Going Once, Going Twice…Going Five Times At Shore|Line: 41 FederalJanuary 4, 2008
We didn’t bother to mention it when the list price on “penthouse” unit #42 at Shore|Line (41 Federal) was dropped from $830,000 to $813,400 this past November. But along with its fifth price reduction yesterday (from $813,400 to $797,150), comes another mention today.
To recap, over the course of the past ten months the list price for this modern condo “in the heart of South Beach” has dropped from $939,000 to $869,000 to $850,000 to $830,000 to $813,400 to $797,150. And apparently it ended up being owned by the bank (REO) along the way.
And once again, while asking 15.1% less than ten months ago might simply speak to a change in expectations, it’s the fact that it’s now listed at $52,850 (6.2%) under what was last being asked by the developer fourteen (14) months ago that just might speak to a change in the market.
∙ Listing: 41 Federal #42 (1/1.5) – $797,150 [MLS]
∙ And Now We’re
Back Below Where We Started [SocketSite]
∙ And Now We’re Back Where We Started At (41 Federal) [SocketSite]
∙ Seller Motivated Drastic Price Reduction Penthouse Unit [SocketSite]
∙ Savings At Shoreline (41 Federal) [SocketSite]
Comments from Plugged-In Readers
Wow, those photos are terrible. It’s almost 1000 sq feet, yet it looks like a cave with a fancy kitchen.
Go look at it. The pictures don’t do it justice. It’s quite an interesting unit and I’m not an agent.
aren’t there a dozen or so 1 bedroom units for sale in the beacon under 600k? this might have been a part of the problem. not to mention, why would someone buy a 1 bedroom in the first place. aren’t these young and single folks that have no reason to stay in a neighborhood other than their job? i was spending my money on a lot more important things than a mortgage when i was single.
the photos do make it look like it is 500 sq ft instead of 900.
i think it is still too expensive.
you can rent 900 sq ft. 1bdroom condos in South Beach for $2300. the cost of renting a similar place is still less than half the mortgage and you have the free capital to invest.
There are certainly many better options within a few block radius (The Brannan, Watermark, Oriental Warehouse, etc). But the unit is on a quiet street in a great ‘hood.
as always, part of the problem is the pictures.
Hint: when you’re selling real estate, put up good pics.
if the pics look awful, prospective buyers aren’t going to bother getting in their car or getting on muni to go and see your place!
staging staging staging! This place would look better if they went in at night, turned the lights on, and had some good staging. As it is, it looks like a dark cave. Captain CAAAAAVVVVVEEEEMAAAANNNNN!
that said, there are obviously other issues with this property as well including the location. (I might be alone here, but I hate having to walk under the highway- it makes me feel “disconnected” from the rest of the city)
The fat & easy years have left a surprising (to me, at least) proportion of agents with bad sales skills. Worst here I think are the obvious telephoto pics of the view. The message conveyed is “there really isn’t much of a view, so we tried to fake it.”
I agree that, with each block you go inland from the Embarcadero, the walk under the bridge feels creepy after dark. There’s talk of adding parklike space there, which will make it better or worse, depending on daytime uses and nighttime policing. Anyone hoping to profit (I use the term loosely) from improvements to the neighborhood should be thinking in the long term.
$800k for a 920 sf 1BR is still pretty healthy.
“$800k for a 920 sf 1BR is still pretty healthy.”
The market could fall 30% and would still seem “pretty healthy” on a $/sf basis, but I’m not sure that would be of much comfort to those who were sold on their “investment” appreciating rather than depreciating or in this case to the person who paid $850K.
Pictures sure are important. I went looking with a friend of mine late 2006 for an apartment for him. He decided to look at a TIC unit in a new building, just because it was new. I tried to talk him out of it as a waste of time since the place was so ugly based on the pics. The place was incredible, we ended up buying the building on the spot and at a good deal (around $585 psf in Corona Heights, incredible views and new construction) because they were not getting much traffic.
