From the listing for The Beacon (250 King) #860:
Approved Short Sale 9/30/09 AT $470K!!! Should close VERY quickly at this point.
Originally listed for $488,888 at which point it didn’t close very quickly (it’s been on the market for three months) and purchased in February of 2007 for $672,000. Call it an already approved reduction of 30%.
And while we doubt this one has been approved (i.e., good luck), another one-bedroom short sale at the Beacon was just listed for “$300,000.” Purchased for $599,000 in September of 2006.
∙ Listing: 250 King Street #00045 (1/1) 800 sqft– “$300,000” [MLS]
∙ Listing: 250 King Street #860 (1/1) 909 sqft – $470,000 [MLS]
Don’t go into the light, Carol Anne!
at 300k we would actually be getting somewhere
too bad the HOA dues of 550 would turn a nice $1000 or so mortgage payment into a not so nice 1550..
still that is getting near cash flow positive territory I would think, even with falling rents
I think the reason why they aren’t closing is because the HOA is still under duress, so the banks aren’t willing to lend on it. I don’t think it’s due to lack of demand.
But tipsters out there correct me if I’m wrong.
Either way, it’s a pretty bad place to buy right now. Too much inventory in Mission Bay
Don’t forget, it’s leased parking…so those HOA dues are higher than a lot of the comps in the area.
How/why is the HOA “under duress”?
Anyone know who controls the parking lease prices? The HOA exclusively, or did the developer retain control of parking?
$300k is totally unreal, ouch.
…and when you can get a 1/1 in Mission Bay for $300K, will people pay twice that for D6? I doubt it. Eventually, this is going to affect prices all over SF.
….and when one short sale in a badly managed building, with high HOAs and legal issues sells for $300k will all SF condos follow suit? I doubt it. Market prices are determined by many listing and sales. Not one “apple” found in an orchard.
…yeah, you have to take the strong resale performance at The Palms into consideration too…
A couple of reasons why the Beacon HOA dues are higher than some of the other buildings in the City is because they have a door person AND earthquake insurance on top of everything else. Then you add the monthly parking fee and it all makes it hard for buyers to swallow.
The current dispute between the ROA (HOA) and the COA (commercial assoc.)hurts everyone. Hopefully this will be resolved soon.
Lastly, the Beacon condos leave me cold. They look tired and old even though they were converted from apartments to condos in 2004.
There is too much inventory available for buyers to have to settle for this.
this thread needs a witty haiku.
too bad the HOA dues of 550 would turn a nice $1000 or so mortgage payment into a not so nice 1550..
did you get that by assuming a 20% down payment (of $80k) and then doing an IO mortgage at 5%??? even then it only would cover interest… not taxes (does HOA pay insurance?)
so $1000/mo plus the $550/mo HOA plus $250 taxes is $1800/mo
(unless the HOA pays taxes)
how long until we realize that “buying” homes using IO and option ARM products isn’t a good idea?
besides, how many San Franciscans who can pony up an $80k down payment are interested in a place like this?
I think that the Beacon is NOT a “beacon” for SF housing in general because it has too many “special” negatives such as the ongoing legal issues. That said, I’d certainly think about this over a $700k condo nearby.
I was being a tad bit lazy, but since you ask xsfr…
1.) with 60k down (20%) and a rate of 4.75% – around $1150/month in mortgage payments.
2.) taxes are obviosuly a big issue – certainyl should not be ignored
3.) I wasn’t aware that parking has to be leased for an extra cost – big problem.
4.) the HOA dues are a killer.
All in, yeah, it would run around $1800-$2000 a month to cover PITI on this property.
I might be wrong, but I would think a 1/1 (with parking) in this neighborhood could rent for around 1800-2000.
Taking into the tax benefits of property depreciation, a landlord could possibly find this price of 300k to be acceptable.
Certainly no slam dunk, but it was a slam dunk in the other direction at 600k 🙁 or is it 🙂
Will you settle for a bad limerick?
The once was a man who bought and did sue,
The developers of The Beacon with much ado,
For gross misrepresentation,
And bad ventilation,
But now the bank says that he is through.
One of the lead plaintffs in the class action lawsuits against the Beacon developers is throwing in the towel. His unit, #804, is scheduled to hit the auction block (according to PS) on October 20 with an unpaid balance of $830,526. The 1,476 sq.ft. unit was orginally bought in 2006 for $906,666.
