Built in 2000 and sold for $535,000 in March of that year, 662 Capp Street #3 resold for $780,000 in November 2004 for average annual appreciation of 8.4% over those 4 years.
As a tipster notes, it’s apples to apples to apples in the making and now asking $749,000.
∙ Listing: 662 Capp Street #3 (3/2) 1,631 sqft – $749,000 [Zephyr] [MLS]
Three-quarters of a million dollars for a condo on Capp street still seems way too high to me.
But that kitchen does look efficient and functional to me.
Prop shark shows that there is a huge downpayment at risk here in the first loss position (more than 50% of the purchase price). A diemos hero!
BTW, prop shark also shows that the slightly smaller unit 4 (1490 sq ft) sold for $830K in November 2008.
Call me a paranoid apple-pie or the entitled “trust fund baby” or whatever else you want to call me, but this area has had it’s share of gang-related shooting and some murders (around 20th street and Valencia) for a while now, and I don’t think it will change any time soon.
And every once a while, an innocent person gets shot in the process.
So why would anyone wanna buy a place here if you can live elsewhere ?
I would even rent somewhere else as opposed to buy something in that 4 block radius. (20th and Valencia).
And no, I am not inflating the dangers / risks in that section of the City.
Read More – 20.Aug.2009 (i.e. yesterday !) Police efforts keep lid on Mission violence
Chad:
I’m with you.
I can be somewhat imposing looking if I want to be, and thus am usually able to walk around pretty seedy neighborhoods.
(I used to volunteer to exchange needles and give HIV tests in the Tenderloin back in the 1990’s as example)
however, I walked from 20th and S. Van Ness to the 16th street BART at about 445am on a Wednesday recently. it was very nerve racking. I literally (no exaggeration) walked down the middle of the street on the yellow stripe because there were so many people hanging out in doorways dealing drugs and prostitution and also acting erratically (meth).
I would never never never let anyone I love walk those streets between dusk and dawn ever again.
===
the actual unit is very cute.
it has an EXCELLENT work triangle. i guess you only get that if you can keep “designers” away from the kitchen.
(actually, in general the bad work triangles come about due to poorly spaced kitchen islands. this doesn’t have an island, thus retains its good triangle)
Wow – this is the funniest thing I’ve read in ages on this website. Much funnier than any $40 million Gold Coast home. Capp Street is where I would live if I had a deathwish. Or if I wanted to become Charles Bronson from Deathwish, as I am sure something would happen to you or your loved ones there forcing you into vigilantism.
Why not just buy one of those lovely (if it’s your thing) Victorians along Golden Gate in the WA? The gang activity there is nothing like this area’s.
Oh Chad, you are such a worrywort. Those are nonfatal shootings that are increasing. Geez! It’s only three quarters of a million dollars! And, look! How pretty. Quilted bedspreads are the new chopped pillows!
Oh you ss haters you!
No way, chuckie. I’m pretty accepting of lots of the things we see here (with some price adjustement towards the rational). And I live in western (aka real) SOMA, so I am familiar with a little on the streets. But man, give me homeless junkies over MS-13 every day of the week.
It just boils down to this – I have spent the last year training everyone I know to associate Capp with instant, painful, violent death. As a result, an otherwise inoffensive, nay, perhaps lovely, condo for a cool 3/4 mill on Capp just makes me twitch a little.
No, I’m with you Mr. E. That was just my attempt to allude to the charges of “ss haters” that spring forth as soon as someone criticizes a neighborhood or a property 🙂
I think I saw you that night, ex sf-er. I was hangin’ in one of those doorways just off 16th. I was taking a fat puff off my pipe when I noticed someone walking down the middle of the street. I turned to my buddy standing next to me (we call him meth head fred) and joked about how crazy that person must be. Far out.
I guess this time I’ll be the one to point out that the crime problem on Capp was probably nearly the same in 2000 and 2004… or was it? At any rate it will be interesting to see if some of the Mission coolness premium is dissolving in this downturn. I never understood people buying those condos on S. Van Ness (Citrino?) for example.
For crissakes, you people are wimps. Move to Walnut Creek if you can’t take an “urban element.”
I love the Mission. Along with the Castro, it’s where I spend most of my time. I’ve never been bothered and I’m not afraid of it. You’re vigilant like you should always be, but crissakes, it’s not that hard.
Frankly anytime I go to the “real SF” north of California, I’m shocked by how douchey most of the people at the bars are. I find that much more frightening.
There is more. Here’s one from last year, on Capp St: “His last words were, he told her: ‘I love you,’ “
@tipster. You are right on, I am indeed a worrywart. Scary how you can infer sooo much from online activities. My girlfriend too hates that I worry so much….
But then again, I’d rather be an ALIVE “worrywart” than a DEAD Hero 😉
If you have not lived on Capp Street, you really should not be commenting on what it is like to live there. I lived at Capp/19th for 6 years and in those 6 years, all of the drug use and sex for hire was cleaned up and the entire area was revitalized. I never had any problems, outside of people parking in my driveway. The only incident I ever had was at 16th and Mission BART, which is why I then would walk to the 24th St Station. It is a great neighborhood for walking to Valencia Street (which is quite possibly the best value in terms of quality of products versus price – although parking is always tough).
If you are worried about being killed or injured, I hope you avoid driving or riding around in automobiles, because that is far riskier than living on Capp St. Do you take Muni everywhere, or do you just stay within walking distance of your house all the time Chad?
I think it is funny that ex-SFer was so terrified of the Inner Mission, since he is a guy who grew up in the TL and is pretty street-wise. Too much Chicago living has made you soft buddy! I used to walk around that neighborhood at night all the time, albeit not at 4:45AM. You should have walked up Van Ness to 16th, then up 16th, preferably on the North side of 16th Street. It is probably a bad idea to just wander around that area after midnight, especially on a Friday or Saturday night, if you don’t which blocks are sketchy, I will grant you that. Mission from 17th to 16th is the worst, as bad as the worst streets in the Tenderloin.
The worst things that have happened to me personally are being solicited to buy drugs, being solicited to buy sex and being propositioned for sex. I always just shake my head and say “no thanks” and keep walking and it has never been a problem for me. I am not a particularly imposing looking character either, but I have lived in neighborhoods where drug sales were common place, so I have learned how to literally “look the other way”.
I love the Mission as much as anyone, really despise the Marina, and dodge piles of poo in SoMa every day. My commute involves a walk down eighth street from the Civic Center Bart. I cross 6th Street on foot all the time. Urban element is not the issue. Besides, it’s people from Walnut Creek that make me avoid Columbus and Broadway on the weekends. Unless I am going to 15 Romolo, but I digress.
