With 14 percent of all property listings in San Francisco either already bank-owned or seeking a short sale it’s surprising how often we continue to hear of distressed sales dismissed as anomalies or irrelevant to the “real” market in San Francisco.
Purchased for $775,000 in April 2007, number 514 at the Odeon returned to the market this past October seeking $975,000. In November the list price was reduced to $750,000. And yesterday it was reduced to $670,000.
But no, 181 O’Farrell #514 is not bank owned (unlike the most recent sale in the building or another that’s currently competing for a buyer’s hard earned bucks).
∙ Listing: 181 O’Farrell #514 (1/1.5) 1,080 sqft – $670,000 [Redfin]
SocketSite’s San Francisco Listed Housing Inventory: 5/10/10 [SocketSite]
Oh My At 34 Percent Under A 2006 Value At Odeon: 181 O’Farrell #508 [SocketSite]
Oh My…Another Bank Owned One-Bedroom At Odeon [SocketSite]

20 thoughts on “Not Another Anomaly”
  1. In years past appraisers have posted here explaining that bank owned and other such ‘distressed’ sales are excluded from the comps used to evaluate a property. If there are any appraisers currently reading SocketSite, could you please pipe in and describe the current state of affairs ? Are distressed sales still excluded or have the appraisal guidelines changed with the market ?

  2. I guess SS doesn’t cover the “real” SF market, because Noe and PH REOs are certainly anomalies on these pages.

  3. based on my daily perusal of properties going to auction i would guess that most of these are in district 10, district 9, and a few in SOMA highrises. yes, someone is confusing this with the real sf.
    ps. someone did get a great deal on a 2-unit in pac heights last week at auction.

  4. “Are distressed sales still excluded or have the appraisal guidelines changed with the market ?”
    For some people, the only comps from the last couple years are distressed sales. So the appraiser has no choice but to include them. They just show an adjustment to the price, like they do for less sq ft, less bathrooms, etc, etc.
    It’s amazing to see short sales sitting in contract for 5 to 6 months so far.

  5. I am a peninsula Realtor who does about 20% of my business in San Francisco.
    With that said, I haven’t had any appraisals that that have excluded distressed comps. I know this because I ALWAYS pull the comps before an appraisal. There is usually at least one comp that was a short sale or an REO in the batch. I also pull my own comps in case the lender uses an appraiser from Podunk who doesn’t pull the right comps or leaves out an important one. That way, if that happens, I can justify a re-appraisal from the underwriter.
    As far as I’m concerned, a comp is a comp. If a distressed comp sold for under what others believe to be the true market value, it’s usually not just the seller that was distressed. Many of these properties were not kept up or they had been abused by a owner who knew they were going to lose it anyway. These properties sold for what they were worth at the time and condition.
    An REO may sell a bit under the comp market to get it off the bank’s books but they are almost always sold “as is”. So if there are some physical problems, the buyer must deal with those issues, and pay for those repairs after the close. It may not be such a great deal after all.
    There is no free lunch folks. There is always a reason why a comp sells for less than what some think is the market price.

  6. 217 properties meet these criteria. I understand the post and the implications, but without understanding the details behind these 217 listings it’s hard to give this much weight. Maybe 50% of these are just stale properties that are totally undesirable and are sitting and accumulating. More analysis / insight into this inventory would be appreciated.

  7. Distressed sales are dismissed as an anomoly because 90% of them are south of highway 280, and in SOMA south of 80
    I’m going to assume that you mean that these are anomalous with respect to other parts of town, in which case they were never comps to begin with.

  8. Distressed sales are dismissed as an anomoly because 90% of them are south of highway 280, and in SOMA south of 80
    It doesn’t matter where most of them are. If your neighborhood has any, there is a good chance they’ll be used as a comp.

  9. Clark said: Distressed sales are dismissed as an anomoly because 90% of them are south of highway 280, and in SOMA south of 80
    Nonsense. Your own trulia link shows otherwise.
    http://www.trulia.com/for_sale/San_Francisco,CA/x_map/foreclosure_lt/
    When listed in “featured” sort order, the first page of 50 results emphasizes neighborhoods south of 280 (and its 70%, not 90%). But if you click “next 50” a few times and look at each page, or change the sort order, you’ll see foreclosures all over the city, at about the same density as non-foreclosure listings.

  10. dont get that Trulia link.
    surely with it showing 50 at a time shouldnt take more than a few clicks to show all the foreclosed listings, but seem to be able to click 20+ times.
    doesnt look right.

  11. Nonsense. Your own trulia link shows otherwise.
    Good catch; just re-sorting by price (high-to-low) reveals a very different picture. Assuming of course that the data are real to being with…

  12. Definitely not a clear picture on the distribution with all the “pre-foreclosure” inclusions and duplicates. Regardless, I have no doubt that the REO/short sales are weighted toward the lower end properties and D9/D10. But so are sales! There are only about 30-35 sales/month in SF of $2 million or higher, so even a few distressed sales thrown into the mix would have a big impact. It looks like the higher-end distressed sale story is just getting started (and may or may not ever amount to much).

  13. Where does this mucho distressed D9, and not SOMA condo, notion come from? We’ve seen like eight in Bernal, maybe two in Potrero, and as far as i can remember none in the Mission. Somebody is asking for 900,000 dollars on Florida street today, btw.

  14. anon@3:57, will you clarify your post? I didn’t quite understand the first sentence — are you saying that D9 is not distressed outside of South of I-80?
    Also, are you talking about the place on Florida near 24th St that was a 5BR?
    (you sounded oddly like fluj for some reason, btw)

  15. Someone is asking for 900,000 dollars on Florida today.
    Someone was asking $975,000 for the $670K property that is the subject of this thread. Lotta good that did them.

  16. @sfrenegade. Nope. I’m not even a bull per se. But I don’t think distress has effected single family homes in D9 one iota, and plenty of people on here talk as if that’s a foregone conclusion. I’m in the market for one, and if anything, the Mission has gotten more expensive, not less expensive. At least for ssingle family homes

  17. Here’s another one at the Odeon on life support. Unit 315 (1/1 1081 sq.ft.) has a tax basis around $880k. It was bought with financing from Countrywide (what could go wrong?) and Citi in December of 2006 and received a NOD on Feb. 19, 2010. The owners also bought Unit 650 at 250 King for $595k in 2006 (financing by Citi). They received an assessment notice in Dec. 2009. Perhaps they will jettison the Odeon property to stay current at the Beacon? Will be interesting to watch both of these places.

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