While seven of the St. Regis (188 Minna) condos are currently listed for sale (not including the Penthouse), a plugged-in reader notes two others (#27A and #29B) are scheduled to hit the court house steps on October 14.
As another plugged-in reader noted last month, the owner of the two units facing foreclosure “put the family savings of some $5 million into developing commercial real estate buildings” a few years back and built quite a debt-laden real estate empire.
∙ Going Up: St. Regis Penthouse Construction Nearly Complete [SocketSite]
∙ Local success story takes a detour into Chapter 11 [sacbee.com]
And further musings that the higher-end (i.e. much of SF) will continue to weaken, with continuing price declines, from . . . the California Association of Realtors:
http://www.sacbee.com/business/story/2238800.html
A few interesting quotes from a group that is better known for their rose-colored glasses than stark analysis (and they do “foresee” a slight rise in the median):
“Watch, too, for growing trouble in the higher-end home market, which so far has been spared the huge price drops seen at the less expensive end, said CAR chief economist Leslie Appleton-Young.”
“I don’t see a tsunami of foreclosures,” said the CAR economist. “I see an elevated level of foreclosures over the next couple of years, and an acceleration of foreclosures at the upper end of the market.”
“Sales of higher-end homes. Appleton-Young said many buyers are having trouble financing more expensive houses – and hesitating over fears they will lose value. Those factors, combined with rising joblessness among owners of higher-priced homes, have the potential to bring down prices in the upper segment.”
“Loan resets: Projections suggest that thousands of new risky adjustable-rate loans – including especially dangerous pay-option mortgages – will reset in 2010 across California, possibly triggering a new stream of loan defaults. Many of those, too, involve owners of more expensive homes.”
I need to go see if hell has frozen over — I’m agreeing with the CAR on price trends.
You have to wonder how many are being kept off the market right now and rented, either listings for rent or places currently already rented. That’s probably a shadow inventory of another 7%.
If you want a place at the St. Regis, here are some of the many other owners who will gladly rent their units.
http://sfbay.craigslist.org/sfc/apa/1412014046.html
http://sfbay.craigslist.org/sfc/apa/1412004213.html
23F (featured here before):
http://sfbay.craigslist.org/sfc/apa/1411107033.html
http://sfbay.craigslist.org/sfc/apa/1408310233.html
http://sfbay.craigslist.org/sfc/apa/1406272550.html
There are also plenty of Four Seasons and Ritz Carlton rentals right now. Prices have to be incredibly soft for rentals.
Purchase prices obviously will be trending down with that much inventory and foreclosures beginning. You really need to have a screw loose to buy anything above FHA limits right now. And FHA is tightening as well: prices under those limits will fall too.
This is unit 29B for rent for $9,000.
Hmmmm, interesting.
http://sfbay.craigslist.org/sfc/apa/1406272550.html
I think even without the economic downturn the demand for luxury condos in SOMA was way over-stated.
There is no influx of high paying jobs coming to San Francisco – if anything the job-base, outside the service and medical groups, will decline over the next decades.
The other pool for these condos are up-scale individuals many of whom purchase them as part-time homes. I have a friend whose aunt, mostly living in Hong Kong, purchased a unit in the 4 Seasons. She lives there (the 4 Seasons) just 6 weeks/year.
This pool of very well off individuals is small and never was going to be able to absorb the thousands and thousands of very high priced units at one time planned for SOMA.
I have a copy of the 02/07 San Francisco magazine with a cover picture of SOMA and how it was supposed to look by 2020. I can count at least 24 30 story plus towers. These were planned and/or permitted and under construction.
Of the 24, only 4 have been built. ORH, Infinity towers and the Millenium. Everything else is now on hold or abadonned. The Business Times reported a while ago it will probably be a decade before another high-rise condo breaks ground in SOMA.
Gee, that brings us to 2020 and reinforces my belief that these grandiose plans hatched a few years back were all a pipe dream and will never come to pass.
It never quite penciled out even then, as a few dared point out, but those were the bubble days and pretty much everyone, including developers, bought into the myth of SOMA and this forest of massive high-priced condos lived in by very high paid workers who would walk down the street to their high-paying jobs.
It was all a pipe dream.
As usual, the CAR’s predictions are likely stale.
Price adjustments on the “high end” have been occuring in San Francisco since the stock market crashed late last year. Realtor friends and friends who have sold homes since November of 2008 complain that prices are 25-30% off peak for $2 million+ SFR/condo market, and while prices are still soft the big drops may have already occurred. It is hard to know whether the CAR is predicting further falls from these already depressed prices in locales that have been significantly impacted.
