324 Day
Purchased for $1,053,000 in 2007, the single-family 324 Day was subsequently gutted, foreclosed upon and returned to the market mid-renovation last month over in Noe.
Asking $760,000 (“Seller/lender anxious to sell, very motivated. Bring your best offer, don’t worry about the listing price.”), the sale of 324 Day closed escrow on 7/17/09 with a reported contract price of $675,000.
Yes, the price of “fixers” is falling.
Calling All Contractors That Still Have Cash… [SocketSite]

Comments from Plugged-In Readers

  1. Posted by auden

    They still overpaid by $25,000.

  2. Posted by The Milkshake of Despair

    “Yes, the price of fixers is falling.”
    Was this a fixer when last sold in 2007 ? Or was it already in tear down state ? If anyone took a look at this pre-teardown in 2007, it would be interesting to hear your opinion.
    A fixer is a house that can be made livable by catching up on basic deferred maintenance and replacing badly out of date stuff : new roof, refinished floors, paint, landscaping, kitchen and bath remods, etc.
    I’ve seen plenty of teardowns too : severe foundation issues, wood rot, basic systems (plumbing, electrical) not working. Minimally the whole house would be gutted and sometimes large parts torn down.
    What was 324 Day in 2007 ? a fixer or a teardown ? Lots of fixers were handled like teardowns during the Dwellification boom. Was this one of them ?

  3. Posted by unwarrantedinlaw

    Thanks for that, Mr. Milkshake, very instructive.

  4. Posted by sparky-b

    Between this photo and the sale I saw a Notice Of Violation posted on that blue plywood. It was for undermining the neighbors foundation.
    I’m with Milkshake as well I wouldn’t call this a fixer and use it as an example of the fixer price going down.

  5. Posted by salarywoman

    Well, whatever it was in 2007, it is not a fixer now.
    The most sensible and economic option for this property is to maintain whatever is left of the front facade a) to satisfy the city and b) because, urbanistically, it is the right thing to do. The rest of the building, including the foundation, should be completely demolished and rebuilt.

  6. Posted by sparky-b

    The foundation has already been completely demolished so that part is done.

  7. Posted by tipster

    Does this count as an apple, since it was purchased to do over and some of that work has been done. If so, 36% is quite the price drop.
    Is there anyone here still trying to say things are down only 5-10% in Noe or has that laughable statement finally been put to rest?

  8. Posted by Someone

    The complete story of the “developer” was featured on
    [Editor’s Note: As noted on a related property last week: An Ex-Comp Now Contractors Special Closes Escrow On Cole (1130).]

  9. Posted by remodel

    Can anyone comment on undermining the neighbor’s foundation? I am interested in a redo of my foundation but worried about the impact on my neighbors (also brick)

  10. Posted by sleepiguy

    I agree with salarywoman… Demo everything but the facade and start over. I’m all for preservation, but more often than not, these homes are lost causes. Unless you are a contractor or have done it many times before, I’d stay clear of these projects. They’ve been bankrupting people for ages. I’ve done fixers and tear-downs and the latter are just emotionally and financially draining. Unless you have plenty of cash on hand, stay away… and I think people are staying away.

  11. Posted by David

    Undermining a neighbor’s foundation to make improvements to one’s own foundations is done all the time in SF. I own a residential architecture practice and we encounter this all the time. There are numerous ways to effectively handle this, and the means very with the particular site conditions. If you’re on rock, you’re fine, sand is a whole other level of complexity and cost.
    The SF building code has a section that requires notification of the affected neighbor to allow for discussion of the proposed work and what method of soil retention/ risk mitigation will be used.
    Ultimately, the property owner undertaking the foundation replacement is responsible for keeping in place the soil under the neighbor’s house, not supporting the neighbor’s house directly.

  12. Posted by remodel

    Thanks David! Interested in posting a link to your company info? Thanks!

  13. Posted by Anna

    Good comment from sparky-b on the original post:
    “I think this place would have sold for $1.75M if was finished and sold in 2008, but now that market is one of the worst, and this place will only be worth $1.35M. If the cost of the work is $400K and the carry/close is $150K, then break even is $800K purchase. Let’s say “I don’t worry about the asking price” and offer $600K, then it seems like a decent project. But, since basically nothing in Noe sells under $700K I don’t think it will happen.”

  14. Posted by EBGuy

    Anna, I agree that sparky was right on in his assessment (though, he didn’t think is would sell sub $700k). You wouldn’t happen to be one of the Three Musketeers (it would start to seem like an episode of “All in the Family” here)?
    This was one of those “feel good” foreclosures. The bank took a hit of $25k on the loan (plus lawyers fees and transaction costs) and the rest was distributed in Mr. Muhawieh’s investor network. Repudiating debt, one foreclosure at a time…

  15. Posted by whatever

    Looks like Metropolitan Bank took it back for 770,926 on 6/16/09, so it’s more than a 25k hit.

