A few months after the 15-unit Glen Park Market Place premiered, 53 Wilder Street #406 closed escrow for $855,000 (September 2006). It’s two bedrooms, two baths and 1,249 square feet. And it’s back on the market and asking $839,000 (2% under its 2006 price).
Interestingly enough, a two bedroom, two bath and 1,279 square foot unit next-door (53 Wilder Street #405) sold for $871,000 this past April. It had been purchased for $810,000 in November 2006. As a plugged-in tipster noted about the sale at the time:
The only explanation I can come up with for the gravity-defying price is that Glen Park village has improved significantly in the meantime. The new Canyon Market on the ground floor seems to be successful and some nice new restaurants (Le P’tit Laurent, Sangha) have opened within 60 seconds walk.
Neighborhood, building or property changes can definitely muddle an “apples to apples” comparison when trying to divine how “the market” is moving. That being said, back to 53 Wilder #406 (or #203 which has been on the market for 70 days at $749,000, purchased for $729,000 in September of 2006).
Will changes in the village continue to help Glen Park Market Place defy beyond #405?
UPDATE: From the aforementioned tipster: “I should point out that one of the restaurants I cited (Sangha) has since closed.” Perhaps that’s what’s changed for #406…
∙ Listing: 53 Wilder #203 (2/2) 1,212 sqft – $749,000 [MLS]
∙ Listing: 53 Wilder #406 (2/2) 1,249 sqft – $839,000 [MLS]
∙ Glen Park Market Place: Range Of Prices And BMR Deadline [SocketSite]
So a new market and restaurant or two can add 60-100k plus to a homes value?
Viva Contiga and Whole Foods around the corner from me then.
Glen Park is becoming a lazy google indicator nabe.
Like Noe, it’s peninsula-accessible, and if you are near the bart, you can even commute to Twitter more easily! Hopefully, you won’t have creepy neighbors trying to look up where you live though 😉
Remember every googler got to reprice options at about 300/share recently. That along with successful zombification means we are back in business, especially in the under 1m segment.
There may actually be more folks chasing these under 1m commutable properties now than there was in 06!
Wait a minute. LMRIM said Glen Park was going to tank, very soon, last year. What gives?
As the tipster in this case, I should point out that one of the restaurants I cited (Sangha) has since closed.
No one was more surprised than I at the appreciation of #405. I believe one of the two currently on the market (maybe #406?) was listed as contingent for a while but it’s now back as Active.
Dunno, GP may be commutable to the Peninsula as dub dub says but, if I worked on the Peninsula, GP is the last place I’d want to live. Burlingame, Millbrae, areas along El Camino – far better neighborhood environments.
One explanation could be that the buyers were from out of the area and their agent wasn’t quite knowledgeable about the comps. I’ve seen a bit of that in Glen Park lately–more specifically, in a condo between Bernal/Excelsior/Glen Park/Mission areas.
I can’t speak for LMRiM, but in his defense he foresaw neither the transcendental nature of this bailout (the results of which are far too early to predict), nor the option repricing — nobody did.
I think in a “normal” market, everything falls, but this is not a normal market, and people with assets have enormous advantages right now, even if they want to squander them on solvency taxes 😉
Companies too! Intuit has spent 250M dollars on 2 acquisitions in the last 3 months that I’m aware of (mint and paycycle). When balance sheets don’t matter, companies with strong ones are even more powerful than usual.
Large tech companies are generally unencumbered by debt, so that explains much of what is going on right now, especially in the Google industrial complex.
And the best startups (like twitter and facebook) have access to the capital (all the folks losing money in VC want to have these companies on their books), even though venture investment is off something like 80% year over year.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/10/12/BUID1A4ITC.DTL&type=business
And while I generally agree with Gil, the cachet of living in SF “near public transit” as opposed to burlingame or milbrae can not be ignored for a certain group of people, as we see on socketsite day after day.
It’s just a fun theory though.
I agree with dub dub. Glen Park has really benefited from the recent run up in demand for neighboring Noe Valley. Buyers priced out have seen this as a logical (relatively) more affordable alternative. (For instance, you can still purchase smaller homes for around $700K.) Public transit options are excellent and 101/280 access to the Peninsula is a short drive away. I can’t overstate how important that is for the people who live in the area. Even if you work in the East Bay, with BART you can get to your destination relatively quickly. Anyway, with Noe, and the rest of the city for that matter going through significant price discovery it’s going to be interesting to see how well GP holds up. So far it has been pretty solid.
The restaurant scene in the village has improved remarkably over the past 24 months with more coming. Sangha turned out to be a failure which was not unexpected if you ever dined there. Osha however seems to be (surprisingly) struggling. Gialina, Chenery Park and Le P’tit Laurent are thriving. This only adds to the overall desirability.
With respect to the featured unit I’ll be surprised if it sells for $839K. The 53 Wilder condos are relatively large and well appointed but nothing special. Personally I would want to live close to a grocery store but not necessarily above it. (Even a boutique one like Canyon Market.)
(For instance, you can still purchase smaller homes for around $700K.)
In GP? I don’t think so. More like ~800.
“In GP? I don’t think so. More like ~800.”
