The Comps They Are A Changing: The Short Sale Of 2924 19th Avenue

Per Property Shark purchased in 2005 with 100% financing so our “homeowner” will lose nothing when he’s booted out. Except, of course, the priviledge of pretending to himself and his friends that he’s a million dollar homeowner.

Yeah I saw that but it looked like they just rolled in the fees. It didn’t look like a cash-out.
What it did look like was 2005 realtor (TM) advice in action:
“Look. Just sign up for any loan you can get. Then in a year when the place has appreciated and your fico is better you can refi into a better loan.”

“BTW, this is technically Lakeside I think, and it’s on a very busy street, but it’s within 1 block of the Merced Manor neighborhood that fluj always *used* to say was so stunningly strong. “\
“Technically Lakeside I thnk” and on 19th — but you feel it’s somehow valid to speak of the adjoining neighborhood and couple it with a barb tossed my way. Huh.
This is under 2000 feet and it is located at the intersection of two incredibly busy thoroughfares.
Location, location, and um, what was the other part? Oh yeah. Location .
This is San Francisco. A block or two often make a world of difference. I mean, there is a fixer on the market on Geary street for ~615K right now. Is anybody saying “The market in Laurel Heights is in the crapper” ?
Going back to 2000, this property was the highest 3-E 19th Avenue by a very wide margin of 180K. A couple others sold for the mid 8’s. This one was originally priced at 989K — and that would have been way out ahead of the curve. Now it is a short sale for 899.
You so love to lambast me about Merced Manor, Satchel Paige. It’s pretty weird because I admitted that perhaps the market out there has shifted a bit from its very pricey and competitive nature two years ago. Wasn’t that good enough? I mean you extended yourself a little far here and you’re not doing yourself any favors at all.
And as for Merced Manor, 2964 22nd looks to be doing OK.

@Satchel:
Love your commentary, but I would go farther than saying it’s on a very busy street. 19th is a six lane state highway that is frequently clogged with stop and go traffic, and Sloat is the largest cross-street in the area. That’s also one of the most dangerous intersections for pedestrians in the city.
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/08/23/MN7LRN9U4.DTL

Sure it is. But if it sells for 899K it is still a 49K bump to the positive for the next closest property.

I know it’s funny. I’ve done all I can to not say, “They overpaid in the first place,” because everybody piles on when I do that. But hey man. One hundred eighty thousand more than the next several highest? Bought in 2006 and 2007, hot markets too?
So here we are. A terrific blunder was made. And the hed is, “The Comps They Are A Changing” ? A more accurate one would be “Stupid Idea Predictably Gets Hosed at Deadly Intersection.”
Also “Comps.” Try “comp.” Appraisers need more than just one item to work with.

hard to make much of one property, especially this property. I think however that it MAY be instructive in one way.
we’ve seen a fair number of marginal propertis in SF that really skyrocketed… and now are plummeting.
it is perhaps possible that during the big bull run a lot of these super marginal properties sold for way way way over their “core value” (fluj’s “they overbid” argument) compared to the better properties, that got just moderately overbid.
Now 2 years later the marginal properties are plummeting but the better properties aren’t (at least not yet).
thus, you get a nice property in a nice area that appreciated a little bit over 4 years but was remodeled.
then you get a prime property that was remodeled that skyrocketed in price
then you get a marginal property that goes into foreclosure, and people are astonished that it ever sold for so much.
it’s like what we’re seeing in the far flung suburbs, where some properties are down 50%. (they’re marginal based on distance from SF).

The irony is not lost on me that we’re supposed to glean much from the “very different picture” of a single transaction, relative to what we can glean from median or $/sqft. Nevermind for a moment that this “apple” with a dead brown lawn sits on what is essentially a 6-lane highway. The “comps” (plural) are a changing? Do you know how the readership around here would jump all over a realtor who trolled the city, found a single data point (i.e. “an apple”) that showed a bit of appreciation and declared that the “comps are a changing”? Tsk tsk…

it is perhaps possible that during the big bull run a lot of these super marginal properties sold for way way way over their “core value”
Yes, 2005-7 was an excellent period to sell flawed properties. Everything sold quickly and for a high price. Buyers were overlooking problems with location, structure, parking because properties were scarce and competition was high. Flippers and developers were snapping up the tear downs because the “like new” stuff commands a premium.
The good stuff however will always command a good price and is less volatile. SF has a much higher ratio of “good stuff” compared to the rest of the bay area and perhaps that’s why SF is less volatile. The same seems to go for the better peninsula and south bay neighborhoods.

When this sold back in the day, did the Realtors all tell the other buyers “oh, he overpaid” or did they say “I guess that’s just the new reality now. You’ll just have to find more $$ and pay more for the one you want. If you want something on a less busy street, you’ll have to pay even more.”
And did the other realtors tell their clients it was on a busy street, or did they gush how close it was to Stern Grove and the Zoo, and how easy it would be to jump over the bridge or drive down to your job in the south bay. It’s amazing to see the change in attitude, particularly by the Realtors, now that things are headed down. The kind of talk I’m hearing now was never raised during the boom.
Sure it was just one comp. But I’ll bet that one comp got repeated by every agent in the area and used to drive up the bids of other homes nearby.
One comp. Indeed.

And did the other realtors tell their clients it was on a busy street, or did they gush how close it was to Stern Grove and the Zoo, and how easy it would be to jump over the bridge or drive down to your job in the south bay. It’s amazing to see the change in attitude, particularly by the Realtors, now that things are headed down. The kind of talk I’m hearing now was never raised during the boom.
Sure it was just one comp. But I’ll bet that one comp got repeated by every agent in the area and used to drive up the bids of other homes nearby
Again, none of the ensuing 3-E 19th Ave sales support that bet.
Realtor walks outside with client. Over the din of 19th avenue cars hurtling by, he shouts, “Client, guess what, this is a busy street.”
Client responds. “No shit Sherlock.”
You are such a realtor basher Tipster. Every single day you find a way to say the same thing in different words.

I show 529 a foot, actually. The three comps were all smaller homes, so expect higher $psqft. One went for 576 a foot, and one 606 a foot. However, the closest one in size went for 488 a foot in March of 2007.
This is probably where you tell me I’m wrong and that larger homes don’t trend down in $psqft. And then I say you’re wrong about that. Then someone else comes in and tells me I’m stupid, followed by another person who had a realtor take his lunch money.

I tend not to use the price of short sales as comps because they are often priced lower than what they end up selling for because the listing agent needs to entice someone to make an offer because the seller’s lender usually won’t tell them what they are willing to accept for the property before an offer is in. In every short sale I’ve been involved in, (that didn’t have a prior offer where the lender decided on a price after the first buyer dropped out)the lender has asked for much more than the property was listed for.