Listed for $4,299,000 in October of 2008, the sale of 4552 19th Street closed escrow this past Friday (3/20/09) with a reported contract price of $2,550,000. That’s $636 per square foot for this completely remodeled and renovated Eureka Valley home.
Keep in mind that the sale will “officially” be recorded as 1.7% under asking (versus 41% under original list) in industry reports and statistics as its last list price was $2,595,000. And that a reported six offers still resulted in an under asking close.
∙ 4552 19th Street Joins The High-End Half-Million Dollar Cut Club [SocketSite]
∙ 4552 19th Street Joins The High-End Half Million Dollar Cut Club [SocketSite]
But if we assume or argue it was only 3000 sf, that pans out to $850/sf, proving prices have not dropped at all. And it closed quickly proving that there are still scads of cash buyers out there, and five more willing buyers proving a lot of pent-up demand 😉
Wait, if I look at the floor plan, parcel map, and Google satellite pictures–and do some wild extrapolations–I’m pretty sure the REAL square footage is 1,900, not 4,000 as shown in MLS.
Meaning the REAL comp should be $2,110 / sq ft, NOT $636.
This just proves prices have not fallen one bit. In fact, they’re moving up in anticipation of huge Spring demand. Buy now, or be priced out forever.
Okay, Okay, I give in I will grossly overestimate my next project. Have it your way.
$900 psf in this neighborhood is still attainable. Easy 😉
(I’m actually not surprised at all that it sold here – my guess was that it would sell for $2.5 – which I bet is what it did sell for after buyers’ credits :))
So they got $200 psft for a gut remodel, including foundation work.
Translation: there aren’t going to be a lot of flippers competing for the next one of these. These guys lost money.
And 6 offers and it still went under asking: that’s very telling about where this market is heading.
Does anybody know when this house went in to escrow? (was it the normal 30 day escrow period)
Buy now or be priced out forever? I’ll put my investment portfoilio against your SF condo any day.
During that time when I argued with nearly every single bear on here about whether or not this neighborhood “could” (yes, “could,” do a search and look at the language I used) command 900 a foot, a house on Mono street sold for well north of 900 a foot. I think like 1100 or so, actually. So was I right? or was I right? I have pointed out the Mono street validation of my statement more than once. But here you go again. I see you working though, LMRiM. Here you take this very huge house, in a totally different market than the context of the previous discussion, and make a sarcastic swipe at me. Nice one. You’ve such a gracious web persona, truly. So pleasant for everyone. Warm fuzzies always.
You freaking twerp.
we all should know better… the house is worth what it sells for, not what the asking price is. sure, it sold for 41% less than the original price, but the asking price means near nothing, it’s what the place sells for that counts. right?
@ Garrett
In 2007, most places sold for asking or more. Sellers would show the house for 2 weeks and then collect offers on a single night, sometimes from 10 or 20 buyers. This would create an auction mentality and drive prices above list.
You’re right that a house is worth what it sells for, but what this shows is that agents are no longer able to manipulate prices upwards based on scarce inventory and buyer fear.
That there are no more multiple offers over asking is a price reduction in and of itself. Power has shifted from sellers to buyers.
Oh yeah, 2007. When every bear on Socketsite guessed wildly incorrectly as to selling price, only to disappear, or pointed to each sale for slightly less than asking as harbinger of apocalypse. But now? “2007 was a total bull market.” — every bear on socketsite. Funny how that worked out.
Why is there this constant need on this site for certain people to look in the rear view mirror and pick out predictions that may have been wrong, or whose timing might have been off, and rub those in each other’s faces?
Let’s just stick to the facts, try to make sense of them, and discuss what they mean for where the market is and where’s it’s going.
Many real estate “professionals” rely on informational asymmetries to dupe buyers in to overpaying. Let’s just trade facts, analyze them truthfully, and help each other out. And not childishly rub each others’ faces in “gotchas” when predictions end up being off.
