reported contract price of $734,000 ($594 per square). Call it a 23% drop in value over the past three years for the two-bedroom condo with a deck (and some windows) overlooking Mission Bay.
UPDATE: Some additional color (and opinion) from the short seller’s agent:
Truth is we went through four buyers and our first offer was for $789,000 but no one wanted to hang out and wait while the bank takes 6 months to decide. Had the lender been able to respond before 4 months passed, the sales price would have been much closer to the original list.
Bottom line it was the best deal the bank would get even though as an REO it could have sold for more – it still would have cost them another 3-5% to foreclose and process it. The price was reflected in the fact the buyer was taking a gamble with their time and emotions as to whether it would ever close, and it was a nailbiter.
Cheers.
∙ I’ll See Your $800 Per Square Foot And Raise Lower You $200 At 235 [SocketSite]
So much for the $600 psft floor theory!
Next stop: 500
It was a short sale obviously.
Truth is we went through four buyers and our first offer was for $789,000 but no one wanted to hang out and wait while the bank takes 6 months to decide. Had the lender been able to respond before 4 months passed, the sales price would have been much closer to the original list.
Bottom line it was the best deal the bank would get even though as an REO it could have sold for more – it still would have cost them another 3-5% to foreclose and process it. The price was reflected in the fact the buyer was taking a gamble with their time and emotions as to whether it would ever close, and it was a nailbiter.
In this case the last buyer still standing won and ended up with a great price not likely to be repeated soon in anything other than a short sale.
“In this case the last buyer still standing won and [the seller] ended up with a great price not likely to be repeated soon.”
TFTFY.
^ The new, longer, “it’s on a busy street” excuse we saw at the beginning of the downturn.
a comp is a comp, but having tried to purchase a short sale last year I appreciate and identify with the added color provided by the listing agent. just like I won’t buy on a busy street, I have no plans to offer on another short sale. in this area, anyway, neither the agents nor the banks are prepared to sell them in a timely fashion.
so, the listing agent, thanks. your comment reminds me of the old days of socketsite when the signal to noise ratio was higher.
You can try to justify the price any way you please, but it’s still a price and still a comp. No difference between this and “Family had to move quickly to start a new school year.”
Looks like prices are still on the downward trajectory.
Who’s next to bite the hand that feeds? “Justify” ? Someone with actual perspective told you what happened. Does this site really want to be nothing but people gassing each other up all day? Wow.
anonn, in a reactionary and defensive tone, you completely missed my point. A price is just a price is just a price. Trying to justify or rationalize a price to yourself is silly.
I am sorry scurvy, clearly that sales price is incorrect.
I have it on good authority that the SF median is rising and therefore this home could not have lost value. Even if had somehow fallen in price I know from reading the comments here that prices are down a max of 10%. Clearly the 2006 buyer over paid and there fore this comp is not a comp, plus it’s a short sale, plus it’s not in the ‘real sf’, plus my friend told me prices in San Francisco never go down, plus we reached the bottom months ago, plus …
I caught your point. You were told what happened. Where was the rationalization and justification?
plus socketsite is biased and only features properties which have fallen in price, not that they really have fallen in price buyers just over paid, so it’s cannot be a real price because it didn’t go up.
I sat with my finger over the ‘send’ button for a good 5 minutes before I posted because so many times it’s a why bother situation posting any other side. It’s important to know it’s a short sale. It’s a pertinent fact – not a justification (so thanks for the voices that appreciated that).
Also a pertinent fact that did not make this site is that a comparable unit sold a little over a month earlier, same floor plan, one floor higher for $799,000 which is $647 sf:
Sold
09/30/09 $799,000 104 235 Berry St #507 San Francisco 9 – D 2 2 1235
^That buyer has to just LOVE this transaction, short sale or not…
A comp is what a buyer’s market would pay and a seller would accept in a moment in time. The sales before or after could be higher or lower depending on a gazillion and one reasons.
Real estate sales are customized unique transactions. No two sales or properties are alike because no two buyers, no two sellers and no two condos/houses,lofts, coops, TICS, duplexes, etc.are exactly alike.
Even cookie cutter stack condos are on different floors that adjust views and prices or they face different directions which changes views and lighting.
What someone offered to pay today and seller accepted can appear to be the deal of a decade today. Then something happens – HOA litigation, a bankruptcy, foreclosure, death, job transfer, divorce, you name it, and the next sale price drops through the basement. Only then does someone re-think that the previous “deal of a decade” wasn’t such a great deal at all.
