From the listing for 190 Newton in District 10 (Crocker Amazon):
Seller has stopped work and is selling the property AS-IS. Warning – this property is not currently habitable. Permits and plans are available for Buyer inspection….Subject to lender approval of short sale….Money ran out in renovation.
From the listing for 139 Leese in District 9 (Bernal Heights):
Property in a state of complete disrepair….Not habitable at this point in time….Not for the faint of heart. This is rough. Subject to lender approval of short sale.
From the listing for 522 Chenery in District 5 (Glen Park):
[O]wner was in middle of remodel- no walls – down to studs- come take a look!
Can you connect the dots?
∙ Listing: 190 Newton – $399,000 [MLS]
∙ Listing: 139 Leese – $449,000 [MLS]
∙ Listing: 522 Chenery – $659,000 [MLS]
From propertyshark, it looks like 190 Newton was purchased in 7/05 for $575K. Now it’s 30% off. No one could have predicted this… hehehehe
139 Leese was purchased in 7/05 as well, for $680K. It’s now down 34%. That’s a good start.
Both those properties were purchased with at least 10% down, based on the loan records, so you know the owners didn’t go “willingly” here. A lot of money died and went to money heaven here.
The good news is that for both of these properties, the same institution made both the first and second loans. (Essentially, the banks were “conspiring” against themselves to help the “owners” avoid the PMI insurance that might have helped the bank!) Assuming ther are no other loans, that should easier to negotiate a short sale because there is no incentive for th 2nd lien holder to veto the sale, as in just about every other short sale out there….
522 Chenery looks like a HELOC situation. Taxes are only $450 per year (thank you prop 13! for keeping such responsible and able owners in their property). Hopefully (for them), they took the money and ran…..
reverse home staging
There are a bunch of these in district 7 as well, but they normally don’t hit the MLS and sell privately.
I haven’t heard of a “bunch of these” in district 7 – isn’t that Pacific Heights?
Hey, the one on Leese looks only slightly less habitable than the open house I saw at 70 Mullen this weekend for $700k….
A lot of money died and went to money heaven here.
I beg to disagree. A lot of DEBT died and went to debt heaven.
The real money went to materials, contractors, workers and fueled the (empty shell) economy. This money went to pocket A to pockets B,C,D and then to more pockets for a few cycles. We all benefited fron it.
Another reason this money didn’t all go to loss. Whatever work they started at 139 Leese created what will be a better home for less money for someone. Of course, that will be if the new buyer finds an economical advantage in finishing the job.
In general, not all the money is lost during bubble. We often get cheap stuff out of it as a result and it helps society as a whole move forward. Cheap railroads, cheap broadband, cheap housing.
Of course, an annoying factor in bubbles is that the people participating in it make everybody’s life more expensive for a while. Like artificially unaffordable housing.
I saw the Leese property on another blog (which has some seriously split your pants funny commentary about real estate photos) – and that bathroom. Oh the horrors. I love the straight forward commentary by the agent. Not for the faint of heart. No kidding!
HAHAHA!
This is ACTUALLY written in the listing detail!
” Yuk! ___Bring clients if they are contractors.___ YUK!”
Satchel — I’m wondering if you’re reading too much into the price declines. These properties were all gutted for renovation, so I’d expect them to be worth less than if they’d been left untouched, with their outdated decor intact. I’m not sure how much of the declines should be attributed to their current condition and how much to an overall decline in the market. I’m no bull, just wary of reading too much into the % declines here.
Of course, there’s also value to the new buyer in not having to pay for the “gutting” part of the remodel, but that can’t be too much, can it?
The bathtubs on Leese look like they have seen some serious corpse-chopping. Is that what you meant, NW?
Trying to find financing for a house that is not habitable may not be the easiest thing in the world to do. The % drop may have something to do with that.
I can understand the lack of staging but the lack of chopped pillows is unforgivable.
Ken’s right. The property value is hosed in the middle of a demo/remodel because it will never appraise in current condition. The pool of potential buyers also gets infinitely smaller for these. Regular people will live in cosmetic fixers.
“Trying to find financing for a house that is not habitable may not be the easiest thing in the world to do. The % drop may have something to do with that.”
Now, come on. This is the Bay Area. Are you really saying that professional contractors/flippers can’t just reach into their pockets and pull out $400K – $650K?
