728 Duncan
As we reported in June 2010:

Listed for $2,550,000 in March, the list price for the self described “Noe Valley modern cool” home at 728 Duncan was reduced to $2,385,000 in April, and just a few minutes ago it was further reduced to $2,295,000.

Once again, the single-family Noe home was purchased for $2,475,000 in August 2007 according to the MLS (although tax records suggest a contract price closer to $2,448,000).

Withdrawn from the market in 2010, the Noe home returned to the market listed for $2,150,000 in July 2011 with a Notice of Default having been filed the month before.
Never having hit the courthouse steps, the short sale of 728 Duncan closed escrow last week with a reported contract price of $1,821,000, 24.1 percent ($579,000) under 2007*.
With a list price that was reduced to $1,799,000 this past September, however, it is officially “over asking!” according to industry stats and charts.
*UPDATE: As we noted in 2010, while the MLS reflects an August 2007 sale price of “$2,475,000,” and tax records had suggested a contract price closer to $2,448,000, the recorded sale price was actually $2,400,000, financed by way of a $1,680,000 first, a $350,000 second, and with $370,000 down.
A Cool $165,000 $255,000 Off At 728 Duncan [SocketSite]
Apples To Apples For A Hip “Cool” Noe Home: 728 Duncan [SocketSite]
Psst! It’s Now Bank-Owned (And The Other Is In Default) [SocketSite]

45 thoughts on “Over Asking For 728 Duncan! (But $579,000 Under Its 2007 Sale)”
  1. The original thread of comments when it was listed at 2.55mm is fairly hilarious and a little bit sad– but worth going back and having a quick look.

  2. Based on the fact that it wasn’t a short sale until listed at 1.799, I assume the owner had at least $600K down and lost it all.
    When this guy bought, fear of tech stock option money was running rampant and the economy looked like it was going to be fine for a while, so prices would only go up. That seems to be the standard recipe for disaster in this area.
    Outside of 1998-2000, when option money was flowing to far more people, and tech companies were spending money like water (so that even people without options like me were making bank), option money isn’t really enough to make a dent in such a large real estate base. But the FEAR of option money makes a HUGE difference, because so many of the buyers have it that it lifts the entire market.
    When the economy turns, and it always turns, the option headlines stop, the fear disappears, and prices fall back to earth. Some of us were smart, saw what was happening, and stepped aside. This guy did not, and he appears to have lost a considerable amount of money.
    Lesson learned: option money comes in waves. The fear of it amplifies the effect of the actual option money, so the waves are much larger than the option money alone will produce. The smart money steps aside during those periods of fear. The dumb money is lost. Learn from the mistakes of the people before you.
    [Editor’s Note: Not Quite. The 2007 purchase, which we just confirmed at $2,400,000, was financed by way of a $1,680,000 first and a $350,000 second with $370,000 down.]

  3. Tipster, what makes you think the original purchase was linked to a “fear of option money”? In 2007? I think it was just a case of the purchaser buying at peak (or just after). No more, no less.
    That whole “option fear” idea seems kind of out of left field and pretty dated, like back to 1999. If that theory were true, prices would be climbing right now, and they’re not.

  4. BernalDweller, if prices aren’t climbing right now due to the “whole ‘option fear’ idea”, you’d never know it from reading the local media. Every third story about real estate is seeming to mention how there are going to be so many Fb employees running around with money dripping off of them that you’ll simply have to buy now before the IPO unless you want to be priced out forever. That’s a paraphrase, btw.
    As far as this place, pretty much the only selling price prediction on the original thread was from sanfrantim who predicted “the place moves at about $2 m”. Who’d have known that was optimistic?

  5. “If that theory were true, prices would be climbing right now, and they’re not.”
    That’s not the CW in the marketplace at this moment in time. Whether down to the media, or down to seeing their own peers’ behavior I can’t say. But buyers by and large feel as if the market is heating up. I think realtors are more skeptical, and put it down to a lack of inventory more than anything else.
    In fact I had a conversation with someone in a Facebook family yesterday, saying that we in the realtor community sort of feel like the coming FB wave is just hype. This woman whose husband actually works for FB disagreed. She said she thinks it’s a fact that there will be a lot of FB buyers in six months or so, and that she wants to get into something ahead of that. It was pretty interesting to me, but I’m still unconvinced so far. Because springtime is practically here and the market tends to pick up regardless.

  6. Well, it might be popular in the press, and it may or may not be “CW in the marketplace”, but I don’t think selling prices will bear this out. I might be wrong, let’s see what the CS index shows for February or March when it comes out in April and May.
    I’m an owner, I’d love to be bullish, but I just don’t see it right now. And back to my original post, I don’t think “option fear” had anything to do with 2007 sales.