The issue is gang violence. And not even that good old wholesome kind from the ’80s in LA.
That’s not strictly a dense urban living issue.
Oh, and joma, you’re right. I’ll merely disregard the crime reports. Data, shmata.
Redfin shows 18 condo/TIC listings in Mission. Just browsing through, my impression is that 2/3rd are smelling stale. Is anything selling in Missions?
Based on my little research, I’ll predict this place sits for 3 months or more and goes through one or more “price improvements”.
Such strong feelings about the Mission, which in my opinion, is the only real “urban” area in SF. As a Chicago transplant, I feel most comfortable hanging out in the Mission. I’m just not sure I could live there. How do people feel about the Valencia corridor? Would any of you buy a place there? Linda street seems really nice. Any thoughts??
I would live on or about the Valencia corridor, particularly if I were a little west of Valencia. To my knowledge, Linda (the street) is pretty cool.
This is the great joy of San Francisco. It’s block by block.
Mr E, can you elaborate on why you really despise the Marina? How do you feel about Pac Heights? St Francis Wood?
I will gladly clarify. The Marina is a lovely part of the City, and owning a place there would be fine, so long as you aren’t at home when the next earthquake hits. During the day its shops can be quite nice. But when the sun goes down, it feels like I am back at a fraternity or sorority party in the absolutely snottiest fraternity or sorority that has ever existed. And there isn’t even any free beer.
In Pac Heights, the folks tend to have a little more class. For example, they have figured out how to get the collars on their polo’s to lie down straight. I like it fine.
St. Francis Wood? Purely residential. Quite lovely. May not be for me. I think I’d be more of a Forest Hill guy, simply for the easier access to the other side of the hill.
Mr E, “despise” is a strong word. Let me fill you in on a lesser-known aspect of the Marina, in case it might clarify some confusion.
There are 3 very distinct demographic groups in the Marina:
(1) long-time owners, mostly in the 60’s and 70’s, whose property tax is in typically $1,000-$2,000
(2) the “frat” crowd you’re referring to. They are not the majority, but they are indeed a noisy and obnoxious minority. 99% renters in the corner apt blocks
(3) late-30’s professionals, with toddlers in tow, who tend to stay until they face the prospect of sending their kids to public school in the city. At that point most migrate to Marin/Peninsula/EB. Some rent, some own.
As a Marina resident, it bothers me a bit to be associated with the wonderbread crowd, but I have successfully ignoring #2 above for many years now. A small price to pay for the convenience of being able to live almost car-less (as opposed to Union ST, Chestnut has real-life shops); not to mention it’s one of the safest nabes in town.
Asiago, I am sorry if I offended you, although your Marina sub-group (1) does little to assuage my feelings. 😉
no offense
and I am actually in group #3 (although I start to have a few grey hairs)
if’s it’s prop 13 that fuels your ill feelings re group #1, you’re not alone, but like someone else said, hate the game, not the players
@toadie, you may wanna look at homicide maps for atleast the last 2 years in the Mission before making your decision.
2008 Nov – 22-year-old man shot to death in Mission District
2008 Sep – Man killed in Mission District shooting
2008 July – Slaying Victim Identified
2008 Aug – 18-year-old man shot dead in Mission
2008 Aug –S.F. man, 47, shot to death on Mission District street
I can go on and on. There are over 16 homicides in an 8 block radius around Capp / 20th and Valencia.
I do understand Mission Resident’s passion in defending their streets / neighborhood. I would too, if I lived there.
But the 2009 Homicide Map shows a completely different story. One that is littered with Homicides and Shooting (both Gang related as well as ByStander “wrong place wrong time” fatalities).
Do you really want to put yourself in that situation ? Like I said earlier, Heros are great, but Heroes always Die !
Thanks for your comments Chad and Mr.E. Chad, aren’t those incidents mostly in the inner mission, though? I have to agree with Mr.E, that those blocks may be drastically different than those west of Valencia St. I have a family so I am somewhat nervous, but I think the Valencia Corridor area has a distinctly different feel, with more families moving in. I have even seen a couple of sales in this area around 2 million or more (Linda and 19th being one of them). Would people really pay that kind of money if they didn’t feel reasonably safe?
Toadie – people do stupid things. They take out interest only loans, buy Pets.com stock and smoke. Only sellers should rely on what people do – that how you make a lot of money. Buyers relying on what people do only end up getting bilked.
Do your own research and look at the data. Do what makes sense to you.
As an aside, this is what I hate about the “Wisdom of Crowds.” Crowds are markets. Their results end up being set on the margin and are functions of the information put into them. Often, that information is bunk, and even when it is not, cognitive bias gums up the result.
OK, I feel better.
I’m not saying this location can’t be unsafe but I don’t see any homicides for 09 so it can’t be that much of a war zone. That’s not to say this condo is worth 749K either…I’ve gone out to dinner around the Valencia corridor at night many times and it’s usually crowded with lots of people and hence fairly safe. Perhaps after midnite it may get a little sketchy but I’m usually in bed!
“But that kitchen does look efficient and functional to me”
Funny, that’s almost the exact layout of my kitchen, right down to the orientation of the dishwasher, sink, stove, and breakfast bar. The only difference is the location of the fridge.
It is a pretty efficient layout though does have one small problem. The work location in front of the stovetop is sort of a “master” spot and only one person can work there at a time. Though this kitchen seems a few inches wider then mine. Maybe two people can work there without scalding or slicing one another.
I guess Capp is less dangerous than my place in that regard.
Noevalleyjim said it best. It’s safer to live in the mish than drive your car.
Chad- most of those homicides are gang on gang related. Non gang members get a free pass. As for robberies have you ever read the Noe valley voice? Lotsa robberies there (and other wealthy hoods in SF) every month. Robbers are smart, have cars and go to wealthy hoods too.
Clearly, choosing a nab to live in is based on personal preferences. I’ve been in the mish for 5+ years, and have rental units here too…and me luv it 🙂 Its an ideal place for people like me without (the need for) real jobs, as it’s always interesting walking around. Lotsa great food too, including all the renegade food carts and hideouts (try pals takeaway sometimes). The mish is very diverse too, with hipsters, Latinos, artists, a few yuppies…it’s a better mix than most SF hoods.
And owning rentals here is awesome! There is a never ending supply of hipsters coming in, seeking to assuage their banal suburban upbringing. Hipsters are a great rental demographic- almost all are college educated, not a few have trust funds/mom and dad to cosign on lease, and they sure know their coffee! I’m only pulling ‘spro shots using the finest micro crop beans these days, all available walking distance. So for others seeking to live on the wild side, to rub elbows with both the seedy and the hip, commeth to the mish.
