CFAH

610 Grand View Avenue: Living
While you might not want to consider it part of “the real” Noe Valley, according to the industry map it officially is (albeit on the border).
And while purchased for $1,076,000 in March of 2004, the sale of 601 Grand View closed escrow on 7/28/09 with a reported contract price of $1,030,000 (4.3% under its purchase price of five years ago).
The Juxtaposition Of Two Potential Sale Pairs For One Noe Property [SocketSite]
San Francisco Real Estate Districts: Maps And Neighborhoods [SocketSite]

Comments from Plugged-In Readers

  1. Posted by Trip

    Nice place, nice area. 3/2 SFR that sold for 4.3% under its March 2004 price. This is a good example of why SS “apples” are really a critical piece of the puzzle, and one that is hard to find locally anywhere else.
    This is further evidence that we’re now pretty far into deflating the 2003-2007 bubble in SF created by the credit expansion. And this discounted sale was during what many are calling a big rebound amidst declining SFR inventory and rising demand. We still have more to go, though, and we also have some of the dot-com bubble to work through (I don’t think we’ll get all the way back to pre-dot-com prices).
    This place also shows that one must be leery of comments like “some places are still selling at 2007-like prices.” On the surface, this sale might fit that description if one did not dig a bit (or have SS do it for you). I don’t doubt that “some places” are still netting buyers who aren’t too clued in to the trend, but that’s awfully rare. $1,030,000 is certainly not cheap, and if we did not have the 2004 sale as a guidepost but only the 2002 $655k sale (pre-renovation), one might buy into such comments. But we do have that “apple” sale price to put things in the proper perspective. I suppose one could still look at this and argue that there was no SF appreciation between 2004 and 2007, so we are still “at or near the peak” . . .

  2. Posted by DanRH

    I thought this one was going to sell for like $800k based on all the comments posted last time. what happened?

  3. Posted by San FronziScheme

    what happened?
    Someone overpaid. This happens all the time. A bit less these days though 😉

  4. Posted by DanRH

    “And this discounted sale was during what many are calling a big rebound amidst declining SFR inventory and rising demand.”
    who’s saying that there’s a big rebound???
    I don’t think anyone has…if anything, folks are saying there’s been a ‘slight’ rebound, but even that’s debatable.
    Also, I also thought that, if anything, there’s been too much inventory vs. declining inventory.
    I don’t know…when I read this sale, I’m a little surprised – it went for more than what I thought it would. To casually say ‘someone just overbought’ and dismiss this data point is a bit odd.
    Looks like stuff in NV are back to 2004 prices (although again, it’s been said this is not the best location in NV).

  5. Posted by amused

    @ SanFronziScheme –
    I’m confused. You (and your committee) constantly heap scorn on fluj when he suggests that someone might have previously overpaid for a property.
    Yet here you are, faced with a data point that’s not entirely negative, and you’re saying they’ve overpaid. So: does it happen? Or not?

  6. Posted by San FronziScheme

    amused,
    You cannot expect a bear NOT TO use the word “Overpaid” because this is at the core of the whole thing!
    I think that everyone buying today at market prices is basically overpaying, just like they were overpaying 2 years ago. Just by 20% less.

  7. Posted by anonn

    What does “20% less” have to do with this property?

  8. Posted by San FronziScheme

    Yawn. fluj still trying to get people on his shrinking turf. Pretty sad.
    I think that everyone buying today at market prices is basically overpaying, just like they were overpaying 2 years ago. Just by 20% less.
    Nothing this sentence says this is specific to this property.

  9. Posted by anonn

    Oh. Now it’s my “shrinking turf.” Whatever. Your comment was stupid. Like everything else you say.

  10. Posted by San FronziScheme

    Another insult coming from our dear fluj. Sigh.

  11. Posted by DanRH

    Fronzi, just admit that you were wrong on this one call.