^ How much are they saying the square footage was off by???
Noticed something in the MLS listing that maybe we are missing here, and perhaps a mistake by the listing agent, but it says that this is a BMR unit. Perhaps that is why it’s approved at $300K? I doubt a BMR unit would have sold for $599K originally though.
FWIW:
I agree that as these properties do become interesting as they fall in price.
I haven’t seen this unit, and I have no interest whatsoever in living in a 1BR apartment, but $300k for that area does raise my eyebrows just a touch, so I’m sure it raises other people’s eyebrows as well…
I have always been out of touch with SF pricing, but there is a point where prices are even attractive to me. $300k for a 1/1 in that area without legal issues is very close.
The Beacon and its residents seem to have hit a very long-lasting patch of bad luck.
I’ve long felt that the The Beacon was the poster child for the craziness of the SF condo market at its peak. This always was a marginal building, right from its low-budget conversion from apartments. But… I guess many folks back then ignored all its downsides and piled in because “real estate only goes up”. No surprise that this building is probably suffering more than other large condo buildings in that area.
EB Guy, that was a bad limerick. Or at least not proper. It goes:
9-9-5-5-9
There once was a man from Nantucket….
Re: the Beacon. It should have stayed apartments. Going condo was always pure hubris. It is particularly disconcerting that disputes between owner/residents and commercial tenants have blown up and contributed to the problems. If the building had stayed apartments, that would probably never have become an issue either. Unfortunately, this project gives mixed-use projects a black eye generally when, in urban form terms, it is exactly what we need more of.
Sorry, but even at $300k it is still overpriced. That is not chump change and can now buy quite a nice place not far away from SF. One might pencil in some rational comparable rent analysis, but only if you avoid the significant downside risks, ignore the opportunity costs, ignore income phase-outs for depreciation, and assume unlikely rents. This complex is going to become foreclosure central. Who knows what HOA hikes and special assessments will be imposed to cover legal problems and vacant units. And don’t bet on any appreciation for a low-end box like this any time soon.
Knock off another $75,000 and it may start making sense as income property. My wife’s uncle recently bought a condo in Sacramento for $92,000 that fetches $1200/mo in rent. As others noted, these are much better suited as apartments than condos. I still wouldn’t buy it to live in at that $225k.
But . . . at 50% off it is an improvement! Shows how truly out-of-whack things got a few years ago.
This building isn’t marginal, it’s trash. The design doesn’t just look awful, it functions badly and leaks through cracks that shouldn’t be there. The shame of it all is overpowering.
Buy in the Beacon
For the cost of a Bentley
Still unattractive
The bank won’t approve
Three hundred thousand dollars.
Short sale means no sale.
Beacon burning bright
Cold autumn wind sends shivers
Prices fall like leaves
They call it Beacon
I call it Bacon
Sizzle Sizzle my Nizzle
You guys are not looking at the bigger picture. Land prices vary drastically depending on location. You cannot compare a condo in downtown SF to one in Sacramento. Realtors use $/sq foot as an indicator for desirability. Prices and rents in SF will never be as low as East Bay. There really is no reason for them to be equal.
You may not want to live at the Beacon but I am sure someone out there does, for the right price that is. I am not a Realtor so I would not be able to properly assess this property’s value but calling it too expensive without citing proper comps is meaningless. Let the market dictate the “fair” price.
anon:
I’m not sure that Trip’s argument was that rents/prices are lower in Sacramento (if your post is in reply to Trip’s).
It is that a property “worth” 92k fetches 1200/mo in rent. (a cost to rent multiple of 76.6)
this property (the Beacon) would struggle to get 1800/month, and yet its bargain basement price is 300k. (multiple of 166.7)
many properties in SF have multiples of 300-500. That makes no economic sense unless the buyers factor in heavy future appreciation. a poor bet IMO.
the issue with SF is that the price:rent ratio (or multiple or however you want to look at it) is out of wack, even for SF.
In other words, it has become increasingly more expensive to buy compared to renting in SF, even compared to SF of the past. That is changing the last year or so, but the rent:own ratios are still out of wack.