Those years at SF General taught me the damage even a tiny 22 lead from a cheap Saturday Night Special can do to the body. You look pale, distant, no visible blood, no mess. Just dead.
A coupl’o comments:
There is no question that I’m softened by living in the midwest. I don’t doubt that. (and actually I have to say it’s a testament to how sad parts of SF are that I even have to apologize for wanting to feel safe)
however, I still know the difference between “poor” and “seedy” and “unsafe”.
Like I said, I grew up in the ‘loin (not ‘loin adjacent). 2 of my brothers were pseudo-gang members and my other brother was a meth head. Our neighbors were drug dealers and prostitutes. Heck, a lot of my FRIENDS were drug dealers and prostitutes. I’ve watched people get shot and stabbed before. So I know when a situation is “bad”.
I can still walk into poor and seedy places without batting an eye. This is one reason why I chose to simply walk up Mission at 445am. However, once I was walking on it I realized I had made a mistake, and that it was not just poor/seedy, it was unsafe.
A lot of people fighting and acting erratically in doorways (I think there was some sort of deal going wrong or something). A person stumbling with a needle in their arm. and there were a lot of people in those doorways and on the sidewalk.
it made me wonder if the gentrification of the Mission has compressed all the “bad” into a small stretch of the Mish. (between BART and 18th or so).
Overall, I LOVE the Mission. It’s one of my favorite hangouts. However, I will never never never go down Mission between BART and 20th again between dusk and dawn. And that is sad, because for me it’s a change for the worse.
The neighborhood overall is fantastic, but not that specific area.
^ mission st between 16-18 has a high concentration of flop houses/daily rate hotels. Our beloved board of stupidvisors will not allow prop owners to remake those, since they are a source of the holy Grail, “affordable housing.” That is the worse area of the mish. during the daytime it’s more reminiscent of the bar scene in the star war movie. But late at night it’s unsafe.
But I never walk that area late at night. I’m over clubbing and bar slumming. If that’s your scene just take a taxi. Otherwise most of the mish during most times is fine. I’ve been walking it for 15 years now, and I still have my original TAG watch intact.
One Saturday morning I walked down Larkin St. at around 10am and witnessed people lying in the sidewalks with needle sticking out of their arm, drunks passed out in their own urine, really a sad scene. Reminded me of Vancouver’s downtown East Side … best thing would be to displace those people into a high density slum and gentrify the ‘loin and close-in parts of the mission.
Are you sure it was Larkin Jimmy? Larkin these days is mostly Vietnamese restaurants and people out getting Pho on Saturday mornings have pushed most of the alcoholics and homeless to Hyde St or over to Ellis St.
Just like most rough neighborhoods, the TL has its good blocks and its bad blocks.
Yeah I’m sure, I lived on Polk and walked one street over … all the way down to Soma where I’d left my car the night before.
How many years ago was this? That street in particular has changed quite a bit in the last five years.
From the new SFGate article linked earlier this year, there has not been a single homicide in the Mission all year.
Hardly a war zone. Lots of great restaurants a short walk away.
I don’t wander the streets around there in the early morning hours, but otherwise feel pretty safe. I ate at Limon Rotisserie nearby last week, and coming up is my reservation at Flour+Water, one of the toughest tables to get in the city right now.
Capp street is nothing like it used to be. There are certain streets in the Mission where gang violence tends to be, and it’s wise to understand that. I spent pretty much all of my 20s in the Mission and I still go there daily and nightly. It’s changed so much it isn’t even funny, tho. You never used to see young Asian girls just out of college jogging at night with headphones on. That’s a very useful gentrification barometer. I’ll put that up against Jimmy’s lazy bathroom meter, or the Lazy Google Indicator any day of the week. Most Asian guys I know wouldn’t have let their daughters move to the Mission, not even over their dead bodies, back in the ’90s.
Last time I spent the day in Mission was at the Carnaval Parade. After the parade, had lunch at Delfina Pizzeria, walked over for ice cream at Bi-rite and came home with a bag of goodies from Tartine Bakery. Very nice! Oh, and hung out at a very nice coffee shop (can’t remember the name??) for an hour or two. But three quarters of a million dollars for a 3/2 condo in that area? Couple that price with what NVJ, ex sf-er and others have said and it makes for a prime example of the craziness that went on in the bubble years and is still going on over there IMO.
In fact, I wouldn’t buy there for any price. If I wanted to live there, I would just rent. So 45 yo hipster might really be on to something!
^ but I own and live there too!
Besides, delfina/birite/tartine? C’mon chuckie, that’s the yuppie-marina version, aka “the new mission”. You otta try slumming it on 24th st, east of mission st. Go git yourself some Humphrey slocombe ice cream, some dynamo doughnuts and some ‘real’ oaxaxan cuisine at las palmeras market. You’ll be okay daytime on the weekends (just have your cell phone on and 911 on autodial 🙂 Now that’s the ‘real’ mission! (sic)
thanks 45yo, i’ll have to try that next time.
hey, so you’re able to read and post on SS from your iPod? I have tried it on my treo but it sucks!
Yea it works well because the iPod touch portrays web pages well, and the interface is very functional too. Except for flash, and the small screen size, it’s perfect for web browsing on the go.
I just got back from the Street Food Festival, which was at the block from 25th to 26th on Folsom, and it was great. Walked there and back and didn’t get shot at even once.
A bunch of our friends own homes in The Mission, mostly people we have met through our child’s day care. Most of them are doctors, lawyers or computer programmers. Whenever we go over to their places, we remark on what large places they have. And whenever they come to our place, they remark on how nice our block is.
Most grown-ups realize that life is like that: a series of compromises. You decide what is important to you and stick to that and compromise on the rest. Or you can bellyache about how even though you make a nice salary, you still can’t afford big house with a Golden Gate Bridge view with a bedroom for each kid. I honestly don’t know where that sense of entitlement comes from, but the Bay Area is endemic with it. It is the thing I like least about living here.
The Mission in general is really becoming kind of a foodie mecca, still thankfully off the radar of the North of California crowd, though perhaps that is starting to change. I am glad I can walk there from my house, but I am also glad I don’t have to deal with the drunken crowds if I don’t want to.
