Purchased for $1,000,000 in June of 2006, listed for $950,000 in November 0f 2008, and…reduced to $885,000 last week. Once again: top floor, corner, renovated, parking and in the real Pacific Heights (i.e., north of California and a block to Lafayette park).
∙ Listing: 2155 Buchanan #9 (2/1) – $885,000 [MLS]
∙ A Pacific Heights Apple Up In The Tree: 2155 Buchanan #9 [SocketSite]
Okay, let’s just get this all over with really quickly:
LMRiM: I have some evidence that this place hasn’t paid its taxes and is going into foreclosure. But don’t buy now. Once the deleveraging process is over you will be able to pick this up for its true value of $575,000.
Fluj: Go away, you have no idea what you’re talking about. Anyway, this place is not prime. The 1-California bus will make those whirring electric bus noises at night, and buyers may be confused by the nearby Lafayette Park into thinking that they are buying in Lafayette rather than SF. Last buyer overpaid.
Paco: Maybe this place is down 12%, but what about the S&P? Primo California RE always outperforms the S&P, and those are the only two places you can store your money.
Spencer: I have a friend that rents a place comparable to this for $800/mo.
Paul Hwang: I’m the best agent in SOMA. And technically this place is South of Market if you’re willing to travel around 24,000 miles.
Augh!! Chopped pillows!
I want to go to the open house so I can straighten them…
Bravo, anon!
Anyone have square footage for the unit?
Ok anon of 5:11, I might disagree with the individual parties involved (I wont say what side I fall on), but that was funny having read all of Baker’s recent rants…
Personal opinion here, but I think the usual characters and their reindeer games are hugely entertaining (and educational). God forbid they leave and the commentary here turns to riveting topics like, “Does anyone know where they got that toilet seat?” or “I would have put the dresser against the other wall.” Not exactly traffic drivers.
1,120 square feet per PropertyShark.
LOL, anon. I really like that summary 🙂
Taxes are fine on this place – no delinquencies. But propertyshark shows that the buyer paid $1,000,000 on 6/13/2006.
If it sells here, that will result in a capital implosion of about $170K, after selling costs. Not bad – that’s only about $5400 per month tossed away. It could be worse, and probably will be.
$170K of nondeductible personal loss. Should have rented.
Of course, no one knows the whole backstory here. Maybe the data are wrong, and the seller really paid just $500K. I mean, who knows?
My amusement at anon’s summery is only outweighed by my annoyance that I wasn’t summarized as well. Haven’t I earned my share of critics yet too?
Still a few too many blocks from the REAL SF. I’ll pass.
Hee-hee, great summary.
Bravo, anon.
Unit #7, seemingly quite comparable to this one, has also been listed off and on since Feb 2007. Currently listed at $960,000 since 8/2008. Bought in 7/2005 for $899,000.
http://www.redfin.com/CA/San-Francisco/2155-Buchanan-St-94115/unit-7/home/569049
I see a hospital out that living room window. Great for a nurse at $575,000, but not the real Pacific Heights.
anon – that was so good it made me throw in a rare post!
a 2/1 isn’t a ‘real’ condo anyway right?
Wow, I shouldn’t have doubted my gut instinct. Back in November I said:
“.. I was going to say $795,000 based on the 1120 square footage – but then I saw that it’s a 2/1 so I’ll gander a guess at $915,000. This still strikes me as too much…”
I suppose it could go for asking or just over, but a 1/1 in this price range, especially across from a hospital emergency room, is a tough sale.
A 2/1 for $885k? I’d rather pay for a 2/2 at Infinity.
North of California? That’s so late 80’s. It’s time to move on.
HA! You can have your Infinity tbonestk. Even though it’s across from the hospital, only a very few die-hard soma-ites would likely prefer that location over this neighborhood. I have seen the unit and it is quite nice for what it is, nice period detailing/windows etc, and there’s roof access to boot with views. I just don’t think it’s worth anywhere near the original asking price.
Funny. Somehow my Bayview, Ingleside, Oceanview bottoming refrain became “not prime” SF. (When there are about 50 distinct areas between those three and this area where many regular posters on here would never in a million years contemplate purchasing. Anyway, this one is surely pretty prime. And it definitely has gotten hosed. But you forgot about the patented “What do you expect? They only held it for two years and didn’t do any improvements.”
Agree with the post above. 2/2 @ The Infinity is better value. My prediction is $799,000.
you forgot about the patented “What do you expect? They only held it for two years and didn’t do any improvements.”
Yes, the absurdly high transaction costs kill you if you choose to, or have to, sell within a few years. On the other hand, this sold in July 2005 for $899,000 and June 2006 for $1,000,000 . . . The short holding time wouldn’t affect the selling price, just the ROI.
Just a thought — maybe there are fewer buyers out there now that one needs to come up with $180,000 cash to put down for a nice but modest place priced like this one, with about $6000 in monthly payments after that. So Pac Heights is now back to about 2004 pricing? (and anon 5:11 — that made me laugh out loud)
i think the superior neighborhood in this case by far outweighs an extra bathroom that would be gained in soma. it would hold true even if i worked in soma. this is of course subjective.
On the other hand, this sold in July 2005 for $899,000 and June 2006 for $1,000,000
Actually, Trip, it looks like another condo in the same building sold for $899K, number 7, and it’s up for sale too now:
http://www.redfin.com/CA/San-Francisco/2155-Buchanan-St-94115/unit-7/home/569049
It looks like basically the same thing as Unit 9, but not as updated, and asking $960K. They can’t be happy about the new $885K listing price for Unit 9. 20% of the building is for sale I guess.
Unit 9 (subject of this thread) sold for $800K in November 2003. Let’s see if it gets back there (my guess is it will, no problem).
Fair value on these places = $500K. Interest rates only go from 18% to 0% one time, and people are going to discover that asset price behavior over the period from the early 1980s through 2000 (for stocks) or 2005-07 (for residential real estate) was highly anomalous, and shouldn’t be used to project future evolution of prices. Stock investors are starting to understand this. Before the declines are over, even owners in the Real SF ™ should realize it too.
People spend over 800K on a place with 1 bathroom?
R u kidding?
I live in the neighborhood. This is a short walk from prime Filmore St…near Lafayette Park…and…yep…a bus route around the corner (not smack outside the window)…and, it is still Pac Heights (NOT Lower Pac Heights)…it offers a nice life. What it is worth, I do not know….
Those of you who prefer this Pac Heights granny over something at the Infinity better have a large savings account to pay for the upgrades you’ll need on this old hag.
This apple is nothing compared to some properties coming up this spring. We’ll be looking at some of the most prestigious properties on the most prime blocks.
well put anon 5:11.
sleepiguy, now you are talking. spill the beans…
@sleepiguy, why? in general aren’t the most prestigious properties the ones that change hands the least? by extension, won’t these owners, on average, have the best LTV ratios and the least reason to sell? I’m happy to be wrong about this…
LMRIM the non-conversant with values fair market value guy! “fair market this” “fair market that.”
