As you might recall, last fall 2760 Sacramento #9 hit the market in Pacific Heights for $769,000, received multiple offers, and sold for $859,000 on 8/31/06. At the same time, 2760 Sacramento #11 hit the market for $795,000, was reduced to $755,000, received four offers, went into contract for $795,000, and then finally closed for $749,000 after the “winning” bidder backed out (and the multiple offers evaporated). And as we wrote in September:
Our take: competitive bidding still gets the best
of peopleresults, and views continue to command a premium. And at the very least, we’re still calling it troublesome for the buyers of unit #3 who paid $827,000 last November [11/05], don’t have parking, and are located two floors directly below #11.
And now 18 months after its last sale, unit #3 is back on the market with a list price of $849,000. A sale at this price would represent annual appreciation of a little under 2% over the past 18 months. We’ll keep you posted (and “plugged-in”).
∙ Yet Another Data Point At 2760 Sacramento [SocketSite]
∙ One Building, Same Floor (Plans), Two Very Different Prices [SocketSite]
∙ Listing: 2760 Sacramento #3 (1/1) – $849,000 [MLS]
Interesting that nobody from the Real Estate Industrial Complex has commented on this. I am now of a mindset that it is time to get out of the Bay Area, and this listing is another straw on the camel so to speak. $849,000 AND you have to go to the basement to use a laundry machine and of course NO parking. The last straw would be if the laundry machines require coins for usage.
I think the population decline of the Bay Area is not over as long as prices like this continue. Our firm has offices in Orange County, SF, Seattle and Chicago, and right now the only waiting lists for position vacancies are in Chicago and Seattle. People want to own, but do not want to be robbed and in Chicago this price would get you in the most prestigious building in the best location, view, 2bd, parking, doorman, etc. (OH, and your own washer and dryer).
Totally agreed – it’s reaching the point of absurdity, and I think the tipping point.
Interestingly enough, I have friends who have been super bullish on real estate during the past 5 years (and have coincidentally done very well financially). Even they are now considering selling and renting for a while. For those of us waiting the market out, every day seems to bring another welcome headline.
To anon – source please, for the supposed “population decline in the Bay Area” – and please, something from 2006 at the latest – dotcom bomb (and the very, very, very short-term accompanying population decrease) was years ago.
Here you go…
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/04/05/BAGGVP2QD31.DTL
Yes it has come back almost 2%, but as the article states, this is some of the slowest population growth of ANY major urban area. Also, note that over 50% of the new population in the Bay Area is from international immigration which is rather interesting. The population gowth of this state has and continues to be in Southern California.
So…you went from population decline to increase of 2% over six years. Hmmm…
Also, I should point out that the places in California showing the largest increases are ALL in the Central Valley, not Southern California as we normally think of it (LA/OC/San Diego).
Also, that is showing the increase for just the nine counties of the Bay Area. If you think that San Benito and Stanislaus counties are growing the speed that they are simply because of the bounty of economic activity in Tracy and Los Banos, and not because thousands of people are moving there, yet commuting to the Bay Area, well, wake up. Houses don’t cost the amount they do in Tracy because it’s a wonderful place to live – they cost that much because of Bay Area spillover. (You can certainly say the same of Riverside in Southern Cal in relation to LA)
ooops. I think the growth over the last 6 years is 0.5%. If you think that is a sign of a healthy Bay Area economy, so be it. The most interesting part of the article is who is moving in, and who is moving out. These numbers do in NO WAY justify the cost of housing in San Francisco or the Bay Area. I actually believe we are about to experience an over supply in the Bay Area, though not in the city except for high end Soma condos.
Yes, the increase is only .5%, not 2%, and that is the entire SF, Oakland, Fremont area. The truth of the matter is that almost the ENTIRE 42k that were lost were from SF proper, which dropped to a population as low as pre-dot com levels (that was in another Chron. article last year). I’m sure we all know people who moved to Fremont or down the peninsula in the last year. Oddly, I haven’t had a friend move to SF in over 5 years. And Brutus, the idea that people are moving all the way to Tracey and still commuting to the city? That’s nuts! Prices went up there because people took the profits from their SF homes, escaped the city, and could spend much more there, so developers charged more for their tract homes to take advantage of the huge profits they could get out of gullible San Franciscans. Lastly, almost half of new SF residents were from BIRTHS. And I don’t know a whole lot of 1 year olds who can buy over-priced real estate.