Good post, NVJ. The festival was too successful for its own good today! I hiked over and down Bernal Hill Park to the festival, and have to say it was really wonderful – good, mellow crowds and a really nice layout for the fair, unlike the normal street fairs for SF. Great inaugural year, here’s hoping they expand it next year. I live in Bernal now, but lived at 20th and Harrison for years until 1995. The vibe is very different, and better, now than then. I’m hoping Flour + Water and Schmidts Deli both succeed.
wow NVJ, you are brave! i walked there too today. all those throngs of young people having fun looked super nervous, huh? wondering if they are going to get shot. not.
personally, it was way too crowded for me,so i baged eating there, but am glad that the non profit, la cocina, had such a successful event. they want to do it again next year, and will hopefully increase the size to accomodate all the people.
overall, the mish this year had: the Cesar Chavez Festival, Carnival, two Sunday Streets, and now the Food Festival.
thanks for the reports guys. i gotta find my way over there more often.
I went to the Street Food fair, too. Only got one food item– the lines were way too long! It was a big success, and I’m sure it will grow for next year.
Hi guys – food festival aside, what is an honest fair price for this large, decently finished unit in an iffy neighborhood ? Where else can you get a 3/2 this size, with this level of finish for 700K in SF ?
How big is the risk of getting mugged while pulling into the open garage, say at 11 pm ?
Is it safe for a twenty something woman who works at 826 Valencia to walk to and from work daily or to and from the BART station in the evening – okay, not at 4 am ?
“what is an honest fair price”
Determine what a comparable place would rent for then determine how much principle at today’s interest rate would give a similar monthly payment. That’s an honest fair price.
Unfortunately you will be outbid by an idiot.
So just remember that in a contest to see who is the biggest idiot it’s the loser who wins.
Outsider,
You have to decide what a fair price is. For me, 350K would be a reasonable price. To me, that’s about 200K more than what a similar property would cost in most of the rest of the country, in a better neighborhood, but with lower paying salaries.
For example, about 150K can get you an equivalent place in Austin. So there is a 200K premium for the higher wages/quality of life advantage that I would be willing to pay over Austin. $200,000 is a lot of money — it’s about 11 years of saving for a 200K household (assuming they save 15% of disposable income, with a 40% tax burden).
I would be willing to save for 11 years in order to live here rather than in Austin — but not for 30 years. Now wages in Austin are lower, but not by so much — say they are 15% lower. So a 200K household here, that could afford 700K, could be making about 140K in Austin, and could buy a similar property for about 1x income, instead of 3.5x income. That extra 2.5X income could be used for something else — such as early retirement or purchase of other rental property, or buying mortgage bonds. You need to do this type of math yourself, for your own valuation, and decide on what is the best for you.
As NVJ said, if the ROI doesn’t reach the level he wants, he can stick with munis, or buy elsewhere. And that option is always available to everyone else as well.
But whatever you do, have the courage to pay only what you feel comfortable paying, not what you think someone else will pay. I got into a big argument recently with someone complaining about rents, and I said “why not move to where you can afford the rent?” — which made him very angry. Don’t spend X “because that’s what people do”. Spend X because you are getting X value out of the transaction. That, and a level head will help you avoid making the mistakes of the herd — it will allow you to make your own, unique mistakes.
Went to the Street Food thing too. Way too big. I’m sure it was a raging success but they did not plan for that size crowd. It should have been another block long, with another two cooking/serving areas. Oh well, now they know. The media has been fanning the flames of “street food” hasn’t it? I think I only saw one real street food guy, tho. He was grilling elote (corn on the cob for the non Missionite/Spanish speakers) on the corner of Folsom and 26th, outside the festival. LOL. Loved it. Dude had a line 30 deep too!
As for me I was too crowd averse. I walked the whole thing and it was lines everywhere. My marching orders from the old lady were to deliver a lemonade. There was no lemondade anywhere. Just puree’d heart of mango and horchata and other potions I’ve never heard of before. So I went to the beer garden and had one pilsener just for the fun of being able to stand in the very middle of Folsom street having a pilsener.
BernalDweller,
Both Flour + Water and Schmidt’s are already successful. Have you been to either one? There is no doubt about either one for the short term. It’s wonderful IMO. Folsom street! Who would have thought?
Outsider,
The risk of getting “mugged” is nil. I have never heard of a single one on one robbery where a normal woman minding her own business was assualted in the nearly 15 years I’ve been around the Mission.
@anonn – I know both are successful now, and have been to both – guess I want to see them last a long time, past the initial infatuation into stable neighborhood institutions.
Diemos/Robert- Los altos hills, atherton, Ross, etc are all expensive towns, multi mil homes mostly. You can buy similiar homes for a fraction of the cost elsewhere. Therefore, only wealthy people can affod to live there, either via high income or a substancial asset base.
SF is the same. Yes, it’s bigger. Yes it’s much more diverse and has a legacy of both owners and renters that ate not wealthy at all. But for anyone moving in now, both buy and rent, they need to be pretty well off, or OK with a roomates rental situation. Even if the neighborhood is an upcoming one, it is expensive. I’m stating the obvious.
Forget average, existing incomes. Look at necessary incomes of incoming population. Just like atherton, if all of a sudden the entire global population equated it to say Akron Ohio, guess what? Prices in atherton would plummet. Same with SF. YOU may think it’s overpriced, etc. No problem, decide what is best for you. Key is, there are lotsa people that do think SF is worth a premium, hence why a nice 3/2 for $750k in the mish is considered a good value in those peoples eyes.
You guys keep trying to instill a doctrine where it’s irrational, or just wrong for SF to be as expensive as it is. This is akin to arguing religion. I don’t know how many times in my youth well intentioned christians (ok, as a youngster my family and I did some time behind the orange (county) curtain) worked real hard to try and convince me that Jesus is my savior. SF RE is worth exactly what people are willing to pay for it, not what average incomes are. And if it’s expensive, only people with high incomes or assets will buy it.
You guys keep trying to instill a doctrine where it’s irrational, or just wrong for SF to be as expensive as it is.
Honestly, I have no idea what you’re talking about. It seems to me that you feel a need to cheerlead here, where this doesn’t add clarity. I get the sense that many of your posts are of the sort where you need to personalize things, which is a big mistake when trying to determine value. That is a religious fervor.
As you say — spend your money however you want, that doesn’t bother me at all, except if it reaches the point where I have to bail you out. In any case, I have no problem with you paying X or 5X, when I believe something is worth X/3. That is how money is made, after all, as well as lost.
45 YO,
Robert and others like him are totally convinced of the infallability of affordability ratios. They utterly discount that non work related capital purchases a lot of real estate in San Francisco. You and I see evidence of this practically daily, but they do not. It is what it is. I’ve given up arguing about it.
“I’ve given up arguing about it.”
Me too. That’s why I always say to drop in on January 1, 2012 so that you can shake your head and “tsk, tsk” about how my religious fervor blinded me to the true value of SF real estate.
😉
Ciao!