I looked at this place months ago. It is on one of the few bits of bedrock in that part of town, per geological maps.
Unforunately, the space is dominated by the huge industrial kitchen that everyone just has to have these days and the equally ridiculous spa bathroom. A larger living room or bedroom and more closet space would have made this place much more attractive.
The views are what are called “peek-a-boo” by real estate agents. That’s great for lingerie, but not real estate.
What killed it for me was leaning off of the balcony, looking to the side, and seeing the killer view that the unit right next door has. I just couldn’t live with that.
This is just another (albeit almost extreme)example of how far above market new construction is generally priced. Even with all these reductions, it’s still likely overpriced relative to the rest of the resale market in the neighborhood. The closest near comps would be the 1/1.5 plans at The Brannan and I’m betting they’d be priced considerably less (though believe they are less sq.ft.) for comparable floor/view.
But I actually appreciate almost everything about this unit from what I see and read posted here. It just needs to find the right buyer(s) — would be perfect for a couple who don’t really need a 2nd bedroom but perhaps do some entertaining (and would therefore appreciate the added functionality of the extra half-bath). I really think we need lots more like this unit in our market but must be very much in the minority . . . .
800K for a 1 BR with obstructed views seems quite expensive to probably just about everyone. It does to me.
Sure fluj. Anything that loses money was overpriced. That is the point of a bubble and its bursting. The previous owner didn’t think it was overpriced getting a loan he/she couldn’t afford. In fact, most didn’t think so overbidding at anything is sight over the past few years and that fact will be painfully obvious going forward.
Sure. And after this the buyer loses the property, and the bank owns it, pricing it to sell like a bank is wont to do, maybe that is a market indicator.
And maybe when a new similar property several blocks away sells for over asking Socketsite will trumpet this sale quite loudly.
It is obvious just from looking at the main page that over asking doesn’t mean the owner didn’t lose money.
Huh? I said “new.”
This whole thread is talking about “REO as market indicator.”
What a crock. You guys all love to seize on stuff like this and prop it up as if a single property has some magical significance. Yet you ignore the dozens of new one bedrooms that have sold for big bucks, to folks who can afford them, within a few blocks of this anecdote.
“Yet you ignore the dozens of new one bedrooms that have sold for big bucks, to folks who can afford them, within a few blocks of this anecdote.”
What proof do you have that they can afford them? For too many years all one had to do was claim an income.
REOs are the worse market indicators. Houses don’t foreclose in good markets. The rate of foreclosures has been making records.
“Yet you ignore the dozens of new one bedrooms that have sold for big bucks, to folks who can afford them, within a few blocks of this anecdote.”
Get a clue fluj. The fact that condos are selling for “big bucks” doesn’t mean that prices aren’t falling. Google sold for “big bucks” today and closed at $657/share. Great if you bought at $70 but not so great if you bought at $750.
What evidence do you have that people are unable to pay? I receive NOD and NOT emails from three different title companies, weekly. I have been for years. There has not been an appreciable spike for San Francisco.
What evidence do you have that prices are falling? In this area, or any beside 10 and parts of 3? You guys are annoying. You know why? You assume too much. You assume post popular media consumption. Try finding a 2 br for a client in South Beach sometime. Try going out and actually seeing what’s happening. Try lowballing a property that is remotely desirable. You’ll see.
Akrosdobay, this whole thread is about REO as indicator. Is it not? Socketsite said it “just might speak” to that. Baloney. It is an REO. REO as trend? LOL.
Here’s an article for you. It speaks to what has actually happened in the marketplace: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2008/01/04/carollloyd.DTL
One cannot posit the bad decisions of flipper/speculators as positive indicators of general market trends.
“It is an REO. REO as trend? LOL.”
Does fluj understand that the only reason that this place is now bank owned is because it failed to sell for what it was purchased for in 2006?