Annon – In general yes, but it is still possible…I just did a quick search and found the following active properties for just under 700K. 590 Laidley (featured on SS), 540 Laidley & 236 Baden. There were a couple of 2/1 homes on Chenery over the past couple of months listed in the low 700’s. (I must admit I’m not sure what they ended up selling for.)
I actually looked at a unit in that building a couple of months ago, and it went into contract rather quickly. I don’t recall the number, but it was on the third floor and asking $800K. It is not one of the two currently listed units or the one that sold in April for that matter. My guess is that it either sold or fell out of escrow and was withdrawn.
As Willow said, they are nicely appointed and roomy for 2BR. I also like that area alot. Since we last looked there however, we’ve shifted our focus to SFH. We’re also in no rush, so we’re being picky.
Willow,
I’ve been working with a client whose ceiling is 699K for quite some time. GP is her desired location. They aren’t out there. Both the Laidley properties were pretty funky — not bad deals IMO, but not for everybody — and they got into contract within days. My guess is both 700+. I’m curious to see what they do. The Baden property is Sunnyside and a fixer for 636K. So really it will wind up costing somebody nearly 800K.
Seconding dub dub, and countering Gil, GP really is in a great position relative to a lot of other locations, particularly since most couples include two income earners. There is good access to high tech jobs on the peninsula, but also fantastic transit access to downtown San Francisco or even Oakland. It’s basically the SF family neighborhood (as opposed to SOMA, say) that has the most and easiest transportation options. I think that counts for alot.
“Seconding dub dub, and countering Gil, GP really is in a great position relative to a lot of other locations”
Curmudgeon, I don’t deny GP has better transportation access than many other SF hoods.
My point is, if I worked on the Penninsula, I wouldn’t be looking to live in any SF neighborhood. The ones I could afford like GP are congested, little parking, little open space for kids to play, dirty streets, dumped cars. I could go on.
Bottom line, the quality of SF neigborhoods is generally poor relative to most other cities.
The allure of SF for some, who have to commute to live here, does not register with me. Maybe having lived outside SF for periods of time colors my perpective. I dunno.
Two earner couple with good Peninsula jobs? I’d check out Broadway/Burlingame. The small shopping area near California up to El Camino is far superior to GP. Restaurants, art shops, a Lucky, boutiques. Walkable streets. Tress and shrubery.
The area around El Camino in the San Carlos area too is a much better neighborhood option than GP for those working on the mid-Peninsula and south.
I’ve been noticing a lot more people working at google moving out of SF and into San Mateo/adjacent areas. Cheaper and it lessens the commute. Personally, I’ve never understood why they would choose to live an hour away from their work while paying a premium to do so. You can always drive out to the city.
Personally, I’ve never understood why they would choose to live an hour away from their work while paying a premium to do so.
Caveat: SF is not necessarily (much)more expensive than MV or PA.
“The Baden property is Sunnyside and a fixer for 636K.”
Annon – Just looked at the map and you are correct, the property is officially in Sunnyside. However the housing stock along the Sunnyside/Glen Park border (i.e. Joost, Monterey etc.) is generally well maintained. Definitely worth a look for your clients, particularly if their ceiling is $699K.
“The ones I could afford like GP are congested, little parking, little open space for kids to play, dirty streets, dumped cars. I could go on.”
Gil – Actually parking in Glen Park is very good compared to other neighborhoods in San Francisco. As far as open space for kids you have a number of options most notably Glen Canyon. The streets are also relatively clean; again in comparison to other areas in the city. (Granted Millbrae & Burlingame is cleaner.) Not sure about the dumped cars though…I’ve lived here for almost 10 years and don’t recall ever seeing one.
My point is, if I worked on the Penninsula, I wouldn’t be looking to live in any SF neighborhood.
But if your spouse worked in the City, or in the East Bay, you might sing a different tune. SOMA and GP both seem ideally-located for two-income families, especially professionals/specialists where the work isn’t just anywhere.
El-D, that was my point about GP, and maybe I wasn’t explicit enough. If one spouse works on the peninsula, and another in the City, GP is a very good choice. And of course, that is particularly true if the couple values the good things the city has to offer compared to the peninsula locales Gil mentions. It does all come down to a matter of taste.
As a recent purchaser (March) in Glen Park I am glad that prices are holding up as well as they are. My wife and I really like the location ( we used to rent in Noe). We are a two income family where my wife works downtown and I commute to Palo Alto. The combination of Public transit and freeway access is amount the beating the city. I would highly recommend GP to anyone looking for a new SF neighborhood.
“My point is, if I worked on the Penninsula, I wouldn’t be looking to live in any SF neighborhood. The ones I could afford like GP are congested, little parking, little open space for kids to play, dirty streets, dumped cars. I could go on.
Bottom line, the quality of SF neigborhoods is generally poor relative to most other cities.”
Are you serious? I live in Diamond Heights and I don’t think I’ve ever seen a “dumped car” in Glen Park. Are we both talking about the same neighborhood? Also, as some other posters note, there are quite a few nice parks around the area. I won’t argue the point that you could do better for the money (somewhat, anyway) in San Mateo/Burlingame. I actually used to live down there and liked it, but my whole life is in the city so it made no sense. I have more going on nowadays in town, but that’s a personal choice. The business districts in the peninsula cities are generally underrated by the cityfolk.