“They utterly discount that non work related capital purchases a lot of real estate in San Francisco.”
And there, at least, you’ve brought up a mechanism that’s plausible but it would have to be a lot bigger fraction than it is to dominate SF values.
For counterpoint I shall point to Aspen, Colorado which is a market that is totally dominated by non-work related, discretionary purchases from the Uber-wealthy.
It’s tanking.
Cheers!
(P.S. Anyone know how to do Umlauts?)
Anonn, I know a quite a bit about windfalls, as the lucky recipient of more than my share. And I am quite familiar with the process of pouring the windfalls into real-estate, as I’ve had several sets of colleagues lose the equivalent of decades of savings this way — Indeed, I made some valuation models about this. Easy come, easy go, I guess.
However in this specific case, I only posted an innocent comment advising Outsider to pay what they believe a property is worth to them, not what they believe someone else will pay. I didn’t prescribe what metric Outsider should use, or what premium they should assign. I only mentioned my own premium as an example.
That should be a pretty neutral comment. It was a neutral comment. But I guess even arguing for a process of valuation — for any valuation process — is seen as an attack on real estate prices, and requires an immediate response. That, too, is telling.
I am sorry – but you guys are just nuts. I asked a series of simple questions and they led to a half dozen posts of useless mental Masturbation !!!
Okay, Robert – I am NOT living in Austin so prices there is irrelevant. One can buy a 4000+ sf home in Brentwood for under 100 per sf and commute to the City if one wishes and you don’t even have to make 200K a year. By the way, I have a friend who bought a highrise condo in the swanky part of Austin in 2006 that is, in my opinion, every bit as pricy as in SF during its bubble days.
Back to my questions: If you folks think 700+K is way too much for this 1600 sf 3/2, what do you think the unit is worth if it was in Pacific Heights, say next to Lafayette Park ? Capp street is clearly not in a great neighborhood but there is far more to see and to do than in Pac Hts where there is NOTHING unless you get to Fillmore or J-Town.
I’ll guess this place ends up going for a touch under seven. $685k or so.
45yo, you’re joking about Humphry Slocombe and Dynamo being somehow different in kind from the 18th street “marina” stretch b/w Guerroro & Dolores, right? I’m a fan of both but it doesn’t get much more gentrified than that (and bi-rite still wins hands down over humphry slocombe, even if it’s less purposely “crazy” with its flavors). Los Palmeras is great though, and that one’s truly “real mission.” If you want bulk carnitas, that is the best place I know of to go.
I also disagree with the “marina” characterization on the dolores heights side of mission. It’s still a way more diverse and less douche-y crowd than the pink polo shirt/collars-popped/tanning salon crowd you find walking around chestnut street.
Shza- LOL! Yes, you totally caught me…I was wondering if anyone would catch on. Good one.
I didn’t take it as any sort of aggressive comment or attack Robert. It’s merely that you speak from a secure stance. 350K is your fair valuation, and I know where it comes from. It has to do with the way you think things should be and it is based upon a formula which you have shared more than once. Maybe I misunderstood.
Outsider, did you read my comment? Capp street is fine, IMO. To me a condo on Capp shouldn’t be much more than 400 a foot, but this one will probably get close to asking.
Robert: I’m not personalizing this, nor am I cheerleading for SF RE. I happen to think that you tend to minimize the factors that most people consider paramount for housing. many are intangible such as desireability, proximity to family, etc. You tend to minimize them by always revering to an affordability ratio. You may be willing to go $200k over the $150k baseline you established. But that may not be enough for SF. According to your logic it’s overpriced already at $350k. So why is it acceptable for this sample property to be ‘over priced’ by $200k and not $500k? For most people purchasing RE is both an emotional and rational purchase. Hence it is highly subjective…and perhaps not so different than choosing one’s religion.
This is a conceptual difference that we have. I am not talking about market timing, i.e. If the best deals in SF RE are now or 1 year from now. And that is also dependent on your hold period as well as the specific property one chooses and Specific deal one makes.
We specialize in useless mental masturbation here on Socketsite, in case you hadn’t noticed.
In answer to you questions, I will give you my opinion on the latter ones by giving you some advice: get a rental in The Mission and live there for a while yourself and find out what you think of it. No one here can really evaluate your perception and tolerance of personal risk. You might have an irrational fear of gang violence, like Chad, or you might even get kind of a thrill out of the risk, like 45yo hipster seems to. I personally know The Mission pretty well, but I cannot comment on that particular block of Capp. I have been there but not at enough different hours to offer an informed opinion. Perhaps someone else can, but even if they do, they still will not know your personal tolerance. Hopefully, you have already picked up from our collective commentary that The Mission is block by block.
This place is not priced so spectacularly well that you at risk of losing out on the only similarly priced condo in the neighborhood, so you have time to do your research.
As to what it is “worth”? I dunno, but a 600k mortgage at 5.25% equals a PITI of 4400, back out the P and you get monthly out of pocket of 3700, figure 1/3 tax deduction for the rest and you get total cost of $2500/mo. Add back in the HOA and you get to $3k which is about what this place would rent for. So it is probably worth about that to me, you might want to assume some kind of bonus or discount for appreciation potential, probably a slight discount in today’s market.
Your primary residence should probably not be bought with the idea that it is an investment though, you should mostly think of it as a way to consume housing. It is not a bad idea to run the numbers, but in this case, they don’t tell you too much, other than this place is neither wildly overpriced or a great deal. I am not really paying attention to the condo market, so I can’t tell you anything about that, but I am sure any of the many realtors who post here can give you the low down.
Robert’s Austin condo reference is ridiculous, of course, and indeed, one can find cheap condos much closer than Texas, if one wishes, e.g. Brentwood or Tracy.
Still, for a 1631 SF condo to cost $150,000, the price would be $92/SF.
The average re-sale condo price in downtown Austin (as opposed to the Austin region, which is cheaper, like the greater SF region compared to SF) is approx. $300/SF:
http://www.austintowers.net/market/austin_market_index.html
A bit cheaper than the $459/SF asking price on Capp Street, but much less of a difference than Robert claims.
Pssst NVJ- y u no answer my question to you on the SF recorded sales activity post? On multi units, GRMs, mid penminsula, temescal, etc?
That’s pretty silly, Dan. First, you need to use an index — the website you linked to is not a meaningful measure of price changes, but of a very limited set of transactions (think dataquick). Indexes do exist (OFHEO) and show that the median price is about 180K. That is for the MLS, but it is primarily SFHs.
Agreed that in downtown Austin, the median SFH price is (more or less, since it’s hard to measure) 220K, but you can’t compare downtown prices in Austin to something on Capp street here. Have you ever been to Austin? To Capp street?