If the market is up from 2006 shouldn’t the person who was trying to sell this place before it became an REO been able to sell it for at least the same amount as it was purchased a year earlier?
geta: The answer to your (rhetorical) question is “No.” That the market is up does not dictate the results of a particular sale of a particular property. Local factors, whatever they may be, dominate general ones.
You know what, Satchel, prices haven’t fallen in Miraloma Park in the last year or year and a half. They’ve risen. And the SFR volume ’06 to ’07 is down by a mere two — 76 to 74.
For most of 4, since you so often wish to speak about it, it seems like a great place to raise a family. Big yards, neighborhood atmosphere, large homes. But I never thought it was a good place to develop property. Relative to what it costs to get in, how large the properties are and how much they therefore cost to rehabilitate, versus upside? There were relatively few $2M sales in 4. I show 30 for ’06 and ’07 combined.
No, for value I would have looked across Portola next to West Portal, at Inner Parkside. Two or three years ago one could have picked up a nice size run down house with a giant L shaped garage, a big backyard, and ocean views, for relatively cheap. Developed properly, that sort of house is now worth 1.2 -1.4M or so.
And on Area 3, Pine Lake Park, Merced Manor, and Lakeside have done nothing but climb in the last few years. Merced Manor properties will sell in two weeks unless they are overpriced by 150K. Then they’ll still only take a month or two. You know when the sky is falling and all.
Yeah, and to continue what sanfrantim said, you guys need to look at what’s happening specific to condos. There are so many developments some of the four to five year old properties are analogous to a four year old Ford Focus. That is not to say that there aren’t some Mustangs in the bunch, because there are. Those are the “special” properties. But by and large I’m sure this property was hurt by the fact that so many better 1 BR 1.5 Bas were out there by the time they tried to sell.
That’s why there are relatively good deals to be had on third generation lofts. Something sexier is out there, elsewhere. This is specific to condos SOMA, South Beach, and Central Waterfront. Nowhere else do we see this level of new construction in such concentration. Why you people fail to see that, yet simultaneously view the city as “losing population” is something I can’t grasp.
The only reason the property is now owned by a bank is not because it failed to sell for 2006 prices. No, the only reason the property is now owned by a bank is because the buyer can no longer afford it. In my opinion, if you are going to buy a SOMA condo and you don’t have money to burn, you had better do your homework. Chances are something better might come along that renders your property less valuable. But don’t buy something you can’t afford. Insert “realtor fault” indignations here.
bdellgawg said it best. the place next door has the view and this one doesn’t. what did that place sell for? go offer the bank 30% less based on this simple fact.
Typical fluj, blame a stupid buyer…they overpaid, they couldn’t afford it, etc. It’s obviously not the market and the fact that it was on the market for months without selling before it became bank owned is meaningless.
There have been multiple properties that have sold for a loss featured on SS alone. Last week alone on SS there were two REO condos and one 500K loss but fluj will always say some one overpaid or couldn’t afford it.
That is the point. People over pay in a bubble, stupid lending standards give people guns to shoot themselves with. There is more than ample data to show that the infallible SF market is cracking. Properties are being pulled from the market unsold ( I have friends that have done this). The entire economy is paying the price for the stupidity over the last decade but SF is from a parallel universe where nothing can affect it according to fluj. Get a clue indeed.
In fact, I said this isn’t typical. There aren’t many more foreclosures and NOD’s than any other time in the past few years. I said that. No, this is atypical.
What’s actually typical is this site seizing on one guy losing his property as market trend. Coupled with the fact that it has obstructed views and there are newer, better properties that have hit the market — that was my point. Not, “oh gee. one stupid guy.” Knock it off. And while you’re at it, show me how South Beach has gotten cheaper. Please. Any of you. Show me how South Beach has gotten cheaper. Otherwise, stop it.
Why buy anything new and sell it for a year later expecting not to take a loss? Think about that. I have never once talked about appreciation on here and I never will.
