Purchased as new for $780,000 in April of 2012, the 1,244-square-foot unit #401 in the converted Hales Warehouse building at 2 Mint Plaza resold for $1,250,000 in November of 2015, despite the “short-term hold” and the unit having been “used” between, which is what happens when the market is actually appreciating.
Having returned to the market priced at “$999,000” two months ago, angling for an “over asking” bid, the re-sale of the two-bedroom, two-bath “historical loft with stunning modern architectural detailing throughout” has just closed escrow with a contract price of $950,000, down 24 percent from the fourth quarter of 2015 on an apples-to-apples basis, despite the above-average term hold (which is what happens when values are actually depreciating and despite the fact that the widely mis-reported index for “San Francisco” condo values is “still up 20 percent!” over the same period of time).
Yes, (before someone else posts it), the street condition in the neighborhood has gone downhill markedly over the last 7 years, so some price depreciation due to a marginal loss in livability has to be taken into account. We can debate whether or not that accounts for more than 10 percent or so of the decline.
The better news is that perhaps the ≈$764 per ft.² benchmark set by this sale will mean the seller for the 1bd, 1ba unit on the 7th floor might stand a good chance of getting an offer at or above their asking price of $733 per ft.².
In case you’re wondering what happened with unit 502 after the “Luxury Live Auction” gambit for that condo in the same complex failed to produce a closed sale, the subsequent relisting for $1.2 million was removed in mid-March of this year.
IMHO, the deteriorating conditions from 2015 to 2023 more than justifies a 25% drop in value. I know thats not the only reason it dropped, but some buyers who might have considered looking at this in 2015 wouldnt even consider it today. most people would consider this location to be unlivable
Keep in mind that this doesn’t simply represent a 25 percent drop in value, but a 25 percent drop in value below the condo’s 2015 price, net of any post 2015 gains.
For context, the Case-Shiller index for “San Francisco” condo values gained 34 percent from the fourth quarter of 2015 through April of last year.
This sounds like the exact domicile of those who are leaving.
Well paid tech worker who can now leverage their talents working from anywhere.
Unlike other jobs that are returning to the office (financial, legal, etc.) the tech industry is one of the best for telework/ WFH. Why would a tech worker with a decent resume stay in SF at these prices and put up with the hellish street scene, even if they had to lose money moving away?
Well paid tech worker who can now leverage their talents working from anywhere
Or not working
fromanywhere: i.e. tech seems to have formed an oversized portion of layoffs. The figures are perhaps something of a mismatch – many may be picked up by smaller firms whose hiring isn’t widely reported – but it’s likely <<100%.It is standard practice for companies (tech in particular but all major industries) to set salaries relative to regional cost-of-living so a tech worker who decides to leave the bay area to work remotely is likely taking a significant pay cut to do so. Few companies pay bay area salaries outside of the bay area, unless the area is comparable in COL expenses (like NY). It also seems like fewer bay area companies are supporting 100% WFH teleworking as they expect people to be able to come into a local office at least some of the time.
SF has lost a lot of population that in gained in the decade 2010-2020. I do not recall exact stats but approximately 80,000 people or 10% of the Bay Area population. Some moved far away and a large number are older millennials forming families and moving to the burbs. SF city condos (not pre 1950’s flats) are a dead money “investment” going forward. There just are not enough people who can afford to own and who want to own a condo to push demand. Add in new construction adding to supply. This loft is in one of the best buildings in SOMA for lofts. Just not the demand.
See: Bay Area Population Revised Down, S.F. Shrank the Most.
Interesting. You know, the other real estate agents commenting here say we are all supposed to “…believe in supply and demand.”
If it’s true that “there just are not enough people who can afford to own and who want to own a condo”, then prices are supposed to adjust downward so that the remaining people who want to own a condo can actually afford to purchase one. I think there’s plenty of demand. The price level just needs to reset downward substantially.
Despite frequently being conflated and misunderstood, simply “wanting,” desiring or even being needed is not the same thing as demand-ed, which is a function of price.
Yeah it’s hard to understand how “who can afford to own and who want to own…” – i.e. the two magic ingredients mixed together, as opposed to being in separate alchemists flasks (or) – might get confused with “demand”. Silly amateurs.