104 Funston
As we wrote this past May:

104 Funston was purchased for $2,750,000 in May of 2007 and returned to the market this past March asking $3,150,000. Reduced to a “lucky” $2,988,888 on April 15, the price was further reduced to $2,875,000 eight days later. On Friday it was reduced to $2,750,000.

According to the listing the property “appraised at $2,850,000” and you can “move in with equity.” Who are we to suggest that its three weeks on the market at $2,875,000 without a sale would suggest otherwise.

Withdrawn from the MLS after 155 days days on the market but then relisted at $2,600,000 with “one” day last month, yesterday the list price for 104 Funston was reduced to $2,200,000 (23 percent under its “appraised” value) in an attempt to solicit multiple bids which are now due next week (10/21 by noon).
And with respect to any apples-to-apples comparisons, don’t forget to account for the roughly $400,000 worth of work between the $2,750,000 purchase price in 2007 and today.
∙ Listing: 104 Funston (4/3.5) 3,963 sqft – $2,200,000 [MLS]
Instant (Appraiser’s) Equity At 104 Funston [SocketSite]
Will 104 Funston Return With Even More “Move In Equity?” [SocketSite]
No More Mention Of (Even More) “Move In Equity” For 104 Funston [SocketSite]

18 thoughts on “A Quick Reminder Not To Bank On An “Appraisal” (Or Instant Equity)”
  1. It’s now at exactly 20% below the 2007 price, and on that basis alone it would seem to be priced about right for this market, maybe still a bit high on an apples-to-apples basis (which does not apply). That would mean $550,000 gone to money heaven to those who argue “only 20% down? And da bears say prices have fallen a lot!” But of course there is also the additional ~$400,000 down the toilet on this one.
    But the new buyer will profit from the mistakes of the previous one.

  2. Frankly, I don’t see it selling particularly quickly at 2.2M. It’s really kind of an awful location right next to Park Presidio and the park, too noisy and foot-traffic-y compared to the rest of the “Lake” area. Maybe they’ll find that one deaf exhibitionist who is into it.

  3. You guys are looking at this the wrong way. All this means is that there is more instant equity in this property for someone to unlock.
    And there’s only a week left for this “profound” reduction in price, get your bids in: “Offer Date Thursday 10/21 Noon”

  4. This is actually a pretty nice home and I think that at $2.2M it has a very legitimate chance of selling, or at least receiving offers on its offer date. The location is less than ideal, but there are some positives to the location as well. This is a lot of house in SF for $2.2M IMO. Not sure why this wouldn’t be a short sale at this point unless the current owners plowed major equity into the place.

  5. hosed, thanks for posting. But I think the professor has a very keen read on the SF market, and accurately states that it is not unlike most other markets right now. I guess you’re right that he does not seem to appreciate that he bought at the top of a magnificent bubble and we ain’t returning to that.
    “First, the weak economy has created a self-fulfilling prophecy: houses are not selling
    so owners reduce their price. Buyers, seeing prices continuously dropping, bide
    their time if they do not absolutely have to buy now.”
    Exactly right. We see it with the tremendous drops in sales volume in SF.
    “Second . . . Very few people seem able to get a loan significantly larger than the jumbo conforming loan. Few people keep that much cash around even in a down stock market environment. The upshot, they cannot buy and so sellers cannot sell.”
    Again, pretty right. Although I think he overestimates the strength the market within the confirming loan limits, which is also very slow.
    “Third, in the depressed San Francisco housing market pretty much the only luxury houses that sell are found in a very few ‘fancy’ neighborhoods-where buyers get less house for their money but more brand-name appeal. And even in these few neighborhoods only a relatively low percentage of the supply of houses is turning over in a reasonable amount of time.”
    Again, just about right on.
    “When the credit markets loosen up some more and deflationary perceptions turn to expectations of growth, I am confident that San Francisco’s housing market will be one of the first to turn on a dime and become vibrant again.”
    The loosening up won’t be for a long time, so this is just speculation now. But I don’t see SF turning around before anywhere else, just as it has performed pretty much in line with many, many other places for the last few decades.

  6. “simultaneously increasing its list price when withdrawn to $2,500,000.”
    So that it looks like they withdrew out of strength?

  7. It means they will pull it off the market, then come back on at 2.2 touting a “Huge Price Reduction!!” because the name of the game in the Real Estate Business is for everyone involved to do everything possible to mislead buyers.

  8. Withdrawing an underwater listing is a common strategy. The professor can now sit out the holidays, channelling fluj’s “prices are only down 5-10%, down 5-10%, 5-10%…..” while contemplating how he “overpaid”. Hey, it happens. Besides, what’s a $1m+ loss anyway to a San Fran “luxury” buyer….. It’s gonna hurt, though, to write those $17k+ property tax checks 2x a year ’til the market “comes back”.

  9. so bombero,
    are you saying that everything that sold at the time of the professor’s purchase is down the same amount?
    i would posit that some pay too much and some get a deal. and if you buy a fixed up place,its like a new car in that you will lose money just driving it off the lot.

Leave a Reply

Your email address will not be published. Required fields are marked *