Why is there a need for certain people on this website to constantly bash real estate professionals? Attributing Machiavellian schemes, such as “agents are no longer able to manipulate prices upwards based on scarce inventory and buyer fear” ? and other pure nonsense? It’s quite tiresome.
@ anonn
In 2007, why did agents hold a single day/time to collect all bids?
To generate multiple offers.
To create an auction mentality.
To drive prices up.
If I had been a seller in 2007, I would have hoped/expected my agent to do the same thing so I could get the highest price possible.
So, it’s not pure nonsense that agents try to drive prices up. But the market has changed. The power has shifted from seller to buyer, and it seems like agents are slow to realize this, or at least they don’t admit it to their buyer clients.
And it is true that agents have more information than buyers. Which is why this site is helpful in leveling the playing field.
Does anybody know if this was a short sale?
Please stop acting like a creep, “annon”/”fluj”.
[i]During that time when I argued with nearly every single bear on here …[/i]
You didn’t argue with me. My point then was that prices were too high and would likely be lower in the future, and I was right.
[i]LMRiM … You freaking twerp.[/i]
I don’t like him either, but the analysis he posts is robust and far more useful for projections than anything you have posted. This language you are using is not appropriate for any forum. We understand you both disagree about prices and what goes into that.
[i]Oh yeah, 2007. When every bear on Socketsite guessed wildly incorrectly as to selling price, only to disappear, or pointed to each sale for slightly less than asking as harbinger of apocalypse. [/i]
This every bear stuff is a poor characterization and far wide of the mark. I never predicted selling prices, only future reductions, and I was correct about that while you were consistently behind the curve. This “every bear” qualification you use is emblematic of sloppiness in your analysis. You are in sales and have useful information about the market moment by moment. Others have longer term views and better projections. How many serious downturns have you been through? I got involved in real estate in the 80s when the S&Ls all fell on their own swords, and this is the same only worse.
[i]Why is there a need for certain people on this website to constantly bash real estate professionals?[/i]
To a significant degree that is because of how YOU as an individual choose to behave. Perhaps if you could find it in yourself to seek a higher level. You have interesting information and views to share, but your attitude is not serving you or anyone else particularly well.
@ Mole Man
You’ve almost got the html tags. Instead of [ and ]
Try
Like this!
@ Mole Man
Sorry, it didn’t all show up. Instead of brackets, use the less than key (Shift + comma) and the greater than key (Shift + period)
In the competitive markets of years past it was done that way for the sake of ease. Do you have any idea how much more difficult it would have been otherwise? Think about it. What sort of logic would have you negotiate with different starting points, considering each offer itself had timed expiration on the offer sheet?
Mole Man, the guy baited me personally. Out of the blue and apropos of nothing.
Then DataDude comes along with his conspiracy theory.
And this, To a significant degree that is because of how YOU as an individual choose to behave. Perhaps if you could find it in yourself to seek a higher level. You have interesting information and views to share, but your attitude is not serving you or anyone else particularly well.
With regard to monolithic stereotypical slams such as DataDude’s conspiracy theory and “real estate professional” quote snideness?
Hardly.
@ anonn – agreed. I totally understand why the market worked this way back in 2007.
The point is, we’re in a different market. And many agents either haven’t caught on or are telling their clients that prices are holding steady.
My agent recently told me that based on their analysis for Noe Valley, prices haven’t dropped at all in the last 15 months. They did mention that sales are down.
So, although I haven’t seen the analysis, I’d be inclined to draw a different conclusion. My guess is that only the very nicest properties are selling. Places that once sold for $900 psf are now selling for $800 psf. My agent failed to mention that there are plenty of places priced below $800 psf that aren’t selling. They provided only one slice of analysis and a conclusion that is most likely flawed. If I were to follow their advice, I’d overpay substantially.
@ anonn
Based on your expert opinion, have prices in San Francisco fallen, and if so, by what percent? Where will prices go over the next year? And what about inventory?
What facts can you use to back up your assertion?
(wouldn’t want to be accused of conspiracy theories, here)
Market gets tough, realtors’ people skills go right out the window. Remember Gomez on the Addams family? Buy I tell you, BUY!
