Four Floors Lower, But Asking One Hundred And Fifty Thousand LessNovember 11, 2008
While the resale of #2202 in One Rincon Hill (425 1st Street) closed escrow on 6/24/08 with a reported contract price of $1,300,000, #1802 has yet to find a buyer.
Originally listed at $1,399,000 prior to being withdrawn and then leased (asking $5,250/mo), #1802 returned to the market in August with a list price of $1,299,000. Over the past 80 days the price has been cut four times, most recently to $1,145,375.
In terms of direct competition there are three other 02 resales listed on the MLS. Yes, including the aforementioned #2202 (now asking $1,359,000). Once again, pricing for #1802 when the sales office first opened: $980,000 (not including any upgrades) versus $1,020,000 for #2202. Don’t ask us.
∙ Listing: 425 1st Street #1802 (2/2) – $1,145,375 [MLS]
∙ Listing: 425 1st Street #2202 (2/2) – $1,359,000 [MLS]
∙ The First “Official” Resale At One Rincon Hill Closes Escrow: #2202 [SocketSite]
Comments from Plugged-In Readers
So I’m guessing these people figured they could turn a profit because unit 2202 “sold” for a profit?
That’s sad – I hope they haven’t spent much on staging it, cause it’s going to continue to sit like all the others are.
I’d suggest listing it for the 980k they paid, and pray a sucker that hasn’t been paying attention to the tanking market for the last year and a half happens upon it….
My guess when this thing goes bank owned it sells for $985. Still another 150k off before its gets some sniffs.
Can you open any of the windows in these highrise buildings? The view is cool but without a fresh breeze it seems like it could get mighty hot.
I’ll agree w/Tipster on his previous posts back in June.
The 2202 resale does not seem to be an indicator of the actual market in retrospect.
But we sure got a lot of cheers at the time (and some flak too…)
So let me get this straight. #2202, the very first sale, and for an fantastical price, is now for sale 4 months later?!
Does anyone believe it was not purchased by an untraceable, but hardly independent party to pretend that resales were strong, and who only purchased it to goose the first sale price?
4 months later and it’s for sale. What a joke.
These places are priced at $875 and $1,000 per square foot, respectively.
Meanwhile, at the Infinity, their starting prices are roughly at $750 per square foot. Arterra is in a similar range.
In terms of Soma resales, there’s a Beacon penthouse short sale around $750 psf as well, and tons of other properties well below $700 psf throughout the area.
Anyone else see the disconnect here? I realize that it only takes one monied spendthrift to fall in love with it. But after months on the market, you’d think folks would realize that the window has closed.
Cooper is right. 1,309 X $750 = $980K. And that just prices these where a ton of other inventory is already sitting.
Wait. 2202 sold in June and it’s being flipped in Nov? If that’s the case they get what they deserve. Very strange.
2202 back up for sale less than 5 months after it “closed” as the first secondary resale in 1RH?
LOL. Seems pretty likely that that June sale was a phony stunt (tipster theory). Kudos to the 1RH sales staff for trying that. No doubt some suckers fell for it and closed themselves over the summer (“wow, prices really ARE up from the preconstruction prices – I just KNEW those nice developer folks weren’t lying about resales after contract walkaways!”).
If that’s the case they get what they deserve.
On another link, fred was asking why people would salivate at the misfortune of others.
If the said misfortune is self-inflicted, then who cares what happens?
Anyone know whether the 02s on these floors will eventually have their views substantially blocked by Phase II of the ORH project? I could imagine that having a significant drag on their saleability at this point.
Why is the millenium so mum on this issue? When will they lower their prices? Let’s face it, it is inevitable. I don’t care how fancy the sales people are, they can’t survive with an empty building for 3 years until the economy turns.
I sure wish the view was of GG and Belveder…
There’s no doubt in my mind the sale of 2202 had some shenanigans to it…
And Tower 1 won’t have views blocked by Tower 2, because Tower 2 isn’t being built. 🙂
Also, ORH won’t be lowering their prices. They’ve elected to rent out remaining units instead:
A quick google search of the phone # listed here shows that it belongs to Charmane Crain, the resident relations manager/concierge at One Rincon Hill.
The floor windows crack open in ORH. Not much, but a little. (they are around 1.5 ft long by 0.5 ft high near the floor). ORH buyer can fill us in on exact dimensions.
If the windows are opened then there is somewhat of a murmur of highway noise even on the top floors, but it’s for the most part white noise, and I quickly got used to it.
however, I would personally need the windows closed at night.
some of the units have balconies, and obviously the doors open to the balconies.
my first thought upon seeing this was that tipster was right way back when and the first resale was a ruse. I too was mightily surprised back in June when this sold.
however, an equally plausible explanation is that it was bought by a googleaire or a financial whiz who didn’t understand the macroeconomy or who really believed SF is “different” for whatever reason, but now has been caught by the financial dislocations that occured in the last few months. these last 4 months have been extraordinary to say the least… I’m sure that we’ll see more liquidations of RE around town.
I’m sure these units have air conditioning. With all that glass it’s an absolute necessity.
A friend lives in ORH (above 25th floor). An amazing view for sure and pretty nice place…but $1.4 for one of these little places?
I’m sorry in this market that is a fairy tale. I bet it goes for $900k.
The have air conditioning and the base of the windows open to provide air circulation, if you need it. I was in penthouse for a tour a few weeks ago and heard nothing with the window vents open. Perhaps white noise on the balcony, but it was sprinkling so the wind and sound was muffled. I heard a tugboat.
