CFAH

3444 Washington

With a tax assessed value of $15,840,090 (suggesting a sale price of around $15,200,000 in 2006), 3444 Washington returned to the market a year ago asking $17,500,000. Six months ago the home was relisted at $15,750,000.

Two weeks ago the listing expired but was then reactivated. And this past Friday the asking price was cut to $12,000,000 (21% under its implied 2006 price/value).

Comments from Plugged-In Readers

  1. Posted by Tall Guy

    I feel like I need money to make money in this market. More money than I have.

  2. Posted by eddy

    North of $10M is going to be a challenge. I think we will look back on the heights and realize that value and pricing got a bit out of hand. Everything over $10M is going to be hard to move unless it is truly special and unique.

  3. Posted by lolcat_94123

    lol@ “a bit out of hand.”

  4. Posted by LMRiM

    Funny how these high dollar sellers make the same amateur mistakes that all amateur investors do. $17.5M wish price a year ago? lol.
    BTW, tax records show a prior sale price of $15,225,000 (look at the first supplemental tax bill), but in the earlier thread sleepiguy (who always seems to be right on these sorts of places) thought it sold for $16.5M. Maybe they threw in some furniture, ha!

  5. Posted by Legacy Dude

    Must be some mistake here. The experts in the trenches have repeatedly said that prime SF is down no more than 10% at this point. I guess this place must be in one of those neighborhoods where you need kevlar. Plus probably on a busy street. Does anyone know if this is a good area?

  6. Posted by sleepiguy

    While I got the information about the previous sale from someone peripherally involved (not a realtor), I shouldn’t have taken it at face value. This was back, what, summer 06? I think we should assume the assessed value is closer to the sale price. However, there was a similar sale in the 8 figure range where I know the buyer payed more than the official assessed value and I don’t really understand the discrepancy…
    Anyway, I don’t expect a sale at this price either. I’d be really surprised to see any 10+ sales between now and the end of the year, unless it’s that Gold Coast mansion.

  7. Posted by Chad

    Is it possible to convert a residential to commercial easily ?
    If yes, then I would scoop this up and turn it into a high-end NightClub 🙂
    Admission starting at 100 $ a head.

  8. Posted by Chad

    @Legacy Dude You heard right.
    But this one is an exception cos it is at the very very high end of the market (even for us Rich San Franciscans 🙂

  9. Posted by EBGuy

    @Legacy Dude, Nice link… I’m going to be heading Downeast in a couple of weeks and will try to blog a report on the state of uber-prime island living (not that I’m in that set, but information usually trickles down to the plebes). I think there was a bit of denial last year (wishing prices still set at pre-crash levels or a little under); I imagine it will be full on “duck and cover” mode now.

  10. Posted by FormerAptBroker

    The six-bedroom home at 2100 Vallejo Street was re-listed late last week with a sharply reduced price: $15 million. Now that’s what I call a price reduction…
    http://www.sfgate.com/cgi-bin/blogs/ontheblock/detail?entry_id=43494

  11. Posted by Toady

    Bad luck! Three 4’s in the address. Rules out any rich Chinese coming from the Mainland to save the day.

  12. Posted by eddy

    There are surprisingly few data points above $10+m so the apples here are very limited. I’d say maybe only a few dozen properties have ever sold for above this amount in the city and they were all between 2002-2008. I’m sure there are a few outliers someplace, but the thought that any ole’ mansion in D7 with a view was worth $10M is what got out of hand. This reality has more than a few homeowners in the nabe upset as it will eventually have a trickle down impact. Can’t wait to see what the Foreclosure on Jackson street yields.
    2601 Broadway last sold for $6.2M in 1999 and it’s now asking/dreaming $15M. I don’t think it sells for over $10 today.
    2100 Vallejo just dropped their price last week to $15.2M. Last sold in 1995 for $2.5. Not sure it sells for over $10M.\
    The other 3 properties on the MLS are not worth discussing; and of course there are about 6-10 homes that are not on the MLS but actively for sale. That Gold Coast home is the only one that has a shot at getting over $10M. I’m not even sure that 2901 Broadway could sell there; but probably.

  13. Posted by anonn

    It’s not surprising in the least, 10M is a huge number.

  14. Posted by LMRiM

    It’s not surprising in the least, 10M is a huge number.
    I bet it’s surprising to the guy who paid 50%+ more than that huge number for this place just three short years ago.

  15. Posted by Legacy Dude

    Can you imagine paying $3.2 million to rent a house for 3 years? That’s $90,000 a month, not counting interest, property taxes, maintenance, etc. In total, this 3-year hold cost somebody nearly $4 million dollars. Simply astounding. They destroyed more money in one piece of prime SF real estate…..in 3 years…..than the average schmuck will even make in a lifetime. Maybe I’m the only one who finds that amazing. Guess I’m easily amused by large numbers.
    But Chad explained what happened here: the place is simply TOO prime.