In “San Francisco” prices have fallen considerably. In neighborhoods where most people on here would be interested in purchasing property, prices have fallen by much smaller margins. Prices are likely to continue to drop somewhat over the next six months, in my opinion. So you must be dilligent in examining each property on a case by case basis. Inventory is likely to continue to rise somewhat. However, despite what many on here have said, most people actually purchased with considerable down payments. They bought in competitive markets and the ones who made winning bids often had the most cash. These people therefore do not have to sell, and will not have any motivation to sell for that matter. So wholescale huge citywide price drops will remain a Socketsite pipe dream.
@ Sand Man,
Question: Why are you continuing go work with that agent?
It’s true that SOME houses are still seeing competitive situations, but it’s rare. Overall I would say prices are down about 5-10 percent in Noe. But I really hate to be so overarching right now. It’s block by block at this point. And I’m not sure that 900 a foot was ever the true metric. It occurred from time to time, but as the average? I don’t think so. Eight hundred a foot has been the number to my mind, for some time. Again, the $3M Noe house sale has only occurred a handful of times.
Sand Man,
You should get a new agent! Giving you the conclusion of an “analysis” without showing you the sales data that went into it is useless. And I can’t believe that anyone closely following Noe sales would argue that prices haven’t dropped in the last 15 months…
Datadude, back in the early 1970’s during the oil crisis and the end of Bretton woods, you wrote on this forum that “by March of 2009, information asymmetries in the real estate market will be gone. Widespread dissemination of information will reduce the “value-added” by brokers. Real estate brokerage will occur on a flat fee system instead of a percentage. Finally the system whereby buyers make the largest single financial decision of their lives with little to no objective data will be gone. One will easily be able to pull up granular neighborhood data and graphs on sales info, price per square foot and other very basic info– instead of relying on their broker.”
You were wrong, wrong wrong! You neglected to take into account the NAR’s strong lobbying efforts to preserve self-regulation and a monopolistic hold on basic information. You were wrong! What the h is wrong with you anyway?!
Furthermore, DataDude, look at your calls from the 1980’s! Horrific!
as we sit here today listening to that classic Ah-ha tune which will definitely stand the test of time, I would like to make several predictions about what the future will hold: “I believe that one day a simple Governor from a small Southern state will rise to the highest office in the land. He will lack political skill, but will lead on the sheer strength of his moral authority.” “I believe that Justice will prevail and, one day, the Berlin Wall will crumble, uniting East and West Berlin forever under Communist rule.” “I believe that one day, a high speed network of interconnected computers will spring up world-wide, so enriching people that they will lose their interest in idle chit chat and pornography.”
(from conan o’brien commencement speech at harvard if anyone is curious. . .)
@ nanon
LMAO
Thanks for your posts and much needed humor 🙂
I also predicted that an Austrian body builder would become the world’s highest paid actor, and move on to become governor of the state with the largest economy.
And as far as I know, real estate commissions are still percentage based–unfortunately–but if you know of any flat fee structures, please let me know.
Conan’s speech here – hilarious:
http://www.february-7.com/features/conan.htm
(nanon, do I know you?)
What happened to all the square foot discussions? They were fun!
For the record, I like both Lmrim & anonn…they both add to the discussions.
The REO ratio* in Noe is less than .1, so it is looking fairly solid at this time. Not a lot of “pent-up” supply in foreclosure pipeline. Still, there are those two duplexes that I pointed out in the last Noe thread if there is anyone flush with cash from their last flip… hint, hint, fluj…
*# of Foreclosures/(# of Resales+new construction) as shown on Trulia. Note that some of the “foreclosures” (NODs, NOTS and actual REOs) stand a chance of being cured before being put on the auction block.
A Seller’s agent is paid to get the highest price possible. The ignorant posts about agents is just that, ignorant, and to fluj’s defense, they are pretty rampant on SS.