Stop acting like you are seasoned veterans, like you know me, my thought processes, anything. I fully expect the market to take a 3 to 4% hit. You guys are almost all armchair economists and R.E. novices. Most of you aren’t even dabblers.
“Last week alone on SS there were two REO condos and one 500K loss but fluj will always say some one overpaid or couldn’t afford it.”
Fluj is correct.
He is only wrong when he assumes that these examples are the only ones in the city that overpaid or bought something they couldn’t afford and that everyone else is fine.
When the option arm / Alt-A reset wave hits the tide will go out and we will see who has been swimming naked.
(Still waiting to see what happens with the ORH closing. Prediction: 50% cancellation rate with prices lowered 10-20% in order to sell out the building.)
“Last week alone on SS there were two REO condos and one 500K loss”
(-)anecdote + (-)anecdote + (-)anecdote = trend
(+)anecdote + (+)anecdote + (+)anecdote = three anecdotes
Of course people overpaid or couldn’t afford it that is the nature of a bubble and its bursting. Fluj doesn’t seem to grasp that fact and always says they overpaid but the market is healthy.
You and I are saying the same thing
You really expect to be taken seriously hiding behind an alias. It doesn’t take a RE veteran to see what has been going down. RE veterans are the worst because they are biased and can’t see the forest for the trees. If you are one then step back and see the big picture. I seriously doubt you have been in the RE business that long.
I don’t understand how so many of you can understand the “nature” of this “bubble” but cannot provide any evidence of change. For every anecdote of less I can provide an anecdote of more. In nearly every neighborhood volume is down but average sales price and median is up. That is neighborhood by neighborhood, OK? Not city wide.
1. Older more mundane condos are generally now less expensive.
2. Areas 10, and parts of 3, where many actually did buy with dodgy loans and not enough capital to bail themselves out, have been hit.
@ akrosdobay. I would ask you to stop seeing the big picture for a second. Look at what is happening in Seattle, SF, NY, and other areas. Much of the country has taken hits easily explainable through your macro prism. Some areas have not. The end.
“For every anecdote of less I can provide an anecdote of more.”
Then do it and save us the lame anecdotes of places simply selling for over asking.
“You really expect to be taken seriously hiding behind an alias.”
Didn’t fluj get outed a couple of months ago? Anybody remember the post?
“I would ask you to stop seeing the big picture for a second. Look at what is happening in Seattle, SF, NY, and other areas. Much of the country has taken hits easily explainable through your macro prism. Some areas have not. The end.”
This clearly shows you you lack of understanding of how RE markets and trends work. Unfortunately like religious fundamentalists you won’t believe data if it were presented to you.
The first step in prices going down is sales slowing. This is clearly happening in SF and Seattle. Sales have declines year over year with this year inventory closing up over last year. Prices lag sales data by 6-9 months usually.
There is a conflict of interest with you and RE so you will not likely see what is happening until it is to late for you. Cheers.
settle down guys. fluj is a realtor in the city. i don’t know what akrosdabay does for a living but he obviously does not live, and probably never has or will own in the city. lets keep it civil. one of you is spending your full time job trying to find places to buy and sell for clients. one of you is acting like you know it all.
@ james – well said. akrosdabay, everyone knows that Fluj is an agent, and nobody has a problem with it. He is out there in the trenches everyday and of course has a different viewpoint on the market. Contrary to popular media belief and speculation, there are still people out there buying and selling, properties still getting multiple offers and selling for over asking price. Not all of us buy into the doom and gloom, sky is falling attitude that others are. Just accept that fact and move on.
I don’t need a buyer’s, seller’s, or level market to make a living. I need people who want to buy or sell property to hire me. There is no conflict of interest. What am I to you, a billboard for a bull market? Clearly you don’t read what I have to say without bias.
“THe first step is …” STOP RIGHT THERE, ok? Japan showed you that? Dot Com? Tulips? Please. Cut the bullshit. Or at the very least express your opinion without condescencion.
