As we wrote ten months ago with respect to 270 Castenada:
Asking $3,890,000 and briefly in contract before being withdrawn last April, listed at $2,995,000 today. Still touting “too beautiful to describe” despite Maybeck’s (and the Vernacular Language North) attempt.
As we wrote five months ago:
Reduced to $2,595,000 in May before being withdrawn from the market without a sale, 270 Castenada is now seeking a tenant at ten thousand a month.
As we write today: asking $2,199,000 in 2010.
It’s our start of year 45% off sale!
Good things come to those who wait.
Beautiful place and it even looks cheap, but only in comparison to bubble prices that are gone for good. If I didn’t think it would be 10% less next year, I’d buy it myself. I’m sure someone will.
A little sanity returns. $600/sf for this pretty remarkable place certainly illustrates how foolish the $800/sf SOMA condo box purchases were and the similarly high prices paid during the bubble years in lousy areas or dumps in decent areas.
It is all a continuum. If a place like this is down 45%, we’re going to see reductions in the same ballpark all over town. They are already common in the first and hardest hit areas, and the declines are now movin’ on up.
I think it will sell around asking now that the sellers have gotten realistic about missing out on their bubble-era contract and have accepted that those days are not coming back.
“how foolish the $800/sf SOMA condo box purchases were and the similarly high prices paid during the bubble years in lousy areas or dumps in decent areas.”
Not foolish at all.
2004. You buy a place. Bid whatever you want, it really doesn’t matter. Put in your offer you’ll pay $50K higher than any other offer. Get a loan and start making the payments.
2005. Refinance and take cash out. Start making the payments using the cash out and buy a boat.
2006 Refinance and take more cash out. Go interest only to reduce the payments. Pay using the cash out, with money left over for a vacation.
2007 Refinance and take more cash out. Go option arm to reduce the payments. Make the payments with the cash out, and pay off your credit cards with the rest.
2008. Keep making those cheap option arm payments: lower than rent.
2009. Stop making any payments at all.
2010 Throw the keys back to the bank and walk away. Rent for 2 years and start over. You haven’t used a dime out of pocket to pay for any of this for the last 5 years! Stupid is the people who actually paid rent.
Exactly where was the stupidity? Other than my not figuring all of this out and riding that gravy train, of course.
Hee hee, tipster, you are absolutely right as to those bubble purchasers who followed that model. But most didn’t, and they are sitting in their boxes paying 3X rent and stuck (well, not really stuck as they could walk away, but they don’t do so).
That’s a lovely house.
Agreed on the refi strategy. Bid on an investment property. Thought, gee, bidding $330K wouldn’t be a problem, last buyer bought at $260K in 2002, he should make plenty of money plus the rent. Title report comes back, of course he refi’d up to $415K…oh, it’s a short sale now.
Gee, dude, you got $155K, or $100K profit already on your $55K down payment (assuming you made one in 2002)…Never mind the rents. Why bother with a short sale, just give it back to the bank. Assuming that will happen soon enough…in the meantime collect rents without making your mortgage payment-why bother?
argh.
perhaps an opportuity for ownership to change hands from an artist to a business person?
I thought list prices didn’t matter just sales comps, hee hee funny pretzels.
Funny stuff, guys. But can you genuinely say it’s off 45%? When and for how much did the current owners buy it? Where did this area peak in terms of $/sf? The only thing off 45% is the seller’s delusional wishing price. The property itself has probably fallen ~20%, I’d guess, though I’m not an expert on this neighborhood. Just trying to keep things rational.
Don’t let reality get in the way of anon and Tipster’s fun, Dude. They don’t.
The Coalition of the Willing needs a conductor. He really is the “market’s” worst nightmare as he is trapped by his new place, but bought this so long ago that he can keep lowering the price and show a “profit” (I bet they will still come out of this claiming $500k tax free). As they say… there goes the neighborhood. My musical vernacular is somewhat limited, so I’m hearing “Ride of the Valkyries” right now.
Realtor here doesn’t seem particularly competent at using a digital camera or setting a price. It was actually in contract at a $3.89 listing price, so I don’t know if I’d quite call that a “wishing price,” Legacy Dude. It probably didn’t appraise for that amount, but someone was still willing to pay it.