If you’re accusing Buyer’s agents of being complicit in driving prices up, at least be specific with that accusation. But to accuse Listing agents of driving up prices… um, yeah, I guess you’ll just give your home away when you sell then, right?
But yes, Sand Man needs to fire his clueless agent. Even relying on a general market report from the office to advise a client with specific needs is cause to get fired.
To shed some more light on agents…. most could give a crap if prices are going up or down, just so long as you hire them. Do you think the Solano agents who have double last year’s business care that prices are down 40%? All they care about is that there are a ton of homes being sold.
Meanwhile low volume in SF means a shake out of agents… good agents will survive and even thrive, many other agents will exit the business. So if you’re competent, this is a good market too. Wall Mart is pretty friggin happy with low retail sales everywhere else. Their competition goes out of business and they reap even more when the economy turns.
As for asking $4 million on a $2.5 million home. I have no idea why, but the Listing agent’s in question are doing the same thing on 4432 19th St about a block away and a couple of other properties. It started at $3.99 million or a $1,000 per SqFt…. insane for the Stro. They dropped it $1 million and it’s still over priced…. it too is probably worth $2.5 or so. But just as a low starting price auction means nothing as an anecdote to the SS bears, a ridiculously over priced one should also be meaningless if you’re being honest with yourselves.
Now go interview several Realtors before hiring your idiot cousin or college roomate who just got their licenses and gives everyone a bad name.
“I have no idea why …”
Because they have visions of sugar plums dancing in their heads. Sadly, the sugar plums have run out.
Let’s be sensible about agents’ motivations. hangemhi is accurate as far as he goes, but imo only gives half the picture: agents are much more concerned with volume than price. A corollary to this is that sellers’ agents are more concerned with actually getting the property sold than the ultimate price received, although of course the higher the price the better (both from the client relationship/professionalism point of view, as well as from the fact that a higher fee is earned).
However, a buyer’s agent is inherently conflicted: he wants to make sure that his client gets the property, and not some other agent’s. No commission $$ if the purchase by his client doesn’t go through – if someone else “gets” the property. Of course, there is some subtlety here – a good agent can “read” his client. Pressuring a client to bid high must be balanced against the potential for alienating the client or making him unhappy. There is the potential for referral business.
In the end, it seems logical to assume that the motivations of agents – to the extent that they can be generalized – is to talk sellers down (making sales and hence commission $$ more likely) while talking buyers up (again, making sales and hence commission $$ more likely).
And that imo is why certain realtors spend so much time trying to discredit individual bears’ postings on SS. As salespeople, they really believe that individuals have influence over markets, and perhaps in trying to nail down a particular client and earn a particular fee, perhaps they are right. But if they think that the overall market is influenced by anonymous blog comments by anonymous bloggers, no matter how well thought out or pursuasive, they really don’t understand the macro factors at work in this market imho.
LMRiM also left out a critical piece of the pie re sellers’ agents. It is true that they are more concerned about volume than price, but that means they also want/need places to sell fast. You make a lot less money if you actually have to work to sell a place — pay for marketing, sit around at open houses week after week, etc. The only real work for SF realtors in the bubble years was getting a listing. I got about four unsolicited “offers” to sell my place every week in 2004-06. I think it is the dream of re-creating that frenzy that drives a lot of realtor misinformation and attempts to discredit the bears — it may not even be conscious — and it is counterproductive because (if it has any effect at all, which I doubt) it is preventing sellers from setting realistic prices.
Now I get a couple of unsolicited mailings a week asking if I want to buy a place. Seems like having a seller’s listing ain’t all that grand these days since few are moving. But if you can land a serious buyer, then you can make some money in this environment. Of course, the best thing that could happen for the industry is for prices to reach the inevitable (but still far-away) bottom sooner rather than later, but the cloudy vision from the bubble years seems to have blocked that realization in many. Hangemhi’s example about the Solano market shows he gets it — I bet he/she is good.
it was 4.3 for about a day. then they reduced it 500k or so after they got feedback that their price was unrealistic.