Then you have Mr. Nouveau Riche, who is a Silly Con Valley player with money to burn. He buys the same floor plan without negotiating the price…why? Because he can. Is that an accurate comp? Of course. It’s what the buying market will pay at that moment. Did the seller get the deal of a decade? Maybe for that moment. Until the next seller gets 5% higher than he did. It’s all in the perspective. It’s always changing.
It’s always “Somewhere In Time”…somewhere.
The buyer of 507 knew full well about the short sale below. Their agent explored our listing thoroughly, but also knew one in three short sales actually close and to be honest until the day before close I wasn’t 100% positive we would close either. That buyer did not want to take the risk because they loved the building/location.
Short sales take a strong stomach, a lot of patience (and hours and hours and hours on the phone with the banks). People can build sweat equity in a fixer, a short sale costs a ton of ’emotional’ equity and fortunately in the end we ended up with a buyer that had a very even temperament (wasn’t a first time home buyer), had great representation, and was very calm and patient. Also he ended up paying more than the recorded sales price due to a number of technical issues that aren’t worth posting – all of which the lenders knew about.
There’s just nothing fun about short sales, but it worked out in the end (primarily for that buyer)…
Being in a short sale right now (buyer side) I appreciate the flavor that the listing agent provided. Also I know in acquiring businesses (slightly different from RE) that multiples do vary based on circumstance and only a fool blindly takes a comp without assessing how it is similar or differnt from what you are trying to value using that comp. So I do think this sale is a valid comp but one that needs and calls out for some (but not much) adjustment.
I also know that the commentor on using the median needs to go back and read Socket Site’s post (perhaps it was Calculated risk) on why median pricing is a very poor guage of real pricing.
Finally I know from looking at real estate, it is very safe to say in many parts of this City, prices are definitely 10% and possiblye 15% down from the peak price (06 to 07). This comp is a 22% decline. So perhaps what this tells us is that in this hood, pricing is down 15% to 18%.
I also know that when I was living in coastal OC (less than a mile from the beach) I told my neighbors that prices would need to correct 30% to 40% in every neighborhood. They thought I was crazy 4 years ago, got worried two years ago and now don’t talk to me since recent sales in my former hood allow me to say “told you so.” Prices went from $1.05 million to $650k — 38% drop less than a mile from the beach. And OC is about a year ahead of SF in terms of when pricing peaked and collapsed.
Yes I know all Socket site re always goes up people will say SF is not OC but trust me there is plenty of wealth and economic activity in both areas, they are more similar than you’d like to admit and hiding behind “but SF is different” is being shown as a very foolish strategy.
[Editor’s Note: Medians Are Up, But Don’t Confuse That With Increasing “Prices”]
“biting the hand that feeds”?
that’s a pretty loaded statement.
this site certainly wouldn’t starve without a certain profession of “feeders”.
and besides the “food” offered in that post was more a snack than an entree: public information (short sale) combined with spin (don’t treat this sale as a comp).
so yes, thanks, to the realtor who contributed: without contributions there wouldn’t be a site.
but don’t imply that challenging a realtor’s post is somehow diminishing this site – in fact, this open debate is what makes this site great.
wow, socketsite has completely jumped the shark.
Challenge away. Nobody said it wasn’t a comp tho. So don’t challenge something that wasn’t said with the same tired act. And stick your feeder comment where the sun don’t shine.
” And OC is about a year ahead of SF in terms of when pricing peaked and collapsed
Why do you think that is? And why does it not at least make SF slightly different?
Looks like I’m a little late to the sandbox fight taking place here, but here goes.
The listing agent posting above is pretty much dead on. This purchase price is a steal, and the buyer was rewarded for their patience. How do I know? Because unit #412, at 955 sq. ft., will close very soon at about $770K. Still a significant drop from the original sale price of $910K in ’07, but a 15% drop as opposed to a 25% drop.
After a summer loaded with short sales in the area, this fall saw heavy action. My clients lost out twice on units in the area, the second on a full price offer just a few buildings over. So just guess what it sold for – keep your eye out for 255 Berry and get back to me. Hopefully, it as just an overheated fall market, and I can eventually get my guys back in there.
But honestly, I am experiencing this small segment of the market first hand. Would love for it to be on a downward trajectory, my buyers would love it… but it’s not.