Second thing, re: “SF neighborhoods quality being poor compared to other cities,” WHAT other cities are you talking about? I’m from the east coast and can definitely say that SF is generally cleaner and tidier than most big cities, whether we’re talking about the first tier (Boston, NY, Phila, DC) or the second (Providence, Hartford, New Haven/Stamford, Baltimore). Same goes for the midwest where I lived for awhile. What SF-level cities have so many consistently cleaner, more well-kept neighborhoods? I am genuinely curious.
“Same goes for the midwest where I lived for awhile. What SF-level cities have so many consistently cleaner, more well-kept neighborhoods? I am genuinely curious.”
Portland, Seattle, Denver, San Antonio for starters. Throw in San Diego.
San Francisco is filthy compared to these cities. I have not lived or visited eastern cities so I can’t comment there.
Its more than clean neighborhoods. The Sunset is fairly clean yet the grid streets, cemented in fronts, tiny backyards, attached homes in a line block after block after block. Downright depressing and ugly IMO.
Now I grew up in SF and knew basically nothing except Sunset or Mission types neighborhoods. That was the norm for me.
When I went away to college in Portland it was culture shock. Large lots, large backyards, no backyard fences in many neighborhoods. Trees everywhere in many neighborhoods. Stunning. It blew me away. And these were middle class hoods so to speak.
I’ve lived in Seattle, Denver, been to San Antonio and San Diego often and yes, the “middle class” neighborhoods in those cities put the Sunset, the Mission and GP, if I might say so, to shame.
I point out Burlingame and San carlos because those neighborhoods are somewhat typical of what I found in th othger cities. BTW, San Antonio neighborhoods are awesome – but flat of course.
And yes, I am trying to get a job relocation to the Northwest but that has stalled because of the economy – though I hope to relocate in the next 3 or 4 years.
BTW, I live in Miraloma and walk down to GP BART in the morning and have seen a couple of cars junked on Bosworth in the past year alone.
“Portland, Seattle, Denver, San Antonio for starters. Throw in San Diego.”
Ummm Gil….kind of having a hard time with the comparison to San Antonio and Denver. Those cities certainly may be as populated, but the similarities end there.
By the way, I agree that San Francisco is pretty grimy, but it is a MUCH better city than these places you mentioned in my opinion. It’s all subjective though, as you said yourself. Either way, it sounds like your plan to move out of the area is a good one for you. You should be able to save money and have a better standard of living… at least by YOUR standards. That’s really the important thing. Good luck!
Nice part of town. There are those ex-homeowners, though, who refuse to leave even after the bank has foreclosed; I’m guessing they didn’t do cash for keys. Surely 38 Wilder will boost neighborhood values once they evict the squatter and put this 3bed/2bath (1,426 sq ft) home on the market. Foreclosed on 09/16/2008 for $590,289 (but worth $900+k by Zillow’s estimate). A little pent up supply report before we head into the weekend.
If nobody has any chance of buying it, how can the term “supply” be used, whether pent up or not? As one property comes onto the market from the foreclosure cycle, another one goes off it. The only way your “pent up” term would make any sense is if droves came on at once, changing the game. That won’t happen. There are too many roadblocks along the way between a foreclosed property and a market.
You cannot compare Portland/ Seattle to SF. It drizzle a lot up there and the weather in general is just not nearly as nice. Cleaner street, bigger space, but crappy weather. No thanks. If those two cities have the same weather as SF, then I think your argument is valid. Meaning apple to apple not apple to orange.
Burlingame is nice. But if I move there, nobody will come to visit me. I much prefer closer to my friends and action than live in the suburb even though I know the weather is a bit warmer and you get more space.
Glen Park is awesome for families. Glen Park Canyon is a great area for field play, tennis, playground, hikes, basketball. There are several wonderful preschools and nursery programs along the main drags. Glenridge Coop, Billygoats, Neighborhood Playgarden, Glen Park Montessori.
The library offers lapsits and all kinds of resources. Hello Destination the best bakery every . Love those amazing croissants — I’d say the best in the city and their cupcakes yummiliciuos! Though Noe Valley Bakery still makes a better cheddar scone. The cute Poppy and Penny Lanes are very rare and special for this city with their country feel. Laidley is fantastic and fun — the most creative block in the city. It’s a great hood for families.
I always puzzle about these “filthy San Francisco” comments. San Francisco has some of the cleanest air and water of any large American city. Portland is probably a bit cleaner.
Here is Reader’s Digest ranking, it has San Francisco as the 4th cleanest and Chicago as the dirtiest:
http://www.rd.com/your-america-inspiring-people-and-stories/50-cleanest-dirtiest-cities-in-america/article15115.html
San Francisco scores poorly in sanitation, so I imagine that is what Gil is talking about. San Antonio is even lower though, and that is what I remember from my time being stationed there.
Beauty is in the eye of the beholder, I guess.