I’m not one for predictions as you know. But I’ll make one now. This is going to be a greeaaaaaat development for enlightened socketsite dialog.
I’m with sleepiguy. Malin and crew has a ‘coming soon’ for a prime pacific property coming to market. Can’t wait to see what hits the market. i’d love a sneak preview as to whats coming to market. I’ll be surprised if we see prime monsters hit the market, in this environment. Could be a disaster scenario that really tests where we are here…..
eddy
I feel sorry for the seller. He bought when real estate only went up, and there was no real risk to whatever you paid: the goal was to outbid everyone else. Less than 900 psf in that neighborhood with parking was a bargain. The economy was humming with nary a problem in sight. It probably was the happiest day of his life.
Now, he’s crushed. His life savings are probably gone. His credit rating is at risk of being destroyed if this gets any worse. And the economy is shot, so he has no real chance of making his savings back any time soon.
He did what any of us might have done. I feel badly for him.
The real stooges are the people who are even THINKING about buying now. Who would buy anything, this place OR a place at Infinity when things are clearly tanking and the layoffs are mounting. Someone who buys now and gets his butt handed to him when he tries to sell deserves what he gets. The handwriting isn’t just on the wall, it’s on the sidewalk, the street and the lamppost.
anon 5:11 was great.
LMRiM,
In addition to the net loss, you’ll have to add the purchasing costs, + the difference between owning and renting from a strict standpoint, property taxes.
Overall, that’s 12K+/month plunked down for a 2/1. You could live in a resort with massages and spa for that kind of money.
Yet another factoid along the way to affordability.
Strange… I guess Fluj isn’t getting enough attention so now he’s trying to bait LMRiM or one of the cave bears?
The cave bears are hibernating and won’t be coming out to play until the “spring bounce” when things really get rolling.
🙂
This place is cute and in a great neighborhood.
It has many things that Infinity doesn’t:
1) a great neighborhood
2) a real dining room
3) a better kitchen
4) it doesn’t have an unoccupied tower right next door full of exact similar units
People are so obsessed with thousands of bathrooms. You’d think sharing a toilet would cause plague or something.
but I can’t tell by the pictures. They also don’t show the 2nd bedroom… odd. I’ll never understand why RE salespeople don’t show their product as best as possible on the internet. That’s what’ll drive people to the open houses more than anything.
But this place looks great. It’s good square footage for a 2Br.
another predictable casualty of macroeconomics. in the end San Franciscans are insane for paying even $400k for such a unit IMO. (and yes, there are $800k 2Br condos across the nation including cheaper markets like Atlanta) People are paying so much for housing that it really limits their ability to retire, unless somebody else comes along and pays substantially more for the unit.
=====
bdb:
you say it in jest, but I personally don’t make much of this market until spring comes around. There are just too few transactions.
After the vaunted Super Bowl we’ll see people rush their listings to market, just like every year.
One big question: will buyers show up? I would guess the answer is no. If they do show up, it will show relative strength of the SF market. If they don’t, then you may start to see actual price drops in “the real” SF, since pricing is made at the margins. only those who “need” to sell will sell, and they’ll need to do it for less.
the other bigger question: what will government do? will they subsidize rich San Franciscans to buy multimillion dollar homes and million dollar condos?
“WWGD” indeed.
ex SF-er to your point that buyers will stay away. I, unfortunately, have to agree. There are likely to be some truly scary headlines about the economy sure to make buyers question the need to make a purchase.
For example, there are several analysts predicting a jobs report this Spring of +1 Mil in losses in a single month. A headline about 7 figure job losses in such a short span of time is going to give any potential buyer reason to delay a purchase and that won’t be good for sellers in any district or neighborhood in SF.
http://www.calculatedriskblog.com/2009/01/retail-sales-collapse-in-december.html
Looks like the “indefatigueable” US consumer is finally pooped. Now that his HELOC and cash-out refi’s are cut off the consumer lead recession is finally here.
ex,
the government has been subsidizing rich folks on the coasts, to the tune of about 90 billion a year I think, through the mortgage interest tax deduction. What’s that deduction worth to the buyer of a median 180K house is the U.S.? Barely enough to itemize. Now take the proud owner of a million dollar pac heights 2/1 (don’t forget the 100K heloc!) and you’re talking a real, huge subsidy to the rich. (Or the hugely indebted, depending on how you look at it. Debt is still wealth here, right?) Of course you know all this, I’m just venting.
I hate this tax break. It’s regressive. It’s blatant social engineering and a hand-out to the banks and the real estate industry. It raises prices, and it makes people think it’s smart to spend a dollar to save 30 cents. And we’re never going to get rid of it. I used to ask my friends how their debt obligations somehow exempted them from funding their government, but I don’t anymore. The government is going to hand out money to the banks one way or another, so you might as well pay your taxes directly to the bank.
I think it’s pretty clear that the brakes just failed on the economy and it’s currently out of the government’s control. This is a very scary time. Stimulus plans take many months, as long as a year, to have an effect.
If I were the seller of the property, I’d drop the price to $775K and dump this thing at whatever the market will bear – it will certainly get bid higher than that. They may be lucky and sell it at the current price, but I think if it doesn’t sell quickly, it’s heading much further down.
Thanks for the morning laugh anon. Touche.
However as a resident here I do have a few things more to say
1) a very similar unit one floor down is currently priced @ $960K
2) THis neighborhood is amazing. Lafayette park, alta plaza park and fillmore st. For a person who lvoes to walk, i don’t think you can beat this anywhere in the city. of course, personal opinion
3) If this si not the “real SF”, i don’t know what is. Pacific Hts has for a very long time been known as the most expensive neighborhood in the 2nd most expensive city in this fine country
4) THe Infinity doesn’t even compare. This building and unit have a lot of charm and a neighborhood. Infiniti is cookie cutter, small, not charming, poorly designed and isn’t in any neighborhood to speak of. Also the inifiniti is a falling unsold rocketship. this neighborhood is established. while the price here has dropped precipitously, theoretically Pac HTs should hold up better than any other SF neighborhood
5) I rent for $2150 with parking. It is now clear thanks to very knowledgebace posters that I have a “good deal”. But I know for a fact that you can rent a 2bd here for $3000. i know I cahnged my tune, but am willing to admit mistakes and have more indepth knowledge and know a specific unit for rent now for this price.
6)I would be a buyer for this apt. at $700K as long as the market has somewhat stabilized at the time it reaches those prices. I swear, even though my monthly payment would go up substantially, i would be a buyer. I love the building and neighborhood
7) there is no noise from the hospital. i know this is hard to believe, but I literally hear a siren once per month tops and I ahve never heard one after midnight
8) the bus line is right outside of the window for this particularly unit, albeit 2 floors down. I can hear the bus, but it is not as loud as one might think and you get used to it. I am a person very sensitive to noise (think cranky old man) and i have no problem here.