  12. Posted by anonn

    You insulted me with that “shrinking turf” nonsense, clearly. Not that it was any good as an insult. What does it even mean? No, I asked you a simple question because the 20 percent comment seemed pretty forced. I asked a question of you, as you did in the other thread of me, “Proof” ? (when you hadn’t read where I already displayed said proof.) Then you went into your little “copy what the other clowns say” thing. Which you do all the time.
    No, you do two things on here. You regurgitate and you opine without clear understanding. Unfortunately what has developed is that you post more than anybody else.

  13. Posted by Jimmy C

    You mean the “victim” overpaid (and really not by much), as in the one left holding the smoking gun, when the realtor, appraiser, loan agent, title company are all off counting their money.
    Essentially people paid exactly what they could get approved to pay by a whole cadre of unqualified riff raff which is what makes up the residential real estate industry.
    This person got off easy only losing less than 5% while most other stock based investments lost much more over that time frame, so the doom and gloom crowd is losing it’s soapbox.

  14. Posted by LMRiM

    This “overpaid” meme is really worth hashing out imo.
    When fluj/anonn (and others in that genre) use the term, they generally seem to be arguing that someone paid “over the comps” or over market price at a particular point in time. So, as an example, a person who pays $2.2M for a property in a nabe that had not seen very many over $2M sales “overpaid”. In essence, they didn’t do their diligence, or fell in love with a property and went hog wild with an overbid, etc.
    Now the bears will often grant that certain people “overpay” in that sense. How could some people not? You are not dealing with a very sophisticated group in aggregate, and of course generally the loser “wins” (the winner’s curse) in any sale in a bubble market. (Some on the other hand surely find a deal and “underpay”, but of course this is going to be a rarer occurence in a bubble market.)
    However, I think most bears will argue that in the SF bubble market, practically everyone is “overpaying” relative to fundamental value, which is driven by things like inceom growth, substitute products to purchasing housing, supply/demand fundamentals and distortions, etc. I would certainly argue that.
    About this property, sure the buyer overpaid in 2004 in the sense that he paid over intrinsic value. The result is a property that cost way more than it would have to rent a nicer property over the 5-year holding period, and still generated an approx $100K capital loss (after commission and other transaction costs). It could have been a lot worse – so I assume that the buyer did not really “overpay” in the flujanonn sense back in 2004.
    It does seem like the “he would have done worse in stocks meme” is one that we are going to be hearing a lot. Well, that might be. Average investors are probably destined to sacrifice their wealth to the banksters in this cycle, whether through housing or stock-based investments. Pick your poison.

  15. Posted by diemos

    “So: does it happen? Or not?”
    It’s true that both the bulls and the bears will point to properties and say “They overpaid!” which can be confusing until you know the unspoken subtext.
    Bear: They overpaid just like everyone else who bought a property in SF in the past five years!
    Bull: They are the only people to have ever overpaid for a property in SF!

  16. Posted by Robert

    LMRiM/Diemos,
    What are your predictions for income growth rates going forward, say over the next 5-10 years? I am specifically interested in the top incomes (say the top 10%).

  17. Posted by LMRiM

    Robert,
    I don’t have a specific range forecast, but I expect very weak GDP growth going forward (on average) for the next decade, and so expect very weak income growth, almost certainly negative in real terms at least, and probably pretty low in nominal terms. Partly I think the weak gdp growth will stem from the unwinding of credit bubble excesse (malinvestment), and partly from the larger role that is going to be played by government spending going forward.
    About income dispersion, I expect that the top will continue to do relatively better than the average – perhaps the “top” will be even narrower than your top 10% segment. It will probably be a different cohort, though, than during the credit bubble, although the scale of the prospective 2009/10 bonuses for the banksters that is shaping up makes me wonder whether these guys can really pull off this theft again, cementing my view that the most capable and ruthless economic actors in our society are still in the FIRE sector (at least the top rungs of the sector).
    I do expect incomes at the very lowest ends to do relatively better because of all the government giveaway programs that are coming, but I think that wholescale wage compression a la the post-WWII period is going to have to wait until after a true deflationary collapse a la the Depression. It appears to me that the banksters are still firmly in control – the institutions set up in the 1930s and the maturation of the Fed (and consolidation of its power/contol) have really given those who control government a very powerful arsenal to combat wealth and income compression.
    If you asked a bankster whether he would prefer 50% of an economy that grows at -2 to +1% potential, or 25% of an economy that grows +2 to +5%, he’ll choose the former, as most would I guess. It’s a relative game (we’ve all got so much material wealth compared to what evolution has equipped up for), and they’ll keep the game going at all costs.

