Measuring nearly 2,700 square feet, the three-bedroom unit #32B near the top of the Lumina tower at 201 Folsom Street was priced by the sale office at $5.385 million in mid-2017 and ended up selling for $5.25 million in August of 2018.

The “premier” unit – which is outfitted with a private view balcony, a fully enclosed den/office/fourth bedroom, three full baths and features “walls of glass framing N & E exposures of San Francisco’s Bay & skyline in South of Market’s most desirable, full service condo development,” according to its most recent listing – returned to the market this past May priced at $5.595 million, a sale at which would have represented total appreciation of 6.6 percent for the luxury unit since the third quarter of 2018.

Reduced to $5.395 million in July, dropped to $4.7999 million in September and then further reduced to $4.4999 million in October, the resale of 201 Folsom Street #32B now closed escrow with a contract price of $4.2 million or roughly $1,565 per square foot.

For those running the numbers at home, the unit’s HOA dues, which include valet parking in the building’s garage, are currently running $1,461 per month.

And while $1,565 per square foot certainly isn’t “cheap,” it was 20 percent cheaper on an apples-to-apples basis than in August of 2018 (while the index for Bay Area condo values is only down 2.7 percent over the same period of time and “median sale prices” are up).

Comments from Plugged-In Readers

  1. Posted by thattechguy

    This isn’t surprising. Soma is down 15% overall. 20% on those high numbers isn’t shocking at all. Bigger prices tend to lose more since there are less buyers. This is standard right now, and not a shocking headline IMO.

    The city will bounce back in a year – silly to miss these opportunities.

    • Posted by sf

      Eviction and foreclosure protections end in a few weeks. Will SF extend them? If not, how much further will prices fall? Waiting a few more months may be an even better time to buy.

    • Posted by Cave Dweller

      @thattechguy — Why do you think the city will bounce back in a year? Will it recoup the price drops or will it exceed them? What are your estimates?

      • Posted by TBK

        Looking back 40 years shows that the city always bounces back. Why is this any different? It may take longer than a year, but once things normalize, the city, it’s location and the surrounding areas will keep being a draw. Regardless of tech.

        • Posted by Cave Dweller

          Past performance is no indicator of future results. About 40 years ago commercial packet switch networking got started which eventually led to WFH in 2020 to keep parts of economy going.

          Why is it any different?
          Centralized shopping with last mile shipping
          High speed networks that move information and entertainment literally at the speed of light enabling remote services and engagement
          Overpriced RE in SF that doesn’t make business sense
          Growth of competing economic centers inside and outside of USA
          .. are some reasons

        • Posted by Cave Dweller

          It is also because of pronounced expansion of commerce atop packet switched networks, SF RE grew. SF by itself did very little other than happen to be in the neighborhood of change.

          It is this networking that enabled remote control of wherever from SF. And it will also be this networking that will enable remote commute and re-organization of our society/culture in the years ahead.

        • Posted by Brahma (incensed renter)

          I don’t know why anybody that has been reading this site in any regularity since March of this year could ask “Looking back 40 years shows that the city always bounces back. Why is this any different?”. This question has been asked and answered almost weekly since March.

          Look, saying “…commerce atop packet switched networks…” doesn’t quite capture it. TBK could respond, correctly, that we had e-commerce over the Internet well under way in 2001 and after the dot com implosion The City bounced back.

          We also had web video conferencing then, but only a few specialized people used it with any frequency. What is different this time is the “Stay at Home” orders forced all kinds of people to use it, and everyone got quite acquainted with the ins and outs of Zoom pretty quickly.

          That is going to produce a permanent change, because even after the pandemic is over, a significant number of people will be able to act on their preference to live outside the Bay Area in general and S.F. in general. Those people are only here because their job required it or they wanted to cut down on their commute time, the latter of which was so bad because our infrastructure couldn’t support the population load.