9) am surprised to see the quick drop in the neighborhood. Didn’t think it would happen this fast in Pac Hts, but I was wrong (at least for this unit). There are many other 2bdrs within 2-3 blks that have sold for $1M from 2004-2008. will be interested to see if this is a “real” comp
10)these owners couldn’t afford this unti
spencer,
do you live in this actual building?
if so i will retract my comment about shag/popcorn/hollow doors etc…
View of a hospital is a feng shui no-no. Forget about potential asian buyers…
Eddy, 2830 Pacific is the new decorator showcase – hence the coming in April tag.
If something is advertised in this building for rent at $3000 (as spencer writes), that means it can probably be had for $2500-2700. The economy isn’t going to get any better, and asking rents are just that: asking.
Paco yes.
but i have hired an interior decorator to install shag carpets and hollow doors because I prefer them. I should have them by end of Q1.
BTW, I have a feeling the “real SF” is shrinking. pretty soon, Pac Hts will only be north of Clay and I will be living in Western addition. am thinking of buying kevlar and a bb gun
LMiRM. I think the $3K is a hard number. Since it is still 1/2 of the mortgage costs with no money down, am pretty sure they will get it.
If there’s any baiting going on, it’s in the form of the following.
House on Tingley “Fair value 300K plus or minus 10 percent”
Condo in Pac Heights “Fair market 500K”
The guy is baiting. Saying complete out of the blue nonsense to bait the likes of myself and Paco.
Think about the two, the areas, their 200K difference in “fair market value,” juxtapose them, consider construction costs. Be open minded about it. It’s telling. The guy is talking out his anus.
It’s ridiculous, and so out of any sort of knowledge base I find it somewhat amusing that I’m the only one who doesn’t let the guy get away with complete hogwash on here. And I catch flak for it.
Funny.
i hear ya fluj,
i think the fellow is enamored of his internet persona. and he has quite a following amongst the other lifelong renters and daytraders…
LOL, fluj. Your meltdown continues. That’s what happens when you try to sell an attached house in Sunnyside for north of $1M.
(Just FYI, you conflate a lot of ideas, very sloppily. I never say “market” or “fair market value” or things like that when I throw out an estimate of intrinsic or fair value. It’s only intended for people who understand something about asset valuation, and therefore not for salesmen.)
“People are so obsessed with thousands of bathrooms. You’d think sharing a toilet would cause plague or something.”
All I am saying is that with the possibility of parents visiting, friends crashing, and kids being born, it sure is nice having more than one bathroom. And for 800K, i would expect it.
Now if you never have friends or family visiting, and you don’t expect to have kids in the next 5-10 years it would take to recoup your investment in this place, then feel free to spend 2-3x the cost of renting a similar pad.
That listing is doing fine, thanks. But tho I provided numerous comps that countered your last personal missive re: that property, here you are again.
And here we see you backing off “fair value.” Well, you should. Run far away from it, hobbyist. To you fair value is less than construction.
You keep setting ’em up. Stop baiting me and maybe I’ll let your nonsense stand.
Look at picture #12 on the MLS. Man, that’s a steep street!
i agree again w/ r u kidding
Funny fluj, I see you really don’t understand the difference between intrinsic or fair value and market value estimates. I go easier on you from now on. I thought it was all an act.
About “backing off ‘fair value'” – I challenge you to find even one instance where I used the term “fair market value” whe I throw out an estimate of fair value. Just one. If you’ll reread your post above (Posted by: fluj at January 14, 2009 8:41 AM) in the light Ijust provided, you’ll see your amateur mistake.
I’m done with you. I’ve said my piece, hobbyist. Now you want to mince words. No thank you.
Paco nailed it. You are nowadays almost always out of line, and far too infatuated with a fake professorial persona. You speak about what you don’t know every day. It’s grating. But heck with it.
Let me interject that “prime” is in the eye of the beholder. I’m with sf at 8:13PM above – I wouldn’t live in this museum piece for free. You could give me a D7 home today, and I’d sell it for whatever the market would bear tomorrow and use the cash to buy a new highrise condo in Soma. That’s just me, and I’m sure I’m in the minority, but just want to point out that not everyone wants to live in D7.
In regards to the decorator showcase, Chronicle had a blurb on that this morning. The new one is getting ready to come to market while the last two are still sitting unsold.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/01/10/HOAQ1535D5.DTL&type=realestate
All I am saying is that with the possibility of parents visiting, friends crashing, and kids being born, it sure is nice having more than one bathroom. And for 800K, i would expect it.
For $800k I expect a lot more than ANY of you San Franciscans!!!! ROFL!
But if we’re talking about extra kids and all these visitors, I’d rather have a 3/1 than a 2/2.
it’s MUCH nicer having guests sleeping in their own guest room with their stuff OUT OF THE WAY than the bathroom situation.
Besides, who are we kidding here? Most of the people buying these 2/2’s will be DINKs or a couple with 1 kid. Sharing a bathroom between 3 people is not that big a deal.
Or they might have their parents come over a few times a year. Again, the horror of having 4 whole people share a bathroom for a weekend!
Obviously, I’d choose a 2/2 over a 2/1, ALL THINGS BEING EQUAL. But I’d never pick a 2/2 in a risky development in an up and coming neighborhood over a 2/1 in one of the most prime neighborhoods on Earth!
but like I said, people are obsessed with bathrooms these days.
Spencer: “a feeling the “real SF” is shrinking. pretty soon, Pac Hts will only be north of Clay ”
Pacific Heights was north of Clay, and then crept down to Sacramento by the early 1970s, and then to California, and then some clever real estate describer invented “Lower”, the boundary of which now seems to reach Geary.
The real SF, however, was the SF of Herb Caen, and since SOMA did not exist as it now does when he died, it is not in the real SF and may never be. Caen’s interesting division was between the City and County. PacHts, real and lower, are both in the City. Old but great neighborhoods, like St Francis Wood and Forest Hill and Ingleside Terrace, were in the County, but they would surely be included in “real SF”. The new buildings of SOMA are not real SF because they could be in Hong Kong or Houston or Atlanta or Dubai.
All of this is open to dispute. What is not open to dispute is that this listing is surely in real SF, at the southern edge of PacHts, a great neighborhood, much better than SOMA.
It may not be worth the asking price, however.
This thread has already gone waaay OT…
Anyway, technically the last 3 decorator showcase home are on the market: 3701 Washington, 2901 Broadway, and 2820 Scott.
This year, the decorators have no budget. Normally, the seller pays for the new kitchen and baths, etc, but now the designers themselves have to pay for everything. Good luck with that!
And if it wasn’t already obvious, I also would never, EVER leave D7 for SOMA.
Any chance you guys can stop with the personal attacks? They really add nothing.
The original funny post on the thread should convince you that everyone is pretty familiar with each other on this site, and so there is no real need for anyone to point out to the wider audience who someone else “really” is, etc. We already know it. The average reader and poster is smarter than the average bear. We get who everyone is. You don’t need to remind us.
Make your case and certainly dispute what’s said. All positions are really valuable. People are smart enough to discount for the speaker. Really, trust us, we are. But this constant description of the individuals, and why they are bad, is annoying and not really beneficial.
That said, vox’s comment at 9:10am today is even funnier than the original post.