Interesting comments on Glen Park vs the SM county cities for Peninsula workers. I think SocketSiters vastly underestimate the number of tech employees who live in the City. I worked at one of the huge techs for many many years, and 40% of our workforce was SF resident. The vast majority of that 40% (which worked out to 5000+ people) was in 94123, 94115, 94118 and 94109. Generally, if someone is willing to strap on the SF – Peninsula commute, and many are, they will take the extra 15 minutes to live where they really want to live. I agree that if you are going to live in Glen Park you may as well live in Burlingame or San Mateo, though to buy in Burlingame is significantly more expensive than GP, admittedly for a different type of housing stock.
What I would call old-school tech (Cisco, HP, Oracle, Sun, Microsoft, Intel, etc.) has created thousands upon thousands of millionaires, who continue to have very high paying jobs today. This is a big population of relatively young, SF dwelling, $200K+ per capita earning people who I never see mentioned here. I don’t have anything other than anecdotal data for the 2.0 companies to compare, but I would make a pretty educated guess that with the exception of Googlers (only because of their equity windfall), old-school tech employees significantly outearn the newer breed, and quite a bit of the sales activity in the $1.25-$2.5M area is attributable to them.
I am not a techie any more (I am now a financial services person so you can sneer at me more) so this is not me I am talking about!
A couple of things.
Regarding repriced stock options – most likely the beneficiaries won’t be able to sell them for another year and even then, they won’t be able to sell all of them at once due to vesting times and blackout periods.
Regarding 38 Wilder St – my husband and I looked at and put a bid on it. It sold for $720K, $10k over asking which we thought was crazy. It needed a TON of work and the square footage is very misleading. One of the downstairs rooms included in that square footage was sloppily carved out of the garage and has no windows. There are no appliances in the kitchen and weird outdoor stone tile for flooring in the back rooms that needed to be torn up. The boxy 50s layout is very cramped and since it goes into a hill, expanding down has very limited light sources. We’ll be interested to see what happens to this house but have no problems not getting it as we could not fathom paying over $700k for it.
“You cannot compare Portland/ Seattle to SF. It drizzle a lot up there and the weather in general is just not nearly as nice. Cleaner street, bigger space, but crappy weather.”
Well jaja, Portland gets 36 inches of rain a year. SF gets only 23 but San Rafael gets 33 inches. Portland has generally warm San Jose like summers. Fairly dry but Portland does get rain over the summer – about 3 plus inches spread over June/July/August. Just enough to keep Portland green all year round. Which is a big allure for many of us.
It drizzles a lot, but it does so in SF during the summer and much of SF is gray all summer.
The weather is hardly crappy. You get the rain of a Marin winter and the warmth of a San Jose summer. Perfect!
Now if you don’t like thunder storms with bolt lightning stay away. They are common in the fall and spring. I find them spectacular so for me that is a plus.
It’s not just bigger lots, intimate neighborhoods and clener streets – the setting is more spectacular than SF. We have beautiful hills, Portland and Seattle have beautiful hills and mountains. The foliage blows the Bay Area away.
Anyway, don’t discount the advantages of Portland and Seattle.
Definitely worth a look for your clients, particularly if their ceiling is $
We did look. Like I said, it’s a fixer. All told it’s gonna look like an 800K purchase in the end.
The only similarities I see between glen park and burlingame are proximity to a commercial district and a freeway. Otherwise glen park offers a great environment for a wide range of buyer types. You can commute by car, Bart or bike. You can pop over to the Mission, the MOMA, the Symphony or the Ferry Building within minutes. Glen Park is by far the best BART-able neighborhood in SF.
The sale price of #203 was misquoted by the site above. It originally sold for $739k per the MLS and per socketsite’s original string in 2006:
http://www.sfarmls.com/scripts/mgrqispi.dll?APPNAME=Sanfrancisco&PRGNAME=MLSPropertyDetail&ARGUMENTS=-N500782465,-N190695,-N,-A,-N3398874
[Editor’s Note While the reported sales price on the MLS might be $739,000, according to the recorded sales price with the Assessor’s office the actual sale price was $729,000.]
While not referenced above, 53 Wilder #301 closed escrow yesterday with a reported contract price of $750,000. Purchased for $739,000 in September of 2006 for a 1.4% gain in value over the past three years (average annual appreciation of 0.5%).
Congratulations to the sellers of 301. That is a more than acceptable outcome. 406 is on the top floor and is slightly larger so perhaps a sale at asking is withing reach.
It looks like #406 is in contract already. Contingent date is listed as Sunday, so it essentially got an offer at the time of the first open house. It seemed underpriced relative to the unit that closed in Spring, so I guess the quick offer makes some sense. That’s still amazing in this economy, but GP is a very nice area in my opinion.
Just catching up on my reading, so I’m posting a bit late.
I don’t get why Glen Park homes are so expensive. I’ve rented here a while and $1M homes are mixed with *a lot* low income housing.
Check out the Google Map showing all the hud/low incoming housing in SF.
This isn’t the same map circulating a year ago. It’s been updated and has a ton the smaller HUD units listed. These smaller units add up when there’s a whole street of them (like Arbor Street in Glen Park).
Guess it helps if I actually Give the url.
http://ptstatic.appspot.com/sanfrancisco-hud-projects.html or http://maps.google.com/maps/ms?ie=UTF8&hl=en&msa=0&ll=37.761351,-122.43885&spn=0.094318,0.126858&z=13
— Glen Parker
The sale of 53 Wilder #203 closed escrow yesterday with a reported contract price of $732,000. That’s $3,000 over its recorded sale price of $729,000 in September 2006, but apparently $7,000 under its reported sale price of $739,000 according to the MLS.
