3661 Folsom
Purchased for $685,000 in 2005 (10% over asking at the time), it’s a plugged-in reader that notes the buyers of the single-family Bernal house put nothing down (there’s nothing like overbidding with other peoples’ money) and financed the investment with two variable rate loans.
Returning to the market eleven months ago with a newly remodeled interior and asking $875,000, the list price has since been reduced three times, most recently to $749,000 at the end of August as which point it became a hopeful short sale at $488 per square foot.
Which leads our reader to wonder, how could a home that’s listed for $64,000 (9%) over its purchase price possibly qualify as a short sale? And while we can’t say for certain in this case, the newly remodeled interior is probably a good guess. Negative amortization or a home ATM scenario could also be at play.
UPDATE: A plugged-in agent adds:

The seller was forced to put a substantial amount of money into the home because damage was done to its foundation by a major renovation of the house next door. I believe those expenses have helped make this a short sale.

∙ Listing: 3661 Folsom (3/2) – $749,000 [MLS]

Comments from Plugged-In Readers

  1. Posted by dub dub

    Lot size 1750 feet, no parking, small sidewalks, and no walkable designer cookie stores nearby to justify all of these things (I may have missed them on mapjack, though).
    It looks like there *are* charming little houses (with parking) on that street though (see mapjack, move up the hill a bit, to the right of the “Doctors office”).

  2. Posted by R

    It’s got probably the worst curb appeal ever (look at picture 15). And as dub dub says, no parking, no garage, it looks nice inside, but for that money you can get a house that doesn’t look like a shed..

  3. Posted by John

    Dub Dub – these types of ignorant posting dilute the usefulness of the comments – you obviously know nothing about the neighborhood. This house is surrounded by nice houses in a sunny neighborhood, blocks from a huge public park and Cortland Street. I’ve only walked by and never seen the interior.

  4. Posted by dub dub

    lol John. I explicitly mentioned there were charming houses *on that street* (practically next door)!
    The house in question is terrible, small lot, no parking. Is there a cookie store on Cortland I missed?

  5. Posted by john

    I stand corrected! My apologies!

  6. Posted by curmudgeon

    Dubdub did miss the charms of Cortland street. Which are modest, but genuine. However, he and others don’t miss that this house has zero curb appeal. It’s on a typically mixed bernal block (with butt-ugly and cute for neighbors). And the picture of that living room with the drawn shades takes the cake for me. I would hate to live in a place where you feel compelled to close yourself in.

  7. Posted by anonn

    My take — do not endeavor to flip a house in Bernal sans parking. Kudos to the editor for includint the 10 percent overbid disclaimer.

  8. Posted by anon

    Given the games the MLS realtors play with list prices and DOM, statistics on this are iffy, but I think it’s safe to say that 10% over asking in 2005 was par for the course. That was peak bubble frenzy for the NINJA-type loans, and you basically did not get a place unless you bid “over asking.” The list price meant little to nothing.
    The higher-than-purchase short sale price is not surprising at all. Prices were up about 10-15% from 2005 to 2007 so they easily could have refinanced with a higher loan or taken a second.

  9. Posted by Michael

    Nothing down? Driving up prices bidding with easy money? Selling for a loss four years later even after fixing it up? Not in San Francisco!

  10. Posted by JimBobJones

    These pictures look too well-lit and/or photoshopped because there’s no way this house would be that well-lit on its own with the tiny windows and especially with shades drawn, as curmudgeon mentions. Looks like the realtor did a good job making the best of this place in the photos.

  11. Posted by The Milkshake of Despair

    ^^^ yes, the photographer used a strobe to improve the lighting. You can see its reflection off of the bathroom mirror in photo #10 : that four sided lighter polygon on the wall to the right of the medicine cabinet mirror.
    The results are pretty decent.

  12. Posted by EH

    double-doors on a bathroom?