Spencer,
If the real Pac Heights creeps back to North of Clay, we will still be renting in Pac Heights. And, yeah, there is a difference in properties once you step onto Sacramento and beyond. It is weird. In any event, if this economy is really going to get super bad, wouldn’t everyone need a BB gun, not just people south of Clay? All the sudden, I am glad we are renters. These last few years of wondering if we made a mistake by not buying is coming home to roost.
have you all seen the Pac Union listing on Steiner, a bful restored victorian 3/2, 2200 sq ft for $500/sq ft? bful. prices seem to be coming down SF
ex-SFer: the bedrooms are pics 6 and 7 on the MLS. They look really similar, but 6 is a corner bedroom and 7 is not. Having seen the unit, I can say that they are similarly sized bedrooms, but 6 is a bit nicer because of the light.
Scorpio: looks nice but this is not in Pac Heights, its in the Lower Haight and it doesn’t have a parking spot which is huge in this market (didn’t matter as much a few years back but why would anyone buy a place w/o parking right now when they have so much else to choose from?) Moreover, I don’t think you could add one given the historic nature of the building (and it might be in the Market/Octavia plan area that I believe restricts adding parking in some cases). Didn’t look beyond the basic stats, but the price doesn’t surprise me as a result.
I meant to post this on this thread and not the Irish one.
key statement from below…”San Francisco is expected to fall the most in 2009 at -18%, followed by Los Angeles (-16.6%), and Las Vegas (-13%).”
The CME housing futures that track the S&P/Case-Shiller median home price indices of 10 major cities offer a clue into how much more investors think home prices have to fall. In the chart below, we highlight the percentage difference between the October ’08 actual Case-Shiller numbers (the most recent set of numbers) and the current price of the November ’09 futures contracts.
The composite 10-city November ’09 contract is currently trading 12% below its October ’08 level. San Francisco is expected to fall the most in 2009 at -18%, followed by Los Angeles (-16.6%), and Las Vegas (-13%). The rest of the cities are expected to fall less than the composite, with Boston home prices expected to fall the least at -6%. Miami, Denver, DC, and San Diego are all expected to see home prices fall by less than 10% from 10/08 to 11/09.
Thanks Jake!
I lived in this neighborhood for many years. First in a huge flat on Clay between Fillmore and Steiner and then in a house on Sacramento between Steiner and Pierce. It is a great neighborhood to live in but the truth is it is Lower Pacific Heights and not Pacific Heights proper. When we first moved in it was about halfway gentrified. Our across-the-street neighbor used to talk about the neighborhood risk he took when he bought his place and how well it seemed to be working out for him. I think the real clincher was when the drycleaning shop which used to be next door to my flat got redeveloped as three condos.
The area may be primo now but it used to be funky and, in my opinion, when it was funky it was much more interesting. I now live in South Beach with a reach-out-and-touch-the-water bay view. Personally, I prefer modern to Victorian. And I prefer the rawness of the waterfront to the cozy row houses of the Western Addition. My view includes run-down, abandoned piers and maritime industrial stuff, a floating dry dock, for example. It’s not for everyone, but I love it. And it takes people’s breath away when they walk into my apartment.
When South Beach becomes primo (don’t scoff, it will probably happen eventually) and if I’m still alive by then, I’ll be looking for a new place to live.
Sorry, I know this is OT. But hot off the press, Google is anouncing LAYOFFS!
http://www.marketwatch.com/news/story/In-sign-times-Google-makes/story.aspx?guid=%7BD2A6BCF2%2D5C3E%2D4CA7%2D8092%2DA7F63765CFE9%7D
Don’t worry about being OT, Satchelfan. We love doom and gloom. (And we love Satchel too :))
I’ve got to say that the GOOG story is sweet vindication for me. I know it’s only 100 people in the “recruiting” organization (sure…), but still.
I wish I was still short that turkey – it undeperformed even the S&P last year (which had its worst calendar year in its history, and on par with the 1931 wipeout before the index was constructed).
It’s “only” 100 people but it’s Google’s HR department. It means their era of fast growth is over. Face it, they’ve had NO profitable ideas since 2002.
BTW, about 1/6 of their employees are contract programmers and other contractors, and my understanding is that all but a handful have been let go. About 3000 people. So they’ve ALREADY knocked out 1/4 of the headcount they had at the start of 2008.
It isn’t just tech that’s struggling, though plenty of tech firms are. Northern Telecom (networking firm which had a $250 Billion Market cap in 2000) and the Shane Company (“Now YOU have a friend in the diamond business”) filed for bankruptcy today.
We’re heading into pretty scary territory, and the real problems are just starting. It takes awhile to burn through your cash, ShaneCo has been doing it for about a year – they said sales fell off a cliff a year ago. 1/3 of the biotech firms have LESS THAN a year left in cash. One third of all biotech firms! Either they lay off to the bare minimum or they’ll be next at the bankruptcy court.
Anyone buying a home right now is going to lose a lot of money.
tipster,
Just to prove that you are wrong saying “anyone buying a home right now is going to lose a lot of money”, check out 2780 19th Street.
3/2, asking $599K, after 106 days, sold for $590K in Dec. Now on CL for $3200.
This should be pretty close to break even for day 1.
Ester,
If it’s worth $499K next year, they lost $100K. They even lost that if they hold way longer than 1 year because they could have bought next year for less and then started holding it, rather than buying now and breaking even for that year.
They are going to lose a lot of money.
(I’m sure you’ll never comprehend what I’m saying, so I’m going to stop now while I’m ahead.)
yours is based on forecast on the future (your own forecast), and mine is based on facts today.
Whether it is going to be $499,0r $599, or $699, no one knows. You don’t know either.
“and mine is based on facts today.”
Indeed. Who would ever think to make an investment decision based on their expectations for future value? Why, that’s just crazy. 😉
I don’t know ester — your “pretty close to break even” looks to me like about a $1000/mo loss, even if one assumes the owner will get his asking price for rent. This is definitely a short-term loser, and without significant increases in housing prices or rents, it is a long-term loser as well.
Maybe you could make it up in volume?
Well, as a landlord, it is not my business to persuade people to buy themselves.
I am just curious that for those of you who have rented in the city for 10+ years, and have seen your relative, friends, coworkers paying less their mortgage than your rent, did it ever occur to you that “damn, i wish I have bought back then”??
No offense
and, to your question, I do make it up in volumn. 4 rental combined is losing maybe 1k to 1.5k a month, afther this Feb, it will be $900 a month, by 2012, it will all be break even. And I will have the next 40 years to enjoy positive cash flow.
Well, as a landlord, it is not my business to persuade people to buy themselves.
I am just curious that for those of you who have rented in the city for 10+ years, and have seen your relative, friends, coworkers paying less their mortgage than your rent, did it ever occur to you that “damn, i wish I have bought back then”??
No offense
and, to your question, I do make it up in volumn. 4 rental combined is losing maybe 1k to 1.5k a month, afther this Feb, it will be $900 a month, by 2012, it will all be break even. And I will have the next 40 years to enjoy positive cash flow.