[Editor’s Note: Close but not quite. As noted last October, on the MLS for three weeks prior to being reduced to a “realistic” $3,749,000 (32% above its sale price).]
well, that was not so smart of them if they really left it on for 3 weeks at that price. 4.3 for a large suburban family home on the corner of 19th and Dink Hill? Even at the peak, I don’t see that happening. It was a not the right home for the market in this area on many levels, but it was a nicely constructed place nonetheless. 2.55 is a terrible price for it. You know the developer/flipper messed up on a number of levels when LMRiM guesses the correct closing price.
Lmrim- the problem that I have with your reasoning, along with several other ‘quant’ types on this blog, is that you believe the housing market can be predicted by macro economic factors and fundamemtals. The problem is that there are a whole bunch of economic factors (many are conflicting) and the trick is summation of how ALL factors (Inc. Those beyond economics) ultimately effect housing prices, and their timing. And insofar as that is concerned, comments on influential SF RE sites do impact peoples decisions.
As all of us have witnessed on SS, it is hard enough getting definitive data from: case-shiller, dataquest, MLS analyses, price per square feet, medians, apples to apples, etc. All those sources give some infocstoons, but there are always contrasting, or at least compromising rebuttals. Perhaps RE agents over emphasize the singular and specific attributs of a specific property, which often inhibits the derivation of meaningful analysis. But ultimately this micro approach is what serves their client best. It is not up to the agent to play ‘economist’ and advise the client if now is the right time to buy. They should be able to provide data, and perhaps some resources for the client. But ultimately it is up to the client to decide when the time is right for them to purchase.
But what a good agent can provide is the micro picture, which is very important. Things like: a 2/1 is a white elephant in this family oriented hood; a condo without prkg will be hard to resell; this area is prone to mudslides; there’s a new low income housing project due to me built right next door to this house. All these things effect value, and a good agent knows their ate well, and advises clients accordingly. An agent should not play amature economist! People can go to SS for that, or to ‘professional’ journals, as these make predictions about as well as the blog amatures. This is similiar to stock brokers and their recommendations. Years ago the WSJ would get several professional stock pickets choice picks, and compare them to darts thrown on the stock charts at random. And I believe the darts won over 50% of the time!
In summation, there are no simple answers. people need to grow some balls and reach their own conclusions on when, where and how to invest. There is alot of info out there to explore.
“But ultimately it is up to the client to decide when the time is right for them to purchase. “
That decision requires knowledge of economic trends and especially the trends in the locations that interest the client. While most here on SS seem to be knowledgeable, not all clients are savvy in those details.
That’s OK, not all clients can repair plumbing problems either. They just call the plumber when a pipe bursts.
Who should a client call when they need advice on timing a real estate transaction? Is there anyone who can serve as an adviser to avoid making a stupid financial decision? It’s a large amount of money after all.
The implication that with this this sole correct guess LMRiM “gets it,” and agents do not, is laughable. The guy very much does not “get” the SF marketplace. Look at the atrocious track record. The whole fair value flame thing is nothing more than a cop out, a way of saying “I don’t get it, but I’m going to show everyone on SS my scorn for the SF market.” Or look at the Los Palmos one he and others smugly teased me about. The guy’s guess was 25% off. That’s a neighborhood he was supposed to “know very well.” He knows very little of value when it comes to the local r.e. markets, and I’d go as far as to say nothing.
“Why is there a need for certain people on this website to constantly bash real estate professionals? Attributing Machiavellian schemes…”
LOL, I don’t think people in your profession are as smart as Machiavelli…..
“LOL, I don’t think people in your profession are as smart as Machiavelli…..”
I’m like totally smarter than that dude. So whatever on that one, broseph.
Milkshake of despair (cute name, btw. Try Humphrey slocombe ice cream in the mish, 24st @ Harrison 🙂
‘Who should people turn to for RE advise’- there is no one “the source”. Who do people to to for stock advise? A broker? Financial planner? Friends and family? Self study/experimentation/trial and error? That’s my answer, all of these and more. And as I said, a good agent can help you tremendously with the micropicture, and perhaps on getting a good deal on a specific type of property. But it’s unrealistic to expect the to ‘know’ of prices will continue dropping, if values will be lower 2 years from now, etc. Clearly no one ‘knows’ that for sure. Except god, or Lmrim 😉 (joke!)
