As we wrote last month:

Purchased for $835,000 in May 2006 just two years after changing hands for $648,375 (ah, the good old days of easy unsustainable 13 percent average annual appreciation), 2773 Folsom Street #301 returned to the market yesterday asking $799,000.

A sale at asking would represent average annual depreciation of 1.2 percent over the past forty-four (44) months for the three-bedroom/bath Inner Mission condo and value it at 5 percent under its 2006 price (not accounting for the added value of its “updated kitchen”).

Yesterday the sale of 2773 Folsom #301 closed escrow with a reported contract price of $850,000. That’s 1.8 percent ($15,000) over its 2006 purchase price or 0.5 percent average annual appreciation over the past forty-four months, but all not accounting for any added value from the aforementioned update.
Apples To Apples To Apples In The Inner Mission (2773 Folsom #301) [SocketSite]

26 thoughts on “A Mission Apple Doesn’t Fall Under Its 2006 Tree”
  1. yeah but of course May 2006 sale was not at the one millisecond in time when the market peaked so its actually down a lot.

  2. Yes, remarkably good showing considering the overall market declines in SF!
    So, the 2006 buyer – 2009 seller paid approximately $6000/mo (after tax-savings) for a fairly crummy Mission condo. And he — sincerely — was quite lucky with that result! Personally, I would have rather lived in a good-sized SFR in any number of awesome neighborhoods for the same rent, or rented a similar place in the same neighborhood for less than half and banked the rest. Ahh, but then I would have been “flushing money down the toilet on rent.”

  3. anon, I suspect if the buyer knew he would be moving in 3 years, he would have done the same. even in bubble markets, it’s hard to make up the transactions costs for a 3 1/2 year hold. but, where did you get the $6K after tax figure?
    the sale was +15K, so, assuming 6% total closing and commission (50K), that’s 35K lost. I’ll round up and call it $900/month. property tax is another $800/month and the mortgage should have been in the $3500 range at most (5/1). ignoring the oppty cost of the down (safe give these deflationary times) I have $5200/month pre-tax. not a small sum, but assuming tax benefits, substantially less than the figure you were quoting.

  4. sfsal, you are right — I missed the $330 HOA. so $5500 pre-tax or less than $4K post-tax. still too high, but very different than the “$6000/mo (after tax-savings)” thrown out by anon.

  5. steve, your mortgage estimate is too low by about 500/mo. Your taxes are too low by $200. You are ignoring HOA and insurance and maintenance costs. And, as you note, you are ignoring opportunity costs, but so did I.

  6. Inspite of the fact that I’ve enjoyed all of apples to apples comparisons, I’ve grown weary of the slow pace of change. Exactly what structural forces are in place that allows prices to ratchet up but not down (and thus defy basic economic principles)? Will I be able to provide a decent life for my family in SF anytime soon? Or, sadly, is it time move on to another city (i.e. Portland, Seattle or Vancouver, BC)

  7. The Mission continues to gentrify. The Central Waterfront continues to develop. People like to be near the BART. Jobs continue to be points south. This sale isn’t surprising at all when you consider growth and jobs trends.
    The development next to the funeral parlor on Valencia and 26th has I think two or three units sold too. We’re talking across the street from Clooney’s, and each one ~900K or more.

  8. “Exactly what structural forces are in place that allows prices to ratchet up but not down (and thus defy basic economic principles)?”
    Vancouver Jones — housing crises take a while to work through the system. The early 90s drop in housing prices in SF worked first as a relatively quick nominal drop, followed by a slow real drop (i.e. due to inflation) while prices were nominally flat. This took at least 5-7 years. I think if mortgage rates go up because Treasury/Fed stop subsidizing things, you may see another quick nominal drop, but all of this will take a while to work through the system.
    Housing works differently. The stock market has frequent liquidity events — i.e. transactions. But only about 600 houses (give or take a 100) are sold in SF every month. It takes a long time for price trends to work through the inventory when things are happening so slowly.

  9. The seller financed 668K at 6.25%. So the loan cost $41,750 a year, or $3417.59 a month. Property taxes were ~$9500. So that’s another 800 a month. HOAs were 330 a month. Insurance was probably about a grand, or 83 dollars a month. I have no idea how they did their taxes, and nor do any of you guys. How much would a 1600 foot nicer condo like this with parking have gone for in 2006?

  10. “… take a long time to work through the system”
    So, in light of this property, you’re saying that nothing at all has occurred?
    Those comments do not speak to why something would sell for more, 15 months past the SF market shift.

  11. I’m trying to make sense of this one. The condo is really large (over 1600 square feet) but I think this location while getting better is still pretty gritty. (Being within walking distance to Limon Rotisserie helps! That part of Folsom is tree lined also which adds to the overall desirability. ) I guess the unit attracted a buyer who wanted a turn key home close to transit and some cool bars/restaurants. Great outcome for the seller.

  12. “Those comments do not speak to why something would sell for more, 15 months past the SF market shift.”
    The market shifted in 2006? This place didn’t sell for more than 15 months ago, it sold for $15K more than 4 years ago with a new kitchen. Price up from 2006 is not the same as prices not falling since 2008.

  13. “So, in light of this property, you’re saying that nothing at all has occurred?”
    In light of this property, I was saying absolutely nothing. I was simply answering Vancouver Jones’ question, which seemed rather general.

  14. The things you said to Vancouver Jones were nonspecific CW that did not answer the question. He asked what might have ratcheted this price up. You answered as if the question was, “Why didn’t this property take a huge dip?”
    Also, to anybody curious, I looked at 2007 9-C condo sales and there’s nothing to indicate this would have sold for any more than 850K during that year. So the idea that this went way up and then back down to 15K over 2005 isn’t supported. But you can make a case that this has more to do with the Mission and general trends, and that’s why I answered his question that way.

  15. Bad interpretation, anonn. Read it again and try again. The question is about why SF is so expensive and why prices rise so quickly but fall so slowly, and had nothing to do with this specific property, other than the fact that the price went up slightly (although didn’t “ratchet up”).

  16. Oh, this particular property didn’t prompt the question? Which was …
    Exactly what structural forces are in place that allows prices to ratchet up but not down (and thus defy basic economic principles)?
    That’s not what you answered. He asked, “why up?” you answered, “why not down?”
    Hey, read your readings to your heart’s content. But don’t try to pass off macrospeak as insight.

  17. As usual, you’re clueless as to context. Maybe you missed the first sentence and all the other sentences to Vancouver Jones’ question. But that’s okay. Carry on with the cluelessness, sir.

  18. I’m clueless as to context? That’s funny. What is this thread about? What property prompted the question? Do you know what context even is?
    How did you answer the part about “up” in any way, at all?
    I suggest you stop attempting to use literary terms, moving forward. Every time you do you misuse them. Context indeed. LOL.

  19. “Why wpould anyone pay $850,000 for a condo on Folsom in the lower Mission?
    Don’t get it”
    me either. but some lucky seller sure found themselves a sucker

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