“4 rental combined is losing maybe 1k to 1.5k a month, afther this Feb, it will be $900 a month, by 2012, it will all be break even.”
but, but, ester. That’s a forecast about the future!
diemos – LOL! 🙂
ester – Hope you’ve had experience as a landlord in SF. Having close family members as landlords, I know it is a pain in the ass if you’ve got psycho tenants. Good luck with getting that positive cash flow.
If ester has a good-paying job to manage the negative cashflow, she should do just fine in her landlord business.
To say that you have to inject about $50k over 4 years to get a business up and running that will bring in steady cashflow for 30-40 years isn’t all that bad, actually. Especially since most of the activity is passive (i.e. waiting).
You’re not gonna retire off it but the world is not exactly ending for her either.
“I am just curious that for those of you who have rented in the city for 10+ years, and have seen your relative, friends, coworkers paying less their mortgage than your rent, did it ever occur to you that “damn, i wish I have bought back then”??”
I’ve lived in San Francisco my entire life. In the last 20 years I’ve never had a friend/relative/coworker with a mortgage that was less than DOUBLE my rent (and I was always living in a nicer neighborhood and/or house).
Now that this thread has devolved to the rent / buy question I thought I’d add a link to a posting that I saw recently that pretty much summed up my own personal ambivalence about the whole question of renting / buying.
My dad used to say never buy a home you wouldn’t want to be stuck living in, so over the years I avoided: cheaply constructed ‘lofts’ in the mission (when everybody said buy now or forever be priced out of the city!), new homes with three-car garages in the Morgan Creek (when that was as close as I could buy to my job near San Jose), and most recently TICs in the ‘not real’ SF on an arterial. I’ve done OK buying and have also been happy renting. As a business decision, I know RE sometimes works out, and sometimes doesn’t, lately I don’t think it really does. But I’ll probably buy again anyway and if you read “Amy’s” post in the following link you might see why.
http://seattlebubble.com/blog/2009/01/10/to-buy-or-rent-not-just-an-emotional-decision/#comments
rational renter,
That post was probably a better argument for moving away!
Anyway, it was funny to read a similar blog in a parallel universe. I was worried someone would be named tipester, or something!
Stop the presses!
The other unit for sale in 2155 Buchanan (Unit 7) just cut its price to undercut the seller here:
http://www.redfin.com/CA/San-Francisco/2155-Buchanan-St-94115/unit-7/home/569049
“REDUCED to sell! Vacant….”
Looks like a race to the bottom setting up here. Last one left solvent wins.
Great find, LMRiM. Per PropertyShark, #7 was purchased in July of ’05 for $899K. Yet another loss in primoland if it sells at the new ask of $870K. 1,090 square feet makes it pretty comparable to this place.
ester – I’m curious how you plan to reduce your monthly cash bleed now that rents are falling? I find it ironic that you scoff at us for making predictions in the 1-3 year context (where there’s plenty of visibility based on current trends), yet you seem to base your decisions around a 40-year horizon.
ARGH, LMRiM you beat me to it, lol! Unit 7 might not be as nice as 9 however as it seems to be right at the corner of Buchanan and Sacramento so the bedrooms face the street unlike 9’s (although the windows are nice). Because it’s at the back of the building, unit 9 also has some nice views.
Yeah, sellers are having a hard time moving anything in District 7, it appears. I see 27 SFRs and 70 condos/TICs on the MLS (I suspect more were pulled for the holidays). December saw 2 SFRs and 9 condos/TICs close.
Any pickup in January so far?
http://seattlebubble.com/blog/2009/01/10/to-buy-or-rent-not-just-an-emotional-decision/#comments
I’ve been following that blog occasionally for the past year and half. It is so like Socketsite. Seattle has behaved similarly to SF (stickyest in the region, later bloomer, relatively strong job market compared to nationally, formerly industrial/rundown/sleepy areas getting gentrified/ tech heavy) so it isn’t particularly hard to understand why that is.
I remember from earlier threads that ester is well positioned to ride out this storm. Like any business there are always risks.
I would just say that be patient for your next round of purchases. Rents and prices are headed in only one direction for a while… and it’s not up 🙂 But I love to hear from you just the same.
Great find, LMRiM.
10% drop for a top floor condo on a great street in a great district.
And now we’re under 2005 pricing and sinking.
Amazing.
Q: If we see a property that sells for a 2006 pricepoint do posters get to make a blanket statement about what year’s level we’re @?
A: Of course not.
While we can’t say with certainty that “prices” are back to any particular year with any certainty from any particular sale, listings such as these add to the evidence and help define generalized pricing. Sort of like how the price behavior of one stock doesn’t tell you too much, but get up to around 25 (picked at random) and you’ll get a highly reliable indicator of generalized pricing (index levels for stock assets).
What we can say with certainty from these listings is that a lot of money has died at 2155 Buchanan and gone to money heaven. We just don’t know exactly how much.
We can definitely say what you just said. In the absence of inflection and body language we only have words on a screen to go on here. And it’s hard not to read sensationlist intent behind Tipster’s post, what with “amazing” and all.
To be honest we could probably look at this one example sale and think “wow, this one could have done that ine late 2004.” Again though, much of this has to do with a lack of competition. A sale is a sale is a sale. Nowadays it’s only one buyer. What was the former list price, you know? Not all of these properties were intentionally low-priced. I’d say most of them were surprised at what competition wrought.
The other thing we know – or at least highly suspect to be true – is that the new owner of Unit 2 is probably not too happy with the new pricing reality.
Purchased for $955K in August 2008 (talk about timing!), that Unit 2 at $922 psf looks to be the “top tick”. I guess neither they nor their realtor saw the greatest collapse of the credit markets coming since the GD, which hit within weeks of that purchase. (Unit 2 sold for $750K in 2005, so I doubt it’s any more desireable than these we are discussing – probably less.)
More data about the $955K sale of Unit 2 – it looks like someone overbid for it! In August 2008! (sensationalism intended – how could anyone have not seen what a mess the world was going to turn into by then?!)
Here is the listing flyer – offered at $885K (warning – large pdf file):
http://statement.mcguire.com/110-15518.pdf
“and, to your question, I do make it up in volumn. 4 rental combined is losing maybe 1k to 1.5k a month, afther this Feb, it will be $900 a month, by 2012, it will all be break even. And I will have the next 40 years to enjoy positive cash flow. ”
What if rents drop by 30% over the next 2 yrs
885K. The same number this one is at now. Now, hey, when everybody is overbidding, overbidding is the market. But the people who overbid had to know the risks they ran. Not all people are sheeple. And the people who “lost out” and/or refused to bid that high also understood relative values. Personally speaking, I had dozens of clients make offers at or around asking, or slightly higher, only to “lose out.” Much of the price givebacks I’ve seen on here so far can be put down to a lack of competition. I’m not saying we have not seen real price retreats. And I’m not saying that “highly competitive” was not the actual market, for better or for worse.
“What we can say with certainty from these listings is that a lot of money has died at 2155 Buchanan and gone to money heaven. We just don’t know exactly how much.”