          Now they’ll be able to work remotely, and the folks shouting that everyone will be back in the office by July notwithstanding, many of those people are highly-paid workers who are currently supporting high housing prices. Once they leave, that reduction in demand will have a disproportionately large impact on the local market.

          • Posted by Cave Dweller

            In 2001 the differences were: lack of scale, lack of pipelined compute capacity (cloud computing) and most importantly compute power per $ per watt. In 2001 and during the preceding internet boom, process technology was at 180nm – 250nm. Today we are at 7nm – 14nm. That is nearly 25x compute horsepower in the same semi-conductor real-estate, consuming generally similar amount of power. In addition, cost of DRAM and storage has shrunk significantly both in terms of carrying capacity and real-estate requirements while gaining significant performance .. at least 1-2 orders of magnitude.

            The City bounced back because of the low interest rates ensuing boom 2002 thru 2020 which led to rise and stabilization of AAPL, FB, AMZN, GOOG, NFLIX and others. One of the key differences then was the affordability curve was more-or-less in line with income curve for better part of 2002 thru 2014. From 2014-15 onwards the curves diverged with income curve on the low side of the gap — the situation persists.

            I really don’t know what will happen now or in the future. But I do know that we have teams of people working from wherever for about 9 months. And enough productivity metrics to figure out where to cut costs going forward. A curious new feature now is the lack of diversity in startups. Most of the technology has matured. And those new technology opportunities require such large investments in relation to risk with such high barrier to entry and competitive risk — they are not usually pursued or only only pursued by the FAANGs.

            I do think San Francisco city will thrive. In the specific context of RE affordability — I think the prices are unjustified (in p&l terms) in relation to the underlying benefits. So I expect some price adjustment is due. But there may also be other factors at play that may ensure price stability or inflation — I really don’t know.

  2. Posted by jimbo

    realizing this has dropped 20% and is tracking with SOMA, its still utterly insane to me that someone would pay $1565/sq ft, especially when you could live in a much nicer home in a much nicer part of the city, for less

  3. Posted by Dave (Seatle dude)

    The area around the TTC has been especially hard hit by the price drops. The one-time promise of the area will likely not pan out. If there is a general 25% price drop at some point those HOA fees will look more outrageous and will make these condos, even at significantly reduced prices, harder to sell. It will also give pause to those who hold approved entitlements or are in the process of getting them in the SOMA – who exactly would new condo towers be marketed to?.

  4. Posted by Conifer

    Why are people worried about this well-documented fall in prices? Perhaps it was too expensive, and supply and demand has, as always, corrected it. What if it never comes back, or does so only over the next ten years? It does not mean that San Francisco fails as a city. Except for the small percentage of those who overpaid, many of whom can afford it, the fall in prices seems to harm no one.

    SF has big problems, even if Covid comes under control next year. For a start, how about the third-world part of SF, including “pill hill” which is almost ignored by the authorities.

  5. Posted by EBGuy

    Meanwhile, up in the Mesosphere at #36B…

    • Posted by SocketSite

      If you’re referring to the four-bedroom unit #39B, which was purchased for $5.3 million in January of 2018, it’s now in contract having been listed for $5,998,000 in April and subsequently reduced to $4,995,000 as of early last month.

      • Posted by EBGuy2

        The “penthouse” at #36B looks really interesting as it was bought as a shell (maybe?) for $4 million. Don’t see any permits though for the APN, though. If #36B was a place to park your money or an investment, we’re about to see how wrong things can go…

        • Posted by SocketSite

          Roger. Same development, different tower (hence our confusion). But it actually traded for $7,825,000 early last year (having been listed for $8,875,000 in early 2018).

  6. Posted by Brian M

    Third world seems rather unfair. The lost souls lack most of the skills, family connections, and basic coping skills of a Brazilian favela dweller.

    “Suzie had a job and an apartment. But her boyfriend of the time persuaded her to try heroin and now she lives in the median island of Van Ness Blvd.”

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