Any pro would have this amount of cash lying around, or he should get out of the business. If any of the houses do not sell fast, that is because the smart money (those with the CASH) do not see the value.
Am I way off base here?
(For point of reference about the value of fixers, fools and their money, etc., see the thread on the fall down uninhabitable fixer that actually CRACKED IN HALF when the “owner” tried to DIY the foundation work. It sold in a bidding war – advertised as the cheapest SFH in all of SF I think – for $525K! My, how times have changed…..
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/05/07/BAGF3PMD2L1.DTL
https://socketsite.com/archives/2007/05/the_sudden_collapse_of_149_mangels_and_a_dream_1.html
“Now, come on. This is the Bay Area. Are you really saying that professional contractors/flippers can’t just reach into their pockets and pull out $400K – $650K?”
No, that is not what I am really saying. I responded to the drop in value. I don’t know how long these properties have been on the market, but I expect that these properties will be sold relatively soon to developers that have the cash.
I am familiar with the house that cracked in half. I don’t know who bought it under what circumstances or what they paid for it. But, I do know that there is a sucker born every minute. Some of them are looking to get rich quick and don’t realize what they are getting into. Some of them don’t care about money at all even if it means living beyond their means. Some of them are probably infuenced (good and bad) by realtors, appraisers, and lenders that they trust. One thing that I have found in San Francisco is that there is less risk waiting for a sucker than what most people would think.
I walk by 522 Chenery every day. It is a perfectly fine house, but I just can’t imagine paying $650k for a total fixer on that busy street.
Well said, Ken. I think I agree with you. I don’t think the average house in those neighborhoods has fallen as much as these fixer/partial demos (30%+).
But I DO think the average house has fallen. The ugliest have fallen the most (these fixers fall into that category!), the perfect ones the least, but apples to apples they’re all down and will fall further.
Yes, while the total fixers in southwest Bernal have dropped, the nicest houses have sold for more than ever in that southwest corner– in July, 371 Elsie sold for $1,270,000 and 111 Holly Park Circle sold for $1,275,000 — both well over asking.
So, let me ask a hypothetical (and no, it is not about me.)
If in April of 2007 someone that I know bought a 2 bed, 1 bath, 1 pkg for $810k one block off Courtland close to the library. They are going to gut it, add 2 baths, remodel the kitchen, add 160 odd square feet. They are not really adding another bedroom, but they will get a playroom off the kitchen. All told, I think that they are talking about $300k+ in renovations. (All new plumbing, electrical, tons of demo and new framing and roofing, new windows, insulation, etc.)
Will the market support something like this at $1.1M+ all in?
So they are turning it into a 2bed+ 3bath? If they could market it as a 3 bed 3 bath, I would say possibly.
Two full baths on the top floor. Two bedrooms on the top floor. Half bath on entry floor. New kitchen on entry floor. New playroom off kitchen on entry floor. Existing living room and family room on entry floor. New laundry on garage level. New interior three level stair.
The way I see it, any third bedroom is a crash pad on the entry floor or perhaps the garage level. But only a powder room on the entry level. I guess that it will be a 2 bedroom / 2.5 bath house with some extra rooms.
Both those properties were purchased with at least 10% down, based on the loan records, so you know the owners didn’t go “willingly” here. A lot of money died and went to money heaven here.
The good news is that for both of these properties, the same institution made both the first and second loans.
I just saw another “fire sale” property in the Berkeley Hills. Looks like the original financing in 2005 (sale price $1.2million) was an 80/10/10 -– so $120K in downpayment went down the drain. The first and second liens were owned by the same party. Now hitting the market at $914900. We are going from subprime with no skin in the game to homeowners being dragged off the edge of the cliff… it is about to get real ugly out there.
Satchel,
I think you are right about the $400-$600 that most developers can pony up, but that would only buy these places and not finish the work. That may be a few $100K more. That goes beyond the means of guys working in these areas. These places are going nowhere, they don’t work for any builders at these prices. Why would you spend $700K in district 10, when you can buy a $1.2M Noe place for $240 and put $500K into it. The profit is so much better.
522 Chenery closed escrow on 10/15/08 with a reported contract price of $575,000 ($84,000 under asking).