Austin is affordable. Note that price to income never broke 3 in Austin, and mortgage to rent never broke 1. Also note that the market there never tanked — it is a healthy appreciating market overall, although certain higher priced sections did tank (think condos in downtown, but use a real index).
Of course, I only brought it up as an example of another high tech urban type place. No need to compare Austin to Tracy — have you ever been to Tracy? It’s absurd to compare a high-tech university town to Tracy. But if you prefer Tracy, then fine. The point is, each person has their own preferences, and their own options. So pick your favorite top 10 cities to live in, and decide how much of a premium you are willing to give No. 1 over No. 2, etc. Make your own decision, but consider your options.
“but you can’t compare downtown prices in Austin to something on Capp street here”
“No need to compare Austin to Tracy — have you ever been to Tracy? It’s absurd to compare a high-tech university town to Tracy.”
just what are you trying to say? To me you’re implying that downtown Austin offers more for the money for an urban high tech person. Well of course Austin is cheaper than SF. And it has some of the ammenities that SF has to boot. But it ain’t SF bro. There are still substancial differences that are both tangible (weather, proximity to ocean & mtns, walkability) as well as intangibles (status, prestige, etc).
Apparently enough people think this to warrent a $750k condo in SF whereby in Austin it would cost less than half. And I’m sure people who love Austin can congradulate themselves on all the money they saved. Just like my 2nd cousin Vinny can boast of the great deal he has in Rochester NY, and he paid less than half of that over priced Austin condo. To a large extent it’s all relative and personal.
One comment WRT appreciation
in TX: in general it sucks. Always more land to build on and the very high 3% niño prop 13ed prop tax rate is like carrying an (adjustable) 2nd mortgage. If you want some possible appreciation, you need to buy in a snooty closed gate community or an established, no growth community there.
Sure, hipster, let people pay what they want. But there is at least moderate evidence that people have been willing to “pay” X here (and in the other bubble areas) with someone else’s money — not their own. I.e. first, the banks’, and then the greater fool’s.
Now, somewhere in there is a price that people are willing to pay — with their own money. Valuation is an attempt to discover that hidden price. In the past, I’ve discussed various approaches including: price to rent, bond rate to wage growth rates, price to income, income to mortgage, etc. Now, I proposed something even simpler, which is a rank-ordering, with an estimation of the added dollar value to you of living in #1 versus #2. This avoids any “hidden wealth” issues, which is why I brought it up.
The key aspect of all valuation techniques is to look at the inherent attribute of the property — what it gives you — regardless of what someone else is willing to pay for it.
The advantage of doing this is that if you pay X for a place that you value as being worth X, then you don’t care what the market does, as you are sitting pretty either with rental cash flow or with your housing consumption. You are happy and free from the vicissitudes of monitoring your neighbors’ prices. So no one should oppose valuation in principle, even though their own conclusions and methodologies will differ.
The alternative is the madness of the financial markets, in which nothing brings out buyers like high prices 🙂 In general, a more affordable area in terms of standard multiples has greater upside for appreciation in the future, and has better cash-flows in the present.
I lived on this block until about a year ago, and often walked home in the wee hours by myself. It’s noisy, it’s smelly, there’s trash all over the street aand a high likelihood someone will eventually take a dump on the sidewalk but neither I or my roommate (both female) were ever threatened by violence. I did avoid certain paths home, like any city you learn what to look for. The drug dealers that camp out on the steps of the real estate office at 21st & Mission are less likely to bother you than the drunks spilling out of El Trebol at 22nd & Capp. That said, the biggest issue I had was the noise from Medjool. It’s a lot higher than the buildings opposite so there’s nothing to block the crappy techno remixes from rattling your bedroom windows. I would not buy on this block, much better to pick something on the other side of S Van Ness where you’re still close but not half a block from a major business district with all the noise and traffic that comes with it.
“a price that people are willing to pay — with their own money.”
And there’s the rub hipster. When nothing is required of someone to buy a house and people believe that the amount they’re paying is meaningless because appreciation will cover it, values become disconnected from reality.
But that disconnect can only endure while there’s a critical mass of people who believe. Eventually the market has it’s Wile E. Coyote moment when it looks down, realizes it’s standing on thin air, and gravity reasserts itself.
Price/rent ratios will reassert themselves because that ratio is where a home makes sense as an investment once people stop believing that appreciation is going to bail them out.
Price/income ratios will reassert themselves because that is the price that allows people to actually buy the house. The “affordability products” were never anything more than a way to rent the house from the bank with an option on the appreciation.
Hipster, no I did not see your post. Using Redfin, compare 3449 4th St Riverside, CA 92501 with 486 41ST St OAKLAND, CA 94609. Or you can look at 3972 10th St Riverside, CA 92501, though that listing is kind of suspect at 291 days, it is typical for what kind of gross rents you can get. Downtown Riverside is not “one of the most desirable sub-markets in the Inland Empire” like the realtor who listed that first property said, but I am pretty familiar with the area and it is okay. My aunt lived there for many years.
Cap rates on these two is probably more like 8% than 9%, but for more marginal properties like 4295 10th St Riverside, CA 92501 it is 9+ (though still not the 12.5% listed, I don’t see how they come up with that number).
I don’t have enough capital to buy a really big place, so I am going to have to rely on some free or reduced cost labor from relatives. I am paying for my half-brother’s college tuition and he is a pretty reliable kid, so I might be able to give him $100/mo to sweep up and check on the property. I also have of other relatives in the area some of whom are pretty handy and visit the area a few times a year.
It is all pretty pie in the sky though, my wife would have to find a job first before I would want to think about something like this. It might be too late by then, but I doubt it.