  7. Well yeah, the option fear 2007 thing was a reach I agree. But as a San Francisco owner, you value CS data? I’m a San Francisco owner too and I don’t think it tells me much of anything about the City.

  8. Did the buyer overpay in 2007 or have prices in Noe really fallen 24% in the last 5 years?
    It’s probably some of both, in which case the buyer’s real estate agent and appraiser could have done a better job. But, sadly for this buyer, it’s not the agent or appraiser with any of the downside. The bank took a bit of a hit, too, and perhaps the taxpayers.

  9. Ah, a “mere” $370,000 loss by the owner.
    The fear of Google option money was in full swing by 2006. You couldn’t walk into an open house back then without a realtor mentioning that some Google millionaire up the street had just overpaid. That drove prices up, and I’d bet this guy lost a couple of bids on a house, and so he upped his too.
    This sort of reminds me of the time when I was 6 and my mom asked “If everyone jumped off a bridge, would you do that too?!”.
    By 2006, everyone was jumping off the bridge. The reason people jumped off the bridge was because “everyone else was jumping off the bridge”. There wasn’t any other explanation for it.
    Realtors call “jumping off the bridge” “Comps”. As in “Well the comps for this place are X, Y and Z.” But X jumped off in fear, so Y did too and then Z. Comps are stupid in an environment of fear. They just ensure that you’ll jump off a bridge.
    I’ve found that sometimes, when people are jumping off a bridge, it’s best not to jump off a bridge. At some point, you have to decide that comps are not a measure of value, but are, in fact, a measure of fear, and stop paying attention to them. This guy refused to do that and $370,000 of his money has vanished. Forever.
    As the realtors and other interested parties try to fan the flames of facebook, one needs to be vigilent that one does not get caught up in them, even when “everyone else” is. If the realtors succeed, then you have two choices: walk away or lose your life’s savings. This guy chose to lose $370,000.
    And today, he would have lost a lot more. The banks are not going to take this loss for him again.

  10. I’m sure the “CW in the marketplace” among realtors right now is that “the market is heating up” and prices are rising. I’m sure the “CW” among realtors was the same in 2011. And 2010. And 2009. And 2008. And 2007. And 2006 . . . on back to 1930.
    That “CW” is worth a LOT! NOT! Exhibit A is right at the top of this page. LOL!

  11. meh, you’re sure of wanting to always say the same stuff over and over again regardless of what the market’s doing. And that’s all.

  12. Sure, “option fear” back in 2007, but don’t discount every single realtor touting that the buyer would “double his money inside of 5 years” and that “prices will rise 6% a year, guaranteed!” as another factor.
    This sale was misreported in the MLS as $2,475k back then. Who are the only people that report prices in the MLS? Never trust anything a realtor says. Never. If they will overreport a sale price to goose their sale price/list percentage, they’ll do or say anything. Buyer beware.
    “Overpaid”? Maybe, but this result seems right in line for remodelled SFHs in that part of Noe. 714 Duncan (down 23% from peak), 1420 Douglass (down 26%), etc.

  13. “This sale was misreported in the MLS as $2,475k back then. Who are the only people that report prices in the MLS? Never trust anything a realtor says. Never.”
    While this may be true, it’s my understanding that there are severe penalties doled out to agents who knowingly put false information in the MLS.
    That’s the beauty of a pocket listing. “Hurry and buy before it goes in the MLS!” Buyer beware: the seller’s agent can make all sorts of representations which, if proven to be false, do not invoke the wrath of the MLS gods.
    That’s the beauty of “n/a” listed in the MLS’s square footage data field, only to have the seller’s agent tell you verbally it’s X sq ft per [fill in the blank] – tax records, architect plans, etc. Even if the house appraises, make sure to get a copy of the appraisal and verify square footage against what you were quoted and based your offer price.
    That’s the beauty of verbal representations on things buyers can’t see like foundation, electric, plumbing. If the kitchen is new, the buyer is more likely to believe the agent’s verbal representation that what they can’t see because it’s hidden behind walls is also new or upgraded. Get it in writing. Better yet, insist the seller’s agent put it in the MLS.

  14. Wow, what a drop.
    And I miss the blatant realtor shilling – it always makes for a good chuckle. You can’t knock them – it’s their job. But seeing it played out in the comment is one of the things I love about this site.

  15. @DataDude —
    Yeah. What you said and looks like the recent spin on that is
    ” *I’m* not saying there’s a Facebook Effect. But I’ve heard from a bunch of “Friends” that there’s going to be a big Facebook Effect. Oh and by the way, the market’s heating up anyway!”