  16. Posted by sparky-b

    EBGuy, My number would have been closer if I knew about the Notice of Violation when I wrote it.

  17. Posted by EBGuy

    @whatever — Without a doubt, those transaction and lawyers fees can add up (hence the higher bank asking price at the foreclosure sale). I was pointing out that the bank “misunderestimated” how much damage Mr. Muhawieh could do to the original $700k loan. Thirty percent down, what could go wrong? Looks like a couple of lumber companies and the Jaber Family Trust also took a hit on this one.

  18. Posted by David [Armour]

    My company is Armour+Vokic Architecture.
    Presently it’s just a landing page, but our contact info is there.

  19. Posted by anonn

    Yes, gutted, not permitted, violation ridden, neighbor undermining, post bankruptcy fixers are down quite a bit these days. No doubt about that. But “the price of fixers is falling” ? 675K for this beast, and that’s what the SS ed ledes with. LOL.

  20. Posted by anon

    Yes, a Noe dump that sold for $1,053,000 two years ago that is still a dump but now sold for 36% less is a big story. The interesting developer background only makes it more so. So you’re wrong once again, “anonn.” Now go back to playing World of Warcraft.

  21. Posted by anonn

    “Still a dump” ? read the enormous differences before you spout your little junior vitriol once in a while, you old mean anonymous cretin. An apple this is not. I wouldn’t know World of Warcraft from the Housewives of New Jersey. Sounds like you would tho. Good luck with that.

  22. Posted by LMRiM

    It looks like prices in Noe are down a lot – probably more than 20% on average from last year.
    sparky-b – who’s in the market all the time (as a contractor) and watches this stuff closely – let the cat out of the bag with his comment from the earlier post on this property, which was quoted above:
    “I think this place would have sold for $1.75M if was finished and sold in 2008, but now that market is one of the worst, and this place will only be worth $1.35M.”
    $1.75M to $1.35M is down 22.8%. A telling comment imo, and one which lets you know what plugged in people are really thinking.

  23. Posted by sparky-b

    By “that market is one of the worst” I meant that this type of house is the biggest hit in the Noe area (that being a 2 story place with bedrooms on separate floors, some behind the garage). So I don’t think all of Noe is down 20%, but I do think this type of place is. I guess we’ll probably see as I would expect this gets finished and resold.

  24. Posted by noearch

    It’s not that difficult to replace old brick foundations with new reinforced concrete foundations, and not undermine your neighbor. Just completed that work on my own house a block up on Day St. from this one. If your new foundation goes below the bottom of your neighbors footing, the contractor simply builds your footing in 4-6′ sections, allowing it to cure before moving on to another section. It’s pretty common practice.
    For budgeting purposes, figure about $100k for complete new foundations and seismic upgrade on a house like this one. Then figure about $275/sf for the complete buildout including adding space, new kitchen, baths, finishes, windows etc. My entire house remodel, just completed, came in at about $375/sf.
    Some more advice: 1.) hire a good architect and structural engineer, qualified to do this work. Permits can be complicated. Detailed drawings are important. Make sure your architect remains involved during the “construction observation” phase. He/she should stay very involved.
    2.) Search out a good, licensed, qualified general contractor who has done many homes similar to this type.
    3.) be prepared for some delays, and some cost increases, due to unknown conditions; typical for every house of this vintage.

  25. Posted by The Milkshake of Despair

    noearch and sparky – I’ve heard that the hillside where this section of Day St. is located is riddled with seasonal natural springs. Is that your impression ?
    I’ve got a theory that house-by-house foundation upgrades are fixing local water intrusion problems and forcing the underground stream beneath and on to the downhill parcels. Have you guys seen any such springs um … spring up lately ?
    I guess this isn’t just a Billy Goat Hill problem. Other slopes in the city show signs if springs springing up in the springtime. Not so much a problem in other less dense bay area cities though as the gaps between houses tend to provide pressure relief for underground water flows.

  26. Posted by noearch

    Not sure what “hillside” you are talking about. This section of Day St. is only moderately sloped up…the hills are farther up toward Diamond St. Been here 24 years in my house and I’ve not encountered any streams. No real water problems when we dug our new footings. I dont really think any footing upgrades are changing underground streams, to be honest.