Hey, this is not entirely true. With the money I have saved renting here, I loaded up in gold, large cap biotech and CDs
“Purchased for $955K in August 2008 (talk about timing!), that Unit 2 at $922 psf looks to be the “top tick”. ”
They jsut lost their entire deposit($190K)…3% realtor fee ($29K), $7k per month in mortgage ($42K), + taxes
approx $300K loss or 150% of their intiial investment, if they sell today
Um, when prices go up, it’s because of lack of competition among sellers. When prices go down, it’s because of lack of competition among buyers.
Duh.
And why do you think there is a lack of competition? It’s because unqualified buyers have been removed from the market, and qualified buyers realize this and are being smarter, and stingier, with their money.
Duh.
This is not an anomaly: it’s two condos in a building with enough activity in the past to give us a good idea of where we are in the process.
Welcome to the new reality.
There is no lack of competition. There’s still plenty of competition in SF real estate. Only now it’s competition among lots of sellers for a dwindling number of buyers.
I understand why there’s a lack of competition. I’m sure you know that.
“Duh”? Sorry to not give your childish jumps in logic credibility. One property = insert year. Get out of here. “Duh” huh? Childish, indeed.
I don’t think what I said can be reduced to, “duh,” guy. Not when you consider overbids. Often these prices were set at a solid, even aggressive pricepoint for a reason. The reason was a measured study of comparable properties.
What’s “duh” is that you haven’t even considered former listing price versus overbid. What’s “duh” is you’re so willing to slap “2005 level” summary on a class from one property’s example.
Your “reality” is talking s**t from a computer, about several markets you haven’t even dipped a toe into. Reality? Not quite.
“There is no lack of competition. There’s still plenty of competition in SF real estate. Only now it’s competition among lots of sellers for a dwindling number of buyers.”
Sure Trip. I’ll go along with that. But it’s a different phenomenon entirely.
Still trippin on “duh” from ole Tippecanoe and Tyler too.
The “competition” argument is a red herring. So is any “listing price” argument.
There is infinite “competition” in a world of scarcity for almost anything (except Miami condos, where many have negative fair value). List the condo at $1 and you’ll see.
A listing price is simply the number that a hopeful seller and a conflicted realtor (who clearly has no ability to forecast markets, only to describe what’s happening right now) agree. the realtor of course is incented to agree to a high listing price in many market conditions because he wants to lock up the seller (and thefee) for 6 months. He figures he can talk the seller down later. In “hot” markets, the realtor whispers in the client’s ear, “I’ll get you the highest overbid!” Let’s not try to read anything into listing prices. Buyers set prices, not sellers. In every market. Everywhere. Everytime.
All this talk is just cover for the fact that prevailing price levels have fallen. They’ve been falling in most of SF since 2005/06, and it’s clearly hit the desireable Real SF at some point more recently.
There’s lots of talk here about asset prices, but does anybody care to speculate how interest rates figure into this?
I agree that home prices are on their way down. But what about interest rates? At what point should buyers stop waiting for prices to fall and worry instead about carrying costs rising?
Money just looks so cheap right now that I have to wonder if (over the next couple of years) the housing price will truly fall more than the cost of capital will rise.
LMRiM, you seem to have a good mind for comprehensive analyses of systems with lots of moving parts; what is your opinion?
This ability to describe what’s happening right now is called a comparative market analysis. Yeah, they did their best to gauge, priced accordingly, sometimes aggressively, sometimes very aggressively, and there were overbids. The buyers knew they were overbidding. Red herring? or matters of fact? 885K is 885K.
Your take on a realtor’s whispering machinations I’ll leave alone.
Your take that prevailing price levels have been “falling in most of SF since 2005/2006” is patently untrue and is in fact directly opposed to what Tipster said earlier.
Or how about this, an overbid buys a property. No improvements are done. Three years later the neighboring condo with no improvements done, or even the same condo, is priced at the same amount. Surprise? Why? Market shift for that particular property? Why?
El D,
what is your opinion?
I do think about that a lot, and you’ve correctly identified a huge parameter in asset purchase decisions where the assets are typically highly leveraged and therfore are dependent to some degree on rates.
My personal opinion is that the price is more important than the interest rate because all mortgages contain an embedded call option on lower rates (one can refinance). This call option is sold very cheaply because it is in effect subsidized by gov policy. This call option is worth much more in higher interest rate environments (obviously), all other things being equal.
In higher interest rate environments, leveraged asset prices fall. Always, when you are so far above fair value as now. However, the impicit call value increases, thereby shielding some of the asset price decline. You seem to be familiar with finance concepts, so you might recognize an anolog to this in similar yield bonds that trade higher than others due to convexity (if you don’t, then just ignore that! :))
Bottom line, I would look to two main things when purchasing a house in the next few years. First, be very sure you want to live there for a long time. Interest rates will go up (they are at generational lows now, and have nowhere else to go), but this will take some time and price inflation won’t be kind to real estate when they do. The huge increases in house prices since the early 1980s occurred in a secular period of price disinflation (falling inflation) and falling rates. I wouldn’t expect something like that again (in fact I’m certain that’s not going to happen).
Second, look at standard price to income ratios. A lot of people think SF is going to evolve into this uberrich Disneyland/Fantasyland. They are going tobe proven very wrong. When the upper income decile of a city cannot afford even median housing in a near zero interest rate environment, something has gone very wrong. Ignore arguments like “But SF is a city of renters and always will be”, etc. – these are misguided.
I couldn’t give you an exact ratio that makes sense, or time to buy, but I suspect that if you are sure you want to be here for a long time, mid-2010 (just a rough guess!) would probably be a good bet to get serious about buying something. At that point, the bulk of nominal declines should be behind us, and yet interest and mortgage rates will still be low enough that the continued real declines will be more than offset by the implied rental value and other utiity of owning the home. I expect that most prices in SF will be about 20-25% lower 18 months from now(obviously, there will be variation – just a rough estimate of average decline).
I hope that helps!
all mortgages contain an embedded call option on lower rates (one can refinance)
I’d never thought of it that way, but that’s a very useful interpretation (I’m an engineer, not a finance guy, and yes, convexity means something different to you than to me!)
I agree that something’s wrong with the housing price in SF. My wife and I are in precisely that top-income-decile-but-unable-to-afford situation you describe.
How, though, does the system right itself, not just in SF but across the country? I’m tempted to think that the way things will re-align will be via a protracted period of massive inflation, with housing prices in overbid areas stagnating. Eventually, wages will increase enough to bring the ratio back to earth.
This is exactly why I was thinking that buying in the next 12-24 months might make sense, even if prices haven’t bottomed out: buy after the “edge” has been taken off of prices, but before inflation takes off and carrying costs with it. Then, sit back and watch the value of that massive loan evaporate as I enjoy a nice place to live…
LMRiM,
With the declining tax base here in SF, how will that affect the local Gov approach of tax and spend all the way to a 6.5 billion dollar budget?
all mortgages contain an embedded call option on lower rates (one can refinance)
Sure, right next to language describing a potential penalty.