So yeah… this entire thread has a Socketsite flair to it. “Prices are still heading down, this one short sale is proof, Realtors suck, they all lie, 50% hair cut on it’s way…” No. And if you think this is Realtor spin, realize that we work with buyers looking for a deal too. I would love to go discount shopping with my clients – would *love* it. But right now, in that area, I can assure it’s not the case.
Flame away. I look forward to you *not* posting articles on the recent comps I just referenced… that’s apparently not what the audience is looking for on here.
“I look forward to you *not* posting articles on the recent comps I just referenced… that’s apparently not what the audience is looking for on here.”
I’ve noticed that lots of realtors around here say this, but, from what I can tell, the editor posts places where prices are up and places where prices are down less than the extremes all the time. Either the people who say things like this aren’t reading regularly, or they’re trying to push their own agenda.
As an example that has been repeated here numerous times, certain commenters complain that certain alleged “apples” haven’t been featured on SocketSite. Upon investigation, almost invariably those apples have undergone remodels.
I also don’t understand Poster 415 cheering about a 15% drop for unit 412.
Poster 415, were you talking about unit 506 at 255 Berry that’s listed for $829K?
http://www.redfin.com/CA/San-Francisco/255-Berry-St-94158/unit-506/home/1242585
That unit’s sale price in Feb 2007 isn’t listed for some reason.
Note that unit 519 at 255 Berry sold recently for $607/sqft: http://www.redfin.com/CA/San-Francisco/255-Berry-St-94158/unit-519/home/875870
The listing agent’s explanation makes a lot of sense. Short sales are riskier and require more time and patience. So there should be a value proposition in there as an incentive for the buyer to stick with it.
Just like any shopping, if you grab an item off of the shelf at the most convenient store you’ll pay a lot more compared to if you track down the same item at a more concealed budget retailer.
Desperate seller, meet patient buyer.
Impatient buyer, meet opportunistic seller.
Still a significant drop from the original sale price of $910K in ’07, but a 15% drop as opposed to a 25% drop.
You call that “cheering,” do you?
Interesting word choice.
Nothing brought to the table by you. Nossiree bob.
Renegade –
Oh dude… no, lol. I’m sorry, but no way does this site post an even assortment of up prices and down prices. And no way do the up prices carry the same tone (“we think alpha rather than beta”…).
All of that is beside the point. The market dictates how prices will move, not any of us. In regards to your question, no, it was not unit #506. If that unit sells at that price, or anywhere near it, I will be stunned – the buyer frenxy will have officially returned. Think one floor down…
Flash back to 2006 when we noted prices at 255 Berry seemed to showing early signs of A Troublesome Trend:
The industry response at the time:
Back to 235 Berry and more “pseudo-omniscient pretense” (and “a most benign situation?”) in 2009.
Do you not rate waterfront versus non waterfront, then? LOL.
[Editor’s Note: Nice deflection, but you could try reading the whole thread:
255 Berry #317 ended up selling for $643 per square foot.]
Instant Equity (good things come to those who wait)! Kudos to the listing agent for posting the account.
Speaking of 255 Berry, Unit 504 (a short sale) is pending. Will be interesting to see what it closes for given its history. Originally bought for $610k in October of 2004 with a variable first ($487,643) and second ($121,911) courtesy of Countrywide (for the sake of argument, let’s call it 100% financing). Currently listed at $514k ($589/sq.ft.). Oh, and a NOTS was filed on Oct. 20. How’s that for pent up overlap.
To me (a RE bear, mostly – or maybe “skeptic” is the right word) it seems reasonable that a buyer facing the loss of his time and money dealing with the multiple interested parties etc. in a short sale would demand a discount. For a unit I was willing to pay X for I might offer X – 4 * $3500, or $14K less, to compensate me for the rent I would continue to pay while waiting for everyone concerned to agree on my offer. Seems like some factor offsetting this effect on the comp is reasonable.
In fact, maybe this is another one of those things a realtor should point to when people ask what their value added is… If they had local knowledge, they could go over each of the neighborhood comps and tell you what mitigating or exceptional factors were involved in each.
Huh? You saw fit to include that, yet you admitted error initially? Your verbiage contained a clear message, digging down to the link another. Jeez.
listing agent —
Thanks for bringing your perspective to the table. I’d be interested in hearing more about the (generic) process of buying a short-sale listing and how it differs from a non-encumbered listing, if you have the inclination to write it up.
Such a write-up might lend more weight to the argument that short sales are flawed comps.
delancey, I can share my experience as a buyer:
1) my (very good) agent (that I’ve known and trusted forever) had no idea how they worked. no one in the office knew anything about them either.
