As a plugged-in reader notes, the list price for the “Stunning Pacific Heights Victorian home” at 2679 California was reduced $100,000 to $2,695,000 yesterday. As we wrote about the sale of the property for $3,005,000 in April 2008:
2679 California was purchased on 10/21/2005 for $2,850,000, listed on 2/21/08 for $2,995,000, and closed escrow on 4/2/08 for $3,005,000.
Assuming all work was permitted, the only major improvements from 10/05 to 4/08 consisted of a few new windows and siding, and the average annual appreciation over the past thirty months for this six bedroom, three and one-half bath single-family home in Pacific Heights weighs in at around 2.2%.
A sale at asking would now represent average annual depreciation of 3.7 percent per year over the more recent thirty-five months and a total drop in value of 10 percent ($310,000).
∙ Listing: 2679 California (5/3.5) 4,311 sqft – $2,695,000 [MLS]
∙ Apples to Apples: Pacific Heights Single-Family (2679 California) [SocketSite]
Wow, might this be the first SS repeat apple?
The [2008 vintage comments] are pretty funny from a nostalgia point of view:
fluj: “Does this or does this not show market appreciation? LOL.”
Yep. And now market depreciation. In the many 100,000s.
99paa: “it is certainly a sign that the sky hasn’t fallen here. Yet.”
Right on with the “Yet.”
Trip: “It does show that for very expensive SFRs, we’re not quite back to late 2005 prices yet. But we’re clearly on our way there (and beyond).”
Another good call. Current asking is well below the 2005 sale price.
REPornaddict: “things have been basically constant for good quality SFHs in The City since the end of 2005.”
In April 2008, correct. Since then? Not so much.
sanfrantim: “I’m surprised no one has yet mentioned that when you factor in leverage, 2-3% annual appreciation yields a very good return on equity. At 20% down, that’s 10-15% annual return; double that for 10% down.”
Ouch, leverage cuts both ways and turns into a 100% loss with a 20% decline.
Ahh, the pre-Great Recession heady times.
Not the most quiet area. Who in his right mind would pay 3M to be in Low-PH, even in a 4000sf house?
Asking “only” 14% down from the last sale. Reality hasn’t fully set in I guess.
A typical 28% fall from the bubble top would bring the price to 2.16M, or $500/sf. We’re still 1/2 way from there and I kinda doubt it will go that low, but I am confident there’s still some room there.
And to think it was only two months later that these illustrious words were spoken:
It’s over. Sorry. Scare tactics are dead. San Francisco never really took a price hit and it won’t, either.
Posted by: fluj at June 23, 2008 9:57 AM
Little did he know how right he was. He just should have stopped with the first two words.
This couple is already going to lose $400K+ if they don’t walk away. Just for comparison, I looked at the median amount of retirement savings in the U.S. That number, as of the peak of the stock market and near the peak of the housing market was $213,500 in 2007 (see name link: congressional research service, chart on page 14 of the report, which is PDF page 17).
So sad. The money people are currently losing on SF real estate is staggering.
I’m not saying anything other than fact with regard to the buyers/sellers of this home; but they were from another country and probably didn’t know much about RE and just paid the ask and called it a deal. Probably the host company taking the hit here and not the owners. The 2008 sellers are clearly winners of this musical chair situation.
Fantastic thread – classic!
$3M for this place in 2008? What a sucker! It might be time for a pep talk from one of the cheerleaders about how there is no evidence that SF values have fallen more than 10-15% or at least some wise counsel about “good seats”…
I hope the loss here is in excess of $1m – and I bet it will be.
Does a red front door mean good luck or something in Asian culture??
Just wondering?
^^^ In the 60’s my dad told me a red front door meant the house wasn’t paid for yet.
I’ll actually stick with my comment from this thread two years ago:
====
“yet again, it’s amazing to me how many houses are bought and sold quickly
I look forward to the time when people buy a home in which to live.
buy sell buy sell…
these aren’t houses, they’re stocks.”
I like your version better, one eyed man, because it’s funnier, but here’s a couple of lists of “red door” meanings:
http://wiki.answers.com/Q/What_is_the_meaning_of_a_red_door_on_a_house
http://www.homecurbappeal.com/what-does-a-red-door-mean-the-history-origin-and-meaning-of-having-a-red-front-door/
Interesting.
The biggest winner here was the 2003 buyer who bought for $2.05M, sold for $2.85M, and all they did was pull a cheap vinyl siding permit that expired eventually. So this might be apples to apples to apples to apples.
Between brokerage costs and other things, the 2005 buyer didn’t really make anything.
The current owner is an executive search guy and usually negotiates packages for dealing with kind of stuff for his clients.
Btw, that 2003 buyer/2005 seller also subsequently moved to North Texas, spent about 2/3 of the sale price on a McMansion, bought a very cheap condo in Florida, and banked the rest.
Punishment enough, I suppose.
Biggest winner?
subsequently moved to North Texas, spent about 2/3 of the sale price on a McMansion, bought a very cheap condo in Florida, and banked the rest.
ROFL. you overestimate how expensive it is in North Texas.
You can get a huge McMansion in North Texas for around a million bucks.
like this:
http://www.trulia.com/property/1085351325-6531-Turner-Way-Dallas-TX-75230
Two million bucks is getting you near to a real mansion.
Four million bucks IS a mansion.