I guess the answer to the question posed in the title is “yes”
FWIW, the 2009 sale of 53 Wilder #203 would have needed to be at $781K to beat inflation (i.e. real housing prices vs. nominal) from 2006 to 2009 according to http://www.usinflationcalculator.com/.
“FWIW, the 2009 sale of 53 Wilder #203 would have needed to be at $781K to beat inflation”
That’s true, but most people on this board have been touting citywide 20-30% price drops (in nominal terms). This is no where near that, and we’re in the worst housing crash of our lifetime….all and all a pretty good outcome.
BTW, the S&P lost over 20% during that same timeframe, so it’s all relative I suppose.
I don’t know who these supposed people touting 20-30% nominal drops are, but these people are irrelevant to my point, because I’ve always said that we’d see real drops over time. A few others have agreed with this sentiment — check out the comments on this thread by NoeValleyJim and corntrollio:
https://socketsite.com/archives/2009/09/july_spcaseshiller_san_francisco_msa_continues_mom_upti.html
Some of those touting 20 to 30 percent drops have taken off. Like Satchel/LMRiM, an individual who constantly talked about how Glen Park was tanking, and he did it in the present tense at the time too. “Dude” was another one. “Foolio” was a third. Tipster is another, current one. A whole bunch of anon’s. To be fair, diemos always said more like 2012.
I did indeed repeatedly predict drops of 20% over 2-3 years, starting around 2007, and it was a prediction I made based on pretty apparent fundamentals (or lack thereof) at the time. I haven’t “taken off,” nor am I afraid to defend those predictions today.
If you look back through my posts, I qualified that 20% as an average, saying that certain areas would fall more, while others would fall less. Overall, I think my assessment was pretty spot-on on a blended basis (Bayview vs. Noe Valley, for example). That said, I freely admit that my prediction for declines was generally on the high side overall, given where prices are today. Today being the operative word – this story ain’t over yet.
Rather than review what I did predict, though, I think it’s more interesting to highlight what I DIDN’T predict: I never predicted that our government would basically nationalize our entire mortgage system. I also never predicted that they’d take interest rates to the lowest levels in recorded history to render my predictions incorrect. I didn’t think that banks would let people sit in homes, for free, for over a year before starting the foreclosure process. Most importantly, I never predicted the government would be willing to sell future generations of Americans into indentured servitude to China and the rest of the creditor world to “save” housing and the banks.
This is why I don’t really post much anymore – talking about the direction of the real estate “market” today is about as interesting as discussing next year’s budget for the Department of Agriculture or some other government agency.
So go ahead and beat your chest, anonn. You, who never predicted anything from a macroeconomic perspective. Aren’t you also the guy who stridently denied there ever was a bubble here? The same guy who claimed that prices in “real SF” wouldn’t fall at all? The guy who said Bernal was undervalued? The guy who said the mortgage market didn’t really matter in SF because of family money?
If you feel compelled to play class historian, at least make it a 2-way street. I’ll own up to my predictions if you do likewise. Where my b’errors at?
anon94123, G-man, Jay, joh, Jorge, juju, Mavo, Robert, SF_Banker, SanFronziScheme, two_beers, wanker, The_Japan_Experience, the whole Greek Chorus of doomsayers and FUD throwers.
It really is a rotten thing to try and spread fear during a panic, especially when you really should know better. And now they have all disappeared or switched user names.
I would like it if Robert came back, his data analysis skills are unparalleled and he has a unique perspective on things.
LOL @ beating my chest. I didn’t know “Legacy Dude” and “Dude” were one and the same Other than one time when I was being goaded by 20 bearts I routinely said that a correction was likely. I disputed the predilection to jump the gun and talk about it as if it had already occurred. I also doubted it would be as big as what y’all did. I do believe Bernal was undervalued, and I believe that’s one of the reasons why it’s still pretty strong. “Real SF” was a term everyone’s favorite no account real estate know nothing Satchel favored. Not me. The words you’re trying to put in my mouth are either fabricated or binary, and if I ever asked anybody to do anything it was to consider things on balance. After all this site is about real estate in a city that varies block to block more than most places.
SF Renegade, I was exaggerating when I said “most” people are touting huge drops, but there were ALOT of folks who were predicting 20-30% nominal drops. But since we’re on the topic of admissions, I’ll make one of my own — I never thought RE in San Francisco proper would get this bad. While I still don’t think 20%-30% falls are the norm, prices generally have dropped more than I expected. With that said, I also was well aware that the government wasn’t going to just let the market collapse without pulling out all the stops. Here’s a response that I gave to Satchel two years ago, and I think it’s still relevant now
“The job of the Fed and congress are to respond to market conditions and keep the economy growing. When things are going well, they throttle it down and when they are going poorly – they throttle it up. Economists like steady growth, and I’m sure you already know that already.”
By the way, I agree with NVJ about Robert’s posts….always had interesting perspective.
