While purchased two years ago for $637,500, it’s a plugged-in reader that notes 88 Hoff Street #206 in the Mission closed escrow earlier this month with a reported contract price of $580,000. That represents average annual depreciation of 4.8% over the past two years.
And while we never explicitly featured the listing, it was at the center of an interesting discussion and expectations debate.
∙ What Happens When Expectations Don’t Match The Market? [SocketSite]
I think the seller was lucky to unload this for $580K.
can we get one of the mathematicians to report on the real loss, factoring in commissions, interest, and such
Congrats to the seller here, and condolences to the buyer. The seller had his (or her) “come to Jesus” moment, and no doubt will be a smarter observer/investor in the future.
The seller obviously had a sea change in attitude from the original posting:
“I’m not bitter. I’m just not selling to someone unwilling to pay what the place costs. If it won’t sell now, I’ll keep it.
Posted by: secki007 at May 1, 2008 1:25 PM”
https://socketsite.com/archives/2008/05/what_happens_when_expectations_dont_match_the_market.html
As to “loss”, it’s almost certainly greater than $100K, after factoring in front-end costs, transfer taxes, capital improvement (bamboo floors and $4k assessment) and selling expense. A more sophisticated “economic” loss calculation would take into account (1) the cost of owning this POS versus renting a similar one, (2) investment return foregone (contrary to what most people popularly seem to think, even after the recent stock market swoon, the last three years have been fantastic for generalized asset inflation – stocks, international especially, diversified bonds, commodities, etc. – just about every asset class except of course the one everyone was gaga for in 2005 – real estate!), (3) “psychic” cost of living there versus the “psychic” benefit of telling one’s self that by buying a place – any place – one was on the road to wealth and security (housing “ladder” and all that…) etc. Who knows exactly, but I’d ballpark it at around $150K economic loss. Subtract the value of the wisdom gained, though…. anyone who has invested in asset markets for any period of time has been there….
The seller noted on the earlier thread: “I’m just not selling to someone unwilling to pay what the place costs. If it won’t sell now, I’ll keep it.”
Obviously, he did not have the luxury of “just keeping it” for one reason or another. Even though it’s just business and people sometimes take a loss, I do feel bad for the guy. Bought near the peak and then something apparently came up (job, move, illness, divorce, wanted better schools for kids, could not afford payments, ARM re-set, etc.) that made him need to sell, and he’s lost a significant amount of money. Regardless of the long-term financial benefits (or not) of owning a place in SF, buying at or near peak prices can really be devastating if anything comes up and you have to sell in this down market.
This is an interesting scene in MapJack. On one side of the street are lofts of stucco with big windows, and on the other side is traditional architecture and … wa! Is that crufty old building next door painted silver or is that just a visual effect from reflected sun? It looks like a whole bunch of units have a view of mostly that. Oi!
Well, by holding out for a few months the seller of 88 Hoff was able to get more than the earlier offer ($548,500, I believe).
That’s at least something to be happy about.
Oh, good, the grave dancer is back! And, look, he’s brought his armchair economics with him!
Satchel, I’ll say it again: I have no idea what the chip on your shoulder is that you have to visit message boards and post snotty comments about people who are taking it in the shorts. Did a realtor beat you up when you were a kid? Did a homeowner kick your puppy? I don’t get it.
All in good fun! 🙂
What’s amazing in the case of 88 Hoff was the seller’s expectations:
“We are basically asking for what we paid in 2005 for the place (so all of you thinking I was a price gouging unrealistic money grubber were pretty much wrong.) We put in new bamboo hardwood and 4K in assessment costs to improve the roofing on the building. The neighborhood is flush with new restaurants, and we are a block from BART. Its also the cheapest best located Loft on the Market right now.”
Bamboo costs what? $20K installed (I just had it done in my office) and takes a couple of days to do – not the sort of inconvenience of a Kitchen remodel, and the $4K assessment for a roof is really not going to bring you very much: people kind of expect that you get a roof with every property as part of the deal. The restaurants and BART were part of the mission in 2005. It’s not like there was suddenly an increase in value over that. In most parts of the country, the fact that you spent $X on an improvement will bring 20-60% of X back in the sale. Only in SF do people feel entitled to receive 2X.
So now the Mission is down to 2004 pricing. Not a foreclosure. Not a place without a kitchen. Not an “overly motivated seller”. Methinks the appraisers are going to need a new excuse to keep this one out of the comps. Maybe they can try “overly motivated real estate salesperson”?