  13. Posted by Nick

    Purchased for $685,000 in 2005 … Returning to the market … with a newly remodeled interior … most recently to $749,000 … at which point it became a hopeful short sale
    That just means that they spent at least $65K on the remodel, and they financed that too.

  14. Posted by Mole Man

    A large and well ventilated bathroom is a welcome feature for a home in a City that sponsors all manner of culinary adventure. There is no bede in there, but at least there seems to be enough space for one.

  15. Posted by cake

    Do people think that South-Side of Bernal prices will continue to decline?

  16. Posted by EBGuy

    I’ll see your short sale and raise you a house headed to the auction block on Nov. 25. Must be something on the street that brings out neg-am loans and refi fever. The home at 4239 Folsom (1751 sq.ft.) was bought for $459k in Dec. of 2002. Currently offered as a short sale for $500k. PropertyShark lists an unpaid balance of $818,645. And this is one of 3 Bernal homes being auctioned off in the next month…

  17. Posted by A

    EBGuy – do you really think that house is comparable? That is all the way by the freeway and pretty ghetto, but this house is near the park

  18. Posted by Dan

    EBGuy: The two houses are 0.8 mile apart by car, according to Google Maps, and that distance can make a big difference. In this case, 4239 is not only very close to 280, but also neighbors the Alemany projects. 3661, by contrast, is well north of Cortland.

  19. Posted by R

    Yeah, 4239 and 3661 are apples and oranges.
    But the fact that some lender lent over $818,645 on 4239 speaks to the craziness of the boom.
    Someone was living well for a few years though, took out $350k in cash somewhere along the way.

  20. Posted by anonn

    EBGuy, no offense, but you talk about Bernal a whole lot on here and you don’t really understand the neighborhood. Maybe you should consider spending a Saturday walking around the neighborhood.

  21. Posted by Willow

    How about this for South Bernal…
    25 Glen Court
    Purchased in August 02 for $539,000
    Sold in October 09 for $906,000
    Not a comp for the featured property but it does illustrates how the housing stock in BH is all over the place depending on location.

  22. Posted by sfrenegade

    That is some massive equity withdrawal on 4239 Folsom, if the PropertyShark data is right. The pride of ownership is apparently renting from the bank for above-market rent.
    I don’t know that pointing out a 10% overbid is a “disclaimer” — my impression is that overbids weren’t uncommon during the boom. Right?

  23. Posted by anonn

    I don’t know that pointing out a 10% overbid is a “disclaimer” — my impression is that overbids weren’t uncommon during the boom. Right
    You can bring baggage to the word “disclaimer” if you like. From my experience, the editor acknowledging an overbid in a lead is pretty uncommon.

  24. Posted by steve

    willow, or this one:
    332 College Ave
    Sold on 08/19/2009 $880,000 (with multiple offers – list was 829K)
    Aug 31, 2001 Sold $589,000
    but, moving back north, it seems like there are a number of recent bernal sales at strong prices
    3333 Harrison St
    Sold on 09/10/2009 $1,215,000
    2 Aztec St
    Sold on 09/22/2009 $935,000
    Oct 15, 2004 Sold $825,000
    Oct 25, 2000 Sold $750,000
    301 Winfield St
    Sold on 09/24/2009 $1,200,000
    123-125 Moultrie St
    Sold on 09/18/2009 $1,295,000

  25. Posted by anon

    Ahh, trotting out the old “he overpaid, it happens” line, camouflaged in a discussion of an “overbid.” Only nobody overpaid because 10% “over asking” was the norm in 2005 and not the exception. So whether the 10% “overbid” is mentioned or not is irrelevant.

  26. Posted by cr

    If 10% overbids with easy money were common in 2005, then this listing is a lesson in what went wrong with the market and why it still hasn’t corrected itself.
    If 10% overbids were not common in 2005, then this is an isolated example of a distressed property that should be considered an atypical case.
    anonn, your use of “disclaimer” seems to suggest the latter. I wasn’t here in 2005; I don’t know which is true. But it’s not fair to accuse sfrenegade of imputing baggage to the word. The meaning of your comment was clear enough.

