A splendid 5,354 square foot fixer on a great block in Presidio Heights sold within a week of listing. In fact, a half a dozen bidders dueled it out pushing the final price for 3840 Clay to $4M – 33% over the $3M asking.
Again, it’s a fixer and back in 1999 the architect opened up most of the walls and ceilings and put them back in a very temporary fashion – think no taping, plastering or painting anywhere. Indeed, there isn’t even a kitchen, the back fence is propped up by a drainpipe and the garden currently sports a derelict car collection.
The prior owners, who never lived in the house, had approved plans for a swimming pool in the basement and parking for more than six cars – in addition to any that could be squeezed onto the grass…
*Editor’s Note: This reader report is brought to you by the “plugged-in” Seb (who was nearly bidder number seven).
Thanks for the update. Under a week for a fixer in that price range? Amazing. Anybody actually get to see this house, or did it sell too quick? A fixer of this magnitude and size requires a huge amount of money and time. I assume the new owner has another fabulous place somewhere, and will drop some big bucks to remodel over the course of the year, permits approving of course? The tough thing about remodelling is that it requires cold hard cash. I guess once could take a HELOC out of one’s existing property if s/he had one, but usually it’s simply cash. Imagine spending another $500k-$1million+ on this place. Unbelievable.
This is of course a fantastic neighborhood and this property goes to show that there is a shortage of prime property, otherwise, how could there be a 12 man bidding war? Furthermore, only one person one the war. The other 11 bidders are going to continue looking for a $3-$4 million home, and there frankly isn’t 11 homes in that prices range in this area. Not even close.
Makes the $4million sale of 2707 Laguna St. (500K over asking with 5 bidders) look ‘ok’, given it was in pristine condition. Funny how things work, and it’s just been a month or two since 2707 Laguna St. was sold! I wonder how long it’ll take for another sale to prove that 3321 Octavia selling for $3.7 million sounds ‘ok’, b/c frankly, $3.7 million sounds ridiculous. I don’t care of 3321 Octavia was 3,500-4,000/sqft, there should be economies of scale when spending this much for a house like this featured 3840 Clay unit!
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Prime
I agree with Prime’s comment of “unbelievable”. 33% over asking, $800 per square foot for a house that size (and it’s unfinished)and a property tax bill of about $200 per day seem pretty unbelievable to me. I guess the ability to squeeze six cars onto the property and the potential for that indoor pool (no sunscreen needed) caused that bidding war. I guess that it is the supply and demand curves that set the price – but it’s hard to see any evidence of a market correction with this kind of bidding.
Oh, this was easy. By the time you finish the attic and the basement, you have about a 9,000 square foot home in a great neighborhood. You can support a large home like that in this neighborhood. Total costs of the remodel: about 1.5M and you can easily sell it for 800 psf, giving you an $7.2M home for 4+1.5M and about a year and a half’s work. Even if prices drop 20%, you sell it for 5.8M and you are into it for 5.5M, so you’ve made over a quarter million in a worst case scenario.
And yes, Prime, there are 6 other people looking to make a cool couple of mil. They aren’t going to buy ANY home for 3-4M. Just one that yields a decent return like this one.
The market isn’t going mad, as much as some people would like to think it is.
Homes like this have been selling to young families with help from their PU Club parents who want the grandkids nearby for years. Not many kids have a Mom & Dad who gives them $6mm cash so talking about these sales in relation to the overall real estate market does not make much sense.
I agree, many doomsayers only talk about median income vs. median price as a reason for why prices MUST come down.
Little do people know that even 30 year olds are getting huge gifts from wealthy parents to buy their properties. There’s so much Bank of Mom & Dad activity people are not aware of.
It’s so good to hear than many believe this house is good value at $4 million. It’s great for homeowners in the area. It’s also great that these new buyers can make a cool $2million after they sell it in a couple years. This truly is a great country, that rewards people who have initiative and take risks. But, there will be people two years from now saying it’s unethical for them to make money, mark my words 🙂
Prime
“It’s so good to hear than many believe this house is good value at $4 million. It’s great for homeowners in the area.”
Hey prime, I think it’s worth at least $8 Million. And I have a few friends who think it will fetch at least $10 Million. Great news for your neighborhood. Keep entertaining us!
Informative comments – I can better understand the calculus of the buyer. And I agree that paying this much – plus investing in major renovations does constitute a risk that should (or may) be rewarded. However, I thought the house from the street looked a little dumpy and the it didn’t seem that there was much of a view. I understand that this is a desirable neighborhood – but $4M for this? And $5-8M once it’s finished! At least this segment of the market still seems pretty crazy to me.
It really is a great time to be a homeowner. This segment is very hot, the 2-3 million SFH is very hot, and now the 700-900K condo segment is very hot.
Look at 3117 Buchanan St. for 799K, and 1540 Lombard St. also for 799K. The second got snapped up within 2 weeks, and the first one is accepting offers this Tues. I bet the first one goes for 850K at least.
I’m pretty pumped. Hope everyone has a great weekend!
“It’s also great that these new buyers can make a cool $2million after they sell it in a couple years. This truly is a great country, that rewards people who have initiative and take risks.”
It epitomizes what is wrong with this place: no organic growth. Only rampant speculation based on debt. Stay tuned for the inevitable.
UPDATE: Having returned to the market listed for $9.995 million last month, the asking price for the completely remodeled and fully fixed home at 3840 Clay Street has just been reduced by a million.
UPDATE: The sale of 3840 Clay Street has closed escrow with a contract price of $8.855 million ($1,525 per square foot), which is $1.14 million under its original list price but officially “within 2 percent of asking” according to all industry stats following its million dollar price cut last month.