Coincidentally, the Paragon Real Estate Group last week sent out a study entitled “How Much Have SF Home Values Declined Since Their Peak?” In it, they try to estimate when the peak was for different areas and how much prices have declined since then. I can’t find the study on their website, but here is a brief summary of their claims:
How Much Have SF Home Values Declined Since Their Peak?
* Peak value estimated to have been reached 1/1/06 – 6/30/06
** Peak value estimated to have been reached 1/1/07 – 6/30/07
*** Peak value estimated to have been reached 1/1/08 – 6/30/08
Changes in Average Dollar per Square Foot Values
for Selected San Francisco Neighborhoods & Property Types
Bayview* House -45%
Ingleside/ Hghts/ House -23%
Oceanview*
Excelsior/Portola* House -25%
Central/Outer House -14%
Richmond**
Inner Mission** Condo -20%
Central/ Outer House -20%
Sunset**
Miraloma/ House -19%
Sunnyside**
Hayes Valley/ Condo -18%
Alamo/ NOPA***
SOMA** Condo -18%
Bernal Hghts*** House -13%
StFrancis Wd/W. House -15%
Portal/Forest H**
Noe & Eureka Condo -18%
Valleys***
South Beath*** Condo -18%
Potrero Hill** House -14%
Russian/Nob/ Condo -13%
Telegraph Hills***
Noe & Eureka House -21%
Valleys***
Pacific Hghts/ Condo -9%
Marina(Dist7)***
Most Expensive House -18%
North SF Areas***
That’s pretty odd. I bet if you asked any single Paragon agent what’s been hit worse, Noe Valley or the Castro, they’d say the Castro. And they’d be more than correct.
So after all the chest-beating by anonn and a few others as to how silly and wrong those predicting 20-30% price declines were, this pretty reliable measure — not perfect but pretty sound — by a respected local realtor shows that prices have dropped by just about that much all over town! Some nabes a little more; some a little less. And that is just so far. And that is moreover despite the trillion dollar influx of cash from the government!
Just wait until this massive injection is dialed back a bit, which will happen. We’re still in the early innings folks. Yes, the exceedingly rare apple like this Glen Park place will still defy the trend and anonn will continue to deny that there has been any significant drop at all based on nothing more than his saying so. And prices will continue the unprecedented decline of which we are in the middle.
“chest beating” — the new “Real SF” ?
How was peak defined here? Whichever quarter saw six properties go for massive bucks?
Yeah. Not very useful.
But hey. Take a realtor’s word for it. And bash another realtor with that realtor. At least you’re using a realtor, like you should have done all along.
I said quarter. I should have said month.
“anonn will continue to deny that there has been any significant drop at all based on nothing more than his saying so.”
You can’t do any better than that? Even the biggest haters took objection to the whole 5 to 10 percent down for the better parts of SF stance! Heck, you probably did too.
This crowd was not predicting 20-30% drops, which are actually not that nutty, this crowd was predicting 50% or more. The common claim was that prices would drop to 1997 prices, plus inflation since then. I can dig up the quotes if you don’t believe me.
NVJ is exactly right.
“I never predicted that our government would basically nationalize our entire mortgage system. I also never predicted that they’d take interest rates to the lowest levels in recorded history”
I fully expected them to try, I just didn’t expect our chinese masters and the forex markets to let us get away with it.
“This crowd was not predicting 20-30% drops, which are actually not that nutty, this crowd was predicting 50% or more.”
Yup, Case-Schiller below 110 and 50% off peak prices for everything in the city by 2011. It’ll be an interesting two years until Jan 1, 2012. The imbalances haven’t been corrected and the whole thing could still go south at any time.
Not sure how worthwhile it is to discuss who predicted what, but the following thread from Oct. 2007 is probably pretty typical of the bull-bear debate at the time.
https://socketsite.com/archives/2007/10/socketsites_san_francisco_listed_housing_inventory_upda_1.html
As soon as Helicopter Ben was appointed Fed Chief, many months before the collapse, it was clear what route the government was going to take to handle the looming credit bust. You don’t appoint a guy who spent his entire career studying the mistakes made in dealing with the Great Depression as Fed Chief for nothing.
China and the United States are locked into a very interesting pas de duex; I don’t think there is a historical precedent. There are plenty of cases where empires have borrowed too much from rivals and then collapsed, but I don’t know of any that were done with fiat money. I guess the Versailles war debts the allies put on Germany are somewhat similar, but they were imposed by a conquering power, not voluntarily assumed, and they were never accepted as legitimate by the German people.
Revisionist history aside, no cheerleader predicted the historic extent of the bailouts (if they had, the markets would never have tanked), so the victory laps are silly (not to mention early). Talk about no historical precedent with fiat money!
And you can’t pretend these bailouts don’t exist, then use their consequences to justify a conclusion based on their absence: “Not bad! Only x% off during the worst RE market since [whenever]” is something I’ve read a few times here (paraphrased).
And if the bailouts don’t matter, why are they still there?
In any case, 2010 will be a great (mid-term election) year — continued bailouts, unemployment extensions, etc, all easily funded out of next year’s deficit spending, and monetized by stealth if needed.
That will keep the 80% from doing something stupid (besides voting), no matter how high unemployment gets.
