The bank-owned sale of the two bedroom Watermark (501 Beale) #12G closed escrow on 10/13/09 with a reported contract price of $750,000 ($727 per square foot), that’s $10,000 less than what was owned on the first mortgage at the time the bank foreclosed in August. And that’s 23% less than what the previous owner had paid in May of 2006 ($975,000).
A proposed short sale of the property this past June never materialized.
∙ 501 Beale #12G: No Short Sale For You! (Foreclosure Instead) [SocketSite]
∙ Oh Geez, Watermark (501 Beale) Number 12G Returns As A Short Sale [SocketSite]
Down $225,000 in 3 years. I’m on the fence on this one. I’d say it’s a coin toss as to whether the new buyer will lose more money than the 2006 buyer over the next 3 years on this purchase. Hopefully he picked it up with a 3.5% FHA loan, which would just about get you to the sale price at the max.
You really think a high floor 2 bedroom in this building is going to 525K in three years? I just don’t see that. Maybe 650K.
Mikey, here are a few reasons why I think it’s possible (as I said, it’s 50-50 to me):
$727/sf for a boxy condo is still really expensive — see $511/sf South Park sale in other thread at 20% below 2004price — this is not a $727/sf neighborhood;
An awful lot of these places sold at the bubble peak when funny money loans were at their apex, so there is a high likelihood that many owners can’t keep up;
As evidenced by this sale, the vast majority of 2004-2007 purchasers are now significantly underwater, so even owners who could keep up won’t be interested in doing so;
There is going to be a huge increase in foreclosures in this area, driving prices lower. It’s already started. And the market-propping and low interest rates cushioning declines right now are not going to last that much longer — and we see these big declines in SOMA despite all these efforts. The current crop of 3.5% FHA buyers isn’t going to be interested in sticking around either with declines in prices. So I don’t think it’s beyond the pale at all to foresee sub-$500/sf pricing within the next few years. We’ve already seen 50% discounts at the Beacon, and we’re still not out of the early innings of this crash in SF imho.
However, as ex SF-er has presciently reminded us for about 18 months, much of this will turn on what money the govt decides to toss out there, so any speculating has to have that huge caveat. I’m just betting that the free govt cheese starts to decline from here rather than expand.
More cheese:
http://www.msnbc.msn.com/id/33382851/ns/business-real_estate
I havent been in this place but Im pretty sure that even though it’s at the back of the bldg (ie not facing water side) it DOES have a water view from some of the windows.
That would probably account for the 750/sq ft.
@trip: “this is not a $727/sf neighborhood”
Trip I dont think I would agree with that at present. The Watermark, even though the bldg itself has been dogged here many times, has some of the best views in the city.
Also the Brannan (altho a much nicer bldg) just down the road is selling at least in the 800s/sq ft
I’ve looked at both the Watermark and the Brannan and I would not say the Brannan is a much nicer building. The hallways are long and dark. The views often include an adjacent Brannan tower at close range. The finishes are middle of the road and uninteresting.
The Watermark has beautiful light in the units even if you are in one without a water view. And the unit designs are quite varied. Only a few are generic boxy layouts. 12G has a corner living room with two walls of glass.
I guess it’s chacun a son gout. But I still don’t get it.
This simply shows that $975K overpaid.
I represented the buyer of 11G in 2006, which netted out less than $800K.
For 11G:
May 24, 2009 Delisted * — Inactive San Francisco MLS #1
Mar 18, 2009 Price Changed * — Inactive San Francisco MLS #1
Feb 07, 2009 Price Changed * — Inactive San Francisco MLS #1
Oct 10, 2008 Listed * — Inactive San Francisco MLS #1
Nov 29, 2006 Sold $800,000 — Public Records
Paul, what do you mean by “netted out less than $800K”?
12G should cost more than $800K since it’s one floor higher, correct? Even if this was an “overpaid” situation, this is at least $50K down from your comp.
“Paul, what do you mean by “netted out less than $800K”?”
Probably means the $800K sale included a couple years of HOA or upgrades.
Don’t know if I would crow about helping a client buy a place for $800K in 2006 when the one above just sold for $750K.
Was 11G one of these two lucky buyers?
“Yeah, it was definitely a fire sale for people who knew what to say and who to say it to. I put two lucky buyers into two units in December at steep discounts to the list price (better than 15G). The units will most likely be resold in January at a sizeable profit. Look on MLS for them in the near future.
I think it helps if your agent is plugged into the market and understands the position of the seller. If you choose to have a desperate [Removed by Editor] speculator represent you in a multimillion dollar transaction that blows up, you really have only one person to blame.”
Posted by: Paul at December 22, 2006 2:42 PM
https://socketsite.com/archives/2006/12/whats_up_with_the_watermark_gs.html
“The units will most likely be resold in January at a sizeable profit.”
Or three years later at a loss? Sounds to me like Paul did know “what to say and who to say it to” but he was saying it to the buyer not the seller.
How many buyers are being sold the same “fire sale”/”market bottom” BS today?
Michael,
12G paid $975K
11G netted out less than $800K
If the 11G owner would have chosen to sell in Jan 2007, I believe they would have profitted.
The difference in purchase price is $175k+, damn this is a hard crowd!!!!!!!!