———————————–
Interesting post by fluj on a different “apple” about 4-5 months ago, addressing Satchel:
“Hey, if the only Merced Manor property on the market, 3035 25th Ave, listed at $1.429M, doesn’t sell for around that pricepoint (at only 2260 feet it is sort of pushing the $psqft envelope) you may have something to say about M.M. Otherwise you should really consider holding your peace on the subject.”
Posted by: fluj at March 19, 2008 10:10 AM
That was in response to Satchel’s post:
“Remember that $4.2K property in Merced Manor (3700 sq ft 4/4, renovated) that I always posted about when fluj talked about strong demand in MM? Yes, you guessed it. Empty, going on 6 months probably. Another house for lease also showed up on that street, and I think that one is still vacant too. Maybe some one who is local could drive by 21st Avenue between Sloat and Eucalyptus and post the addressees where the lease signs are?”
The property fluj brought up is still listed, 4.5 months later, even after a $50K drop. So I’m guessing that fluj, you will admit that Satchel is indeed the resident expert on Merced Manor, just as you are in Noe and Bernal Heights. And you will also admit that at least parts of MM appear to be dropping like a lot of locations.
It’s near the bottom of this thread:
https://socketsite.com/archives/2008/03/apples_to_apples_3342_divisadero_two_bedroom_condo_in_t.html
“The property fluj brought up is still listed, 4.5 months later, even after a $50K drop. So I’m guessing that fluj, you will admit that Satchel is indeed the resident expert on Merced Manor, just as you are in Noe and Bernal Heights. And you will also admit that at least parts of MM appear to be dropping like a lot of locations”
I will admit nothing of the sort. I admit that I am candid and freely express my educated opinions. I was coming from the perspective of a realtor who had written three offers for a client a year and a half ago in Merced Manor, only to lose in bidding wars. I’ve already addressed this point elsewhere anyway.
This was off topic, Tipster. You went quite far out of your way to criticize me, and it has been duly noted, buddy.
If I had the time I could go back and dig up hundreds of flatly ridiculous things that you have said over the past year or so. But I won’t.
tipster – I see the MM home listed at 1.359M. Looks like it’s down $70K (5%), not 50K?
Everyone chill out and stay civilized…
Seems like every time I visit this site (once a week or so) the comments on every post eventually degenerate to a flame-war involving the same folks. Their perspectives are often interesting, but, alas, the bad vibe makes me go elsewhere…sigh.
[Editor’s Note: While we do our best to discourage the behavior (and we have to disagree with “every post”), it does happen more often than we’d like, we do feel your pain, and we’re working on a solution.]
fluj, it wasn’t a criticism. You stated that if it didn’t go for near it’s asking price, you’d admit Satchel “had something to say” and otherwise asked him to stop making those statements. It didn’t go for near its asking price. I called you on a statement you made. You said the area was doing well, Satchel said it wasn’t. You proposed that property as a test and it failed. Pony up.
And you are free to call me or anyone else on any statement we make. Goes with the territory of making statements. I defend you when you are right (which is pretty much all the time in Noe and Bernal): I’m defending Satchel when he is right. He was right. Pony up, and live to see another day.
As I’ve stated before, it’s helpful to see all sides, you and Satchel particularly, and no one expects anyone to be right 100% of the time. I’m doing well if I’m right more often than not and you’re still way ahead of that. But here was a case where you called him out, proposed a test, and you lost.
Pony up: that property is sitting there for all to see. Others may have sold quickly but others weren’t the test you yourself proposed. The test you proposed failed. Doesn’t make you an idiot, a bad real estate salesperson, unknowledgeable or any thing of the sort, just means you’re human. Sleepiguy is pretty good at Pac Heights and just admitted to string of mistakes. Admit you called that one wrong and move on.
Feel free to dredge up any of my mistakes at any time. Lord knows I’ve made enough of them. I probably will even make another one or two 🙂
Fluj already did “pony up”, something like a week ago or more.
I would chip in a few hundred bucks if SS would sponsor some sort of bet between all the prognosticators, to separate the chaff from the whey.
As long as there was agreement on the bet terms, there was a clear bonus for the winner (money), and clear penalty for the loser (humiliation).
Perhaps this would help stop some of the petty chirping.
Tipster,
I already told Satchel that in a related thread –not an apropos of zip thread — a week or so ago. It seems as if Merced Manor has slowed. (In fairness, the 25th Avenue property is still asking over 600 a foot but I should have said that in the first place.)
But that’s not it. No, you piled on, and that’s the point. You thought “Fluj was wrong about a condo on Hoff. I’m going to bring up another instance of Fluj being wrong. In fact, I’ll broaden it to say that Satchel is an expert on St. Francis Wood and west, and fluj is not.” and it was sort of out of character for you. UFO manipulation of the National Association of Realtors, OK? But random piling on?