Thanks RG. I wish there could be a better way of trying to get people to understand, that to talk about the REAL situation regarding the economy of San Francisco does not mean that we don’t love it here, and do not think it is an amazing place. BUT, the fact is, there are real problems here and it is not just dirty streets and a huge homeless population. The overpriced cost of housing that in no way has anything to do with demand is driving business and population away. Brutus, do you REALLY think that someone like myself would rather spend $850,000 on a one bedroom where I have no parking and no washer and dryer on Sacramento Street, OR, do what my younger brother did. My brother decided not to return to the Bay Area after college and stayed in Chicago and bought a Victorian home near Peets Coffee and Northwestern University in Evanston (just north of Chicago). He is now a doctor and told me that he could not afford to live in San Francisco, which tells me we have a serious problem here.
OK people. Here’s the deal: SF is a part of the Bay Area. It is NOT a standalone city, hasn’t been in more than 50 years. It costs nearly as much to buy a home in San Jose as it does here. Take a look at commute patterns over the last decade – people are commuting from Tracy to the inner Bay Area (If you don’t believe me, then ask yourself why an Altamont Commuter Express train was started, and why it has done very well in terms of ridership) Also, ask yourself why there are billboards all over Silicon Valley advertising housing in Tracy and Los Banos if they aren’t being hawked to commuters.
You can’t start throwing out things like “the Bay Area economy is going down the tubes” when we show only .5% growth in population – yet there are huge population gains in commuter cities just outside of the Bay Area.
SF is a lifestyle city, much the same way Manhattan is. You think Manhattan is standalone or affordable? I personally know more people who live in the city and commute to the South Bay than people who live in and work in the city. And guess what? They do choose the higher cost of ownership here, because they like the LIFESTYLE. You can’t get that lifestlye in Santa Clara.
So, anon, someone like yourself probably won’t spend that much on a one bedroom apartment. So? Others have, obviously. It doesn’t sound like your priorities fit this city. Myself, I would pay double for a place here over those other places because I want a place with:
1. Good weather – I like being outdoors all the time
2. Walkable neighborhoods – I don’t want to be tethered to a car, in fact, I don’t really want one at all.
3. Good diversity – People, food, ideas
4. Good cultural institutions
If you can find me another place in the US that has these things, and costs less than here, please let me know.
And rg, I moved here three years ago. I have more than ten friends who have moved here in the past year. Perhaps you’re not a part of the demographics moving to the city, and that’s why you don’t know anyone who has moved here lately? My friends (and myself) are all recent grad school graduates with Tech or Finance jobs, that make pretty decent money and have no children. Some single, some couples.
One more thing – please remember that more than half of the people who live in SF rent. Many people that I know (myself included) own a place somewhere else and rent here. Here is what I do:
1. Pay about $3000 mortgage for my place in Seattle.
2. Rent the place out in Seattle for $2100
3. Rent a nice apartment here for $2000
So, my total housing cost each month is $2900. I live where I want to live, but I still was able to benefit from the housing runup the last few years. (And continue to, because houses in my Seattle neighborhood continue to cruise higher)
SF cycles through with recent grads from top colleges and grad schools constantly. People make good money and can afford high rents then can afford high mortgages. You either build your career or you HAVE to move to the East Bay. That is the cycle. This board seems to have a couple of people who await a collapse or know they should cycle out to Denver, Arizona or the East Bay. You can keep complaining, but Stanford and Cal keep producing imports of high earning people who are going to want to stay here and pay and will earn the money to stay here. If you don’t understand that you are going to live in a smaller place due to price here then you should move to your track home and stop complaining.
So do you think this condo is worth the money just to have the honor of living in San Francisco? Do you realize what your income would be for this unit? I only make $150,000 a year myself, and am a homeowner (bought latest home in 1998), but I assure you, my firm cannot get anyone to move here and we are not going to pay somebody $190,000 a year so they can afford a one bedroom without parking or a washer and dryer. And that person making $190,000 a year is looking at other cities besides this town, even though we all know “everyone wants to live here”.
Last I checked, you don’t HAVE to own a home. I would gladly take $150,000 a year and rent a place, rather than make $120,000 somewhere else just so that I could have the honor of owning a place. I’d probably spend less on rent than I would on a mortgage elsewhere, plus I’d have the additional income to save as well. I’ll take a huge nest egg over a flipping tract home in some boring city any day.
This particular property IMHO is just simply overpriced. Reckoning day will be when the actual ‘sold’ price prints. Nice units priced well seem to still sell fine. Then there are ones like these that do not.