  16. I was in the market to buy two times in the last dozen or so years. In my search for a place, I met lots of realtors; hired a couple. No realtor ever told me I would “double my money inside of 5 years” or any such thing. Nor would I have believed her if she had.

  17. I’ve also never heard a real estate agent make any claims about future appreciation. I did however many times get referred to the agent’s mortgage broker friend who spun the serial Alt-A refi fantasy as a way to “afford” something that seemed out of reach.
    Aside from fantasy financing the closest to coercing an overbid were statements like “If you want this place you’re going to need to bid asking + 200K” which on its face were very true during the boom. Missing from the discussion though were any possible strategies involving waiting it out until the market corrected.

  18. I wasn’t going to post, but I felt compelled on seeing the above from sanfrantim, and I couldn’t agree more. We purchased in 2006, and my agent actually did a nice job of trying to make sure we got something that was affordable and we wouldn’t regret overspending on later. I also learned after moving into our condo that our next door neighbor was the first buyer in the building and paid cash. That fact didn’t come up once from either the buyer or seller’s agent (which eventually became the same).

  19. Sorry, I meant to say our neighbor who paid cash was a Google guy in my first post. That’s kind of a key fact in responding to some of the earlier posts. I also just saw the post from Milkshake though, and I had a somewhat similar experience with our mortgage person. He wasn’t a friend of the realtor, but he did pre-qualify us for way more than I felt comfortable with. With that said, he also didn’t seem to keen on us actually trying to get a loan that big….which was fine by me.

  20. Aside from fantasy financing…
    As I noted on an earlier thread, WaMu and NCB made this dream (err… nightmare) come true. Another NOTS on 02/03/2012, so everyone was ‘motivated’. Wonder if the owner got paid anything to move out?

  21. Yes Lance I too qualified for a loan amount about 3-4X higher than what I felt I could reasonably afford even if the interest rate was held super low for the duration of the payback period.
    It took a little self control to turn down such a large debt offer. But as we have seen not everyone could avoid the temptation to accept free money unsustainable debt.

  22. “” *I’m* not saying there’s a Facebook Effect. But I’ve heard from a bunch of “Friends” that there’s going to be a big Facebook Effect. Oh and by the way, the market’s heating up anyway!”

    No, that’s only what you said apropos of your agenda.

  23. ” *I’m* not saying there’s a Facebook Effect. But I’ve heard from a bunch of “Friends” that there’s going to be a big Facebook Effect. Oh and by the way, the market’s heating up anyway!”
    a sale that just closed in Palo Alto, a market I have followed off and on for the past 6 years. I’m pretty sure this never could have sold for more than it just did.
    http://www.redfin.com/CA/Palo-Alto/1030-Greenwood-Ave-94301/home/683158
    $1,126 per sq ft for a barely improved 40 year old house on a 7200 sq ft lot.

  24. “a sale that just closed in Palo Alto, a market I have followed off and on for the past 6 years. I’m pretty sure this never could have sold for more than it just did.”
    Don’t follow PA
    But know what an Eichler is
    Not just any old 40 year old house
    Plus Redfin says medien $/sf for area is $1,112 and’s been over $1k for a while now
    Maybeness!

  25. >Redfin says medien $/sf for area is $1,112 and’s been over $1k for a while now
    The graph you are referring to is this one:
    http://www.redfin.com/zipcode/94301
    It starts in March 2010 with a median sales price of 830. it doesn’t crack 950 until March 2011 and hits a peak of 1004 before dropping to 886. The next time it crossed the 1K mark is Dec 19, 2011.
    Medians are fraught with problems, and some daily average version seems even more troublesome, but how could you possibly suggest that this supports your point. 2 months is “for a while now” in real estate land? hmm, now that I think about it, that seems like about the time when facebook talk started to appear on socketsite.

  26. It all seems so capricious at first — prices of houses are set by what the market will bear, and with only a small fraction of the housing stock on the market at any given time, bumps in the amount of cash available to the buying public (either though stock options, or cheap loans), or the local mood, swing prices around…
    While this might be true for land, it should not be so true for the buildings themselves, whose prices are ultimately grounded by the true cost to construct them. Those costs are less directly affected by options/loan availability.
    This place was sitting on a 750K lot. It probably cost about 750K to build. Its real floor was 1.5M, and figuring in profit, 1.75 still lets the builder and real estate agent make their nickel. If somebody overpaid the builder, or an earlier seller, or both, they were under the kinds of delusions tipster was talking about.