Marina earth rolls
capp street dangers scare big tall
living after fall
via robert: ” rank-ordering, with an estimation of the added dollar value to you of living in #1 versus #2.”
ok, now we’re getting somewhere. of course this makes sense, and i think that many people do this intuitively. most people have a “stretch” city or nabe they want, middle options, and some cheaper(usually less desireable) choices. however, most people will lock in a general region apriori, due to family, schools, work, etc. the way i think you’re talking about it (on a more national level) would seem to apply mostly to recent college grads or single folks/young couples who are perhaps more mobile. hence they can choose to pay the premium of SF or manhattan, or they can also have a lively city experience elsewhere for alot less money.
you also mention the borrowed money syndrome. yes, money was too easy to borrow the last few years and it created distortions in housing values. sure, if one can borrow 100%, and there is evidence that prices keep going up, it becomes a self fulfilling prophecy as everyone gets in. i agree this is not sustainable, and places that were especially victim to this mode, like vegas, miami, phoenix, have taken huge price drops.
so did the easy credit effect SF prices? sure. to an extreme extent like the bubble boom/bust cities i mentioned above? not in my opinion.
via diemos: “Price/income ratios will reassert themselves because that is the price that allows people to actually buy the house.”
i agree with this to an extent, as it ties in to the ‘using your own vs. borrowing money.’ i think we all acknowledge that it is desireable to borrow responsibly, say 20% down, with a manageable mortgage. although there has been much discussion on SS about the percent of people who brought with lo/no down in SF, i have not seen hard #’s, only anecdotes. personally i think maybe 10-20% brought with lo/no down, at least an equal number purchased with large downs (move up buyers w/prior equity, stock windfalls, wealthy families, etc.) and the rest put the usual 20% down. this means the foreclosure rate and resulting high inventory is truncated in SF, which reduces overall price drops.
and lastly regarding these issue, the rent/own equation. this is another equation that is tricky to quantify. i.e. NVJ illustrated that with 20% down this 3/2 mish condo is close to 1:1 on the rent/own scale. but, this would never happen with a SFH in SF. and certainly never happen in the more expensive hoods. as an investor i am sensitive to this ratio, hence i never buy SFH’s and tend to focus on the less expensive/gentrifying hoods, such as the mission. 10 years ago i could do noe valley, but not in the last few years.
to summerize on these points: 1) easy credit effected SF but not to the extend of bubble towns like vegas (15% vs. 40+% overall drop from high) 2) in more expensive areas, rent/own ratios tend to become more decoupled 3) inherent values are highly subjective, and people with means usually aspire to live in more expensive locales, as they tend to associate more value with more expensive areas (not always of course).
Robert, the link to the cheaper SFH for Austin actually shows prices for the Austin- Round Rock metropolitan area. The center of Round Rock is 20 miles from downtown Austin, about the same distance as El Sobrante to SF. The average price per SF for a condo in downtown Austin is much higher. and much closer to the price per SF for the Capp Street condo.
And yes, I’d much rather live in the Capp Street condo than in downtown Austin. Nothing against Austin, but I like my life here in SF.
Now, somewhere in there is a price that people are willing to pay — with their own money
As opposed to daily, in front of your eyes? All buyers are the knife catcher’s union, eh? huh.
I know I know. Just wait. Every reality that is not yet come to pass will be, in two years. Wait. Three. I know.
Courage anonn, Courage!
Only 2 years, 4 months and 8 days until my comeuppance.
gentrification
gold smell granite dreams debt
new people lost decade
Dan, regarding the minutiae of Austin, I referenced the OFHEO data which is for the MLS as you point out — this is the smallest region containing Austin for which a real price index exists.
According to trulia, price per square foot in the city proper has been stable at around $100 over a few years, with median sales price of 100K (based on transactions) and average sales price of 440K — that’s what happens when you focus on too small of an area that has some very wealthy houses in it but is basically a middling-type market. I think it’s reasonable to infer a true median price of about 200K — zillow says 190K, and the census says 218K. But no need to argue about that, or about how much of a discount to that median a Capp Street condo-type residence should warrant in that city (i.e. a condo in a less desirable hood). I gave a 50K discount — maybe you think no discount is warranted.
That was just an example, though. You have some choices, so you can think about how much you are willing to pay to get option #1 as opposed to option #2. This type of thinking should help clarify how much a property is worth to you. Arguing that #1 is preferable to #2, is vacuous. No need to argue that your #2 is different from mine, either, or that your valuation delta is different.
Anonn,
Perhaps some definitions will help. I define “buying with your own money” as paying what you feel comforable under the assumption that you can never re-sell it (and that you won’t need to). All you get is a place to live in or rent out. It will give you increasing returns, in the form of rents that grow with incomes over time — but that’s all you get. This is really the dividing line between trading and investing, and why Buffet often talks about buying a stock as if you owned the whole company, and could never sell it.
Believe it or not, for most of history and in most places, this is what people did. Housing bubbles are fairly rare if regularly recurring events. You should have no problem with this definition, as it is market-neutral. I didn’t call anyone a knife-catcher, but I do think those who overpay are fools, regardless if prices go up or down.
I define “overpaying” as paying more than that what you are willing to pay with your own money, in anticipation that you can outguess what others will pay later on — i.e. that you will resell for a profit from someone else’s money. I don’t think anyone should have a problem with this definition, either. It’s basically the definition of a bubble, or ponzi type situation. Certainly some people can be successful that way, but it always ends in tears for the majority, as a majority cannot outguess itself, or re-sell to itself.
Note that in none of this do predictions of future prices come into play — only future cash flows. Moreover, I am not now specifying how you should decide how much a property is worth to you. So I don’t understand the frustration in your last post.
Hipster,
If you are happy with your rental returns and don’t need appreciation to roll over loans, than you don’t need to worry about the market at all. Prices could fall 50% and as long as rents stay stable, you can go on sipping espressos in positive cash-flow bliss. Actually a cash-flow based investor, like a true dividend investor, *loves* crashes, because it allows for re-investment at a lower price and a at a greater yield. As a solvent landlord, you should be thankful for lower prices that allow you to expand your empire.
badcell breaks it down
gentrification=segregation=apartheid
y’all little bothas
mother earth gonna shake you
ten percent comin correct raw like a war
just bought shotgun ammo
two thousand rounds maybe not ‘nuf
need more for what’s next
ten foot pole too short
will sit this one out badcell
truth too hot summer
murals mariachis
pupusas ammo homicide
micro block by block
^poems^ eegad..you guys are killing me with your new found enthusiasm!
urine soaked streets and
hardwood stucco sunshine
must be worth millions
many try eastern poem
none traditional haiku
summer melts strong minds
(well, with the exception of hiyou that is 🙂
Robert- you’re correct about sustaining positive cashflow. It’s especially crucial in a down market like this. As for a huge market drop being beneficial, remember that values and rents are coupled (at least loosely), hence I doubt a 50% decline would not impact my cashflow. Also, I’d prefer higher values as I’d be able to pull cash out of existing props to reinvest.
Regarding future appreciation, many posters here have little faith in it as an investment criteria. But what I don’t understand is that the same people have no problem buying growth stocks, which usually pay no dividends and only produce value through price appreciation. I know this value is supposed to ev based on their future earnings potential, but we have seen numerous stocks increase in value beyond pure future earnings metrics. I guess you could call them all bubbles, but many saavy investors did well with ‘hot’ stocks, as long as they sold off correctly.