How, though, does the system right itself, not just in SF but across the country? I’m tempted to think that the way things will re-align will be via a protracted period of massive inflation
Maybe, but I doubt it. Massive inflation (say, greater than 10-15% for a preiod of a few years) would be extraordinarily destabilizing to an economy that is 360% debt-gdp. The fall in real output would be stunning. We might get backed into that point (the politicians are that stupid, and Bernanke and his bankster buddies are pursuing their own agenda independent of the best interests of the country), but I suspect that we will get back to normal the way it always happens: depression and decline in living standards. Perhaps a very long process of deleveraging like in Japan.
To bring it back home, SF house prices could get righted no problem. A 50% fall in nominal prices would do the trick. That sounds really bad, and that’s why it is unthinkable to so many. But if you really think about it, it wouldn’t be a big deal at all. 60% of the population are renters, and would see no negative impact (at least initially). Arguably, they would be better off as more and more properties come on the market for rent and the recent wanna be rentier class slowly bleeds value right into the renters’ pockets. That’s what we are seeing at ORH, for instance.
Maybe 5-10% of owners in the city are so rich that a collapse would make no difference. They may even want it. For instance, my best friend from college days has a 9 figure net worth and is very vocal about his hope for a collapse, even though it would impact the value of his Greenwich, CT mansion. People on the East Coast seem to be a little more frank and outspoken ime.
Maybe 50% of the owners in SF are very long term – maybe a higher percentage. They might be a little dismayed by a big fall, and may rejigger some retirement expectations/savings rates, but it shouldn’t impact their lives too much.
Another significant percentage of owners overpaid by a great amount, but can afford their payments, and will just eat the loss. Who can say what percentage?
In the end, I think about 5-10% (at most) of the population of the city would financially “wash out”. A big deal for them, but no big deal for the economy as a whole.
I just got back from spending Christmas with relatives in Florida (Boca Raton, Coral Springs) and prices there have fallen 30-40% (in some areas even more) and I can report that everything looks just fine 🙂 No end of the world, or hunter gatherers or anything like that 🙂
Ultimately, we will get mass inflation – I have no doubt. The retirement entitlements (social security and medicaid and public pensions) are too large and will be defaulted through inflation. But that it a ways off IMO. There’s more money to be siphoned off from the serfs, starting with their home equity. I do think conceptually you are right – pay off a long mortgage with inflated dollars, and that will work over 30 years IMO. But the next 10 are going to be rough. Like I said, I bet the “sweet spot” will be in 1-1/2 to 3 years from now, but obviously all the nonsense going on in Washington might delay even this timetable.
LMRiM,
With the declining tax base here in SF, how will that affect the local Gov approach of tax and spend all the way to a 6.5 billion dollar budget?
One of the many perversities of prop 13 is that it actually smooths property tax revenue. Even in down markets (even if down 50%!) new sales of houses held for a generation is a huge bump in prop tax. Maybe even enough to offset reassessments down on everything that was sold after 2000 (it will be marked down in steps, and not everyone will appply, etc.). Who knows?
Sales tax revenue should take a nice dump from projections. And the goo goos and nuts that run the city and elect those who do will continue to spend into oblivion. I don’t know the system here so well, but I have to believe that the lion’s share of essential services’ cost (like police and firefighters) is being siphoned off right into the public employee pension programs. I saw a US census stat the other day that 57% (!!!) of all spending on police and firefighters in the US (total $113B) is spent on pension plan contributions!
My guess is that SF will get a crisis like NYC did in 1970s (“Ford to City: Drop Dead”), and even though the Feds did actually give some $$, life got a lot worse there (I lived through it). Probably something similar will happen in SF. After 10-15 years of decline, they’ll elect a “law and order” Republican mayor just like NYC did after “Mayor Tennis” (David Dinkins) to clean up the rabble (in NYC the straw was the “squeegee men” that finally broke the camel’s back).
Something to look forward to 🙂
the “squeegee men” … finally broke the camel’s back
Oh, man, I remember those days. I agree that history could repeat itself here.
LMRiM,
Thanks for reminding me that I’m not crazy (like fluj) and that there’s hope for SF. When the money gets cut off from SF City Hall is when the other fraudsters, aka non profits, melt down. Can’t wait.
This is a very revealing post. You have all the pieces.
“Again though, much of this has to do with a lack of competition. A sale is a sale is a sale. Nowadays it’s only one buyer.”
Yup. This is a key economic principle you’ve rediscovered.
Prices go up when there are more buyers than sellers.
Prices go down when there are more sellers than buyers.
this is a fundamental principle that provides a strong foundation for your understanding of market dynamics.
“Not all of these properties were intentionally low-priced. I’d say most of them were surprised at what competition wrought.”
Yup. That frenzy of competition is called a mania. In a mania what little rationality most people have gets thrown out the window and they start making decisions based on absurd ideas. Like the idea that a home will provide one with an endless stream of free money. Like the idea that this is the last moment in time that it will ever be possible to buy a dwelling before one is priced out forever. And so they become willing to go to extreme lengths to secure a property. That frenzy of competition drives prices up.
But history teaches us that the mania always ends and rationality returns. People find themselves asking the question, “Why did I trade my house for a tulip bulb?” As rationality returns, economic fundamentals reassert themselves. The buyers disappear and the speculators start wanting to sell. This is colloquially called, “the rush for the exits”, prices fall.
“What was the former list price, you know?”
Comps are set by sales prices not asking prices, as you well know. You have correctly noticed that there are fine properties in high-status areas of SF that are being offered for sale for less than what was paid a few years ago.
Prices are declining. Not much, just a skosh. But the direction is down. No matter what straws you want to clutch at to convince yourself that they aren’t REALLY going down.
Set aside what you want to be true and put these things together and you will know the future direction of the market.
I’ll leave you with one of my favorite sayings,
“The truth shall set you free … but first it’s going to piss you off.”
“Prices are declining. Not much, just a skosh. But the direction is down. No matter what straws you want to clutch at to convince yourself that they aren’t REALLY going down”
But that’s not my point. I know that prices are trending down from overbid days. I’m not trying to convince anybody they aren’t. It’s not a competitive market. But it’s still very, very expensive, and quite far from the predictions of a great many on this website. And, no offense, but I am privy to a great many things that you and others like you are not. I see and interact with people in the market on a daily basis. But yeah, sure, prices are down.
My point is this thread was, “Stop throwing out fake year-value summations.” Tipster, “2005. Amazing.” LMRIM “Prices peaked in 2005 and 2006 and have declined ever since.” Both totally false.
Hey sure, price is down. Often it is somewhere between past overbid levels and past list price levels. I don’t lie on here. Y’all just always want to take a projected future and use it as a platform. I can’t validate that.
Crazy, Sunny Jim? I’m the one in the here and now.
fluj,
Unit 7 was purchased in 2005 for $899K. It’s on the market for $870K.
What part of that is confusing you?
Jimmy and Chuckie,
Thanks for your warm words, i have been getting too lazy to post sometimes mostly because most of these debates/forecast etc are completely endless and fruitless as well.