Further, according to whom is a slowing an indicator of a bubble collapse?
Perhaps a slowing of sales is an incicator of a return toward a balanced market or a small change. And again, YoY, in every neighborhood there is no sign of drastic change.
The simple fact is, nobody knows. You guys don’t know. Stop acting like you do. What I know is what I’ve said above. Prices are not down in most areas. In fact, they are up. That alone can cause a slowdown theoretically.
Are you saying that a person whose income depends on RE prices and sales not going down is the most objective? 😉
One would have to have blinders on to think SF RE will weather the impending financial storm when the last down turn saw a 14% price drop in SF. This one will make that bust look like a walk in the park.
“THe first step is …” STOP RIGHT THERE, ok? Japan showed you that? Dot Com? Tulips? Please. Cut the bullshit. Or at the very least express your opinion without condescencion.”
How about you cut the bullshit? The only person that took a condescending tone here is you. What with the “you are not RE veterans” bullshit and all.
First, you don’t know what you’re talking about regarding realtors. I have a lot of clients who are currently priced out and hoping for a sea change. Heck, how many people do you yourself know like that? I’ve said that before on here. And what of the people who need to sell? They hire realtors too.
Second, you and several others on here are predicting imminent economic collapse. Most professional financial analysts would disagree.
Third, I’m realistic. If I see cracks, I will concede it. I don’t see what’s happening in areas 10 or parts of 3 spreading.
Fourth, I’d tell everybody who I was if there weren’t so many mean spirited creeps on here.
not at all akrosdabay. i’m just saying he has way more credibility than a guy with an ebonics friendly moniker on a blog about san francisco real estate that doesn’t even live here.
Fluj might be an agent and in the trenches everyday, I could care less. You may not buy into the serious turmoil in the money markets, banking and mortgage industry that is prerogative.
People do stupid things everyday that doesn’t mean anything. The property being discussed here is a prime example of that stupidity. Just like you people are banking on the fact that SF is immune to the “media speculation”. People are still out there overbidding is a weak argument at best.
Bernanke stated in may that the housing problems wouldn’t spill into the broader economy and now the Fed is scrambling around and pumping billions into the markets to keep things from collapsing. What you call “media speculation” is really happening? Whether you want to acknowledge it or not and will continue to happen.
I accept the fact that not everyone believes in doom and gloom. But when really data is blithely dismissed as an outlier I’d rather express my opinion.
Fluj can simply chose to ignore my opinions and go on with his job.
What’s up with all of this picking on fluj and other RE insiders ? I think we’re hearing an honest assessment of is happening on the street right now.
Fluj’s statements don’t even conflict with the bears that much.
Bears : “there’s a trainload of misery with broken brakes rolling down the tracks and gaining speed as it heads towards SF. Things are going to get gnarly in the future.”
RE insiders : “right now things are quite rosy. Business as usual.”
Get it ? The bears talk about what is coming in the future. Fluj reports what is happening in the present. Those statements should be able to sit in the same room without getting into a brawl. As akrosdabay and others have noted, RE downturns take a while to work out.
As far as whether there are as many (+) anecdotes as (-) anecdotes, perhaps those who feel that SocketSite is being overly pessimistic should post their (+) anecdotes that the SS editors have overlooked. For example in this case find a southbeach condo selling for 6% higher than a year ago. Finding two or more positive examples like that could make a strong case that there is not a downturn in southbeach.
Dude, all of you people who look down at individuals in the marketplace, often literally laughing at them, right now are the most condescending of posters. You have internalized sentiment without data. YOu continually espouse a position that tacitly embraces economic collapse. You continually refer to “all asset bubbles” and relate disparate historic episodes to houses that people want to live in. All this in a city where we are two years into thriving when much of the rest of the country has gotten hosed.
And who is condescending exactly? The guy who gets ticked off because he is treated with disdain for having a professional opinion?