  27. Posted by sparky-b

    I haven’t done a foundation on this part of Day, but I have in and around Valley/Sanchez and it was dry over there. I have worked in other parts of Noe Valley with constant underground streams.
    All new foundations are drained to the sewer and capture the water with drain board, perf. pipe, and catch basins. In the case of streams more drainage as well as waterproofing is needed. It’s more work and more money (and not fun) but it does the job. So, in the end new foundations are not pushing water to other parcels, they are taking the water out and sending it into the sewer.

  28. Posted by The Milkshake of Despair

    noearch – I was thinking of Day from Sanchez westward and up the hill to the end. I got my information about Billy Goat Hill being spring central from a geotech engineer who I had contacted about inspecting a north-south running retaining wall suspected of having a head of water behind it during the wet months (lots of spalling). He told me something else about water and concrete that made me suspect his competence though so maybe he was full of it about BG Hill too.
    sparky – That’s cool that code now requires new foundations to drain towards the sewer. It makes a lot of sense to add drainage during a new foundation build because it doesn’t add much additional cost. Adding drainage after construction is a pain.

  29. Posted by john

    So, $675K to buy a lot. That’s what the story is about, right?

  30. Posted by noearch

    @ john:
    Yea, thats part of the story, but the cool thing bout blogs and comments is that new threads can begin and take us places beyond the “story”.. it’s all about sharing info and about communication, learning and being good neighbors.
    I always find I learn more when a certain story goes off course and new thoughts are added.

  31. Posted by NoeValleyJim

    Here are six potential apples I found by cruising redfin and looking at the last three months sales. I am not sure they are “clean” apples, but most of them probably are.
    Only the one who dropped the most was featured on SocketSite.
    From these data points, all of which include 2006 sales and recent sales, Noe Valley SFH are down from between 0-20%, most of them lean toward the former. This data is not cherry picked, except for the fact that I pulled out stuff that went up a huge amount, on the idea that is must be remodeled.
    [Editor’s Note: Come on NVJ, at least do your homework and try to be factually accurate. Of your six apples, we actually profiled three: 3976 25th Street, 714 Duncan, and 1507 Dolores. And we wrote about all three well before they closed escrow (i.e., we weren’t “cherry picking” their outcomes).
    Unfortunately the City’s online permit history site is currently down so we can’t do any basic due diligence on your other three (we tend not to settle for “probably” when it comes to apples).
    We will note, however, that while 435 Alvarado recently sold for 0.5% under its purchase price in August of 2006, you might have noticed that it also just sold for 0.5% under its sale price in May of 2000.]

  32. Posted by Tall Guy

    Ouch, that hurts. A data-slap?

  33. Posted by anonn

    Ouch, that hurts. A data-slap
    Hardly. More like the purchase of a vacant lot, numerous fines, and a lawsuit for 675K. Whatta bahgain!

  34. Posted by NoeValleyJim

    The database is back up.
    435 Alvarado shows no work since a bathroom remodel in 2004. So that is:
    May 12, 2009 Sold $2,140,000
    Aug 15, 2006 Sold $2,150,000
    For 3976 35th St:
    Jun 05, 2009 Sold $2,800,000
    Nov 28, 2006 Sold $2,900,000
    For 16 28th St, there is a permit for four new windows, valued at $4k, this is minor enough I am going to ignore it though not quite a perfect apple:
    May 19, 2009 Sold $1,003,000
    Nov 10, 2005 Sold $1,000,000
    1424 Sanchez shows no work since a deck added in 2004:
    Jul 08, 2009 Sold $1,285,000
    Nov 20, 2006 Sold $1,335,000
    Adding the other two:
    714 Duncan
    Jun 23, 2009 Sold $1,095,000
    Jan 25, 2008 Sold $1,413,000
    1507 Duncan:
    Jun 26, 2009 Sold $1,040,000
    Feb 01, 2006 Sold $1,310,000
    So those apples are from 10/05, 2/06, 8/06, 11/06, 11/06 and 1/08 with a change in value of
    0%, -21%, 0%, -4%, -3% and -23% respectively.
    The mean of those values is -9 and the median -4.
    Now this is not a perfect data set and there are some that believe that late 2006 was not the peak of values, in spite of Case-Shiller and other evidence, but there is enough to tentatively state that prices are about 5% down from 2006 values. I believe that prices went up a tiny bit, perhaps 5%, the next summer and then matched that value in spring 2008, but I haven’t done enough data analysis to prove it to anyone, including myself.
    The price/sq ft graph on redfin looks similar, with some pronounced humps each summer:
    Prices today are $728/sq ft, which is 4% down from the $759 in July 2007, which reinforces the other analysis.

  35. Posted by eddy

    324 Day is back and remodeled at $1.799
    Speaking of the price of fixers, 144 Day just hit the market as well.

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