As for SF RE, I don’t know many investors that are buying purely for cashflow here. It makes no sense, as other markets offer much better cashflows. Almost all are factoring in some type of future appreciation. None of the players I know put an expected percent increase or timeline, but they all expect it by holding on through another boom cycle at least.
So the question is, just because it’s difficult to quantify it, does that mean it’s not integral to decision making? For what it’s worth, in the last few years some books and studies have come out attempting to quantify potential appreciation via the usual parameters: expected population growth, # of new jobs expected, is development restricted, quality of life measures, will new, well paying industries arise, etc. Richard Florida’s superstar or mega city studies look at additional sociological parameters. I do think some SS readers under estimate the value in these studies, and they do speak to that ever elusive appreciation factor.
“Regarding future appreciation, many posters here have little faith in it as an investment criteria.”
Hipster, what else is there when making investment decisions except your predictions about future value and future cash flows?
Now me? I expect that an SF rental property will start out cash flow negative and will go down in value in the near future.
So if you offered me a choice of:
A) Investing 100K as a downpayment on an SF rental property today
or
B) Withdrawing 100K in cash, dumping it on the sidewalk, dousing it in lighter fluid and setting it on fire.
I’d choose B, it would be over quicker and involve much less hassle and aggravation. What B doesn’t offer is the hope that you can make it through the dip and enter the promised land of appreciation and positive cashflow. But if I’m right then there’s a better entry point coming. Why buy today?
Now, I’m quite confident that people in 2039 will look back at today’s prices and think to themselves, “Damn, that’s cheap.”, but if you’re going to buy today you’d better have a good plan in place for holding on to your property through the dip and negative cashflow is not the basis of a good plan.
Investing is about nothing else except predicting the future. People who guess right make money. People who guess wrong lose money. God bless capitalism.
Well Hipster, about the superstar city business, you have to keep in mind that markets are discounting mechanisms. A lot of people confuse this, because they assume higher revenue means that the asset should be worth more. In reality, the value of the asset already assumes what the future revenue (on out to infinity) should be. Only unexpected growth results in real (above inflation) price appreciation.
So prices climb as that expectation takes hold, but because R.E. prices are set on the margins, only a small minority of people (with the ability to pay) need to believe in that future income growth, at which point the views of this most optimistic cohort will set the price for everyone else.
In the recent run-up, the banks ensured that an unusually large subset of the population had the ability to pay, so prices were set by the most obscure cohorts within an impossibly large pool. And the creative class/mega city view was sufficiently widely held to be priced in well before 2007.
I guess that’s part of the reason why prices tripled since 1997, even though incomes (of homeowners) increased only by 50% over that period — the other 250% was anticipation of additional income increases that have not yet occurred. This is why, as you say, the current cap rates “don’t make sense” in terms of cash-flows.
All of this is already contained in the “buying with your own money” meme, because if you believe that rents will climb quickly due to future income growth, you should be willing to pay more to secure that perpetual rent stream today. No need to assume price appreciation of any kind, as prices already reflect what you believe all (real) future rent increases will be.
In the same way, growth stocks (even though they underperform as a group) can properly be valued — just value them in terms of their future profit growth, and not by the option of unloading them for more to someone else.
The question is, were those 2007-era income growth beliefs too pessimistic? In that case, you are right to assume even more appreciation going forward. If the 2007 beliefs were too optimistic, then you will see asset depreciation, at least in real terms, even though incomes can continue to increase. They just need to increase more slowly than was assumed by the most optimistic cohort in 2007.
About those income growth assumptions; when you say that a certain cohort will outperform, what you mean is that they will capture a bigger share of GDP.
By 2007, the top 5% captured 40% of GDP. In 1980, it was around 15%. And this 2.5x outperformance — combined with cities once again becoming more attractive to the wealthy — explains the outperformance of places like S.F. And prices in 2007 assumed that outperformance would continue at the historical rate. Just like Richard Florida assumed that the outperformance would continue. All of that is required for the 2007 prices to be justified.
At some point this must stop, since the top 5% can’t earn 120% of GDP. I actually believe that about 40% of GDP is a ceiling — that such a high share of GDP leads to chronic demand shortages and asset deflation, which shrinks the incomes of the top brackets accordingly. So from here on out, the rosiest scenario is that the top 5% grow in-line with GDP growth, maintaining their 40% share. A more likely scenario is that we wont be able to reverse all of the deflation and that we will see some slight wage compression, meaning that top incomes will see their share drop to say 30% — around 1929 levels. But in that case, the share of the top 5% will underperform the other shares, shrinking by 0.1% a year, meaning that “mega-cities” such as SF will also underperform.
So armed with the knowledge that 2007 prices already assumed continued top income growth of 5-6%, and that we are more likely to see 2% to -.1% going forward, I just don’t see how prices can recover to the 2007 levels, let alone that we will see appreciation above and beyond 2007. And this is not an “uber-bear” position — it is a simple observation on the limits of inequality combined with the Commerce Department estimate of GDP potential output. My own personal position is a bit more bearish. Moreover all of this assumes that any contraction due to the current recession will be long forgotten 10 years from now.
Therefore I return to my “buy with your own money” principle. If you see a property that you want, either to live in or rent out, and if you would be happy with cash-flow or consumption value, then buy it. But don’t assume that you will be able to unload it at a higher price. Certainly you cannot assume that the climb from 15% of GDP to 40% of GDP will continue for the next 20 years.
Robert, that is a whole lotta info you’ve put out there. Very nice.
Perhaps you could start an RE blog of your own ? I will be your first loyal reader 🙂
Yep, thanks for the thoughts robert, diemos.
Robert, I don’t know if it is my recent heightened haiku intake but last few days I have felt that we’re in for a japanese style stagnation and a lost decade. Any thoughts would be appreciated.
Capp = where to get Capp-ed:
http://missionmission.wordpress.com/2009/02/20/drive-by-shooting-in-the-mission/ (Capp betw 22 and 23)
http://missionmission.wordpress.com/2009/03/01/shot-in-the-leg-shot-in-the-back/
http://missionmission.wordpress.com/2009/03/01/shootings-at-19th-and-capp/ (19th and Capp)
http://missionmission.wordpress.com/2009/05/21/beatdown-and-mugging-on-capp-and-24th/
Already contingent. Mission is hot!
Sold for $747.5K on 10/8. That’s a 4.2% nominal drop and a 16.2% real drop (based on 2004 value of $891,772 inflation-adjusted to 2009). Still seems way too high a price to pay for this part of the Mission.
[Editor’s Note: Apples To Apples To Apples Yields Two Different Tales]
Inflation adjustment for a single property? Maybe for a dataset that’s fun to talk about for some people. Actual properties have price thresholds, and this Capp street condo was never going to get ~900K.