Yerba Buena Lofts and The Metropolitan

A Yerba Buena Lofts (855 Folsom) two-bedroom listed for $399,000. A one-bedroom at the Metropolitan (355 1st) listed for $297,588. Considering both are Below Market Rate (BMR) resales the prices shouldn’t come as any big surprise, the fact that both have been on the market for over four months without a sale might.

∙ Listing: 855 Folsom #342 (2/1) – $399,000 (BMR) [MLS]
∙ Listing: 355 1st Street #310 (1/1) – $297,588 (BMR) [MLS]

Comments from Plugged-In Readers

  1. Posted by J

    399,000 / 81,300 = (4.9 x income)
    399,000 / 92,950 = (4.3 x income)
    Where do they come up with these income limits???

  2. Posted by Anna

    What happens to BMRs in a building if prices fall to the point that they are no longer below market rate?

  3. Posted by Mystery Realtor

    There are BMR One bedroom units in Gold Mine Hill priced the same as pretty much identical 1 bedroom condos not in the program, but in the same neighborhood (Diamond Heights). So, why buy a BMR when you can get the real thing for close to the same price.
    Just another example of social engineering gone astray in SF.
    M.R.

  4. Posted by condoshopper

    there is virtually no income range that fits a normal person into one of these units, especially when factoring in HOA fees. either you make too much to qualify, or you make too little to afford it. on top of this, if you have assets, say 100K, then 10% of it will be added to figure your income, which could put you over the max income limit.

  5. Posted by The Milkshake of Despair

    Its not too surprising that BMRs sit longer on the market since their market is so much smaller (and requires a lot more diligence to complete the paperwork).
    But Anna brings up a very interesting question. Imagine the surprise of BMR owners if they must sell at a loss. At its inception the BMR program seemed like a no-lose situation. You don’t get access to windfall profits from appreciation, but mild appreciation was basically guaranteed on top of the fantastic new buyer subsidy.
    Note to SFGov – this may be your golden ticket for an exit strategy to the BMR program.

  6. Posted by Rillion

    “Its not too surprising that BMRs sit longer on the market since their market is so much smaller (and requires a lot more diligence to complete the paperwork).”
    I remember hearing that there used to be waiting lists and lotteries for BMR units, so not sure how that fits with your idea that the paperwork involved shrinks the market. Also seems like the market for a BMR would actually be bigger then for a “luxury” condo. There are more families making less then $100k then there are making the $200k+ needed to justify some of the prices of the luxury condos.
    I do think the main reason for these sitting is price. If the price of regular condos are falling to the point where some of them are competitive with BMR then obviously the units are no longer being priced correctly BMR.

  7. Posted by jamie

    I’d agree the HOA probably keeps people away … I assume you can still rent for less (or at least not pay a very high premium to keep the option of moving on compared to buying).

  8. Posted by Average Joe

    @Anna —
    I don’t think the question is quite as relevant as it seems at first glance. By its very existence the Office of Housing programs are seeking a much longer investment horizon than any individual. Repayment need not be made for decades, and any profits are simply “banked” for additional loans. I don’t know what would happen in the case of someone in a BMR getting foreclosed upon, but — for an unsold unit — it would make sense for them to simply wait out a market recovery. I don’t think there’s any incentive to push a sale.

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