Or the individuals who take arch — and currently unsubstantiated — positions to begin with?
“Second, you and several others on here are predicting imminent economic collapse. Most professional financial analysts would disagree.”
Really! That’s news to me. First I never said economic collapse. I only said the housing bubble is going to burst horribly. The only people that seem to think housing will see an uptick anytime soon are the NAR and people deeply entrenched in RE. Care to post articles of these eminent financial analysts that predict housing has bottomed? Or that wall street and banks have fully accounted for all the bad loans out there?
“Third, I’m realistic. If I see cracks, I will concede it. I don’t see what’s happening in areas 10 or parts of 3 spreading.”
Did you foresee what is happening in 10 and 3 in 2004 or 2005?
So you think I am a black man from Oakland? Why because of my chosen handle?
I think that says a lot more about you than me.
Yeah. I did. But it depends upon what people want to do. I never advised anybody to buy a flip out in Bayview. I advised one group in particular against it. I routinely passed on parts of 3 in particular myself. I do think Bayview is probably a good longterm hold, because if the city had its drothers progress would be headed southward. But that is 10 years out.
And again, Merced Manor, Pinelake Park, and Lakeside are all up YoY. It’s areas where there is significant criminal activity and problematic infrastructure.
I have nothing against realtors. Some of my closest friends are real estate agents. I do have a problem with you dismissing something that doesn’t fit with your viewpoint as blithely as you do with the same excuse every single time. You seem to have a penchant for overstating the obvious. A house is sold for a loss you are quick to reply ” I think it was overpriced when the seller bought it”. An REO, “the owner couldn’t afford it”. Seriously.. what new perspective are you bringing to the table.?
well said Milkshake. Thank you.
I bring nothing to this table. Really?
If you look my (way too many, apologies) points on here you’ll see that I didn’t just blithely disregard the anecdotes you refer to. I explained what I thought happened. And if you’re talking about the Masonic bloodbath then yeah, they flat out overpaid. A record price and no views? come on now. Everybody agrees that they overpaid.
It isn’t always that people overpay. But here’s something. I don’t believe in appreciation. If it happens, then great. Never, ever bank on it.
You want evidence of the same condo selling for more than it did a year or two earlier?
I’ll try to find that.
But it goes against my “Bloom is off the rose” theory as how condos work. New is new. Remodels are remodels. Old is not new.
akrosdabay, i said no such thing. i merely compared your alias to fluj, a self professed realtor working in this market you continue to espose expertise upon.
i think the reality is that you are one of those ridiculous white boys from the suburbs that always wished he was black and got dreadlocks and dressed like a gangsta. that is much worse.
“i think the reality is that you are one of those ridiculous white boys from the suburbs that always wished he was black and got dreadlocks and dressed like a gangsta. that is much worse.”
Wrong again! What is worse is your bigoted attitude towards me without even knowing me based on a alias on a website?
All you have offered so far is nonsensical misinformed assumptions. From your alias I conclude that your are white supremacist bigot that overpaid for real estate in SF and now is hoping things workout. How do you like them apples?
“It isn’t always that people overpay. But here’s something. I don’t believe in appreciation. If it happens, then great. Never, ever bank on it.”
How then do you explain the ludicrous valuations of properties in SF over the past 5-7 years? Please don’t tell me its the remodels!
Fluj – in retrospect I don’t think that there is any definitive comparison that can be done with this particular property since it hasn’t even sold yet (though it seems to more and more likely that it will sell for less than a year before). So please don’t put yourself through the exercise on my account.
The best apples to apples to apples comparison scenario would be :
property X sold in 2006 and 2008 with depreciation -8%
countered with :
oh yeah, comparable property Y also sold in 2006 and 2008 with appreciation +8% (or greater)
I’m not totally sure I understand your “bloom is off of the rose” theory. Are you saying that buying a new condo depreciates instantly after COE ? Sort of like the old adage that your brand new car drops in value by thousands of dollars when you drive it off of the sales lot ?