And it looks like those in the 20% are patriotic enough to do their own duty as long as necessary (and as long as they stay in the 20%).
Have fun, and keep it classy.
Go back and re-read this thread dub dub and tell me again that “no cheerleader predicted the historic extent of the bailouts.”
https://socketsite.com/archives/2008/12/dueling_reader_comments_and_damn_that_economy_en_garde.html
I have arguing for a long time (mostly with LMRiM) that The Fed and Treasury would blow as much money into the economy as they had to, to keep us from falling into a deflationary spiral. All you had to do to realize this was to read the summaries of Ben Bernanke’s publications, or even the redux of them in the popular press.
The Australians are stuck in an economic philosophy which was based on the gold standard, so they just can’t image the power of fiat money.
The one thing I got seriously wrong was my claim that we would see an inflationary spiral, but I still suspect that I am not wrong, just early. Similar to all those who claim that home prices in SF will fall by 50% real soon now.
If Ben pulls off a miracle and keeps unemployment from getting any worse and gets the economy on track without stagflation this decade, we should give him a Nobel Prize or something.
Unemployment would be even lower if we had spent enough money on stimulus and not wasted half of it on tax breaks, but that is probably an argument for another thread.
NVJ — Oh, please. Dec 2008 was not exactly early!
The only surprise was that Obama’s policies subsequently continued what had already begun (and how)! But even you were cheerleading Obama breaking the bankers awhile back, it looks like even in that very thread:
“The people who got us into this mess are out of power and we have a new crowd, much more willing to listen to economists.”
Yeah, right. Even Krugman (whom you also mention in that thread as one of the enonomists not listened to) has subsequently joked about “president Palin”. I don’t have time to read all the other stuff there — lots of technical bickering.
LMRiM always underestimated the power of the government, like most libertarian types do. But it’s still early. I believe this can go on for many years, so we might as well get used to it.
How far back to I have to go to get a “good call” from you? 🙂
I think I started posting here in early 2008. Before that I was posting on patrick.net’s Housing Bubble Blog and I shared the common sentiment there that we were in a housing bubble, though I was no where near as pessimistic as the average poster. Now I am a “cheerleader”. Funny how the worm turns.
Make no mistake, the neo-Keynesians are in charge in the White House, they are hemmed in politically from being able to do what they really want to to do, but they are the ones calling the shots.
I think you misread Krugman’s comment btw, he said that economic growth was going to take a long time to get us back to the Clinton years. President Palin was a reference to this fact, not that he thought Obama was the same as Palin.
“The common claim was that prices would drop to 1997 prices, plus inflation since then.”
Hmm, so that would be 34.6% above 1997 prices, according to usinflationcalculator.com. 1996 would be a trough year from the prior 1991-ish peak, so I’m not sure if that’s a bit aggressive or not.
Btw, I think you mean Austrians, NoeValleyJim, not Australians. And I agree with you completely that dub dub completely misunderstood the context of the President Palin comment by Krugman — it was about how long things would take, not whether Obama was like Palin.
Jim — Krugman’s snarky subtext was if Obama continues along the Bush continuation path, employment won’t return for a decade until “Palin’s second administration”. Not only will Palin be elected, the policies will continue unchanged. Get it?
The whole point is Krugman’s not being listened to now! This must surprise you given your call: [new administration, who is going to listen to economists like Krugman]. How far back do I have to go to get you to admit you are surprised? 🙂
Although you nailed the ongoing “macro” govt xfer of debt from private-> public, note LMRiM and others have always suggested the same thing.
The difference is they felt brazen attempts would collapse the economy (because markets would “see through it” and they are all-powerful). Again, they underestimated the power of a determined government, but you did not — Good Call! 🙂
I don’t read patrick.net, but if you actually predicted the transcendental nature of these bailouts, then definitely Good Call! You should be managing a hedge fund instead of posting here during work hours.
What we’ve got now is a mix between Neo-Keynsian and modern neoliberal policies (as I understand the terms). We probably need a new term for that, but the cynic would probably stick with neoliberal.
sfrenegade — Read my comment immediately above yours (first two paragraphs). I never said he thought “Obama was like Palin” — that is an absurdly literal reading of what he wrote. I think you *both* missed it, ironically!
Note that Krugman has gotten funnier since he has won the nobel prize, so there’s more snark in his writings than usual.
Jim, can you link to a patrick.net post where you predict the transcendental nature of the bailouts?
Thanks.
My mistake then, dub dub.
Krugman has definitely gotten funnier since he won the Nobel.
Krugman is being listened to just fine (or we would not have had a stimulus at all) it is just impossible to do everything he suggests given the realities of working with Congress. That is my take on things anyway. I was surprised that The Administration didn’t at least try for more direct stimulus the first time around. I expect another round after the Congressional elections in 2010, depending on unemployment. We shall see.
So I guess you are half right, they are being listened too, but their advice is not being followed slavishly. Obama is really too much of a moderate to do that.
Patrick.net dropped my name from all of my older posts and Patrick just put them back at my request. Let Google crawl the site and I will get back to you. I remember quite distinctly stating that the bank losses from the enormous credit bubble were going to be nationalized and that savers were going to have to end up paying the inevitable repayment mostly through currency debasement. This was back in 2005, I am pretty sure. As for transcendental, let me go back and see.
