As we wrote in June of 2008:
We’ve always loved the William Randolph Hearst built Beaux Arts building at 1001 California Street, both in terms of location and style. And as far as we know, the 3,500 square foot #9 was the last unit to change hands
eighteensix months ago (12/12/07) with a reported contract price of $2,888,000.
And while unit #8 is only a one-bedroom, it is rather large (1500 square feet) and offers multiple terraces and “views for miles.” Asking $2,495,000 which doesn’t include a parking space or the $2,237 monthly dues. Once again, if you have to ask…
Last September the list price for #8 was reduced to $1,750,000. And last night the list price was reduced to $1,195,000. Purchased for $1,460,000 in June of 2000, a sale at asking would represent an 18% drop in value below its year 2000 pricing and a 52% drop in expectations over the past year. Then again it is on the south side of California.
And non-sardonically, we wouldn’t be shocked to see multiple offers at this point.
∙ Listing: 1001 California Street #8 (1/1.5) – $1,195,000 [MLS]
∙ One Expensive One-Bedroom In A Beaux Arts Building We Love [SocketSite]
“And non-sardonically, we wouldn’t be shocked to see multiple offers at this point.”
Awesome terrace, but if I remember correctly I do not believe the elevator actually makes it all the way up to the unit, i.e. go to the top and then walk a flight of stairs to the unit. OK, I can accept no parking for my $2237 / month, but having to walk those stairs every day?
I’m just curious if the commenter has actually ever been to the unit before?
I know this isn’t professional but… Crap!
It’s a beautiful building and 100 years from now it will still be a beautiful building where as the “groundbreaking” and “innovative” architecture being throw up today will be viewed as eye-rollingly bad crap 100 years from now.
That’s quite an eye-opening cut (from $1.75 to $1.195), and even not knowing too much about this segment of the market I’ve got to believe that it will go for “over asking” by a bit.
Oh, and that’s fantastic that it looks set to go for well under its year 2000 price. People really got pretty silly, and it’s a long slog back to sanity. Visible losses on a 9 year hold is a good lesson to those willing to learn.
What exactly are you getting for the HOA? Flying in an expert from Italy to clean the gargoyles’ noses?
The present value of those HOAs is about a million, by my estimation. A million in maintenance for a 1 bedroom. That cuts pretty deep into the potential purchase price.
A door person in an 8 unit building absolutely kills the HOA. Pay that person $60K, then add another $36K in taxes and benefits and you’re up to $1K per month per unit.
Next, as if a door person in an 8 unit building has too much to do, they hired outside management to “manage” an 8 unit building. So this is clearly a group of people who doesn’t care about what they are spending on HOA.
That spending pattern is designed for a different era, which is in the process of ending, and the current seller is going to pay for that problem.
High HOA is always a killer, more so in bad economy, when people are more cost sensitive.
I am a little confused here, how was the 52% drop calcuated?
Yeah, if only that HOA had been, say, $1000, this property would have appreciated the “typical” post-WW2 average of 6% CAGR for primo California. In fact, if that had happened, the price would be $2.47M today, which is suspiciously close to the original asking price of $2.495M. LOL that some realtor listed it at that price last year.
Dude, when you see an opportunity, you really do say the same things over and over again. At least try to mix up your language.
Sorry about that, anonn, but I feel I have to. There are always new people reading, and besides, people in this town are pretty slow on the uptake.
” Dude, when you see an opportunity, you really do say the same things over and over again. At least try to mix up your language. ”
umm..pot meet kettle, etc etc.
Hardly
It *is* strange, that a unit more than twice as big went for 2.8, and then this gets listed for 2.5.
But with those HOAs, fair value is zero, at least for me. I don’t care how nice it is, a million bucks should be able to fund a 1 bedroom + future maintenance. Even on Nob hill. Call it the “Million per bedroom” ceiling.
Annon, you doubted my view that we were seeing capitulation in the high end. I would hold this up as a prime example of capitulation.
[quote]A door person in an 8 unit building absolutely kills the HOA. Pay that person $60K, then add another $36K in taxes and benefits and you’re up to $1K per month per unit.
Next, as if a door person in an 8 unit building has too much to do, they hired outside management to “manage” an 8 unit building. So this is clearly a group of people who doesn’t care about what they are spending on HOA.
That spending pattern is designed for a different era, which is in the process of ending, and the current seller is going to pay for that problem.[/quote]
One door person cannot work 24/7 – so you need at least 3. Ergo, multiply $100K by 3…
In buildings such as this, the residents are too hoity toity to get their hands dirty with grubby issues such as an HOA. That is what the hired help is for…
I’d rather live at One Rincon 🙂
Hmm — seems like the square footage also dropped, from 1500 to 1300 sf, per the new listing’s figures. So you’re still looking at close to $1000/sf with no parking, in addition to the high HOA. Not so sure this is going to fly off the shelf even now.