  27. btw, some (tipster) used to talk about prices heading back to 1998 or before. here is almost the same house as the absurd palo alto one. just around the corner on an even quieter street. (their back yards are about 100 feet apart.) built at the same time, by the same people. it has 2.5 baths instead of 3, 130 sq less interior space and a 392 sq ft less lot size. 10/98 sale price: $552,000
    http://www.redfin.com/CA/Palo-Alto/1050-Harriet-St-94301/home/1556280

  28. Regarding Palo Alto: 7,200 sq foot lot is two to three times bigger than the lots in San Francisco, and that’s if you’re lucky enough to have yard space at all. Think of the pool parties, the little ones playing soccer, the organic vegetable garden, the sunburns…
    “The land is the only thing in the world worth working for, worth fighting for, worth dying for, because it’s the only thing that lasts…”

  29. Steve, that was 10/88, and so far, no one has stated it’s going back that far.
    I hate to say this, but: Read!
    Palo Alto and SF are very different markets, in very different locales.
    It is clear from the various posts that the facebook crowd is passing SF by. They come to SF when they are young, single and renting, and go to Palo Alto to buy. Although a few may buy in SF, they have largely avoided it.

  30. Steve, that’s a 10/88 sale, not a 10/98 sale. I don’t think even tipster said anything about going back to 1988 prices.

  31. “It is clear from the various posts that the facebook crowd is passing SF by”
    What posts? The one post where I mentioned a lady told me the opposite, yesterday? You care so very much that you’re taking a stand, again and again, simply inserting your naked opinion. What on earth for? Why not just wait and see?

  32. BTW, far from being a barely improved 40 year old home, that is a mint condition Atrium Eichler in just about the best location in Palo Alto, with an unheard of pool. There is a huge park, a community center and a school two blocks away.
    Atrium eichlers are rare and highly sought out in Palo Alto. The price looks low to me given the condition and the location. That was one of the nicest homes in Palo Alto at anything close to that price point.
    No smelly hoboes pooping on your front yard. No kids from the projects having priority for the best schools over your kids. It’s kind of night and day from SF, wouldn’t you say?

  33. highly sought out? nah, highly sought out is new construction, like this 3200 sq ft house that just closed for $4.4M
    http://www.redfin.com/CA/Palo-Alto/1382-Forest-Ave-94301/home/545036
    the eichler cloased for a just a bit more than the lot value, established by this 1.5 bathroom beauty at $2.086M.
    http://www.redfin.com/CA/Palo-Alto/812-Lincoln-Ave-94301/home/546103
    personally, I like eichlers, especially the later claude oakland models. 1973 makes this one of the last home joseph eichler would have marketed, and I hope they keep it and update it. too many of the nicest ones have been flattened because people in palo alto want charming old homes or new ones built to look that way.
    but, the original point is that palo alto is now surpassing its 2007 crest, and it seems you agree.

  34. Well it was the only such comment in the thread! And I don’t even believe it myself, as I said. Anyway, “homes” is plural. Distort distort distort. Clearly from the facebook posts, plural houses, etc eytc. You cannot be real for even 5 seconds.

  35. “I was in the market to buy two times in the last dozen or so years. In my search for a place, I met lots of realtors; hired a couple. No realtor ever told me I would “double my money inside of 5 years” or any such thing. Nor would I have believed her if she had. ”
    “I’ve also never heard a real estate agent make any claims about future appreciation. ”
    Was casually reading, but had to post. While I haven’t had someone guarantee me double in five years, I have had realtors multiple times make claims for easy money including this past month– when one told me that a particular condo was a bargain and actually worth 34% (that’s what the math worked out to be) more than what I would be paying– and that he was confident he could sell it for that in a couple years. Instant equity! Ha . . .
    I know there are good, honest, and ethical realtors out there and that these kinds of comments offend some of the realtors here. But I wish that some of you realtors who post here could go incognito to go see houses or be a prospective house buyer. I think you would be shocked at some of the things some of your brethren say and do if they think you are just some random person with a lot of cash.

  36. agree the facebook effect is alive and well in palo alto, not as much so in sf. agree most of these folks will be overpaying ala 2007.
    too much money chasing too few houses particularly in PA. it’s like the rising tide that lifts all boats, once this tsunami of ipo dollars washes through the system (and it may go way up, and it may stay up a while)… all the boats will go back to where they were before.

  37. True that this tide could raise all boats, but I think it will have a long lasting effect.
    After all, tech money mostly stays in tech.
    People is what matters most in the tech industry.
    People who arrived in the mid-90s in the BA are settled and often much better off than when they arrived. They built on their experience, and the companies they worked with grew with them.
    New companies are created on the back of these mature companies and hire new people who get into the circle.
    All of this makes SF, the Peninsula and the SV a unique economical landscape.

  38. An old favorite, 728 Duncan, sells again quickly. From 1.8m to 2.5m in one year. How do you like them apples.

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