You are right, I should be running a hedge fund. Do you want to lend me $1B so I can get started 🙂
“I should be running a hedge fund”
@NoeValleyJim – Even hedge fund managers usually admit they lack a crystal ball. I wonder why you have trouble admitting that?
The qualitative nature of this bailout has gone far beyond mere “nationalization of bank losses” (which can take many forms) — one can argue nationalization has not actually happened yet.
The second stimulus, however, is *already happening*, and must continue for the foreseeable future, as I believe ex-SFer and others have also mentioned.
Check out the latest budget figures for Oct (and the last fiscal year):
http://www.fms.treas.gov/mts/mts1009.txt
[Oct 09 receipts 135B – outlays 312B = Oct deficit 176B].
Ignoring the unprecedented “qualitative enhancements” to our economy (the results of which are too early to predict), deficit spending of this magnitude and duration is “direct stimulus” in all but perhaps a technical sense. And what has it gotten us? Before you answer, don’t forget the upcoming BLS downward benchmark revisions
http://www.bls.gov/ces/cesprelbmk.htm
Ultimately, you have to decide if you want to run a hedge fund (to profit from your crystal ball), hold public office (to change policy), or be a tech middle-manager (to manage your blog posts here and elsewhere so effectively).
I fear even you lack the bandwidth to do all three, so I won’t be investing (not that I could afford your minimums anyway) 🙂
Good luck, and please continue posting!
What are you talking about dub dub, every kind of fund has economists that come up with fiscal forecasts. Look at the back page of The Economist for their forecast for things like GDP growth, government deficit and trade balance for 20 or so countries.
Deficit spending alone is not the same thing as stimulus spending. The original 2009 Federal budget was $3.1T and the 2010 budget is $3.7, so the overall increase in spending could not have been higher than $600B. Most of the $1.4T budget deficit was caused by falling tax revenues, not by increased spending. The actual “stimulus package” spending this year was only $200B: (don’t get confused about fiscal 2009, which ended in Sep 2009 and the calendar you and I use):
http://www.washingtonpost.com/wp-dyn/content/graphic/2009/02/01/GR2009020100154.html
TARP spending is not usually considered “stimulus” spending and the $250B in tax cuts passed in 2009 most certainly were not, so overall “stimulus spending” in 2009 could not have been more than $400-500B, which sounds like a lot, but is only 3% of the overall $14.4T economy.
Plus, you have to consider the fact that state government spending fell, creating a counter-stimulus effect. I don’t what the overall impact of this was, but it had to have been in the $100B+ range.
Thanks for your career advice, when I make enough money to not have to worry about it anymore, I will probably do one of those other things you suggested, or maybe go back to school to study economics.
TARP spending is not usually considered stimulus? Is that from the Economist too?
Just because it’s not the kind of stimulus you or Krugman (?) approve of (or which was actually legal a year or so ago) you can’t pretend it doesn’t count! Ditto other qualitative aspects of the bailout (which you have been ignoring for simplicity).
Thank you for explaining the technical difference between stimulus and deficit spending (a difference I already noted exists), but you missed a broader point, which I suppose we can ignore for simplicity as well.
Anyway, I eagerly look forward to the bailout/”stimulus”/whatever fireworks in 2010. I hope they hand out gravy to small businesses this time, whether that officially counts as stimulus or not. It’s going to be a fun several years, that’s for sure.
That’s it for me on this thread! Good night!
TARP spending will have no effect on creating activity in the real economy. It does nothing to put spendable money in people’s hands. It just allows the banks to pretend to be solvent.
diemos/NVJ — sorry, I meant the TARP comment as snark against the Economist, but my following paragraph reads like I was supporting TARP as stimulus. I’m a terrible writer, especially when I’m tired.
Recall I’ve been talking about the successfully-zombified banks, forever (like many), and mentioned in this thread that we haven’t really explicitly taken the losses yet.
I also think the surprising qualitative aspects of this bailout are far more stimulative than the quantitative ones.
Now that I’m tanned, fit and rested, maybe I’ll stay off the interwebs. Wheee!
And #406 finally closed on 12/16/2009 for $819,220, 4.2% under the 2006 close.
[Editor’s Note: Glen Park Market Place
Still Defying GravityLatest Comp Closes Down.]TARP will end up costing much less than expected and might even make money:
http://www.nytimes.com/2010/10/01/business/01tarp.html
@NoeValleyJim
Since this is a real estate blog, I thought I’d highlight for everyone the one topical paragraph in the article. Cheers.
“Also, the best result for taxpayers could mean bad results for squeezed homeowners. Treasury has been ready to use up to $50 billion to help modify mortgages for people facing foreclosure, but its initiatives have been such a failure that little has been spent.”
“TARP will end up costing much less than expected and might even make money”
This has always been a possibility, despite what naysayers have said. Individual portions of TARP have definitely made profits and were essentially guaranteed to do so because of the way they were implemented.
What’s more disturbing than TARP, however, is the numerous guarantees our government has made for various financial instruments. If a large portion of those guarantees got called in, it could cost quite a bit a cash.
Whether the banking system remains solvent or not has a pretty impact on real estate.