  27. Posted by sfrenegade

    anonn — The editor does put previous purchase prices on posts sometimes. You only have to go back to Friday:
    acknowledges that the house was purchased at $1,005K, and was only asking 899K at the time.
    You keep pushing this “the buyer overpaid during the boom” theme, and I’m having trouble believing it in most cases. Many many people overbid during the boom, but that doesn’t mean an overbid isn’t/wasn’t a comp or that an overbid wasn’t a market price.

  28. Posted by anonn

    Ahhh, te old, “feigned world weary” routine. Even though you’re just a non participant on the internet.
    No. It’s irrelevant to a person who likes to look at numbers in the abstract on the internet. It isn’t irrelevant to an individual who made a slight overbid on this property, didn’t get it, and later on made a better buy elsewhere. That house, not fixed up, would probably pretty easily get ~630 or so right now.

  29. Posted by anonn

    You keep pushing the “I know what I’m talking about” theme. But you don’t. So mind your manners when you address me. Thanks in advance.

  30. Posted by sfrenegade

    Well, clearly ad hominems are the way to go here, because they’re the best way to show that one’s argument is correct. Thanks, anonn. Watch your own manners, sir.

  31. Posted by cr

    Hey, there’s three of us here saying the same thing. Where’s my sarcastic rejoinder, anonn?
    Manners, indeed.

  32. Posted by anonn

    Ha. Whatever. I don’t like scare quotes. I find them rude. Because they are.

  33. Posted by Shza

    This one in north bernal is intriguing:
    A “short sale” at $999k. Last purchased in 1994 for $355k. I didn’t look at the permits but my guess is that it was more of an ATM than anything (the insides do not look particularly updated) — potentially to the tune of over half a million dollars.
    Finally in contract after nearly a year on the market.

  34. Posted by anonn

    “Insert words in someone’s mouth” say “ad hominem,” argue for a while, say “straw man,” argue for a while, insult someone’s trade, argue for a while, perhaps call someone a “nazi.”
    Sure. Overbids were commonplace. Were they always advisable though?
    If you’re going to dissect a property I think it’s fair to mention an overbid. The editor hasn’t always done so. That is all.

  35. Posted by Insidesfre

    Showed this property a while ago. The seller was forced to put a substantial amount of money into the home because damage was done to its foundation by a major renovation of the house next door. I believe those expenses have helped make this a short sale. It was a really unfortunate situation.

  36. Posted by sfrenegade

    cr — you hit on exactly what I was saying regarding the word “disclaimer.”
    Certainly if MLS was better about showing all listing prices that ever existed, we’d always know whether someone overbid or underbid. Unfortunately, that’s not the case, so we go with the data that we have.

  37. Posted by steve

    does anyone have the story on 323 college or 2 aztec? were these apples?

  38. Posted by Rubicon

    “The seller was forced to put a substantial amount of money into the home because damage was done to its foundation by a major renovation of the house next door.”
    That can’t be the whole story. The neighbor would be liable.

  39. Posted by anonn

    I think 2 Aztec is an apple, yeah. I can’t find 323 College.

  40. Posted by steve

    according to redfin, 323 college ave is MLS 359566. the listing claims renovated kitchen, so maybe not a pure apple but perhaps close. 5.2%/yr gain from a 2001 sale

  41. Posted by anonn

    Oh, 332 College. Yes, it’s not an apple. At ~600 a foot it also doesn’t appear to be evidence of the St. Mary’s Park part of the South Slope declining in value. I don’t see an 840K 2001 buy though? That would have been really, really high for the time.

  42. Posted by steve

    332 college was a 600K buy in 2001, so it was a 5%/year gain
    Aug 31, 2001 Sold $589,000

  43. Posted by R

    332 College.. new roof, new kitchen, couple of new windows.. not a lot of permits that would jack up the price.
    25 Glen Court appears to be the most interesting apple in the bunch. Built in 2001, sold by developer in 2002, no buiding permits. But, 70% appreciation since then.