This listing could be an interesting example of the actual health of the market if and when it sells. (I hope Socketsite puts this back up when that happens) There is no question that the high end properties are selling, but what about units such as this which are now called “affordable” by some city agents. As for Brutus, I am confused, you did not seem to read the article posted above at all for it shows that in fact, except for births, there has been no real population gain in the bay area for over seven years.
Regarding the comment that college grads come to the Bay Area and are given an average salary that would allow them to be able to live here, perhaps you should read this from the San Jose Mercury News. COLLEGE GRADS FLEEING BAY AREA
http://www.mercurynews.com/business/ci_5967711?nclick_check=1
Please stop the nonsense about this being compaining. This is actually a very serious problem for the Bay Area. As I have mentioned before in a previous post. My firm (we are so understaffed I am working this weekend) cannot attract experienced professionals to move to this area because of the high cost of housing. And NO, they should not have to rent some studio for 2100 a month and be satisfied that they live in the “Best Place on Earth”. READ the article.
Your theory that the “Bay Area hasn’t grown in seven years” is absurd. Again, you need to include Stanislaus, San Benito, and Santa Cruz counties if you’re that concerned about population growth. Also, if you take a really close look at the data – the Bay Area did have significant population decreases in 2001 and 2002. So, since that study is merely showing TOTAL gain for 2000-2006, you have to assume that there has been a significant amount of gain in the past few years to counter that loss and turn the decade positive. And lo and behold:
http://www.mercurynews.com/ci_5798587
As you told me, READ the article.
And to Morgan, yes this property is incredibly overpriced (IMO) and will probably not sell for this price. I just have a problem with this statement that because housing costs are higher here than almost all of the rest of the country that somehow that means our economy is in a tailspin and people are leaving in droves. There is no data to support either of those conclusions.
And anon, anybody who is renting a studio for $2100 a month here is a moron. You can still get very nice one bedrooms for that price in ANY neighborhood, and can get two bedrooms for that price in most neighborhoods. That’s why I rent – you can get much more bang for your buck right now renting and investing the rest of your money, rather than taking out a huge mortgage. If rent prices rise, that would no longer be the case.
One more thing anon – you keep trying to suggest that SF is a standalone city, rather than merely a part of the 7 million person Bay Area. Do you think that the job market in SF is detached from that of Silicon Valley? If you do, then yes, I would agree that SF is incredibly overpriced. However, I would be interested to know WHY you think that jobs and prices of housing in the rest of the Bay Area would not affect SF. Think of the City as more of a neighborhood within the Greater Bay Area.
I am not interested in what is happening in Santa Cruz, nor how many people are going to San Benito. I own in San Francisco and Marin, grew up here, have seen many changes, and what happens in Pacific Heights is NOT in any way changed by what a house in Capitola sells for. Yes, this city is now a lifestyle city, and no longer the capitol of the Bay Area which San Jose will assume over time, but if San Jose continues to grow, how could that be good for a condo on Sacramento Street 75 miles north. Nobody disputes that this is a large urban region, and I agree that now is not the time to purchase any more property, but if the South Bay is now where the jobs are, then why not invest down there instead of trying to prop up justifications for why a one bedroom condo should be worth 850,000?
That would be like saying that a house in the San Fernando Valley in Los Angeles should be expensive because 75 miles south a house on the beach in Laguna just sold for 17 million.
anon, if you want some anecdotal evidence – and if any realtors or others that know the people in the market want to pipe in, please:
In the last six months, I have known personally five different parties that have purchased properties in San Francisco. Descriptions:
1. Male/Female couple, late 20’s. Both Google employees, combined income $200,000 plus. Don’t plan on kids for five more years or so. Commute to the South Bay a few days a week, and are allowed to telecommute some days as well. Moved to the city for lifestyle. One car between the two of them, didn’t pay for a parking spot. Park on the street.
2. Male/Female couple, 60’s. Sold house in San Mateo for $900,000, paid cash for a condo in San Francisco. Wanted an urban lifestyle to semi-retire, no kids at home.
3. Male gay couple, mid-30’s. Both consultants, one in the wedding industry, one tech. Combined income $200,000 plus. Sold house in Redwood City after gaining $300,000 in equity over the last five years.
4. Male/Female couple, early-30’s. Both tech industry mid-levels. Combined income $200,000 plus. First house for both, but each put more than $150,000 down.