“But it goes against my “Bloom is off the rose” theory as how condos work. New is new. Remodels are remodels. Old is not new.”
That might be the most ridiculous statement in this thread and that’s saying a lot. Are you saying that it’s not going to be easy to find examples of a condo selling for more than the previous year because they’re actually depreciating assets but yet the market in South Beach is up because more expensive places in new buildings are selling?
I am saying that, yes. Well sort of. In my opinion there is a saturation effect happening with condos in a few areas of the city. More and more condos keep getting built within close proximity of other condo developments. The newer developments make the less than stellar condos in other existing buildings even less valuable. Meanwhile, the new developments have a better chance of selling — even if they aren’t that great — at or close to asking merely because they are indeed new. You really find that ridiculous?
“You really find that ridiculous?”
Are you kidding? Yes, that’s ridiculous. Not the concept with which I’d actually agree but rather that you’d interpret this as a sign of an appreciating market.
Do you even realize that you just demonstrated how values can be falling despite a rising median sales price?
Spmebody please help. I’m done after this.
I never said “the market” is appreciating. I said REPEATEDLY that it has been volume down, median up, nearly everywhere. I questioned repeatedly how what we have can be viewed as a sign of apocalyptic implosion.
But man. This is South of Market, South Beach, and Central Waterfront. We’re talking condos now.
“The Market” is something else entirely.
Because some parts of town are actually volume up, or nearly the same, and median up. But does that mean “the market” is appreciating? No, that doesn’t either.
“In my opinion there is a saturation effect happening with condos in a few areas of the city. More and more condos keep getting built within close proximity of other condo developments. The newer developments make the less than stellar condos in other existing buildings even less valuable. Meanwhile, the new developments have a better chance of selling — even if they aren’t that great — at or close to asking merely because they are indeed new.”
fluj, I’m not sure I’d agree that the “newer developments make the less than stellar condos in other existing buildings even less valuable.” I think what does this is what you refer to as the “saturation effect” or maybe just simple over-supply. Otherwise new construction generally sets a new benchmark that can be to the benefit of resales in an at least balanced market. This REO is an over-the-top example of new construction being priced at the absolute margin of what was acheivable when it sold. The buyer clearly didn’t do enough homework.
Since you asked for “help” I’d use the relatively high margins the developers are still getting at properties like The Infinity and others, to respond to those who think the market is worse than it is.
This condo is worth $500,000 and if anyone had cash on hand and made an offer you could probably get it. Banks hate REOs because they lose money owning the property. Banks have to pay taxes, maintain the property and market the property etc…. This is why the price has dropped so quickly, the property is a wasting asset in the banks’ mindset. Banks would rather take as much cash as they can get and move on. If you have cash, the bank will listen….
“Not the concept with which I’d actually agree but rather that you’d interpret this as a sign of an appreciating market.”
I never once said the market is appreciating, or anything about an appreciation occurring in the four months or so I’ve been posting on here. In fact I have often pointed out how odd it is that people bought something, did nothing to it, and bears wonder why they took a loss two or three years later. Appreciation is a sucker’s bet in the best of markets.
My personal perspective, as a Bitter Renter of a substantially nicer (and larger) apartment in a much better part of town, is that paying $797,150 + taxes + condo fees + financing costs for a rather depressing apartment situated under a freeway overpass in a nondescript part of town, in a flat to declining market is the definition of (financial) insanity. The fact that builders and owners can get even HALF their asking prices never ceases to amaze me, and I will happily refuse to participate in the madness until it subsides.
I also have to confess my delight at seeing so-called ‘investors’ lose their shirts on crummy real estate buys (after being told again and again that I’m a fool for not ‘jumping in’).