  44. Posted by R

    “”The seller was forced to put a substantial amount of money into the home because damage was done to its foundation by a major renovation of the house next door.”
    That can’t be the whole story. The neighbor would be liable.

    Rubicon, it does sound strange.. but the building next door, if I’m correct, has undergone what appears to be most of a major renovation, but is incomplete and vacant. So there’s something fishy going on..

  45. Posted by insidesfre

    Yes, the neighbor was liable, and there’s been a lot of litigation happening. Didn’t read the disclosures, but just got the upshot from the listing agent.

  46. Posted by R

    I stand corrected, neighbors didn’t renovate, they tore down a ‘storage building’ and put up a new 3 story house. But none of the permits are complete, nobody appears to be living there, and they started Summer 2006. Plus the mortgage lender is some person in New Orleans. Sounds interesting, would love to get the whole story.

  47. Posted by anonn

    22 Gladys, a block off Mission, and south of Cortland sold for 1.15M today
    [Editor’s Note: A down to the studs renovation at $561 per square foot (and it closed last month according to the MLS).]

  48. Posted by steve

    along with:
    3333 Harrison St ($1,215,000)
    301 Winfield St ($1,200,000)
    123-125 Moultrie St ($1,295,000)
    that’s a good number of $1M+ sales this fall

  49. Posted by Legacy Dude

    Cherrypicking random addresses is fun!
    How about 95 Crescent, 3905 Folsom, 724 Moultrie, or 379 Highland? Each will yield ~$100K in losses for the sellers at current asking prices.

  50. Posted by steve

    legacy dude, 15% losses (or, discounts) don’t surprise me. $1M+ sales in bernal of all places, in a market that is supposed to be completely melting down, do.

  51. Posted by EBGuy

    The two houses are 0.8 mile apart by car, according to Google Maps, and that distance can make a big difference. In this case, 4239 is not only very close to 280, but also neighbors the Alemany projects. 3661, by contrast, is well north of Cortland.
    Fair enough, but I like to think I was answering cake’s question about South Bernal declines 🙂
    For something a bit more relevant (north of Courtland!), the home at 3746 Folsom was taken back by the bank (WaMu) on Sept. 14 for $545,000. Will be interesting to see the listing when it hits the streets.

  52. Posted by SocketSite

    Million dollar sales in Bernal Heights South shouldn’t come as a surprise to anyone. What might surprise some, however, is that while there were at least ten listed sales in 2008, we only count four so far in 2009.
    And perhaps even more surprising, the average dollar per square foot for those ten million dollar properties in 2008 averaged $672 ($712 if we remove a $357 outlier, $677 if we also remove a $955 sale). For the four in 2009 the average has so far been $551 ($607 if we remove a $384 outlier).

  53. Posted by anonn

    Adam, you should be commended. Not correct there. Surprisingly interested tho! And pointed!
    [Editor’s Note: Feel free to provide your data to the contrary, but simply “not correct” really doesn’t cut it.]

  54. Posted by sfrenegade

    That is great data, editor. That suggests an 18% decrease in nominal market prices, which is quite significant. These sorts of compilations would be great as regular posts instead of comments for various neighborhoods, although I know it takes some time to compile such stats.
    Such compilations would certainly silence all the haters who continue to cherrypick higher priced properties, even as they complain about others allegedly cherrypicking properties that showed declines.

  55. Posted by anon

    I count 48 $1,000,000-plus sales in Bernal in 2007. So it looks like sales volume in Bernal has really plummeted outside the lower end. Of course, it is also likely that places that would have fetched $1M in 2007 now fetch far less, which explains some of the fall in sales volume above that threshold. The unavailability of cheap, no-down loans also explains much of it. People that actually can afford the down payment on a million-dollar place tend not to want to live in Bernal.