I have switched my reseach from Pac height to SOMA and now to West Portal. I am losing patience with Pac because everytime I looked at the current listing and compared to what I paid for the two units I already owned (purchased during the peak year of 07/08 by the way), prices are way high. Can’t get excited.
With SOMA, I am unsure about the rent even though the purchase price has come down so much.
So I turned to west portal now. Any other areas taht are worth putting on my rader screen??
Spencer, how many years are you away from protected tenant? Just kidding. OK?
Back on 2155 Buchanan, I am sure a lot of people would point to these two units and say “price is down 20%, and will be down another 80%”.
But to me, they are NOT any cheaper than what is currently on MLS. If I could pay $625K and $700K and rent out for $2900 and $3200, why would I buy these two??
What part of that is confusing you?
The part where you broadened it to everything.
“But it’s still very, very expensive,”
Truer words were never spoken. If you look at long term value of price/income or price/rent metrics SF prices are very expensive by a factor of two.
“and quite far from the predictions of a great many on this website.”
Patience fluj, patience. 2011. Rome wasn’t burned down in a day.
“no offense”
you sometimes exasperate me but you never offend. I hope you never take my economic analysis personally, we are all just leaves in the river, being swept along in the great macroeconomic currents.
diemos,
” we are all just leaves in the river, being swept along in the great macroeconomic currents.”
um, i’d say there are more than a few burrs on here clinging to
the river bank..;-)
LOL
“Truer words were never spoken. If you look at long term value of price/income or price/rent metrics SF prices are very expensive by a factor of two”
Diemos, your 2011 predicion exceeds a lot of conservative predictions re: recovery. You know that, right? IMO, you need an event at the local level for your predictions to come to pass. A gradual lessening, with continued all time high level purchases here and there in every non-bottomed out neighborhood, will not do it. It’s not looking like an inverse V right now. Mass layoffs in the area would do it. But tech will be relatively strong. Mass rent decreases could do it. Doubt that will happen. Everybody getting creamed by rate adjustents on notes could do it if everyone succumbed. (The government and superior access to capital are probably going to prevent this one.)
So I doubt it, man. A return to 2004-type levels? Perhaps. 50%, and a return to 1997? Unlikely.
Jan 1, 2012. As long as I’m alive and in reach of an internet connection I’ll be here to hang my head and weep and wail about what a fool I was. 😉
LOL. It won’t matter, diemos. In 2012, median price will be $400K and Case Shiller will be 85, and people will still be pointing to one property in primoland that got renovated, doubled in size, and had solid gold bathroom fixtures bolted to the structure as proof that prices are up HUGE since 2007.
“LOL. It won’t matter, diemos. In 2012, median price will be $400K and Case Shiller will be 85, and people will still be pointing to one property in primoland that got renovated, doubled in size, and had solid gold bathroom fixtures bolted to the structure as proof that prices are up HUGE since 2007.”
That was a flame. But what the hey. You have no clew about SF values. We see that daily. Past or present, you are not conversant. And now you want to talk future? Pass. “Decreasing since 2005-2006” — man. You came on this site with an agenda, what it is, I do not know. I suppose it’s merely titillation? Regardless, you never even bothered to really take in anything anybody else has said.
“prices are up HUGE since 2007”
naaah. Didn’t say it, pal. They aren’t. But we see by the “2007” that you went back and looked at the veracity of your own earlier statement, tho.
Speaking of mass layoffs, rumors are that Goog cut 6,000 employees/temps.
http://layoffblog.com/2009/01/08/google-layoffs-6000-cut-details-kept-off-web/
and according to SF Fed, the tech sector has not bottomed out yet. Tech sector has lost 37,500 jobs since August.
http://www.marketwatch.com/news/story/tech-hits-recession-mode-signaling/story.aspx?guid=%7B02E571DA-5C41-4030-B75D-236720BA6DCF%7D&dist=msr_1
@ fluj – “But we see by the “2007” that you went back and looked at the veracity of your own earlier statement, tho.” Not at all, fluj. Take another read of what I wrote (you misquoted it twice).
@ Satchelfan – I know I’ll get flamed for “patting myself on the back” but what the heck – especially since fluj keeps talking about how I’m “not conversant” (talk about chutzpah after 3035 25th Avenue, and 76 Caselli, both of which fluj and I traded posts about and where fluj came up short). Here’s what I wrote on SS almost exactly 1 year ago:
“I would expect GOOG to go flat employee growth (possibly negative through attrition) within WEEKS, if not months. Layoffs – if they are ever officially announced – by Q1 2009”
**********
About other layoffs, my wife just heard yesterday from two moms at the local school, and another friend this morning in the Marina that they (or husbands) were just laid off from Barclays (2 in technology, 1 in HR – all “overhead” costs). Apparently the cuts are going pretty deep for tech people who work for banks.
The school foundation up here (Tiburon) usually takes in just under about $1M in donations by January. This year it’s $400K, and the trend looks terrible.
“76 Caselli”
I know of several 900+ per foot sales in the same area after that flawed floorplan (flaws pointed out in thread by others than myself) home sold. And all I ever said was properties “could” sell for that much in the area. See, that’s the thing. You don’t know. And in that megathread, I seem to remember you leading off with, “I don’t know much about the area but it should be similar to St. Francis Woods” or something. I mean, all sorts of wrong.
Yeah. Barclay’s is cutting back. That has hit somewhat close to home as a friend needs to leave the country in a matter of weeks.
And the layoffs keep coming in the tech sector. AMD just announced 1100 more cuts and on top of this, cuts in salary.
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/01/16/financial/f091519S68.DTL&tsp=1
Umm…I don’t think we can call the tech sector “relatively strong” at this point.
you know what satchelfan, nice name! your hero knows nothing about sf re, hates it, yet posts here 24/7.
Tired of getting piled on already. Have lots of fun tracking strategic layoffs from boomtime expansion. Theres’s a difference between revenues down and in the red. You might term it, oh I don’t know, relative strength?
Have a nice weekend.
Fluj – not trying to pile on you. Everyone is entitled to their opinion.
p.s. Nortel filed for Chapter 11 yesterday.
“Spencer, how many years are you away from protected tenant?”
I don’t know what this means.
I know several biotech companies in the bay area that are planning 30-50% reductions in Q1. A couple of the companies in Mission Bay are likely to go out of business this year
I see Pfizer just announced 2400 sales positions will be cut, Oracle is cutting 500 sales and consulting positions, Autodesk cut 750, and Seagate just cut 800. Whew, it’s a good thing SF is not counting on tech and bio to prop up the market.
Biotech will be affected too….bankruptcies looming.
http://www.pharmalot.com/2008/11/crisis-in-the-lab-biotech-bankruptcies-are-looming/
Unit 7 in this building just cut its price again, now down to $850K. Last sold for $899K in 2005.
http://www.redfin.com/CA/San-Francisco/2155-Buchanan-St-94115/unit-7/home/569049
Spencer, you sure were smart to just rent one of these for $2150/mo. Even if you had paid triple that, you’d still be way ahead of the game from where these two sellers (Unit 9 and Unit 7) are going to wind up.