Having been remodeled and flipped for $712,000 in March 2001, yesterday the Westwood Park home at 165 Hazelwood Avenue returned to the market nearly a decade later listed as a short sale for “$699,000.” There’s an unwarranted “au-pair” unit below.
And speaking of short sale listings, this morning the list price on the “Once in a lifetime opportunity” listing for 106 Coleridge over in Bernal was reduced to “$1,195,000.”
They were asking $1,495,000 in February before it was withdrawn from the MLS in May.
∙ Listing: 165 Hazelwood Avenue (3/1) 1,080 sqft – “$699,000” (short sale) [MLS]
∙ SocketSite’s Listed San Francisco Inventory Update: October 12, 2010 [SocketSite]
∙ Another Shot At A Once In A Lifetime Opportunity On Coleridge [SocketSite]
Comments from Plugged-In Readers
It’s on a busy street! The seller overpaid. It happens! Rich Foreigners will save this market! Google!
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Everyone knows it’s a bad idea to try to turn around and sell after such a short time.
Somewhat more seriously, SF had two bubbles, one in 1996-2000 and one from 2003-forward. The second one is largely unwound now. Inflation has undone most of the first one but there is still farther to drop. Pretty nice that one can now buy a fairly decent SFR with parking in a good neighborhood for what bought you a 1-BR SOMA crap condo a few years ago.
“Inflation has undone most of the first one”
Inflation since 1996 is 35%.
Home prices are still double 1996 prices.
Much, much further to fall.
“Somewhat more seriously, SF had two bubbles, one in 1996-2000 and one from 2003-forward. The second one is largely unwound now.”
I’m not entirely certain that the first one was unwound in the higher than conforming-priced markets based on the Prestige Index (which is susceptible to the same influences as Case-Shiller, since it is based on C-S data). But inflation since 1996 has been about 39.1% according to CPI, and 23.3% since 2001.
I think the issue is that part of the appreciation from 1996-2001 or so was bubble and part of it may have been longer lasting. For 2003-forward, it’s not clear that any of it should be permanent. The market change happened earlier.
Inflation is a complex phenomenon. House prices tend to follow wage inflation which has been around two percent more than consumer price inflation for quite a while.
Mole Man, are you talking about CPI-W?
CPI-W between 1996 and 2010 is 41.02% (less than 2% more over the whole interval). CPI-W between 2001 and 2010 is 25.02% (same). Wage inflation has been very low since 2000, and median household income has been down. It’s like the dot-com bust never ended and freely available credit just hid the problems.
Btw, if any of you read Shadowstats, their estimate of inflation is considerably higher:
1996-2010 = 233.01%
2001-2010 = 122.99%
By Shadowstats, some stuff starts looking reasonable. Of course, wage inflation has been nowhere near what Shadowstats says.
Median San Francisco income has gone up quite a bit more than 41% from 1996 to 2010 and the income of the top quintile more than that.
Media household income in 1989 was $33k now it is $71k, for a 115% increase. Inflation in that era was only 71% in that time. So incomes here have outpace inflation and even national income for quite a while. As I have said before, it is not just income that is buying houses here, it is business equity extraction of various forms.
Home prices still have a ways to fall though.
Btw, if any of you read Shadowstats
If you don’t like the facts you see, just make up some of your own. Good idea.
Shaodowstats provides alternate inflation measures by using the same formulae used by the BLS in 1980 and 1990. Hardly making up facts.
If you don’t like the facts you see, just make up some of your own. Good idea.
although I have never used shadowstats in my life and I’ve only visited his website 2-3 times that I recall, the site actually has some merit
The US Government has changed the formula for “inflation” many times, and a cynic would say that it has done so purposefully in order to help understate inflation. (this is important because many government transfer payments as well as private enterprise COLAs are based on CPI).
not only that, the CPI uses hedonic adjustment which is arguable at best. (for instance, if you bought a TV last year for $1000 and this year for $1200 that is 20% more expensive… however if the govt calculates that you enjoyed this year’s TV 20% more than you did last year’s TV, then the inflation of TVs is 0%)
The BLS itself calculates the changes to reported inflation metrics that occur due to some of the changes in methodology over the years. Off the top of my head the last I checked BLS calculated that CPI is about 3-4% per year lower than it would have been if it was still done the same way it was in the early 1980s. That is significant.
