A Quick Update On A Couple Of Comps In The MakingSeptember 14, 2007
It was a month ago that we pointed out 525 Gough Street #203 as a potential “apples to apples” two-year comp in the making in Hayes Valley. Having first sold for $849,000 in 2005, the condo was listed 50 days ago for $899,000. And a week ago the list price was reduced to $879,000. A sale at asking would now represent annual market appreciation of roughly 1.5% over the past two years.
And while we first pointed out potential price reductions (and incentives) over at 310 Townsend over four months ago (and provided additional evidence two months after that), it wasn’t until last week that four of the listings officially acknowledged “Price reduced” (with reductions ranging from $25,000 to $45,000).
And then there’s the newly (and quite nicely) renovated building at 1865 Clay in Pacific Heights (and more specifically unit number six). From the listing agent on August second:
Unit #6 was the first to be renovated, so it was listed first on MLS. However, once buyers walked through the building we allowed them to write an offer [on] any of the available flats, pending completion. They sold for: #1-$1,075,000, #2-$1,075,000, #3 $1,160,000, & #5 – $1,150,000 and have all closed. (#4 was pre-sold before we took the listing). To move the last unit, we reduced the price from 1,199,000 to $1,099,000, and then did a second, market-based reduction to its current price of 1,044,000.
The list price on 1865 Clay Street #6 was subsequently reduced another $45,000 (4.3%). It remains active and available for $999,000 (and not what you like to see as a neighbor).
∙ 310 Townsend: Available And Selling [SocketSite]
∙ 310 Townsend: Two New Listings, (At Least) One New Price [SocketSite]
∙ 310 Townsend: Additional Evidence Of Price Reductions [SocketSite]
∙ Another Two-Year Comp In The Making (525 Gough #203) [SocketSite]
∙ Listing: 525 Gough #203 (3/2) – $879,000 [MLS]
∙ Reductions On A Comp In The Making On Clay (1865 Clay Street) [SocketSite]
∙ Listing: 1865 Clay Street #6 (3/2) – $999,000 (TIC) [MLS]
Comments from Plugged-In Readers
But, but…Dataquick says everything is up 7.8% and the Realtors here said Dataquick *understates* the market.
The day people realize that the DQ Median only indicates what people are spending on housing and doesn’t tell you anything about what they are getting for their money will be a good day.
It would be very helpful if DQ provided $/sqrft or possibly broke out sales volume and medians by price ranges to better understand what is going on in the market.
of course this is highly unlikely, since an informed consumer is a very dangerous thing.
The clay st. property surprises me a litte but it does have leased parking across the street and is a $1MM TIC. The other properties are still overpriced. The Gough street units should never have sold for that much to begin with, they have had all sorts of construction problems with that building and I think some people are trying to get out as quickly as possible. With transactions costs factored in, that Gough st. unit owner is already facing a loss.
I think 2005 seems to a have represented a peak with numbers “apples” to “apples” comp should flat growth since then or any advances have since been given up and we are on the way down, question is how far…
“should never have sold for that much to begin with”
Is that the new argument? What happened to the market determines the price? Let’s hope a trusted realtor didn’t represent any of those buyers that paid too much to begin with.
As far as 1865 Clay it was a TIC when it was priced at $1.19M and the other TICs sold for up to $1.16M in the SAME building. The only difference is that it’s now priced at $999K and the other five are facing a comp that’s down by 20% since they purchased.
I live within spitting distance from the Clay property. I’m wondering if there’s a typo in the listing about leased parking, because an enormous garage was put into the building before it went on the market.
As I said weeks (maybe months) ago, this property should have been on the market from the get go at $999K and it would have sold months ago, probably over asking with multiple offers. Now, it’s been languishing for over 7 months with no bites. It’s a nice unit, but it has its weak points too, so it should be interesting to see how things go with this new reduction.
Saw this on a t-shirt:
“When buyers no longer fall for prices, prices must fall for buyers.”
Why spend $1mil for a TIC? Come on folks.
“Why spend $1mil for a TIC? Come on folks.”
That’s a good question for the four who spent $1.075M-$1.160M a few months ago to live in the units underneath this one that’s now listed at $999K. The market sets the price, right?
It would be almost worth the 979K just to get to see the looks on your downstairs neighbors faces every day when they see you and you remind them that they all paid hundreds of thousands of dollars more than you did!
Ha ha, just in case they forgot, I’d ask them how much they paid while I was bringing a load of friends and our pogo sticks up the stairs.
Then I’d tell them about the GREAT VACATION I took with all the money I saved, etc.
They’d probably smoke me out every night at dinner time.
I’d be worried to buy a tic for these prices too. I would especially worry about the downstairs negihbors who paid 1.1 Million, potentially defaulting on their loans. Maybe they bought using a 1 yr ARM. If so, holy smoke are they gonna get screwed. I think TIC prices should be the 1st to fall since they represent much more risk for the buyer. Maybe that’s what we are seeing here.
^ you might want to do some research before spouting off. the last I checked these are individually financed tics through the bank of marin and fixed for five years.
Ha ha, individually financed loans. What a laugh. Will the bank pay the HOA fees for the year it’s sitting on the market or will the HOA just have to defer maintenance and eat the later expense when little problems turn big and the HOA fees have to go up.
We’re seeing neighborhoods start to rot as individual homes get foreclosed. The homes in those neighborhoods had individual financing, it didn’t seem to save them. If the owners here overpaid, will that happen to a single building?
Finally, I’d bet dollars to doughnuts that the bank has enough protection in the contracts that the remaining homeowners are going to share the pain of any defaults. The banks just aren’t that stupid, and it’s become pretty clear from the last couple of months that people don’t carefully read those mortgage contracts at all.
“^ you might want to do some research before spouting off. the last I checked these are individually financed tics through the bank of marin and fixed for five years.”
yeah, i know the loans are individually financed, but this is one property. If one of the owneres gets in trouble with his mortgage and has to foreclose or sell at a cheaper price to save his ass, it hurts the value of the other units. My point is with the mortgag meltdown happening, i wouldn’t want to depend on 3 or 4 stangers to be able to make their paymetns. It’s hard enough taking care of yourself.
When this stuff starts happening mroe often, or units such as the top floor one going for 100K less than it’s downstairs neigbors, tghe TIC market begins to look like a set of dominoes.
and as an individual, you have no control
“If one of the owneres gets in trouble with his mortgage and has to foreclose or sell at a cheaper price to save his ass, it hurts the value of the other units.”
same story for any building or block not just tics.
“same story for any building or block not just tics”
It’s a lot easier to get out of an individually owned condo tahn a TIC. I don’t nderstand what your motivation is for trying to convince readers that TICs garner the same amount of risk as cindividually owned condos. They do not. The risk is clearly greater when you are dependent on pther financiers
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