2) more critically, the listing agent had no idea how they worked and listed before the bank had been approached
1 and 2 are becoming less common, but they required learning all around. the key pitfalls are that:
3) the property can still be marketed after the seller accepts an offer. in fact, banks often require this as they would like to have multiple accepted offers from which to choose as a starting point
4) banks operate on their own timetable. think months here
5) banks can and will renegotiate everything – and may pass altogether, even if the result is a foreclosure and REO
now, “bank approved” short sales may go smoother. in this case, I bowed out at step 4.
And here’s one for the (non-overlapping) pent up supply category. The condo at 325 Berry #424 awaits the auction block as Indymac slowly moves forward (received a NOTS on May 12). The assessments are stacking up so I don’t think this one is gonna be saved. Originally bought in August 2007 for $671k (882 sq.ft.). Bad timing, I guess…
“but no way does this site post an even assortment of up prices and down prices”
If that is your definition of “fair and balanced,” I don’t know what to tell you. Do you actually think there is an even assortment of up prices and down prices? And if so, please show me statistics to that effect.
No one doubts that the editor has a viewpoint (and if you don’t like it, read one of the realtor/cheerleader blogs instead), but the implication by you is that SocketSite is misleading about the market by having a viewpoint. I don’t think that’s the case. Providing actual data points and giving one’s viewpoint on those data points is what everyone does — you just happen to disagree with the editor’s viewpoint.
If you’re thinking of unit 416, that was last listed for $6K under its 2004 price. Not exactly a vote of confidence — nominally flat over 5 years.
Doesn’t sound easy but steve’s “multiple accepted offers from which to choose as a starting point” and “marketed after the seller accepts an offer” makes it sound like short sales could be the most accurate comps of all!
EB Guy –
Pretty new to this, but like reading the site. Was wondering, how do you get that type of info regarding the unit at 325 Berry #424? It’s very in depth. Is it a service I need to sign up for, or is it something anybody can access?
Renegade –
Last one and I’m out. “Do you actually think there is an even assortment of up prices and down prices? And if so, please show me statistics to that effect…”
Wait, so you’re telling me that Socketsite is simply reporting the state of the market? Fair enough. But by that logic, wouldn’t their articles between ’02-’07 exclusively been about significant year-over-year appreciation? Except… they weren’t. At all. So please, spare me this ridiculous take that socketsite is just saying how it is, because they sure as hell weren’t doing that when the state of affairs didn’t fit their agenda.
[Editor’s Note: Having started publishing in 2005, covering 2002 to 2005 would have been tough. And to be honest, back in 2005 and 2006 we were more focused on the precarious state of the mortgage market, the pipeline of new condos coming to the market in San Francisco, sales office shenanigans, and the shifting market. But hey, what did we know.
Regardless, you really should go back and peruse the full Apples to Apples archive, you might be surprised at the story it tells (or perhaps “pseudo-omnisciently” foretold).]
Curious why nobody has mentioned the recent sale of 255 Berry #104. It went for $475/sq. ft. (1821 sq. ft) I visited it and several of the places for sale in 235 and IMO 255 is a better building.
Poster 415: Your clients may be interested in this unit (if you haven’t already showed it to them) – http://www.climbsf.com/listings/san-francisco/235-berry-st-304.html At 650K this seems like a pretty good deal.
For what it’s worth I actually think 235 Berry is more attractive on the inside and outside than 255 Berry. (Which to me seems more apartment grade…)
“But by that logic, wouldn’t their articles between ’02-’07 exclusively been about significant year-over-year appreciation? Except… they weren’t. At all.”
Well, I’ve only been reading this site for about 3-4 months at most, but, to be fair, SocketSite wasn’t around at all until 2005. I made a quick check, and there were only around 12 posts in all of December 2005, and the pace in December 2006 appears to be slightly fewer than 2 posts/day, although I didn’t count them. In any case, listing prices were already starting to be cut heavily by 2006, and during that time SocketSite appeared to have a few posts on listing prices that had been cut significantly (looks like the threshold was making more than one 6-figure cut).
I quickly spot-checked comments at 5-6 month intervals starting in November 2005, and had trouble finding anyone complaining about SocketSite not featuring properties that went up in value until at least 2008, and coincidentally, my quick check showed that SocketSite featured several properties that went up in value during 2008 (apples and non-apples). And even now, in 2009, SocketSite has featured properties that went up in value, and yet people still complain.