now that is not to say that the original way of doing the CPI is gospel, and any change an error. It is only to say that the CPI has been heavily changed over the years. There is no such thing as a perfect “inflation” number.
the change that I disagreed with most is the change from calculating costs of ownership as home prices to calculating it as imputed rent. This significantly understated inflation in the 2000’s because rents did not rise as fast as home prices did. (not even close).
in sum, your CPI stats are not necessarily better or worse than the shadowstats CPI number, because both are based on official methodology used at sometime in the past by the BLS (and the Bureau of Labor as it was known when CPI was started).
Nice sword over the fireplace.
Staging at its finest. lolz
Another example of how CPI may be hiding real inflation is how they deal with home computer costs. CPI basically takes credit for Moore’s Law in the sense that the cost of a home computer is calculated in terms of $/compute_power. So if you replace your laptop that cost you $500 three years ago with a new laptop that also costs $500 today but has 4X the compute power and memory then CPI considers your cost per compute unit to have decreased rather than have stayed the same.
Most people use their computers for simple communication : web surfing and e-mail. Never mind that the minimum computer configuration needed to read the news or open an e-mail from your grandma today would have been considered to be a laboratory supercomputer 15 years ago. The increase in requirements is due to media bloat which granted does improve the experience though isn’t necessary at all.
So there is some merit to the way that CPI takes credit for Moore’s Law though they may have taken it too far.
I can’t believe that you would take these guys seriously, ex SF-er.
They most unequivocally do not just use an older series method of calculating inflation and project it forward. What they do is estimate what they think the changes to inflation are from things like geometric weighting and try and back them out. And the numbers they come up with defy common sense.
Using Shadowstats values, cumulative inflation from 1982 to today was 609%. In other words what cost $10,000 in 1982 cost $70989 today. According to the CPI-U, in that same period, $10000 went to $21989. Which one is more believable?
In that same period median family income went up 147%, so wages went up slightly higher than inflation, according to the government statistics. According to Shadowstats prices went up four times faster than wages, so our standard of living is one fourth of what it used to be. Does anyone take this claim seriously? 3-4% a year since 1980 ends up with a huge difference over 30 years.
If you really want, we can compare prices of goods from 1982 and today and see which one is closer to CPI-U.
Using imputed rents is fine, since there is both an investment and consumption aspect to housing it is not clear what the best way to calculate this is. While it might have tended to understate inflation during the housing bubble, it is tending to understate inflation now, right? So in the long run it evens out.
It goes back to the question of the The Feds responsibility for detecting asset bubbles and dealing with them. They can do this without fiddling with the inflation calculator. I think it is better if they do not mess with it, since it is important for people like Social Security recipients, who should not to be too impacted by asset bubbles.
“If you don’t like the facts you see, just make up some of your own. Good idea.”
Exactly. I used to look at ShadowStats more often until I actually tried to use their inflation numbers to estimate something. They make no sense. I do wonder whether their money supply numbers are accurate, however.
“Median San Francisco income has gone up quite a bit more than 41% from 1996 to 2010 and the income of the top quintile more than that.”
I’m not easily finding data on 1996, but 1999 median household income in SF was $55,221 according to Census data. In 2009 under the ACS, it’s $70,770. CPI-U says inflation from 1999 to 2009 was 28.8%, CPI-W says 32.15%, and the change in median per the Census Bureau in SF County is 28.2%.
What’s odd is that according to http://www.data360.org/dataset.aspx?Data_Set_Id=9357, the Bay Area’s median household income was $58,250 in 1996, $65,000 in 1999, and $66,657 in 2005. CPI-U says inflation from 1996 to 2005 was 24.5%, and CPI-W says 23.16%, but that data set says 14.4%.
This place finally sold in May of 2011 for $709K, almost exactly its 2001 price.
The euro is down 10% since it sold, the yen is down about 5%, so I doubt many rich foreigners are interested any longer, if they ever were.
Happy times ahead.
Yes, but the other listing in this post, 106 Coleridge in Bernal, sold for $1,290,000, a much better result.
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