Re walking away from the mortgage, did anyone else see the piece in the Sunday NY Times magazine (click on my “posted by” name below) re “strategic defaults” by Roger Lowenstein? It’s an interesting question why more underwater homeowners haven’t walked way, when so many other players in our economy in essence have.
Per the article: “HUD-approved housing counselors are supposed to counsel people against foreclosure. In many cases, this means counseling people to throw away money. Brent White, a University of Arizona law professor, notes that a family who bought a three-bedroom home in Salinas, Calif., at the market top in 2006, with no down payment (then a common-enough occurrence), could theoretically have to wait 60 years to recover their equity. On the other hand, if they walked, they could rent a similar house for a pittance of their monthly mortgage.”
Most economic players in our economy would see walking away on these facts as a no brainer. Why shouldn’t underwater homeowners?
..$3.89 listing price, so I don’t know if I’d quite call that a “wishing price,” Legacy Dude. It probably didn’t appraise for that amount, but someone was still willing to pay it
No, someone was willing to let the Bank pay that much and the bank wasn’t willing to…if that in fact was what happened…as to the buyer snapping out of it and realizing how much they were overpaying…we could continue to speculate. But fact remains, in the end it did not close at that price…
Gravy train? Even with this 2004-2010 gold mining scenario the result would be 2011-2018 rebuilding credit and life options.
More to the point is that many people who got sucked into this put their cash on the table and attached their dreams to properties. Everyone including random taxpayers got snookered. The only people who walked away relatively clean were the top bankers, and the useless financial innovation shell game appears to be past its peak, possibly for a good long time.
Doesn’t anybody buy a house (or condo) for a home to live in? Is it always a shell game? Sigh
If you buy a house then, like it or not, you are in the game.
These comments are so out of touch. The biggest “a comp is a comp” guy talking about a price reduction as if it was a sale. The realtor can’t get the price right, even though it’s been two or three realtors by now. (Ya think the realtor set that 3.89M price, 1100 a foot in Forest Hill? really?) People talking about walking away from mortgages. People talking about credit needing to get repaired.
Meanwhile the seller is probably going to net close to 3/4 million. Play the broken records when they at least sort of fit. Sheesh.
“Meanwhile the seller is probably going to net close to 3/4 million”
Yep, they had the good timing to buy at the trough of the last downturn. Now, if they would have priced it right when they first tried to sell, they likely could have netted 1 3/4 million or more over the 1996 purchase price (they were sooo close). But hey, what’s an extra million dollars? Let’s just pretend the “broken records” don’t “sort of fit” the obvious chasing-down of the market here.
anonn, where did you get the $750K profit amount? The tax value on this place is around $1.6M.
Didn’t they pay 1.35M about 15 years ago?
Let’s just pretend the “broken records” don’t “sort of fit” the obvious chasing-down of the market here
They don’t. Notice the things I specifically stated about other inapropos things said. Go ahead and wonder away about chasing the market down. I doubt this neighborhood has ever seen many 2M+ sales, tho. And I believe a number of posters who have actually seen this property panned it with the exception of the, apparently very beautiful, greatroom.
Thanks for the info, anonn. I didn’t see the $1.35M figure anywhere, so I didn’t know that’s what you were basing it on.
Based on anon@4:28, they bought near the bottom of the last crash (in real terms) if they bought in 1996. Inflation adjusted price of $1.35M in 1996 would be $1.86M in 2009. If they sell at $2.1M, that would be an 18% real profit over 14 years vs. almost a 34% nominal profit.
Anyone know what they owe?
This house, although not Maybeck’s best work, will be best served if purchased by someone who appreciates his unique artistry. Sensitive updating will improve it, but this is not house as investment.
lol at 18/34% profit.
thats only if they bought all cash otherwise could be much higher..
why is leverage only ever considered during losses…
The house was listed August 1996 for $1.35m when Kent Nagano bought it. It already had the new kitchen at that time.
Yes, repornaddict, I’ve seen you mention this claim on SS before (see link). But when including leverage in your calculation of ROE, you absolutely must include property tax, interest, insurance, HOA ($808.58/mo on this house), maintenance (and other renovation/remodel), brokerage costs, transfer tax, other closing costs, etc. in that calculation to determine ROE.
It’s not as simple as “25% down, so multiply by 4,” but I am indeed giving a “headline” rate at 18%/34% profit.
Showing contingent now..21 days not bad. will be interesting to see where/if she closes this time.