I find it strange that people would complain about not seeing properties that went up in value in 2008-2009 (when many more properties have dropped in value compared to SocketSite’s early days) as opposed to 2005-2007 (when some properties will still going up in value). You would think, if anything, that housing bulls would have pointed out that properties were still rising in value in 2005, 2006, and maybe 2007 in the comments, no? So at least in my superficial check and in my recollection of the last few months, I don’t really understand your complaint that SocketSite is somehow hiding data that is good for bulls.
I’m happy to defer to someone who does a better analysis of this site than my 5-minute check. Do long-time visitors of this site have a different recollection?
As an agent who has also been working in the area, I can concur with the other poster that activity has heated up. Multiple offers on a couple different units, some ’04 style “no contingencies, all cash” bids, and some upcoming comps that will skew the data upwards.
Personally, it feels overheated, and for my clients sake, I would hope so.
But I will say this , and please know I’m not trying to start an online argument – with the recent sales that have taken place at 235 Berry and will show up soon, it’s not the building you want to profile for this type of article.
Thanks for all your great work on the site!
In modern america the phrase “not fair and balanced” translates into english as “anything I don’t agree with.”
agree, diemos, that seems to be part of the problem…
In any case, listing prices were already starting to be cut heavily by 2006,
You really don’t know what you’re talking about when it comes to this stuff.
It sold for $734,000. ‘Nuff said.
Maybe I don’t know what I’m talking about, but here are a few posts I spot-checked when I wrote the above — please put whatever spin you’d like on this:
Apr 2006
https://socketsite.com/archives/2006/04/instant_equity.html
https://socketsite.com/archives/2006/04/huge_reductions.html
https://socketsite.com/archives/2006/04/those_damn_neig_2.html
Oct 2006
https://socketsite.com/archives/2006/10/will_we_see_six.html
https://socketsite.com/archives/2006/10/dont_blame_us_if_the_theme_song_gets_stuck_in_your_head.html
https://socketsite.com/archives/2006/10/first_2825_pine_and_now_1331_noe.html
I didn’t look at those, sorry. I know what was happening in 2006 and it certainly was not what you described.
sfrenegade, in case you haven’t yet figured it out, the entirety of annon’s contributions to this site are to respond to a thoughtful post from the editor or someone else with, in effect, “you’re wrong and you’re an idiot.” Don’t waste your time debating with that. You’ll notice that most regular posters don’t even bother responding to such nonsense.
By the way, of course price cutting was starting to get heavy by 2006. Particularly in districts 3, 9, and 10. Sales volume had dropped considerably from 2004 and 2005. Price cuts were not universal across the city, as they are now (more expensive places were actually holding up OK into 2007 as cheap jumbo loans got cut off later than other types), but they were quite common in 2006. Your posts were valid and well-articulated.
No, his post was uninformed and he thinks cherrypicking from a cherrypicker’s blog is valid. Go look at what he cited. (I did afterward.) None of it is representative of what was occurring. A wildly speculative Twin Peaks mansion. A house on Fulton. A house in Lower Pac Heights and one in Noe. None of those areas were dropping in value in 2006, let alone being “cut heavily.”
anon, so “peak” price so often discussed here on socketsite happened in 2005 and not 2006 or 2007? good to know.
FWIW, list prices can be “cut heavily” and still be above the prior sale. I don’t think what I said is inconsistent with market prices still being up if that’s anyone’s beef.
Nonetheless, we actually don’t have good data on listing prices, since most of the data is manipulated (e.g. most data is based on the last listing price vs. the original listing price).
Anyone can cherry pick list prices that are “cut heavily” in any market, at any time, anywhere.
anon: By the way, of course price cutting was starting to get heavy by 2006.
does anyone who reads this site believe this is true for the property routinely disucssed at socketsite? after all, our esteemed editor imputes gains in 2006 and 2007 when discussing older apples quite often. for example:
At 8% annual appreciation from 2004 through 2007, the property would have had to have depreciated by 21% to reach its value today.
https://socketsite.com/archives/2009/10/proof_that_prime_view_properties_havent_depreciated_at.html
how could that be possible in anon’s SF?
With respect to recent sales at 235 Berry, the re-sale of 235 Berry #614 closed escrow on 12/15/09 with a reported contract price of $660,000 (7% under asking and $660 per square foot). Purchased for $735,000 in February 2008 (a drop of 10.2% over the past two years).