  18. Posted by diemos

    Flat overall GDP with continued “Brazilification” would be my expectation.

  19. Posted by San FronziScheme

    DanRH,
    Where do you see that? Rereading the posts and I do not see what you would like me to admit. Or is it a shout-out townhall style discussion? Please provide posts times, replies and all elements.
    anonn,
    Shrinking turf it is. First it was “stable”, then “only 5-10%”, then “Not 20%”. I see a pattern there, following the market by 6 months. Enjoying every bit of it…

  20. Posted by anonn

    Naaaah. You said “20.” I said, “huh?”
    Whatever.

  21. Posted by DanRH

    I was referring to your post (below), which was from the last time this property was talked about on SS (follow link from past). Maybe I’m misreading it, but from re-reading, it sure sounded like you were indicating it would go for a huge discount (ie, at least 40% off).
    -cut/paste-
    ” ‘That’s the 40% discount bears are so hopeful of.’
    Any proof it is not going to play that way? I didn’t think so. But I’ll bookmark those nuggets of misplaced hubris for future reference.
    So far, everything is in line for something of this scale. We might even overshoot…”

  22. Posted by San FronziScheme

    DanRH. Thanks for digging it up… from another thread.
    Sure I still think the 40% will happen. But Rome wasn’t built in one day and SF’s RE bubble will not be fully deflated in 1 year. From other discussions, the bear’s point is that prices went on increasing until 2007-2008.
    Let me point you to Zillow’s charts for 601 Grand View:
    http://www.zillow.com/homedetails/charts/15179946_zpid,1year_chartDuration/
    Switch to 10 Year chart.
    It’s always imperfect, but that gives you a trend. Better look at the 94114 values which are very much following the Zestimates for 601 GV.
    What matters is the leg up from the 1.076 sale all the way to the top at 1.31. Roughly 22% increase to the very top. Take the 94114 numbers from sale time to top and you’ve got a leg up from ~870K to 1.2M or 38%.
    In short, this property’s value probably roughly gained everything from 20% to 40% all the way to the top. I say probably not to offend Zillow’s detractors.
    Where are we now in the graph? This property is in the high 900s (not too far from THIS last sale) and 94114 is down to roughly the same point.
    Roughly 20%…
    I am not making it up as you guys would suggest. I spend a bit of time in my profession (data mining) analyzing vast amounts of numbers for a living and I am pretty god at it.

  23. Posted by OneEyedMan

    pretty god, Fronzi?
    Don’t be so humble

  24. Posted by anonn

    Imposing meta on micro is a joke. “Grand View” and “94114” are not the same thing, first of all. Grand View street has mitigating factors that much of 94114 does not. That’s only the tip of the iceberg when it comes to your errors.
    It WOULD have gone for 20% more at peak, eh?
    sez you. And er, Zillow. Greeeaaaaaat.

  25. Posted by anon

    Up at the top, Trip wrote: “I suppose one could still look at this and argue that there was no SF appreciation between 2004 and 2007, so we are still ‘at or near the peak’ . . .”
    I had read that as tongue in cheek. I.e. no reasonable person would seriously make that argument because it is so absurd. Then lo and behold, here we have anonn arguing precisely that point! Who needs satire when we have the real thing!