Annon, you doubted my view that we were seeing capitulation in the high end. I would hold this up as a prime example of capitulation
I told you condos would be affected the most numerous times. I’ve been in this unit. And if I recall properly, Paul’s right. You gotta take the stairs up from the elevator. But go on ahead and think that this is indicative of everything resetting to 2000 tho. To me, when I look at properties, which I do for a living, 2003 and early 2004 is the real first backwards length. To read this site, you’d think we’ve lapped that. We haven’t.
Just curious if anyone can explain why an owner of a single family house (that is not in a PUD)is allowed to write off any capital expenditures and improvements on their home (for example a new roof) yet condo, co-op and home owners with a home owners association can’t write off any portion of their dues that cover these same things in the reserves. Does any entity get a tax benefit from the dues that owners pay but can not write off? I realize that the owners in a CID or PUD with a HOA co-own all of the common areas and are all responsible for their upkeep. But shouldn’t there be some kind of tax benefit for those paying the upkeep? It doesn’t seem fair. When you see how high some of the dues are it’s mind boggling that someone hasn’t tried to change this.
“I told you condos would be affected the most numerous times.”
And I never disagreed with you.
“But go on ahead and think that this is indicative of everything resetting to 2000 tho.”
Not everything, not yet anyway. But it is capitulation on the part of this owner. The abandonment of dreams of free money falling from the sky and a realistic price at which it will sell.
“You gotta take the stairs up from the elevator.”
I thought we had broken the bulls of this habit but I guess not, so I’ll do my standard snark. (Sorry to do the same thing over and over but new material is hard to come by.) Ahem. Yes! One has to wonder what the owners were thinking when they removed the elevator since the last sale. Oh wait! They didn’t do that. It’s exactly the same as it was at the last sale.
“We haven’t.”
Patience. Patience!
Just curious if anyone can explain why an owner of a single family house (that is not in a PUD)is allowed to write off any capital expenditures and improvements on their home (for example a new roof) yet condo, co-op and home owners with a home owners association can’t write off any portion of their dues that cover these same things in the reserves.
You can’t write off a new roof. A new roof is not an improvement. It’s not a “capital expenditure” in the sense that you mean — it’s replacement of depreciated capital — a.k.a. maintenance. So the answer boils down to willingness to commit tax fraud.
There was another poster on here a while back that commented that roof replacements were capital investments, not maintenance. So, I guess this type of fraud may be widespread.
This is not tax advice, there are all sorts of fine print issues to deal with. etc. etc.
No. That’s not the point. The point is that in worse markets every little thing becomes a glaring shortcoming. In upward and competitive markets that isn’t the case, as things get glossed over. But again, think what you will. Apples to apples, right? I think Eddy said it, or something like it, yesterday. The markets themselves are not apples. How many luxury 1 bedrooms were there in 2000 versus now?
Robert – you may be right but a new roof vs. a old roof that leaks is an improvement in my humble opinion. LOL
I know a relative of one of the owners of a unit. The owner lives on the upper east side in NYC and comes into town for an opera, some shopping or a party now and again and lets relatives/friends stay there when in town.
Any HOA costs or otherwise are completely insignificant to her bottom line. If she had to sell for some reason, loosing money or any profits is irrelevant to the family trust. They are in a completely different league.
I think the editor summed it up best with, “If you have to ask…”.
It is ironic how you’re style of writing acts as a metaphor to SF re: That is, both are impossible to understand.
Nearly every home in Pac Heights has at least one flight of stairs at the entry and another inside. This one has a single flight inside. The horrors!
And large view terraces, because of their rarity, can command a healthy fraction of the ppsft of interior spaces, though they have to be left off the square footages. So this unit was originally priced consistently with the one that sold before.
“The point is that in worse markets every little thing becomes a glaring shortcoming. In upward and competitive markets that isn’t the case, as things get glossed over.”
Absolutely true. A weakening market will show up first in the marginal properties. But that doesn’t mean that better properties are immune, just that marginal properties will fall first.
“Apples to apples, right?”
Actually … yes.
“How many luxury 1 bedrooms were there in 2000 versus now?”
My view is that we are seeing a demand effect not a supply effect but think what you will.
clearly this is not located in real SF.
“It is ironic how you’re style of writing acts ”
I’s will try harder’r next time.
anonn, you should try simply making your point in straightforward English. I know that means you have to actually state a position and commit to it, but it would be a huge improvement over your usual verbose, incomprehensible lack of substance.
For example:
“To me, when I look at properties, which I do for a living, 2003 and early 2004 is the real first backwards length.”
That is an absolutely meaningless, or at least incomprehensible, statement.
“To read this site, you’d think we’ve lapped that.”
Again, that is incomprehensible nonsense. I think you have some point you are trying to make, but nobody can figure it out.