There may be some geographic “micro-climates” where the high end hasn’t yet adjusted (North of California Street, Mill Valley, the Marina) and are at risk, but it seems like the big damage has been done already for the vast majority of the San Francisco high end market.
As a contrarion indicator, I wonder whether the CAR becoming bearish is a sign that we are nearing a bottom or just another data point confirming that we are still in financial purgatory.
How do we view these two units facing foreclosure? Anyone has info on that? Thanks.
Gil says “pipe dream”, and it certainly appears so from the vantage point of today. Yet, we got a measly four towers…look at what happened in Vancouver over twenty years.
After a pause for breath, I think in the next few years we sould be asking ourselves “what did we do wrong?”. I, for one, hope that tower construction will start anew someday soon, but there will have to be real demand for the product, at probably a significantly cheaper price. Might need to change some of those exactions too…
This is unit 29B for rent for $9,000.
Hmmmm, interesting.
As I pointed out in the previous thread, a former tenant is suing (PDF) to get his $26k security deposit back. Double hmmmm…
Curmudgeon – I agree insofar as there would have to be demand again for condo tower construction to start anew.
However, I don’t see that demand coming back.
The towers are extremely expensive to build and require selling upper units at huge prices to make a profit. Not to mention large HOA fees.
Where are all these people going to come from who can afford future units? The long term jobs situation in SF is bleak – leaving aside government, service industry and health care related jobs.
The wealthy who buy here to spend a few weekends or weeks at their SF place is not enough to sustain what the City has in luxury condos right now – let alone in the future.
You can’t do a significantly cheaper price on the hi-rise towers and have them pencil out.
IMO the era of the hi-rise condo in SF is over. As well as the speculative hi-rise office building.
Low to mid-rise projects can pencil out however at these lower prices. When building starts again that is what the new SF projects will be IMO.
Not only do I see the dreams of this mega hi-rise SOMA over, I think the massive development planned for TI is not going to come about as originally planned but will be scaled back significantly.
I can even see the proposed tower atop the Transbay Terminal being scrapped – though its chances are brighter only because it is tied into developing the new transportation hub.
Gil, I don’t disagree with you completely, but I hope that when things eventually turn around, we will focus development on the core of the region and that high rise will be a part of the solution to renewed growth. That isn’t such an incredible pipe dream if you look at Vancouver or, perhaps even more instructively, to Portland. Portland hasn’t developed many true towers, but has developed a lot in the 10-15 story range in their downtown area. I’ve heard quotes that as much as 50% of all residential product in the Portland region was developed downtown at the height of the boom. It is that kind of transformative development that we need…not only in SF but perhaps even more importantly in places like Oakland and San Jose.
But, just to get this thread back in place, I don’t expect we’ll need another St. Regis for a while. Somehow, our dense downtown development has got to house the middle class (or at least the upper middle class) and not simply the top 1% if it’s going to have any future.
Curmudgeon – sorry to go off topic but you brought up Portland and I am quite familiar with it. Hoping to relocate to the Portland/Vancouver area in the next few years.
The downtown transformation has been huge in recent years.
Of note is that there is much more market rate middl;e class housing going up in downtown Portland. And too the area – street life – is much safer than in San francisco downtown.
Plus there has always been residential areas close into downtown Portland unlike SF.
The ease of transportation with the fareless square and all is another big plus.
Downtown Portland is an easier fit for this kind of in-fill higher desnity development.
Plus the coordination with suburbs like Hilsboro is another impetus. Hilsboro, just one, gets a streetcar line, has jobs development complementy mid-density residential areas that are connected by greenbelts and bike paths.
Your point about the 1% who can afford the high prices of condos like St. Regis is well taken. Portland never has had the housing price inflation relative to middle class income that SF proper has. You can buy a home in Raleigh Hills with a spectacular view of Hood on a half acre plus with 100 ft plus fir tress for 300K.
It’s a totally different world up there which is why I am not sure the comparison works.
If St. Regis is too rich for your blood, check out all those units at Infinity. Many are on the market for $3000-$4000/mo range. Probably units they bought at $600-800k with rental in mind: many are carpeted instead of hardwood.
Where can I check to see if the auction is on, and what the rules are?
I’m hearing St Regis units 29B and 27A are going to auction in December along with may other properties owned by Abe to pay off his debt. Does anyone else have any updates.
St Regis 23F now for rent for $8000
http://sfbay.craigslist.org/sfc/apa/1573735503.html