The Article (And The House)October 18, 2006
From the Chronicle: “After five open houses, a $40,000 price-cut and three months on the market, Leslie Nakajima hasn’t had a single offer on her three-bedroom house in Potrero Hill. Nakajima, who does public relations for tech firms, said she’s surprised it’s taking so long to sell.”
“She was considering taking a job in Seattle last year and put the house on the market last fall. After just two weeks, she received two offers, including one for $975,000. She decided against the new job and turned down the bidder. Now, she’s decided to move to Europe and is asking $949,000 for her house.”
“If she hasn’t received any offers by month’s end, Nakajima said she’ll stop trying to sell the house, which she bought 2 1/2 years ago. “They aren’t building single-family homes up on the hill in San Francisco any more,” said Nakajima. “If I absolutely had to sell, that would be one thing. But I’m not desperate, and just breaking even is not really what I had in mind.”
∙ Home prices slip after 4 hot years [SFGate]
∙ Listing: 868 Arkansas (3/2.5) – $949,000 [MLS]
Comments from Plugged-In Readers
Hmm … seems like this house is falling into the woes of 999 Wisconsin St.
I wonder if the proximity to public housing is a factor.
It’s the location. Her next-door neighbors are basically the projects. Boo-hoo-hoo. She shouldn’t have overpaid for this unfortunately located property 30 months ago.
Looks like the house sold for $750k in 6/04. I’m sure she’s kicking herself for turning down a 30% return after just a year, when she refused a $975k offer in Fall, 2005.
In this market, buyers have more to choose from, and any negative aspects (e.g., proximity to public housing) gain importance to buyers who can take their time. Still, the seller stands to make a decent profit when she sells this house.
Then, list it at $849k (still a decent profit for her in this market, especially given the blight) and it would go. This is simply the case of a greedy buyer with a dinged property, definitely not news, in spite of what the Chronicle might be trying to broadcast.
Hilarious. A million-dollar listing quite literally next door to a housing project and fronting a six-lane interstate freeway.
Hello? It’s reality calling.
The Chronicle also quotes a Claudette Center, who has been unable to sell her uncle’s house for 829K. The Chronicle doesn’t mention that Center is a real estate agent, and is apparently trying to flip a house that records show was bought in July ’06 for 656k.
The house is on the southernmost edge of Bernal Heights, just above the Alemany Projects.
“…just breaking even is not really what I had in mind.”
(…wiping the tear from my eye) I know, sweetie. Life is just so hard. You just go off to Europe, and try not to worry about silly things like market trends, real estate investment criteria, and such.
The issue here is pricing — single family homes in Potrero Hill are still selling — many at or over the asking price. This is very tough location to warrant 1 million dollars and I can’t foresee it selling for that dollar amount any time soon.
In my humble professional opinion, this home is comparable to 569 Pennsylvania Ave which just sold for $899. (Subsequently, this was a listing I had — The sellers and agents involved priced the property too high — the sellers reduced their price by 70K and listed with a different agent and sold quickly) One would imagine a price of $850 – $875 garnering attention and an offer. Sellers need to understand that the market determines the worth of their home, not the seller, not the listing agent, not Zillow, not a stat from 2004.
Thank goodness I’m not the only one playing the world’s smallest violin for this woman. If she doesn’t get in touch with reality soon she’ll be happy to break even.
I suppose it doesn’t help when this type of activity happens near you (taken from the Bayview police reports):
Saturday, September 30, 2006, 9:40 PM, 23rd & Arkansas, Shooting (Case # 061045980): Officers responded to SFGH on a report of a shooting victim arriving at the hospital. When they arrived, SF deputies pointed out a white Camaro with a single bullet hole in the left rear quarter panel. The driver of the car told officers that he was not hurt, but that the passenger in the car had been hit in the head. The driver said that he was parked in front of the market at 23rd and Arkansas when he saw the suspect get out of a silver 4 door truck. The suspect then walked up to the car and started firing a gun into the car. The driver was able to duck down and avoid getting hit, but the passenger was hit in the head. The driver drove the passenger to SFGH which was only 5-6 blocks away.
Perhaps the realtor should update the property description…
“Disguised as a cozy Mediterranean Cottage from the outside, this safe house is designed for bullet-proof entertaining.”
“(…wiping the tear from my eye) I know, sweetie. Life is just so hard. You just go off to Europe, and try not to worry about silly things like market trends, real estate investment criteria, and such. ”
If the house was bought for $750k in ’04 then either she’s put a lot of money in the house or selling for her current price of $949k isn’t “just breaking even” as she claims.
Who really cares about the “plight” of the seller?
The fact remains that the house (“tough” location and all) received an offer for $979,000 last year (when logic would suggest it was listed for $989,000). And while neither the location nor the house (it actually looks quite nice) have since changed, it has been sitting on the market for the past three months at $949,000. So what has changed? All together now…the market (and not in an “appreciating” sort of way).
This article smells fishy to me. These are two pretty bad houses to use to gauge market. If you are trying to flip, you better have your location down. And just because she got an “offer” does not mean it would have closed. I have a feeling that deal would have have fallen apart…
It’s easy to comment on it if you haven’t been there. It’s a beautiful house right across the street from a very well loved park that is home to softball, football, soccer games, dog walkers and all around normal people. Her view from her living room is a well maintained park and trees that isn’t likely to go away.
I respectfully disagree with Greg’s assessment of the value and what the house compares to. A better comp is 636 Wisconsin directly one block behind 868 Arkansas exact same proximity to the projects with less square footage that sold for just over a million in June of this year. That one also took 60 days to sell which is a very short period of time by National standards.