  26. Posted by anonn

    I’m not arguing that point. I’m saying the last sale is about where this property was in March 2004. I’ve long said late 2004 was when the market really broke north.
    But what does any of this have to do with 2007? Tell me, “anon.” Or just go away and say nothing and come back to be a crab in a few days, like usual. It matters little.
    Do I think it would have gotten 20% more in 2007? No. The street is what it is. It probably never was gonna get that high. But woud it have gone for a higher price in 2007? sure. I guess that it would have.
    Read. Then talk.

  27. Posted by anon

    “anonn,” you’re just making yourself sound even sillier. You say “I’ve long said late 2004 was when the market really broke north.” But this place closed in March 2004! Or is your point that the market “really broke north” only up to “late” March 2004 then stalled?
    You then concede that the market went up into 2007, and even concede THIS place probably appreciated after March 2004. But THIS place, unlike the rest of SF which went up far more than 20%, “probably never was gonna” appreciate 20% from 2004 to 2007. So I guess your point is that a 3/2 single family house in D5 was not in the class of homes seeing such substantial appreciation because, well, just because you say so.

  28. Posted by San FronziScheme

    pretty god, Fronzi?
    Don’t be so humble

    Editor? Edit tool?
    sez you. And er, Zillow. Greeeaaaaaat.
    Of course Zillow is less than perfect on the house level. Their Zestimate is very often off as any specific house has its own story and they don’t know about a lot of things (additions, issues, renovations). But the bigger the sample the better the stats. I can dig up other sources with similar results:
    http://www.realtytrac.com/ValueTrac/HomeValues.aspx?address=94114
    Similar numbers certainly due to the fact they are using the same set of data (actual sales). I highly doubt Grand View would be THAT much different.
    Let’s go down that theory, though. The Zip code up across Market is 94131 which includes some good (the other half of Noe…) and some less good (DH, Portola, etc…).
    Let’s change ZIP codes in the same link then:
    http://www.realtytrac.com/ValueTrac/HomeValues.aspx?address=94131
    Well, we went from 1M at the top to 800K now. That’s how many percentage points? Sorry, I cannot hear you. 20% you say?

  29. Posted by anonn

    It is not I who is being silly. You and Fronzi are taking macro numbers and trying to slap them onto a traditionally underperforming street in an otherwise eexpensive area. The fact that your words read like you are scoffing, as if you can say with certainty that 2007 would have been “X amount more” is funny. Not to mention the whole hindsight 2007 peak deal. None of you clowns believed me, you all fought me tooth and nail about 2007 being peak at the time.
    So again, yes late 2004 or 2007 higher? Probably, sure. But “20 percent” ? Go away.

  30. Posted by anon

    You’re seriously going to argue that “traditionally underperforming” areas did not see the bubble run-up from 2004-2007? Complete dumps were going up 10-20% a year during that time period! So it’s only this nice 3BR, 2 BA single-family house in District 5 that somehow missed out?
    This is a variation of your “it’s all very micro, bro,” line. In other words, you can pick any individual property and declare it to fall far outside of the general trend in the area just because you say so. I see you’re sticking with that realtor mindset nicely!

  31. Posted by anonn

    You realize that “location location location” and “it’s all very micro bro” aren’t that different, right? Do you doubt the former? Are you trying to tell me that location is not pertinent in real estate, or that you know of what you speak when you challenge me about an area I know like the back of my hand?
    OK guys. 20 percent it is. I don’t care to belabor this further. This property, which in 2009 sold for 4% less than its last sale in 2004 clearly demonstrates a 20% fall from peak. IT’S SO CLEAR. Poor little 20 Percent! He was sitting there in the used percentages lot screaming at all of us, “Use me. Use me. Talk about me! Take me home with you! Waaah.” You win. I feel like a heel. Great point guys. Thanks.