I heard the AC is ventless, like the dryers.
More seriously, though, seems unit 2206 sold for $1,325M in August. This is the only resale made public that I could find, but the square footage is not disclosed. Anyone know how large the 06 floorplans are?
Where is ORH Buyer?? He never misses a thread like this…
Bit of a slap in the face to those that talked about ORH buyers being underwater.
One sale does not make a market as is proven here, especially a shady comp. Let the market talk.
I noticed that the Ritz has lowered their prices from the $1,500 per sq foot range to $1,250 ish. Don’t love the building and the HOAs are bigger than most mortgages, but it looks like at least this developer recognizes that the upper end is not immune to the downturn and prices need to be lowered if they want to move inventory.
Anybody heard whether the Millennium is backing off their pricing yet?
“Also, ORH won’t be lowering their prices. They’ve elected to rent out remaining units instead:”
ORH goes rental… and SS response is …
Renting out ORH?
This is so Miami 2007. First denial that prices were coming down (helped by a conveniently high “resale”), then a change in strategy to rentals, hoping that the goose will still lay golden eggs but from another orifice…
Next? How about pricing to market?
“ORH goes rental… ”
Don’t worry. I understand from the cheerleaders that no rental stock can compare with “owner” stock. I’m sure there are some subtle differences in the units that we bitter renters just don’t see…
And the proposed rental prices, $2950-3800 wishing prices for high floors? Good luck trying to get those wishing rents as this recession deepens and threatens to turn into something more ominous. Sounds like 1-bedrooms above the 40th floor will ultimately go for less than $3000.
We know that at least 30% of the building is empty. Based on all the craigslist ads for rentals, flips, contract assignments, etc, what do people think the true owner-occupied percentage is there? 30%? Can’t be higher than 40% I’d bet.
As the resale restrictions fall off and the prices continue their decline, it looks like that will turn into a Hobbesian war of all against all. Good thing the windows only open a crack 🙂
“Good thing the windows only open a crack :)”
he he … careful though… some people around here can’t take a joke.
Not taking into account that these are wishing prices, and the high HOA’s; and using any kind of reasonable rent multiples, they are valuing these units between $442.5K to $760K.
If the rents stagnate, and appreciation doesn’t return, I don’t see how they will ever justify a higher sale price to any future buyers.
Good point LMRM: and good luck getting financing when the building is very clearly more than 50% rentals.
Hope the flippers didn’t need to refinance any time soon, not that the LTV would support their interest only loans.
But more importantly, when the anti-flip lockup expires and people are free to sell, their buyers won’t be able to get any financing. What WILL they do? Rent their units out! Making the owner-occupancy problem even worse, and locking in that source of trouble for the long term!
Sure there are covenants prohibiting that, but tough times call for desperate measures. What are they going to do, slash their asking prices? Walk away? The HOA will just be glad they are paying the dues and will never enforce the provision, not that they really can. Should be fun to watch!
Will “One Rincon” go “One Ecker”?
1 – Market as luxury condo prices.
2 – when that fails, test the waters into luxury rentals.
3 – When that fails too, go back to option 1 and cross your fingers.
IMHO, the issue is not the place or location or the market target. They’re fine. The biggest problem is price. Not many places can command 900 or 1000/sf+ in this market
Sure there are covenants prohibiting that, but tough times call for desperate measures.
I doubt there are any rental restrictions at ORH, given how many specuvestors bought there.
“good luck getting financing when the building is very clearly more than 50% rentals”
I wasn’t aware of potential financing issues when certain percentage of units in a building are rentals (vs. owner-occupied) until fairly recently. A friend of mine was pre-approved for a loan when she was shopping for condo in SF a couple of months ago. She found a place that she really liked in a four-unit building. The other 3 units were being used as rentals (owned by the same investor). When she went to close on the condo, her bank (I think it was WF, but not absolutely sure) told her that she now needed a min. of 30% down because the other units in the bldg were rentals. Luckily, she had the money, but I think she was originally counting on putting only 20% down. Her realtor (who has supposedly been in the business for at least a decade)wasn’t even aware of this,and was quite surprised by it. Does anyone know more about this?
No, this is not a new thing. It has been around and the topic was even brought up when I purchase a loft back in 03 in the mission where the developer held onto 7 of the 20 units as rentals. If it had reached 10, I would have likely had a problem.
This may be a developing problem in coming years as lending standards get tighter and more scrutiny is applied across the board.
Sounds like your friend’s realtor is another one of those brilliant ones in the industry.
A little tip re: going rental. (full disclosure- I am not an agent, lawyer, etc. so just some advice if you care to look in to it) Another thing to look at (I know people this has happened to) is should the building go rental by any % – who will own them, the developer? etc. Should the developer retain control of a majority of the units, depending on how the CC&R are written, how the HOA is set up, who is on “the board” etc. you may run in to issues with majority %, votes etc. It is likely the developer could hold a larger voting power than other owners and essentially hijack the building.
Since 70% of the units have closed already the developer will not have a majority of the units even if all of the remaining ones go rental.
I wish I could have bought my place for less, of course; but even so, I am happy with my new home, and pleasantly surprised that I am so happy. The level of service and professionalism of all the staff including the valet parking staff have been excellent – levels above my previous condo which is in the same neighborhood and also a “luxury condo.” And I have also been pleasantly surprised at the good turnout at the HoA Board meetings so far – even more surprising is that the high turnout is not due to people showing up to complain and gripe. Instead, several people actually offered praise and positive feedback to the staff and the developer (who has been personally present at all meetings).
Comments are closed.