“The markets themselves are not apples. How many luxury 1 bedrooms were there in 2000 versus now?”
I think this was an attempt to make some point with your rhetorical question, but again, a rhetorical question does not convey anything if it is just bizarre nonsense, like this one.
“The point is that in worse markets every little thing becomes a glaring shortcoming. In upward and competitive markets that isn’t the case, as things get glossed over.”
See, now for this point you simply wrote plain, if not the most articulate, English and we can understand it. It is an obvious, unoriginal point, but at least you conveyed a coherent thought.
Just make your point without trying to be clever, because your attempts at showing how clever you are simply reveal the opposite.
Joe, I don’t give a rat’s ass what you think. I am a trained editor. You are an internet crab. It was a — very simple — swimming metaphor I made up as I typed. If you don’t like it, who cares? If you didn’t follow it, you’rs stupid. Either way, I don’t care.
“I’d rather live at One Rincon :)”
Huh? So you’d rather have Interstate 80 up against your building over Grace Cathedral, Huntington Park, the Mark Hopkins and the Pacific Union Club?
Are you kidding? If not, you’re insane.
I walk my dog to Huntington Park a few times a week and that little section of the city is by far one of the most beautiful. I never get tired of the views and the neighborhood.
Great to see the interior of one of the city’s most beautiful residential buildings. It’s a treat.
Maybe dismissed as a “dumb” question, but if the sale price has been reduced by 50% from the 2.2 mil, did they also do any reduction in the exhorbitant 2,237 HOA dues ?
Or is that something that is not up for bargain ?
I am LOVING this. The city is slowing coming down to “normal” values in the 2 million + category….
We want more !
“if you didn’t follow it, you’rs stupid.”
I’m not stupid. And I didn’t understand what you were trying to convey either.
He’s right. Some of the time I have no idea what point you’re making.
Um, the next price tier downward is circa 2003 or early 2004 pricing? And to read this site, the conventional wisdom is that the market has already surpassed that? Those of us who actually look at properties all the time know that the market really broke northward in late 2004. In fact, many are the times on this very website when the gauntlet was laid down. “Find something 2005 or later that is a positive apple.” Why do you suppose the year 2005 is so frequently chosen? I’ll tell you. It’s because most people who follow SF r.e. closely take it for granted that almost all properties purchased in early 2004 and backward will easily show positive gains. Now, exceptions exist, and this property is one. But a the first backwards length, and already lapped — difficult, really? I think not.
Ugh. Edit button? For a site based upon dialog? Step it up already.
Guys, it’s pretty obvious what’s going on here: Somebody bought a crappy property in a bad neighborhood, and tried to sell after a short-term hold. This is never an advisable real estate investment strategy according to realtors. No surprise they lost money.
And besides, they overpaid. It happens.
Yes! And it’s all micro, my dudes.
I usually agree with a lot of the typical posters on here but question anyone calling this a bad neighborhood? This is one of the best areas of the city, no doubt about it.
…this a bad neighborhood?
Maybe time to take the ole sarcasm detector into the shop for a tuneup…
check out the sfr next to it! – ain’t too many of those in this ‘hood (altho there’s a crazy little single-story black house on the other side of the park)
amusingly, Prop. Shark designates this building’s neighborhood as “Downtown Tenderloin”
LMRiM,
As far as going “over asking”, you are so intelligent and dilligent, I am suprised that you would assign a value to anything without the most rudementary of investigations, ie seeing the place. Maybe u 2 are being influenced by the Socketsite culture.
I’m not saying it will or won’t go “over asking”; just mystified how such a thoughtful person could make such a capricious judgement.
Paul
From asking $2.5m, to now asking $1.2m.
This market is hot hot hot!
Paul, I suspect that LMRiM is willing to “assign a value” to the place w/o seeing it because he does not believe that the market for prime SF condos has fallen so far (yet) that this place will go for 18% below its 2000 sale price.
If it were to sell for that low, it would be pretty surprising since it would imply that even a guy like LMRiM is too bullish about the prime SF condo market right now!
Could be wrong but knowing LegacyDudes post’s it was not sarcasm, wish it were gumby.
Anyone have experience with reducing prop taxes. Submitted for reduction, city called to settle adjustment prior to hearing. Is it best to settle with the city or go to the hearing?
Good question, Paul, about being willing to assign a value without having seen the place. (Obviously, I’m not assigning any sort of exact value, and I cautioned that I don’t know the area so well, so it’s only a rough guesstimate.)
As other posters noted, it’s more just an estimation based on its prior sales price in 2000. When you think about it, seeing a place is really not the big deal it might seem to you (as a realtor who does this all day long and who has the role of trying to pitch and sell a particular property or satisfy the wants of a particular potential buyer). Assuming that the property is not an outlier (really dingy, or – conversely – having a few solid gold washbasins), what one is really doing in guesstimating a price is not evaluating the asset, but rather the purchasers.
