As we wrote a month ago:
Hours after our noting the bank-owned listing for 425 1st Street #3908 at $695,000, the sales office at One Rincon Hill reduced the list price for 425 1st Street #4308 from $780,000 to $749,000 ($992 per square foot).
Today, the sale of 425 1st Street #4408 closed escrow with a reported contract price of $690,000 ($914 per square foot), the 755 square foot view one-bedroom had most recently been listed by the sales office for $785,000.
Considering the sale office sold #3908 for $855,000 in June 2008 ($1,132 per square), and taking into account a five floor higher premium, we’ll call it a 20-25 percent drop in value for #4408 over the past two years.
And the argument that $695,000 for #3908 is “cheap” simply because #4308 is listed for
$780,000$749,000? Not so strong.
And as we noted a few hours later:
UPDATE: 425 1st Street #4308 is now listed as in escrow and with contingencies waived. This ought to be interesting. Hopefully the buyers had the inside scoop with respect to the contract price for #4408.
Nine days later the listing for 425 1st Street #4308 was changed from “In Escrow – Firm” to “Available.” And yesterday the sale of 425 1st Street #4308 closed escrow with a reported contract price of $687,000 ($910 per square foot).
Once again, we’ll call it a 20-25 percent drop in value for One Rincon Hill #4308 and its comps over the past two years.
∙ Additional ’08 Stack (And Year) Perspective From One Rincon Hill [SocketSite]
∙ The First Listed Foreclosure At 425 First (One Rincon Hill) [SocketSite]
∙ Interesting Indeed As One Rincon Hill #4308 Falls Out Of Escrow [SocketSite]
So, the Infinity dropped prices. One Rincon caved too. What is the update on the Millennium. I know, I know… Joe Montana lives there! I doubt that is enough to sell non-view units with eggregious HOA dues at premium prices, particularly when the construction on the Transbay terminal is imminent. Does anyone know anything about additional price concessions?
Yeah, what’s the story on Millennium? Checked with them about 6 months ago and they aren’t budging on price. How many units have sold in the last 12 months? How long can they hold out?
The Millennium is secretly dropping prices but you have to be ready to give an offer before they do… and they manipulate the books so the sales price records higher yet they just give you years of credits on stuff like HOA fees, etc. So effectively you’re paying the lower price but it looks like it recorded higher.
Anyone else think The Millennium is misguided?
Is the location really better than Infinity?
IMO no. Infinity is better.
Are the views better?
IMO no. Infinity is better.
Are the residents better?
IMO no. Three “cabin classes” of residents? Sounds like a recipie for snobbery.
It may have more amenities but it also has higher HOAs – one could take the money saved on HOAs and use it to pamper themselves elsewhere.
Thank you sir, may I have another?
re: HOA concessions, I wonder what the longest HOA and/or parking free ride in any of these buildings is.
The Millennium does have bigger units and a huge staff to help you with all of your worldly desires, but the pricing and HOA dues are still absurd. How many years of HOA dues must they throw in to offset a $300k price gap? At $1200/month, that is 20 years worth of HOA dues! It’s going to take more than fuzzy accounting to sell some of these non-view apartments.
To add to the previous comment by “resdient”, I’d add that Millennium also has:
1)A resident population comprised on of 20-something renters on the low floors who steal water, wine glasses, yoga mats, iPod docs, etc from the gym (a friend just forwarded me the internal email that mentioned this kind of thievery). Conversely, on the high floors, you have 60-something Mercedes drivers who only want to socialize with their own.
2) A urine smell just feet from the lobby thanks to the local residents and disrespectful residents who let their dogs use the sidewalk.
It is no surprise that the building has quietly become a rental building. With the exception of the high floors and view units, the units are either rental units or empty. I, personally, would rather live at the Infinity and spend that extra cash on a real Sports Club membership, real movie theater tickets and my own wine glasses.
Yeah the Infinity is way better in all respects. I heard the Millennium building is sinking into the ground and is slightly tilted too. Warranty guy said structural support is weak and frankly he’s surprised the building is not red tagged.
yeah this homeless guy who used to be an architect told me the Millenium is leaning too. so i called the Millenium sales staff and they are so excited about it. they figure once it leans far enough that tourists take pictures of themselves holding it up they’ll get international exposure and will then jack up prices. Joe Montana was over at my house the other day telling me he can’t decide if it’s better to be on the downward side or the one looking upward. One is better people watching and the other is better for star gazing. Either way he’s excited about this new feature which he is convinced was an intentional design idea from day 1.
@ hangemhi. LMAO.
SS really needs to come up with a standard grid that charts these events. Reading these posts is starting to give me a headache. I can’t imagine writing them and keeping everything straight is any less headache inducing.
There has to be a standardized method to convey this message. Let me know if you need help. Happy to develop a standard here. Seriously.