Milkshake of despair (cute name, btw. Try Humphrey slocombe ice cream in the mish, 24st @ Harrison 🙂
‘Who should people turn to for RE advise’- there is no one “the source”. Who do people to to for stock advise? A broker? Financial planner? Friends and family? Self study/experimentation/trial and error? That’s my answer, all of these and more. And as I said, a good agent can help you tremendously with the micropicture, and perhaps on getting a good deal on a specific type of property. But it’s unrealistic to expect the to ‘know’ of prices will continue dropping, if values will be lower 2 years from now, etc. Clearly no one ‘knows’ that for sure. Except god, or Lmrim 😉 (joke!)
DataDude– no, I don’t think I know you– I don’t participate here too often.
Again, my two cents: I feel perfectly comfortable when humorously disparaging real estate professionals as a whole– just not individual real estate agents. Hangemhi talks about not using your “idiot cousin” or “college roommate.” The problem is that there are too many “idiot cousins” out there who give the profession a bad name. I and most people out there can recount many anecdotes of everything ranging from poorly informed agents to people who knowingly lie about things as there are no consequences to doing so.
At least that is the way it has been in the past. The shakeout, while difficult, may end up being good for the reputation of the profession. A good agent is valuable and the fewer “idiot cousins” out there, the fewer stories that circulate among friends about poorly informed or unethical service. And I’m sure it is frustrating and insulting for well-informed professional agents to have this constant noise around their profession.
Separately but related, I think the trend of commission compression is inevitable. It has happened to every business, product, and service out there through competition and the use of technology. The real estate industry has done everything possible to protect this commission structure over the years even though commissions have already compressed to some degree. I do think there is value there, just less than before with the amount of information on the web. And even without this, I think there is some catch-up to do after protecting the commission structure for so long.
Fluff, you rule!
Yes, there are a TON of “idiot cousin” agents out there. What happens is most Sellers actually interview several agents, but Buyers hire the first idiot to come along. Then they blame all agents for their own lack of due diligence in “hiring” (if you can call it that) their agent.
If you don’t interview several agents, and fire the one you hire the moment he/she proves himself a boob, then you’ve only yourself to blame (or keep your head in the sand and keep blaming all agents).
nanon,
I agree about the “idiot cousin” example. There are many good professionals that will still be there tomorrow, while the bad apples will go back to their original day job like selling used cars or selling Amway or whatever MLM scam is out there.
“but Buyers hire the first idiot to come along.”
Or the first idiot whose picture they see on a shopping cart. Way back when, when I first started looking at houses, I was going to use “dalmation guy” as my realtor for that very reason. Now, fluj, definitely fluj. I’m not sure whether I’ll tell him it’s me though.
That’s the second reference to “dalmation guy” I’ve seen here in the last couple of weeks! When we bought our place he was one we interviewed (recommended by a friend — top producer!), and he pushed hard for us to buy a (more expensive) 2-flat rather than the SFR we wanted. He fed us completely incorrect information about depreciation and tax benefits from renting the second unit (bottom-line — we get no benefit because our income is too high), and he just laughed and said “you got me!” when I mentioned this to him. Needless to say, we used a different realtor.
If you were to hire me, Diemos, I would not want you to tell me who you are. After, you could post your experience on this site. Unfortunately for everyone in real estate this test will only be preceded by a 50% market shift. And you could not even build a single structure for profit with the cost of materials being what they are. So the likelihood of this meeting transpiring, I think, is nil.
And @ “Fluff, you rule!” by anon.
You know that you actually agreed with me in the first place right? I said it was silly to attribute Machiavellian schemes to realtors based upon something like a fixed offer date. You said, realtors are way stupider than Machiavelli.
So we agreed.