5. Widowed Female, 60’s. Husband passed away a few years ago, sold house in Palo Alto for $1 million plus. Bought condo cash.
Those are the five that I know. Perhaps many others are different, but DINKs seem to be the biggest reason for high prices being paid (Double income, no kids). Also could be a reason that population increases will not be incredible – two people replacing a family – means fewer people, but not a “dying city” or “horrible economy”.
And seriously, if you can’t see the correlation between prices being high here and them being high in Capitola, get your head examined. Guess where the semi-retired couple also considered buying? Santa Cruz County.
“Nobody disputes that this is a large urban region, and I agree that now is not the time to purchase any more property, but if the South Bay is now where the jobs are, then why not invest down there instead of trying to prop up justifications for why a one bedroom condo should be worth 850,000?”
Who wants to live in Santa Clara?
You have convinced me. I guess 850,000 for a one bedroom without parking and a shared washing machine in the basement is a bargain. I am sure with all of your “evidence” this condo should be sold by tonight!
I wasn’t ever saying this place was priced well, I don’t think it is. I was disputing your statement that somehow because SF wasn’t “growing” that prices should be crashing and the economy was close to ruins. I was also questioning your statement that nobody in their right mind would move here if they could get a house somewhere else for less. There are a lot of people who will pay MORE for LESS of a house if the LOCATION is prime. There are only a couple places in the US to experience a nice urban lifestyle.
Our house on the east coast is now under contract, but we probably will not buy property in the SF market. We’ve done well in the real estate market and will have 1.9 million in our pocket when we close at the end of June.
For us it’s not just the high prices, it’s the property taxes and crazy regulations (building permits, ellis, renters rights, TIC lottery). It seems like the city of SF has more right over property than the owner.
My husband’s company is having a difficult time attracting employees to move here due to the high real estate prices and is now looking to establish offices in Denver and on the east coast. If they do, we are hoping he will be able to relocate.
If not we will rent in SF and invest in real estate somewhere else… probably a farm in New England and a ski house in Colorado.
Polly, that’s exactly the thing to do right now – you can get a lot more bang for your buck renting here and investing money elsewhere. That being said, a lot of the reason for that is the crazy regs – so you can benefit from the regs as well 🙂
Polly shows what I have been trying to say, though I know whatever I write will be disputed by one poster. When some of us are being told we are a “Bitter renter” and “Not in the Game” they really do not know who they are talking about. I own and bought before the great real estate run-up here in the Bay Area. I own rental units that were given to me by my parents, and own a home in Marin, BUT, even I am thinking of cashing out and leaving the Bay Area. Except for New York, London or Hong Kong, I could go anywhere else in the world and live 4 times better than here. I just think the “unique” special quality of the Bay Area can only command so much of a price before many people look elsewhere.
Anywhere else? You go ahead and try to buy a nice place for less than here in Paris, Tokyo, Seoul, or Moscow. Go ahead. Just try. And I’ll be looking forward to your response stating that we should be buying properties in San Jose (???) because of the growth in jobs in the South Bay. Because we all know that everyone who works in the South Bay certainly would not want to live in San Francisco.
“Anywhere else? You go ahead and try to buy a nice place for less than here in Paris, Tokyo, Seoul, or Moscow”
Hmmmmmmm. Paris, Tokyo, Moscow, Seoul. Let’s throw in Rome, Madrid, Venice, London, New York,……
Something has to be said about the self esteem of the residents of plywood capital San Francisco.
Actually I was thinking more along the lines of a cottage in Laguna Beach ($850,000) that is in a gated cove called Lagunita (view, not ocean front) and a mid century pad in Palm Desert with pool that is about 400,000. Those two places would equal what I could get for my house in Marin alone. Throw in the apts. and I am ready to retire.
Who wants to live in a gated community or a 50’s tract home? I’d pay $2 million for a place where I can walk out my front door to a restaurant or two long before I’d pay half that for some place walled off from the outside world.
Then you have never been to Laguna. I walk there all the time, and I like the surf as well. Life offers many choices besides feeling superior that can you can walk to a restaurant. I walked from Lagunita to dinner at The Montage Resort (next door) and had a meal as good anything anywhere. By the way, Lagunita is not a tract or from the 50’s. Look it up. Warren Buffet had a home there, and Burkle’s palace was built in 1912 and is listed for 35 million on John McMonigle’s real estate website. I have a friend with a cottage there and there is a mix of residents from school teachers to CEO’s.
50’s tract home was in regards to Palm Desert, not Lagunita.