  32. Posted by Legacy Dude

    Wow. Took so much arm twisting just to get this guy to admit the market is down 20%. I shudder to think how cranky he’ll be a year from now, when the market is down 30-40%!

  33. Posted by anonn

    Is that what your reading was of this text, Legacy Dude? Hmmm. Sure you didn’t begin with any preconceived notions?

  34. Posted by San FronziScheme

    None of you clowns believed me, you all fought me tooth and nail about 2007 being peak at the time.
    Clowns?
    Keep the insults coming! I for one really enjoy looking at the little man in the center throwing phantom punches and getting all huffy puffy as his punches start getting more weak and random. Very entertaining. Please never change, I need my daily dose of comedy.

  35. Posted by anonn

    Weak and random? You said this one would ahve went for $1.3M peak. But Fronzi, this house is ~1100 square feet, OK? Try to understand one freaking thing you’re talking about once in a while. You’re hilarious.

  36. Posted by LMRiM

    I just reread the entire comment thread from the earlier post about this property. LOL, that one was anonn fighting with everybody too!
    About whether 601 Grand View would have sold for $1.3M or not at peak – who knows? The fact that it is 1100 square feet and at the “edge” of Noe doesn’t really settle it in my mind. 1420 Douglass – a very small 3/2 (maybe 1500 sq ft pre-remodel? – sold for $1.3 as a fixer in 2006, and then sold for $1.945M in 2008 following the remodel (at 1700 sq ft post remodel, well over 1100 psf).
    Given that smaller houses generally have higher psf selling prices (all other things being equal), 601 Grand View might have gone for $1.3M. Who really knows? – one thing that seems certain now in hindsight that we are seeing some wipeouts on SS (135 Fernwood, 25 Mercedes, 714 Duncan, etc.) is that there was a bumper crop of optimistic suckers tooling around the streets of SF in 2007/08!
    It’s certainly very enjoyable to watch the unravelling, so long as one is in a rented perch that’s costing you less than 1/2 what it would have cost to purchase, that’s for sure. I’m enjoying every moment of this, and so is my money manager friend who I convinced to dump his Oakland SFH in late 2006 on a sucker and is now living in a $2M+ Los Gatos place for less than $4K/month all in.

  37. Posted by anonn

    Yeah man. It would have sold for 1200 a foot, peak. On Grandview. LOL. You guys and your numbers. Learn some damn neighborhoods if you’re gonna post so much.

  38. Posted by anon

    “Learn some damn neighborhoods if you’re gonna post so much.”
    It’s Grand View, not Grandview. And there are some great places on that street.
    Bottom line is it sold for $1,076,000 in March 2004. Whatever it is about this place you are griping about existed in March 2004 just the same as in August 2009. The whole SF market rose significantly after March 2004, far more than 20%. For you to suggest that this single very nice place in a very desirable neighborhood would not have shared in that run-up is just too much. You have personally cited Noe many times as the poster child of the price rise. But I like, or at least enjoy a big laugh at, how you stick to your guns no matter how ridiculous your position is!

  39. Posted by Auden

    I do have to agree with annon here that Grand View is an undesirable street in Noe for a number of reasons, and that property does not fare as well up there. This is not a secret. It’s a marginal location for Noe with the cement monster up above you (market st. overpass), 60’s block apartment buildings, and buses running through frequently. Its also in the fog more than other areas of Noe.

  40. Posted by 94114

    I’ve been inside this house. It has some major major flaws (I know they were there the last time it sold as well). It is literally opposite the Market Street overpass, the bedrooms face an incredibly steep street (think mountain) and have two sets of double pane windows to muffle the noise. While having a great view, privacy is severely compromised by the neighbor’s deck which is right outside the window where the view is, so if the neighbors are outside you can literally touch them. Yes, this is in Noe Valley but one of the major pluses for that neighborhood is its walkability. You can’t walk to anything from here.