“…and we’re working on a solution.]”
Umm…please don’t. The personal attacks do tend to go overboard, but the flame wars can be hugely entertaining, IMO, as long as they don’t get spiteful. Plus it’s great to see pompous chest-beaters called on their BS in a public forum (bulls, bears, and even the neutrals).
Frightens me to imagine a SocketSite where the vast preponderance of content/comments revolve around flaming yards, couch pillows, and bidets.
This will probably just get censored, but what the heck:
I’ve never been anything but 100% civil to everyone. I’ve never called anyone anything untoward. I make comments from time-to-time that people disagree with. Fine. I can’t help it if people flame me; I just ignore them, and I suggest others (including the editors) do the same. Attention just makes it worse.
[Editor’s Note: We don’t disagree. At the same time, we’ll once again ask all readers to try and add value with their comments (we’re into quality over quantity). Now back to 88 Hoff (or at least apples), and thanks for plugging in.]
Just to clear-up some speculation, I happen to know that the owners sold because they were purchasing a single family home elsewhere in the City.
Noise associated with the unit below, which needs to be disclosed, may have affected the sale price. Also, renovations made to the unit, really made it more traditional and less attractive as a loft. Saw the unit years prior during a previous sale and it had some really cool unique lighting, concrete floors and the most amazing closet, all of which were removed/remodeled and made to look more traditional. I believe some value was destroyed by the remodeling.
I stand corrected! (I said “no doubt will be a smarter observer/investor in the future”.)
After imploding around $100K in this condo, the sellers turned around and bought an overvalued SFH in SF! And this is a fun twist on the “apples”, too (bamboo versus concrete). Now, renovations *destroy* value (hehehehe, but who knows maybe in this case that’s right). I can see formica dealers touting this (“rip out that stone countertop, and all that foolish stainless, didn’t you here, austerity is back in…. put in formica, an old Tappan electric double oven and watch the value *skyrocket*…..”)
Satchel,
We will be ripping out a lot of the amazing top of the line finishes in 10yrs. Whether it’s for formica or not we will have to wait and see.
Sorry, fluj, I didn’t see/remember last weeks posting. Wasn’t intended to pile on, just thought it had been forgotten. I did a search on 25th Ave and on 3035, and found nothing so I assumed it had gotten dropped.
No malice was intended: more in the lines of good natured ribbing. It was just one data point and you DID mention the psf was a tad high in your original post…
All in good fun. I DID, however, just learn that the NAR was responsible for the disappearance of Jimmy Hoffa…
“I stand corrected! (I said “no doubt will be a smarter observer/investor in the future”.)
After imploding around $100K in this condo, the sellers turned around and bought an overvalued SFH in SF!”
Satchel – did they consult you on the purchase and therefore you speak from an insider’s perspective regarding the valuation of said SFH or are you just annoying?
“Dude” is right on the money, what would socketsite be without the the hugely entertaining (and insightful) flames? By the way, chaff is the crap (nearly useless) surrounding a seed, and whey is a castoff of making cheese (also used in making ricotta). They generally wouldn’t be found together for later separation, kinda like Satchel, Tipster and Fluj.
“So now the Mission is down to 2004 pricing.”
Not all homes in 94110. The median home price, and price per square foot, for 94110 is up for June ’08, from June of last year, per DQNews.
County San Francisco
City San Francisco
ZIP 94110
Sales 34
% change in sales -35.80%
Median price $822,000
% change in median price 2.20%
High price $2,205,000
Price per square foot $718
% change in price per square foot 2.80%
http://www.sfgate.com/webdb/homeprices/?appSession=47617671667789&RecordID=162&PageID=3&PrevPageID=2&cpipage=1&CPIsortType=&CPIorderBy=
Two thousand four saw THE sea change in the Mission.
The flames are funny sometimes but often very tiresome. I sometimes find it hard to believe that these are grown men (and women) posting on this site.
“Two thousand four saw THE sea change in the Mission.”
You are correct, sir. My lame-box loft skyrocketed in 04 and I correctly dumped it in 05. God what a good ride that was!
I know this is old news by now, but #208 is now in the market for $550k asking. Methinks it will not fetch that much:
http://tinyurl.com/5hgwwh
Sounds like selling #206 for $580k was a good idea after all. So much for people that are “unwilling to pay what the place costs” …
And yes, I realize that finishes are not going to be identical between the two units, but differences seem to be a wash to me.
The guy that sold 206 for $580K was smart to take his lumps (purchased in 2006 for $637,500).
208 is now asking $525K:
http://www.redfin.com/CA/San-Francisco/88-Hoff-St-94110/unit-208/home/18219212