  16. Posted by anonn

    I bet it is too. But if he would have looked around for a minute he might have realized the number of 10M+ sales in SF to that point. And then it would not have surprised. He also might have stopped to understand that holding a property for three years after paying a number with relatively few correlating comps might not pan out that well. THen again he might just be a riverboat gambler. But thank you for cramming one of your same little snaps into Socketsite. It’s been a minutes since I’ve had to say the same thing to one of your same things.

  17. Posted by flujsterfan

    “It’s not surprising in the least, 10M is a huge number”. Anonn, that may be the funniest comment of the summer. (or were you serious?)

  18. Posted by eddy

    My guess is that a homeowner here paid all cash and is probably not much worse off than if they were in the markets over the same period. But of curse, it’s not yet sold and I’m sure the real loss isn’t going to feel very good. What I find interesting about these homes is that it is a very touchy game and the network of buyers is small in this range. You can’t really play pricing games and “under price” it to get a bidding war. It just doesn’t happen, or happens rather infrequently. Interestingly, the selling agent here is having a similar issue with their other high end listing at 1940 Vallejo #8 which is 18% off its asking price as well. These homes sitting long and not selling are highly reflective of the market; and actually, quite damaging as a whole. Either price it to sell, or pull it from the market.

  19. Posted by anonn

    Um, Eddy said that there is a surprising lack of 10M sales.
    I look at sales databases every single day for hours and found the lack of 10M sales rather unsurprising. Why? Because know them to be rare.
    Pretty cut and dry. Pretty dry. Explain the part where that’s the funniest thing you’ve read all summer, would you? Thanks in advance.

  20. Posted by Legacy Dude

    “…probably not much worse off than if they were in the markets over the same period”
    Not sure if that’s correct, eddy. PropertyShark shows a $5MM mortgage at the last purchase. If that’s true, then money in is $15.2 – $5 = $10.2 million down. Money out is $12MM less 5% commission less loan payoff of $4.8MM, for ~$6.5MM. Take out property taxes of $460K for a net of $6.1 million, assuming they didn’t renovate anything. Mortgage interest is only deductible up to $1MM, which doesn’t help much here, and would probably be a wash with any renovation and maintenance anyway.
    In other words, roughly a 40% loss over 3 years. Meanwhile, the DOW closed July of ’06 at 11,150, and is at 8,331 today, for a drop of 25%. The magic of leverage.

  21. Posted by LMRiM

    Don’t forget stock dividends, Legacy Dude, which would have added back about 3% or so to that 25% loss figure.
    Of course, I know a number of people with investment portfolios well in excess of $10M, and none of these is 100% in stocks, so I doubt the “hurdle” for this money deidicated to 3444 Washinton would have been the DJIA (or S&P). Now, of course, some have done worse than 20%, and some have done quite well (up more than 30%). I’d think that a 20 or 25% cumulative loss on an investment portfolio of that size since 2006 would be a very poor showing and certainly in the lower half of actual portfolio returns for portfolios of that size over that period.
    And also let’s not forget that the house isn’t sold yet. If it goes for $10M (and that $5M loan info is correct), you’re really looking at a cash on cash wipeout, which is about what one should have expected back in 2006 in light of the massive and obvious bubble.

  22. Posted by vox

    David Coulter could wipe his behind with whatever he may have lost on this property.
    Seriously, a lot of you people have become beyond boring with your money money money attitude to real estate. 21 comments and not one about the house!?
    Please editor, bring on the porn and lose your tedious preoccupation with $$$$.
    /It’s a really nice house and a your cockerpoo could poop in safety by the shady tree of his choice.

  23. Posted by eddy

    Who is David Coulter with respect to this home? The owner? I guess that would explain the loan from JPM, who in turn, probably doesn’t need to be cocerened about the jingle mail. 🙂
    There is really nothing striking to say about this home. Now the home next door, 3450 Washington, now there is a home! But that’s another Univ of Phoenix family property. I hope 3444 isn’t / wasn’t using that as a comp!

  24. Posted by StockBoySF

    It is a lovely home, though too far west for my tastes (I consider anything west of Lyon as too far west).
    The folks over at Wiseman could make this place spectacular.
    (No I’m not a shill for them- I just like their work.)
    Hate the amphitheater- I’d love to fill it in. I would want a garden. You can actually do something with a garden- what can you do with a hole in the ground with chairs? Have a funeral? But great place to fill in for a garden.

  25. Posted by Smiling Millionaire

    keep wishing…

  26. Posted by Jimmy (No Longer Bitter)

    I can’t fathom why this guy would willingly burn up $4M, particularly if he is SO rich that it doesn’t matter to him either way. Why not keep the place and wait for the appreciation that’s *sure* to come someday (we’re told). The owner is a big-shot banker… he should know that inflation is guaranteed to skyrocket anytime now.

  27. Posted by eddy

    Withdrawn. Prob just expired.

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