That small reduction on the studio (#2E) at 1234 Howard just went from $10,000 (2.3%) to $30,000 (7.0%). And forget the free appliances, pre-paid HOA dues and“free interior designer consultation,” we’re focused on the first evidence of an “official” price reduction at The Potrero.
After six months on the market, the list price for 451 Kansas #492 has been reduced by $15,000 (1.8%). And yes, it’s still advertising “2 years paid hoa + appliances!!!” The free designer consultation? Ask nicely and we bet they’ll throw that in as well.
∙ Listing: 1234 Howard #2E (0/1) – $399,000 [MLS]
∙ Listing: 451 Kansas #492 (2/2) – $829,880 [MLS]
∙ 1234 Howard: A Sales Update (And At Least One Small Reduction) [SocketSite]
∙ Those Amazing Automated Aluminum Louvers On 1234 Howard [SocketSite]
∙ The Potrero (451 Kansas): Now 60% “Sold” And Closing Contracts [SocketSite]
I’m not surprised about the studio. I am very surprised about the Potrero which has always been talked about as a value development in a good location.
What ever happened to rewarding early buyers by raising prices in later releases rather than lowering them? Maybe they could pull an Appple and issue credits at the Whole Foods to make the early buyers ‘whole’…
Reward? Developers will do whatever is in their best financial interest. If that means sticking up prices, they’ll stick up prices. If it means auctioning off units (as is happening in peripheral Bay Area/Central Valley) often causing comps to get crushed, that’s also what they’ll do.
Whatever happened? A declining market happened. The steadily increasing prices weren’t a reward, they were a reflection of the market at the time of each purchase. And so are price decreases over time.
And unlike Apple, who is counting on many repeat purchases from the same purchasers and therefore, has a financial interest in keeping those people happy, real estate is a whole different ball game. The developer really doesn’t give two hoots whether you are happy or sad because the developer is unlikely to ever see you again. You buy at the wrong time, you lose.
“Whatever happened? A declining market happened.”
Not so quick Tipster. Probably more a reflection of just how ‘out there’ the original prices were — even for new construction. The studio in particular was impossible at $429k with no closet and no W/D or connections. For today’s market, it should have never been built. Now more than ever it’s clear that developers better know their market, build quality, and price for value from the outset — or risk losing sales to those who do.
GBBT
I really really wanted to be, but I’m not impressed by the Potrero. Tight spaces, pretty generic and charmless, an electric range…? And it’s only 964 sq. ft. I don’t know…i’d rather save my pennies.
I visited 1234 Howard at a recent sunday open house. The Studio is frankly shocking in it’s austereness and lack of anything resembling character. It looks like a breakroom in a commercial office building. If Saitowitz is smart he will knock the wall out between the studio and one of the adjoining two bedrooms and make a larger, pricier joined unit.
There are other oddities at 1234 howard…like the cheap 1-inch metal 3 day blinds used to cover the floor to ceiling windows in the 1BD unit. Also the bedroom closet is finished with cheap home depot closet organizer shelves etc. These stick out like a sore thumb in the context of the ultra-cool architecture and otherwise beautiful interiors of the non-studio units.
I would consider a unit here, but not at these prices for this neighborhood. The sales rep at the open house told me that 9 units are left for sale, half the building. Given the current market I think Saitowitz will be forced to lower prices to move the remaining units.