The “apples to apples” sale of 1097 Howard #308 closed escrow on 9/11/09 with a reported contract price of $1,900,000. Purchased for $2,450,000 in 2007 and listed for $2,300,000 this past March, the sale represents a 22.4% drop in value over the past two years for the 4,162 square foot Lighthouse Lofts signature space.
And while closing at 17.4% under its original list price, keep in mind that official industry stats will record and report the sale at 4.8% under its reduced price.
∙ The Lighthouse Lofts In General (1097 Howard), And #308 In Specific [SocketSite]
∙ The Lighthouse Lofts Apple Of Our Eye Returns (1097 Howard #308) [SocketSite]
∙ The Market Takes A Bite Out Of The Lighthouse Lofts Signature Apple [SocketSite]
This is a sweet pad. Nice work by the selling agent to get $1.9 for this place. I still think its a bit high for the nabe but there are clearly folks that are OK with that area and its a lot of value for the right person. $452psf isn’t exactly cheap. I suspect this seller wouldn’t have sold this for much less. Congrat’s to all.
Man, with closing costs that’s $650,000 flushed down the toilet in just two years, $27,000 every single month. And that does not even include the mortgage, property tax, and $1100 HOA payments the 2007 buyer made.
And I’m sure someone, somewhere will tout the fact that a Howard Street condo just sold for $1.9 MILLION DOLLARS! as a sign that the market has “held up remarkably well” in San Francisco.
anon (non aanon) wrote:
> Man, with closing costs that’s $650,000
> flushed down the toilet in just two years,
> $27,000 every single month. And that does
> not even include the mortgage, property tax,
> and $1100 HOA payments the 2007 buyer made.
At least he was not “throwing his money away paying rent” and it was a “small price to pay to be able to say he was a SF homeowner”…
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The owner who “lost” so much money, probably doesn’t care. These are the same Bebo folks that dropped over 10X on digs y’all we dream of even seeing.
https://socketsite.com/archives/2008/10/the_socketsite_scoop_on_37_raycliff_terrace_aka_2799_br.html
someone:
Take ten $100 bills out of your bank account right now and light them on fire. See how much you “don’t care”. Whoever bought, then sold, a soma loft wasn’t 650 times richer than you, I can assure you, so their loss of 650K would be worth more than your $1000 burn. They cared.
The seller was definately 650 times richer then me. No one likes to sell at a loss.
I think the new buyer got fabulous deal. Good for them.
Some folks can weather it better than others.
I’m sincerely glad to hear that the 2007 buyers can afford to take the nasty bath they took on this purchase. Unfortunately, thousands of others — and that’s just in SF — who bought into the hype are not able to absorb such a beating.
And my usual kudos to the seller for cutting his losses. If you mark-to-market this place in September 2011, I would not go so far as to predict the 2009 buyer will see a loss of the same magnitude as the 2007 buyer, but I bet it will be close.
this is not an apple
the 2007 buyer spent less than 1% of his net worth on this place, I think it’s fair to say he paid way above-market price just to secure the place
it’s like the average SS reader spending $5,000 to buy a house, knowing it’s really only worth $4,000. Would you really care? It’s rounding error
I say the current buyer is a sucker. He *thinks* he got a 22% discount off of the 2007 market value. He did not. He got to pay 22% less than what amounts to a random number drawn in 2007
asiagoSF, you may be more correct than you realize. 37 Raycliff was also purchased for probably 25-30% premium as well. They ‘overpaid’ and didn’t care. Good for them.
Correct me if I’m wrong, but Bebo (the owner is the founder) hadn’t been sold when this place was purchased. So he wasn’t really that rich at the time he bought it to allow him to just pick any random number as his offer price when he bought this place.
asiagoSF – well said.
The Bebo guy is 650x richer than most anyone reading this site or living in that neighborhood. Check out how much of the company the founders retained.
BTW, what the heck are they doing on the roof on Raycliff Terrace? Talk about folks with money to burn. Also, I want to see them reinstall the coat of arms on their Broadway entrance. Hilarious.
asiagoSF : When the previous owners bought the place they didn’t have $650M, they had a pile of stock in a two-year-old startup. I doubt they paid that much over the prevailing market rate. Given the timing I doubt they were even in negotiations with AOL to sell Bebo, let alone expecting a payout any time soon.
That neighborhood is awesome….for me to poop on.
Asiago, please explain how this is not an apple. The previous sale was undoubtedly used as a comp- the value of the property was determined by what someone was willing to pay, even if that individual isn’t in the same league as the rest of us financially. The sale increased mean valuations and $/sqft for the city and the neighborhood right near peak and certainly added to the thinking that individuals had to buy or be forever priced out.
$1.9M in 2007 would have been too much in my opinion, but the buyer paying too much now or then doesn’t make this any less of an apple. Unless there was substantial remodeling or either of the transactions was less than arms length, it’s an apple.
i don’t quite accept the premise that just because someone is rich and the price is a relatively small portion of their net worth, that they do not seek to get value for their money. this may be true for *some* purchases made by *some* rich people, but cannot be a broad generalization for all purchases by all rich people. even though i’m not rich, when i buy something i can easily afford, say a car or a plane ticket or a computer, i still spend a lot of time on websites, go to different vendors and dealerships, to get the best price. same with people i know who are much richer than me.
I agree with condoshopper – the rich don’t get rich by giving their money away.
OK, so it goes like this: when you buy a commodity you obviously look for the lowest price because of the no-bidding environment and the fungibility of the purchase (car or a plane ticket or a computer). Were you to over-pay by $1 you’d be a fool by any standard.
On the other hand, when you set your eyes and heart on a piece of RE (which is unique, unlike that car or a plane ticket or a computer) you know that if you bid $1 less than the next guy, you lose it forever. So, how much higher you bid depends on your perceived value of the place in relation to your disposable income available for that purchase. If your net worth is 650x the purchase price then it seems plausible that you might up your bid by 20% to make sure you beat the competition.
The rich don’t get rich by giving $ away, true. But (by the way, anticipated or realized, in response to Nick) windfall money does loosen up your purse strings.
Who knows about the purchase price and competitive process, but it does seem that the seller was less concerned about the loss here and just wanted to move the property.
…if you bid $1 less than the next guy…
…then you can be sure you’re participating in a market, since there are other competitive bidders.
I get the point, but the fact that someone has to bid high in order to win is pretty much how real estate has always worked.
For all of the reasons that EBGeek explains so well above, this is definitely an apple.
If we assume that the buyer “overpaid” (btw, who didn’t overpay in 2007 ??) for the reasons that asiagoSF describes above, we would have an apple whose % loss might possibly deviate a bit from the % loss of a hypothetical “median” or “average” apple for the property type and size, neighborhood, time period etc…
But we would still have an apple.