Yo Editor,
Is this thread about Millennium? I’ve refrained from commenting, from fear of getting deleted.
Doh!
Paul
Why are people still paying $910 per square foot? Aren’t condos in Noe going for around $600?
North of $900 per square foot is still a reasonable outcome for the sales office. I’d be interested if anyone knows if that translates to a profit. (However I’m not sure how the buyers will feel about their purchase after a couple of years.)
Selling (or renting for that matter) the remaining units at the prevailing market prices is more beneficial to both the developer and existing owners. Having a building with a number of empty units in the long run can’t be good.
Now if I could only get into the mind of the buyer who purchased 3908 for $855,000. By June 08 the writing was on the wall in terms of where the condo market was heading. Definitely a what were they thinking moment…
Perhaps it’s simply a coincidence, but 425 1st Street #3908 has just fallen out of contract.
Again, sold by the sales office for $855,000 in June 2008 ($1,132 per square), #3908 taken back by the bank and listed for $695,000 ($915 per square) last month while the sale of #4308 closed escrow yesterday at $687,000 (straight from the sales office).
Let’s see if this works, to build on eddy’s suggestion, for the 3:46PM comment by the Editor:
425 1st Street #3908
DateActionPricePPSF
June 2008sold$855,000$1,132/sqft
June 2010listed as REO$695,000$915/sqft
July 20, 2010sold$687,000$904/sqft
Guess it didn’t work. That was meant to be a table.
Table of dis-Contents?
Not sure why John24 and Hangemhi have the right to change teh subject. The info about the Millennium (an ORH comp) was interesting, relevant and important.
Geez, this is a pretty amazing thread.
Let me see if I can summarize:
3908 gets taken back by the bank and listed at what seems like an appallingly low price. THAT causes the sales office to drop the price of 4308, but then it sells 4408 for lower than either of them.
4308 gets sold for an unknown price, but when the buyer of 4308 sees what 4408 was sold for, ditches the contract and 4308 gets put back on the market. 3908 goes into contract, but then 4308 gets sold for less money than either of the other two.
When the buyer of 3908 saw what 4308 sold for, THAT buyer has now walked away.
It’s a race to the bottom and the last one to remain solvent wins!
Meanwhile Willow wonders what the 2008 buyer of 3908 was thinking when they paid $200K more than the unit was worth two years later. But Willow, what are you going to wonder in two years about THESE buyers.
The economy is shrinking as quickly as it was in 2008. And the Fed appears to be out of ammunition that it has any confidence in. At this point, they are really just doing stuff to try to keep consumers from panicking again, but nothing really worked. All of the people who closed seem just as dumb as the guy who closed in 2008.
But the issue is that the 2008 buyer likely put nothing at risk and, given the under FHA amounts, I doubt these buyers did either. They got $18K cash back from the government, which is close to the 3.5% the government demanded as the down, and I’m sure many years of HOA and probably another 18K in closing costs and god knows how much in upgrades tossed in by the sales office, so really, where was the risk to them?
Those days are ending now, however, but don’t worry, it’s you and I who will take it on the chin for these buyers. But have no fear, Fannie and Freddie allow you to buy one of their foreclosed homes from them for only 3% down (which can be paid for by a nonprofit, where have we seen that before, so it’s really zero down, and there is no appraisal at all), and I’m sure FHA will jump on this bandwagon, so you really just have to wait for the next $200K leg down before another crop of buyers steps up with nothing at risk, all for Willow’s amusement.
http://www.fanniemae.com/homepath/financing/index.jhtml
The list price for 425 1st Street #3908 has just been reduced by $33,000 (5%), now asking $662,000. Once again, purchased for $855,000 in June 2008.
tipster,
I have seen something recently in SoCal. Prime coastal location. 3 close neighbors chasing the market down. Do I need to say they also did their share of refis, trying to one up with new shiny toys in the mid Aughties?
I saw that last year. I went back online to check out on them. All 3 are still trying to sell after 500 DOM…
3908 Sold for $660K. Assume 3% (about $20K) was paid by the seller for closing costs/HOA, the $855K initial owner/flipper lost $215K (25%) + about $40K in selling costs, another $10-15K in closing costs, and he’s out a little over 30% in three years.
I repeatedly told every one of those buyers to walk from their 3% deposits and not to close – they would all lose money. This one didn’t listen and paid the price.
$874 psft is still a high price, even for a viewtastic end unit condo, so look for losses when this buyer sells, but the kool aid people were drinking in 2003-2009 was pretty amazing when you consider that they lost huge amounts of money even though they sold at $874 psft.
And yes, it’s starting out to be yet another great day!!
http://www.redfin.com/CA/San-Francisco/425-1st-St-94105/unit-3908/home/17306409