  41. Posted by anon

    Auden, I don’t disagree with that. But those same circumstances applied in March 2004. Ditto, 94114, as you noted in your parenthetical.

  42. Posted by LMRiM

    Well, given all the flaws of the house and street, it sounds like another sad case of an optimistic buyer who “overpaid” back in 2004. It happens. The house probably should have only commended $850K tops back then. But the 2009 buyer is obviously very savvy because SF buyers are, well, savvy (except of course for one, hapless 2004 buyer of 601 Grand View). In fact, the 2009 buyer is actually underpaying a bit imo. Therefore, the underlying value of the property is actually UP since 2004 – and up big – once you adjust for the overpayment.
    I’m glad we cleared that up. These apple declines seem to happen with some frequency (only due to the bias of SS of course) – and it’s important to have a voice of REALTOR® reason in order to explain what is really going on. SF real estate has been and will contnue to be a wonderful “investment”. Buy confidently.

  43. Posted by diemos

    Apples.
    Nutritious, delicious apples.

  44. Posted by auden

    diemos. I hope you were typing that last insightful with both hands, because it sounded like you were typing with just one…

  45. Posted by anonn

    It’s Grand View, not Grandview
    Aaaahhh. The tried and true typo correction salvo from the poster who hasn’t a leg to stand on. Funny. I knew how to spell it when I typed it several times earlier, and when I typed it into the MLS to view the sales history of the entire street. So that unlike you two or three overtalkers I knew precisely what I was saying. But good job, again, with your 20 percent, $1200 a foot peak deduction, Sherlocks. Take a deep breath. You don’t have to hate on everything I say. Really.

  46. Posted by DanRH

    sorry to intrude…
    I guess what I’m curious – are any of the ‘bears’ here at least surprised/shocked that this place actually sold for this amount? (in this market, in not exactly an ideal location and all…)
    I mean, reading all the posts for this property from last time, I got the impression that you all expected this to be sub-950k at least (I know, none of you actually quoted a specific number…that’s a separate issue – i wish folks posting would do that more).
    Anyway, it just surprises and disappoints me that instead of hearing some analysis explaining a bit of surprise on how this place actually got sold for this much in this market, I’m just hearing a ‘look, it’s down X% from an ’07 or so peak’, or a brush off of ‘oh, one single random person overpaid’.
    Even more curious – from what I can tell, ‘bears’ here think this place would sell for less in 1 year from today. Any actual estimates / guesses? I’m going to say it would be flat / sell for the same amount.

  47. Posted by San FronziScheme

    DanRH.
    Amused, entertained not surprised.
    There’s more cash than brains in this market. But this situation is fortunately quickly rebalancing from both sides of the equation…

  48. Posted by LMRiM

    are any of the ‘bears’ here at least surprised, shocked that this place actually sold for this amount?
    Not really. It was listed at $1.195M initially. It actually sold below its 2004 price, in the end. It doesn’t surprise me that at least one person in all of SF thought that is a “deal” – after all, you’re not talking about a particularly savvy group of buyers in the end, and you ony need one. It’s been a very long bubble in SF, and people have been conditioned to bark when there is a dip in prices, just as Pavlov showed. You only need one, but it is getting harder and harder to find that one, as the number of pulled listings shows.
    It’s always useful to remember Mackay’s famous observation:
    ““Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.”

  49. Posted by EBGuy

    Speaking of Grand View, how about the developers of the condo-conversion project at 647 Grand View. I think they should get some sort of award for timing the peak (all $1+million units sold in October 2007). The first foreclosure hits the courthouse steps this afternoon (3bed/3bath 2316 sq.ft.) with an unpaid balance of $1.6 million. From what I can tell it had 100% financing courtesy of JPM Chase (to the tune of $1.87 million). Hmmmm…

  50. Posted by diemos

    “I hope you were typing that last insightful with both hands”
    Never fear Auden, I always practice safe text. Both hands firmly on the keyboard at all times.
    😉

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