  56. Posted by anonn

    There have actually been nine 1M or more Bernal sales in ’09, not four. Six have occurred in the last few months. And the nine have averaged $616 a foot.
    Talk about cherrypicking. Your 18% in nominal market prices figure is using samplesets of 10 and four. And guess what, it’s wrong too. You can’t have “hater,” fronzi the second. Sorry. Not when you hate so willy nilly, foaming at the bit to seize upon something that you think goes along with your tired little act. Go away.
    [Editor’s Note: Sorry, as noted above we could have sworn we were talking about “Bernal Heights South” in which 3661 Folsom and 22 Gladys lie. If you want to expand the discussion to all of Bernal, however, you might want to include the 2008 count and averages for context and the trend as well.]

  57. Posted by anonn

    So that’s nine 1M+ sold this year, and there’s one more in contract. I also think the other three currently on the market, 200 Putnam, 483 Prentiss, and 210 Holladay, should all fetch 1M+. Whether they close by 12/31/09 or not is hard to call.

  58. Posted by anonn

    I see 47 1M+ sales in Bernal in 2007, averaging $626 a foot. So while volume is way down from a peak year, the 2009 price doesn’t appear to be down very much at all for that particular sector. (Huh. That looked oddly familiar when I typed it. Deja vu?)
    [Editor’s Note: And in 2008 for the trend?]

  59. Posted by anonn

    2008 saw 20 such sales. But throw out 306 Mullen, which went for 800K more than the next closest. I show 682 a foot. So pretty much the 5 to 10 percent price difference I’be been saying for over a year now. I tell the truth to the youth. I tell no fibs to the kids. In fact, I’ll bet the four or five sold after mid October of 2008 are spot on what 2009 prices look like.

  60. Posted by bobTrouser

    you see, prices aren’t dropping, there are just less sales of more expensive things….

  61. Posted by anon

    So, 47 $1M-plus sales in 2007, 20 in 2008, and 9 or 10 in 2009.
    If I also had bought a Bernal flip at the precise peak of the market in late 2006, I also would draw the conclusion that this all indicates no substantial weakness in the market at all.

  62. Posted by anonn

    It’ll probably wind up being like 11 or 12 in ’09, volume is down substantially, I’ve shown that prices for that segment are down about 5 to 10 percent, nobody bought a Bernal flip in late 2006, and the market peak was seemingly 2007.

  63. Posted by SocketSite

    So for the over million dollar portion of the entire Bernal Heights market we see this trend:
    2007: 47 sales @ $626/sqft
    2008: 20 sales @ $682/sqft
    2009: 10 sales @ $616/sqft
    A drop from $682 to $616 is a 10 percent decline. But as volume decreases we see a higher percentage of newly renovated homes in the over million dollar mix (which should be driving up the per square foot average). Regardless, do keep in mind that the million dollar plus segment of the Bernal market represents less than 10% of its total.

  64. Posted by anonn

    If I had the time I would correlate 2008’s peak performance price wise with the 500 hater comments about how Bernal was tanking, erroneously and snidely made all throughout 2008. Note that this year’s prices are pretty much what 2007’s were. As for sub 1M, it probably looks similar. Superconforming loan limits are great for areas such as Bernal.

  65. Posted by Michael

    @steve: 75% drop in $1M+ sales since 2007? That doesn’t sound like a good number to me.

  66. Posted by steve

    @michael, phrased that way I agree. I would love to know the 04 and 05 numbers, though. I suspect 07 wasn’t the norm.

  67. Posted by Rick

    If you want a more appropriate comp, what about 3666 Folsom? 2 bed 1 bath. Sold for 788K in 7/09. It’s less 1000 sq feet, but does have a garage. Which brings up the question, “appeal” aside, what is the value of a garage in Bernal?

  68. Posted by R

    This thread is way dead.. but the price on this place moved up today to $785k. Maybe someone saw Rick’s comment.

  69. Posted by R

    And it’s now in escrow.

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