Real estate is a funny asset, in that it cannot be shorted by people who have strong opinions as to a potential mismatch between prevailing price and underlying value (or future forecasted price). Thus, the person who values it highest sets the selling price. So, again, of necessity one is making a judment about the sophistication of the buying pool, not the underlying characteristics of the property itself.
Now, I take it as a given that the SF property market is, and has been for some time, mispriced. We see all the time properties that are being sold for well under prior prices – and of course we only see what has actually sold and do not see all the disouraged sellers who are trapped (although we get hints of it from seeing all the pulled listings). Behind each one of those instances we see a mistaken forecast, because no one buys a house to lose money on it in SF – not in the 2000s!
My guess is that there is at least someone out there with sufficient means to pay $1.2M who will think he is getting a deal because it is 18% under its 2000 sales price. If there is more than one, it will go for a bit over, although in this environment it’s hard to imagine huge overbids. The purchasing pool doesn’t suddenly get “smart” overnight. It’s basically the same pool that so severely miscalculated in years past. 18% under a 2000 price would be irresistable to at least a few of that group I’d guess, and you only need one!
We’ll see what happens.
how much would this rent for? HOA + prop tax alone comes out to over 4K monthly? that’s w/o parking. does anyone else share “robert”s sentiment that fair value is 0?
LMRiM,
Very thoughtful answer, thank you.
Paul
I walk past this building at least 1 building and my Parisian heart starts pumping faster the closer I get to this beauty (the grade might help too).
I’d seriously be interested in this property at this price. Wifey not too hot though though a big Haussmann afficionada and I would need to work hard on that. I think this place at this location would be a great investment over 10 years. Not THE bargain, but decent pricing.
Then I looked at the HOAs. Sigh. I rent at the top of Telegraph Hill for roughly these HOAs AND I HAVE A GARDEN. You just don’t give that up for a noisier nabe. No valet de pied wiping my derriere though where I live now. Is the personnel also servicing the local ladies for that price? Just kidding, I know this is extra;)
I could always make it work financially, but there’s really no incentive over renting. I feel the place will be full of anal-retentive types and the HOA meetings will be bloody useless pi$$ing contests among the non-absentee out-of-towners who would be all Ou-la-la about my Parisian origins then would hate me for proposing to halve these ridiculous HOAs.
I say give me 10 years of free HOAs and property taxes, knock 100K down and I’ll consider it.
“Could be wrong but knowing LegacyDudes post’s it was not sarcasm, wish it were gumby.”
Actually, I was being sarcastic. Obviously this is one of the nicer parts of town, no argument there. I was poking fun at the typical realtor spin that you can’t lose by buying in a good neighborhood and holding over 5 years. That’s precisely what happened here, and it resulted in a loss. A big one. I’m too lazy to do the math, but I’d guess at least a half million bucks was destroyed here over 9 years of holding primo SF property.
LD phew, good to know you consider this a nice part of town I was worried there. As for the realtor spin, clearly it is a loss – a big one. Regardless of the loss not being problematic for the owner a loss is a loss. If this place had been available at this price when I last bought I would have had a hard time deciding between the two.
Some random thoughts:
1. Lived many years in the City. This is a lovely part of town – Stanford Mansion, Masonic Hall, The Fairmont, Hotel Huntington, Mark Hopkins (married there) but – today, as an old guy, – I actually prefer SOMA. Much more so.
2. I drive a stick shift. The stop signs heading up onto California still worry me.
3. Finding street parking around the park was, is and will always be a serious challenge.
4. 1001 California belongs to many of the early 20th century structures in San Francisco that may not survive the next big shake. The terraces are especially at risk.
5. Ironically, $2237 HOA is virtually the exact monthly mortage on a 30 year fixed 417K conforming loan at 5%…
Elisa Stephens Lives next door at 1021 California St. President of Academy Art University. Just thought maybe this will help or not. Which is only one of the few single family homes in Nob Hill and the only one in that block.
Hearst built the structure? Could anyone point to information about this? I had read that he re-built the penthouse but not the entire structure, but am happy to learn more about this from any sources.
Another factoid: the property sold for $1M in 1990. That was the top of another much smaller bubble.
UPDATE: A link to our piece last year (Expensive One-Bedroom In A Beaux Arts Building We Love) complete with reader references to the infamous resident Vincent Friia was accidentally dropped from our original post above. It has since been replaced.
Plans are afoot to convert the empty ground floor restaurant space, which has had multiple failed attempts, most recently Beaucoup in 2002, into two multi-level condos. Design by noted Pac Heights architect Butler-Armsden
Fourteen days after we wrote “non-sardonically, we wouldn’t be shocked to see multiple offers at this point” the sale of 1001 California Street #8 closed escrow.