Trip: I agree that 300k is still too high. I’m just saying that 300k starts raising my eyebrows, that’s all. and 300k raises my eyebrows for a condo in that area that is totally unencumbered… not the Beacon.
you start putting 1/1s in ORH for the 300’s and then I might bite as example (note: I do not predict that)
Ex SF-er, thanks for explaining the relevance of my Sacramento condo example far better than I did! We’re in agreement that a $300k 1/1 price range in this area is pretty eyebrow-raising — a 50% decline in 3 years is a big deal. I was only trying to add that despite that massive drop, we still have a ways to go (although by definition we’re now more than halfway there for some SOMA places). And I don’t think investors will now start swooping in to support prices because the numbers still make no sense and the investment deals are far better in nearby areas.
“without citing proper comps is meaningless”
Price/rent ratios are much more meaningful. The only thing a comp insures is that you’ll make the same mistake that everyone else is making.
ex SF-er:
If you would like to discuss P/R ratios then we should compare similar numbers.
Consider the 15-year averaged P/R ratios given below. They are per annual basis so they will be off by a factor of 12.
http://money.cnn.com/magazines/fortune/price_rent_ratios/
P/R ratios in Sacramento have been historically 30% lower than the ratios in S.F. The Sacramento condo that you are comparing has a 50% lower ratio than the Beacon one. Although the ratio is skewed slightly it’s in the same ball park. I would not make any conclusions based on a single data point.
Let’s not forget how much more inflated the prices have gotten in Sacramento vs. prices S.F. Sacramento also has more foreclosed properties than S.F. which means better deals to be found.
Leave Sacramento out of this. Who the hell wants to live out there? No Bay Area person in their right mind would move to Sact.
Sacramento may not seem important by itself but USA, from a macro point of view, is a collection of cities like Sacramento, San Jose, S.F., etc. For the right price people will want to move around.
For you in particular it may take a pretty large price differential to do so but let’s not make a generalization out of this. In fact my friend’s parents moved there from Bay Area and are perfectly happy.
Unless overridden by some more senior socketsite poster I’m declaring diemos the haiku winner for this thread.
I’m generally just a lurker, but:
“Unless overridden by some more senior socketsite poster I’m declaring diemos the haiku winner for this thread.”
Couldn’t agree more. Genius that haiku was.
This place is ground zero for the disaster that is SOMA real estate.
Affordable new housing in SF is not a disaster. SF needs more housing “catastrophes” like SOMA.
anon:
you may want to re-read my last explanation. the key words were this:
this property (the Beacon) would struggle to get 1800/month, and yet its bargain basement price is 300k. (multiple of 166.7)
many properties in SF have multiples of 300-500. That makes no economic sense unless the buyers factor in heavy future appreciation. a poor bet IMO.
I don’t doubt that there are historical differences in price:rent multiples between different cities like SF and Sacramento.
but one of the major reasons for that is that SF real estate has traditionally appreciated much faster than Sacramento, especially over the last 15 years. (SF saw two RE bubbles in the last 15 years, Sacto only one). or better stated: traditionally SF owners expect higher future appreciation of their domiciles when they purchase RE.
SF RE investors are therefore willing to pay higher price:rent multiples SPECIFICALLY because they have traditionally expected more future appreciation. (they may have a negative carry for some time, but then cash out with much higher sales price later on). I believe that this future optimism may be misguided.
only time will tell of course.
Diemos FTW.
RE pr0n and poetry all on the same site. 🙂
“Affordable new housing in SF is not a disaster. SF needs more housing “catastrophes” like SOMA.”
Agree with this sentiment generally. The federal government is doing its damnedest to prop up the housing market, but what’s really good for the greater number of people is cheaper housing. Propping up the housing market is mostly good for banksters and for existing homeowners looking to make a windfall profit. In reality, those existing homeowners who were prudent (i.e. no cash-out refis/no buying with crappy loans during the boom) will recognize a profit anyway, just a smaller profit, so it’s not like they’re “losing money” except on paper. It’s the same way I’ve “lost money” if I buy a stock at 5, it goes up to 40, and then drops to 20 when I sell. I haven’t really “lost” $20/share because I never sold at 40 — it was all on paper — and I made a profit of $15/share.
Unit 543 (688 sq.ft.) at 260 King started its life as an impressive 2 year (tax-free?) flip as it was bought in 2005 for $497k and sold for $605k. The second time around it appears to have been financed by AMERICA’S MORTGAGE OUTSOURCE PROGRAM (?) Whatever the case, it showed up as a WaMu owned foreclosure on Feb. 9 for $479k. And yes, a RE professional was involved…
The sale of 250 King Street #00045 has closed escrow: Got Shorty For 42 Percent Under 2006 At The Beacon.