That said, the definition of McMansion is fuzzy IMO. to me, a McMansion is a huge place with no details. Others think that Huge homes well done but with “fake” period details are McMansions.
Here’s example of $2M home in Dallas. Obviously, it’s much much cheaper in Ft Worth. you be the judge!
http://www.trulia.com/property/1093590837-6326-Carrington-Dr-Dallas-TX-75254
and
http://www.trulia.com/property/1063863852-4407-Glenleigh-Dr-Dallas-TX-75220
I always figured the definition of McMansion was a newly built suburban or exurban home where the house was disproportionately large compared to the lot.
In contrast to, say, a real mansion (e.g. up in Pac. Heights) where the lot is tiny but you are in a densely populated city so the small lot is acceptable.
6000 sqft on a 9000 sqft lot in Highland Park, a very wealthy suburb of Dallas = McMansion in most people’s opinion. I’m familiar with what things cost there, and I would guess that the North Texas house has probably dropped at least 200-300K, possibly 350K, in value. So it’s not all rosy, but much lower cost of living, no state taxes, are a positive. Property taxes might be higher, but I’m not sure.
I actually don’t think of Highland Park, which is a fairly old neighborhood, as being McMansiony. Yes, there are a lot of newly constructed “mansions,” but they have more in common with the Persian Palaces of Beverly Hills than with my perception of a Mcmansion. The “mc” part implies that it’s cheaply and quickly made. My hometown is full of these things. Giant homes on tiny lots full of sub-Home Depot finishes that are built in newly created, faux-luxury subdivisions fit my def. of mcmansion.
My hometown (not far from Dallas) is incredibly odd. There are a lot of gorgeous 1890-1920s mansions with lush lawns and ancient oak trees, but the wealthier people don’t like fixing up older homes or living in old neighborhoods. They move into these prefab neighborhoods of crap houses for reasons I can only assume are cultural. Maybe they fetishize the new… I have no idea. There are no yards to speak of, and all the old trees were cut down leaving just scattered, scraggy pines spread thin amongst cookie cutter houses. It annoys me to no end.
“Yes, there are a lot of newly constructed “mansions,” but they have more in common with the Persian Palaces of Beverly Hills than with my perception of a Mcmansion.”
Persian Palaces typically fit in with the description of McMansion. For lack of a better place to reference:
http://en.wikipedia.org/wiki/McMansion
Highland Park is an old neighborhood, but this particular house was built in 2004.
This place is offered for rent for 10k a month
http://sfbay.craigslist.org/sfc/apa/2207116415.html
Reduced by another $100k
250k below 2005. 405k below 2008. Our ride on the Wayback Machine continues.
Take a look at this in today’s NYT front page and substitute “San Francisco” for “Seattle.”
http://www.nytimes.com/2011/02/14/business/economy/14dip.html?_r=1&hp
Contingent, a month after dropping to $400K under what they paid.
Not any longer. “Available”
This is a little OT, but I don’t think a lot of these homes are passing their inspections… I noticed a home on Sacramento St. that was recently pulled is now having foundation work, as is 2207 Scott St which fell out of escrow. Likewise, 2623 Divisadero hasn’t closed escrow but parts of the foundation and sidewalk have all been demo’ed, likely by the seller. I don’t think buyers are willing to overlook any flaws, particularly structural, before closing on a house.
Back in contract?
2679 California has once again fallen out of contract and is once again active and available at $410,000 (13.6 percent) under its 2008 sale price.
The list price for 2679 California has been reduced to $2,495,000, now asking $510,000 (17 percent) under its 2008 sale price, $355,000 (12 percent) under 2005.
This is really surprising. I would have thought some H.R. person at zynga would have snatched this up by now. Must be that busy street.
It was in contract at a price $100K more? I’ll bet the person who walked away is much happier knowing he just saved himself $100K by waiting 3 weeks.
You have no idea at what price it was in contract. You know where the list price was on the home when it was in escrow. It is a common tactic to lower your ask to a recently agreed upon sale price that falls apart. It’s a good way to get the buyer back to the table. I suspect that will go into escrow-firm pretty quick from this point.
^ Yeah, what eddy said. And besides, who would even care about saving $100k? It’s not like that’s a lot of money in SF. Even the $650k+ that the seller stands to lose if the house sells with no further reductions is no big deal. Maybe in flyover country people get jazzed about these numbers. But not here.
In Escrow – Firm
I see that this place finally closed – $2,335,000.
Down $670,000 from April ’08, and down $525,000 from the October ’05 sale price. About $800,000 lost, all-in, for the 2008 buyer (plus own vs. rent premium, etc.).
But it’s a big, single-family home in Pacific Heights (ok “lower” Pac Heights and a block away from “real” Pac Heights). So one would expect such a dog place in a dog neighborhood to take a big hit. Nothing to see here, folks, move along . . .
Actually, more to see here than just the previous 2 sales. Let’s not forget the 2003 sale of $2.025, and although slightly upgraded since then from the looks of those 03 listing pictures, this place is largely unchanged. So it’s up 300k since 2003. And there is no way 300k of improvements were made to this place.
The 2005 sale for $2.8 and 2008 sale for $3M are just nutty; but the market was nutty and people (or likely this case, foreign corporations) are getting killed. I think the buyers here got a good deal. I’ve got no issues with market corrections. But this place isn’t going to trade much lower than this price any time soon.
Cheers.