Pricing – she put over $60,000 into upgrading the property not to mention the time and expertise it takes doing so, so no I agree she shouldn’t break even if she doesn’t have to and she doesn’t have to.
As for shootings in the area….HELLO the Four Seasons has had several within a block of it’s property not to mention all the other crime in San Francisco. It is not location specific. This owner was robbed once, when she happened to live in Pacific Heights, and the burglar had to scale three fences to get in there. She did extensive research before she moved in including talking to the neighbors, the police sergeant responsible for the area, and hanging out at night to see what the ‘vibe’ in the area was.
There is always a larger story than meets the eye.
“so no I agree she shouldn’t break even if she doesn’t have to and she doesn’t have to.”
Of course this assumes she will do better down the road (particularly in real terms and taking into consideration any negative cash flow when renting) than this purported “break even”. She might have a fair wait.
I’ve been in the house prior to any renovation when it was listed by Rebecca Ford — an extremely knowledgable and experienced agent. It sold for $750,000K in June of 2004. Even with 60K of upgrades, the expectation that a home 2 blocks from one of the most dangerous housing projects in San Francisco should see approximatley $5833.00 appreciation a month — in a market that has clearly cooled — is slightly unrealistic. Failing to understand and accept the nature of the location is a key mistake — you can’t compare Pacific Ht’s to the southern slope of Potrero Hill.
Say what you will about the national market — we don’t sell real estate in a “national” market – we sell real estate in a city where 60 days is looked at like an eternity.
636 Wisconsin is just off 20th St., while 868 Arkansas is close to 23rd St., and one block further east.
Anyone who know Potrero Hill knows that those two locations are not comparable.
It’s perfectly fine to disagree, debate, and hypothesize. The market is fair game, pricing is fair game, location is fair game, quality is fair game, opinions are fair game, and even marketing tactics are fair game (this is real estate after all). But let’s try to avoid the personal attacks (however subtle or explicit).
And for the record, we’re not too thrilled with either of those comps…
“636 Wisconsin is just off 20th St., while 868 Arkansas is close to 23rd St., and one block further east”
I completely agree. 20th and Wisconsin is a pretty nice area. There’s a lot of neat neighborhood shops on 20th. But although I have never been on 23rd, I know it’s not a desireable location……
If 636 Wisconsin sold for 1MM, then 868 Arkansas should be worth about 850k (which means I slightly agree with dot.com Greg j/k)
My client was interviewed for over 2 hours to which they sound bit one sentence for shock factor which obviously worked.
And yes she knows very well the dangers that lurk around the corner if the market gets worse rather than better, we’ve discussed it at length along with the fact that it was originally a minimum of a 5 year hold.
I think the recent publicity on the multiple shootings on the Hill must have further impacted this neighborhood. It has certainly changed my opinion on this area.
I’m curious about how the paper chose this location for the basis of the article. I seem to remember that a columnist wrote a very similar piece about a month or so back, and that article also used Potrero Hill as the article’s location. In that article, the person profiled was a person in a very similar position as the agent profiled in this current piece; I wonder if it was the same person profiled and part of this story is simply recycled. If it is, I consider it lame, lazy reporting.
Just a few stats –
In Potrero Hill there have been 38 single family homes sold in 2006. The average days on market was 32 days and average sales price was $1,090,000.
The longest a single family house which sold sat on the market in Potrero Hill this year was 69 days.
Currently there are 8 active single family homes on the market in Potrero Hill — 5 of which are above 1 million dollars. I feel several are going to have to endure significant price reductions in order to sell — if you are in the area, two of the most expensive homes ever offered on the ‘Hill are available — 733 and 860 DeHaro — well worth a peak. (Not to worry– no free advertising — neither of them are my listings) Only two homes have ever sold for more money on the ‘Hill – 553 Arkansas in May of ’06 and 1745 20th (great pool in the back) in December of ’04.
My family and I have been looking on the Hill for almost a year (we’ve lived here for 5) for a single family home. I would not even step foot in this house after doing a “drive-by.” While it has amazing views, I would never feel comfortable coming in and out of this location because it is just plain scary. While the pictures look great, I don’t want to feel like I’m living in a bunker. I think this house and many other houses currently on the market here on PH are way overpriced. In the meantime, my husband, baby and I are patiently waiting for people to come back down to earth, along with the prices on their houses. A million dollars for this house is outrageous — and the fact that there are no bidders proves that.
you want outrageous, try checking out the complete shack on 20th between Bryant and Florida for $940K in the Mission — its one of the nastiest remodels I’ve ever seen (actuallly it must’ve gone down by now, as its been sittin there a while now)
By the way, this seller who claims that she’s not desparate to sell has two loans on the property: $600,000 and $75,000. With insurance and property taxes, a conservative estimate of her carrying costs is $5,500 a month.
Don’t have a clue what pr people make in the tech industry, but that’s a chunk of change for a place you no longer want.
You can rent a condo in Pac Heights for less than 1/2 that.
I tell clients to stay away from Portrero Hill south of 18th unless you get a steal.
I cannot imagine paying nearly one million dollars for an average home. Why not just move away? There are plenty of 100k plus jobs in Florida. Home prices are outrageously priced here too, but a million dollars will get you out of the projects.
Is it just me?
You might be out of the projects, but then you’d be stuck in Florida.
“I tell clients to stay away from Portrero Hill south of 18th unless you get a steal.”
I do agree that location matters ALOT in Potrero Hill. A couple blocks makes a HUGE difference. You’re off-base with using 18th as the cutoff though. Many of the nice streets and single family homes are between 18th and 20th. Moreover, 20th street has some charm of it’s own. I agree with your sentiment…I’d just replace 18th with 20th.
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