My only hope is that we someday shift our thinking away from irrational, speculative “investments” (and I use the term in the loosest possible sense) and back into productive, useful work which is ultimately the backbone of any strong economy.
fluj at January 6, 2008 1:47 PM: “I never once said the market is appreciating, or anything about an appreciation occurring in the four months or so I’ve been posting on here.”
fluj at January 5, 2008 2:27 PM: “Prices are not down in most areas. In fact, they are up.”
fluj at January 5, 2008 12:42 PM: “For every anecdote of less I can provide an anecdote of more.”
Now I’m lost as to what the hell fluj is talking about and I’m still waiting for a single anecdote “of more”.
More like, what, exactly are you talking about? Socketsite has been illustrating, and people have been commenting on the trend that is VOLUME DOWN, YET MEDIAN UP for nearly every single neighborhood in San Francisco for the entire fourth quarter. Appreciation isn’t the same thing and I never claimed it. I said prices are not down in most areas. And in plain point of fact they are not.
Fluj – I’m still curious to know whether your “bloom is off the rose” theory means that buyers of new condos should expect immediate depreciation in the near future as newer more attractive condos come up for sale. Sort of a premium paid for buying a brand new product.
If I got that wrong, can you please elaborate ?
I didn’t read all of the comments, but I will mention that there was an interesting article in the Chronicle today talking about how desirable neighborhoods still have multiple bidders for some homes and prices are doing fine. On the other hand, areas on the eastern and southern edges where tourists don’t dwell are having a horrendous real estate market with a 20 month stockpile of supply.
The only place I pay attention to is Baycrest, and I’m relieved after looking at SFGate.com’s past few weeks’ or sales in my building that the prices seem to be holding up for this 1991 built condo building in Rincon Hill.
Will anyone know how much a similar “penthouse” might rent for?
my posts are being censored…
this site sucks as much as as it always has
akrosdabay, sorry, i can’t get my posts on here anymore
i wasn’t trying to offend you, honestly
[Editor’s Note: Personal attacks and racial profiling will always be subject to moderation (or “censorship” if it makes you feel better).]
@ The Milkshake,
In a nutshell, yes. That’s my opinion for the areas of the city where there is (potential) condo overbuilding happening, i.e., South Beach, SOMA and Central Waterfront. I do think that the more mundane, darker, smaller, shared hallway condos in these buildings will suffer from a drive the car off the lot effect.
Posted by: Jimmy (Bitter Renter) at January 6, 2008 2:45 PM
Jimmy, great post. i’m right with you, but not bitter
Thanks Fluj, I had a hunch that there was a premium for that new condo smell. I guess the past few years’ high appreciation rates masked the disadvantage of buying new.
I think that the same premium is paid for flipped properties that are perceived as new/turnkey. That’s why speculators could get $100K for about every $30K invested in the flip-remodel.
Prediction – the Chronicle will run a story in the coming year about people who bought flimsy flips that are now beginning to fall apart. I’ve seen plenty of unpermitted jobs that would start disintegrating 2 years after completion.
Looks like this listing expired after being reduced AGAIN (http://sfarmls.rapmls.com/scripts/mgrqispi.dll?APPNAME=Sanfrancisco&PRGNAME=MLSPropertyDetail&ARGUMENTS=-N451663208,-N213228,-N,-A,-N12224482). Does anyone know if it sold? I doubt it.
So, its final listing price was more than 8% below its original offering price when sold by the developer a year and a half ago. And it probably didn’t sell. Sounds like prices are down in this building.
There was an ad in the Chron today for an auction with an opening bid of $100k but I forget the day.
Who wants to wager on the final price at the last pound of the gavel?
Great to see that this is going to be auctioned off!! The auction is this Wednesday, March 26:
I say it will go for ~$595K, 30% off the original purchase price from the developer.
On a cost per square basis, with the partial view, outdoor space, upgrades, and added functionality of the extra half-bath, this place would have flip potential at that price.
I’d raise you $50k to $645k.
By the looks of the editor’s post today, I’m sure Socketsite will keep us informed.
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