The sale of the “charming Victorian single family home” at 1610 Sanchez closed escrow on Tuesday with a reported contract price of $750,000.
Purchased for $907,000 in May 2005, call it a 17 percent decline in value below the previous comp setting price for the property “located on a quiet street in Noe Valley near shops, restaurants & transportation.”
∙ The Noe Valley Apple At 1610 Sanchez Drops, Just Not Into Our Cart [SocketSite]
∙ A Bounty Of New Noe Valley Apples (And Summer Inventory) [SocketSite]
17% down in Noe on a 5-year hold…
Stories like these are the light breeze drying the paint on ex-SFer’s painting of grass growing.
Slowly and surely the meme of “anyone can get rich quick by buying real estate” is being replaced with “real estate is a commodity that is a good investment in the long run though could sting you over short periods”.
Five years was typically considered to be the minimum hold period needed for appreciation to cancel out sales costs. Now it appears that even five years is too short of a hold.
Once the psychological shift takes hold, expect a long period of null appreciation.
Then the fun starts over again.
“Five years was typically considered to be the minimum hold period needed for appreciation to cancel out sales costs. Now it appears that even five years is too short of a hold.”
10 years was considered “long-term” for the stock market too. Those people who bought and held S&P500 index funds for the last 10 years certainly don’t think so any more, although they made something from dividends.
This place has a 8/1999 sale for $495K. So that’s a 50% nominal increase in 11 years. So is it fair to say that on an inflation adjusted basis, prices for SFR’s in Noe have rolled back to 2000?
http://www.redfin.com/CA/San-Francisco/1610-Sanchez-St-94131/home/807946
This place is a nice apple, seems to sell every 5 years or so, I wonder what it will go for in 2015?
Oct 19, 2010 Sold $750,000
May 27, 2005 Sold $907,000
Aug 24, 1999 Sold $495,000
Oct 27, 1994 Sold $289,000
Jul 20, 1990 Sold $293,000
Interesting history. A quick calculation reveals that about 30% of the appreciation over the last two decades went to the real estate industry. And that doesn’t consider inflation, so the real proportion is a lot higher.
So much for real estate being an efficient market. Half of the profits go towards transaction costs.
In addition to long-term holds, good location was also supposed to protect you against losing money in real estate.
Whoops.
That’s a very specific property. Tiny and not very appreciated by the Google/Apple crowd that seems to be the last ones standing for decent SFHs in Noe. I am also surprised it escaped the contractor total redo trend of Noe’s heyday ($1M for total dumps no-more as it seems). Maybe the 2005 buyer really liked the house as it was?
$750K is still a bit pricey for a property like this. I’d bet the buyers have bigger plans for this house.
here’s how I’ll characterize this sale history –
1990 sale – a prior peak was 88-89. by this 7/1990 sale, most of the nominal price decline have happened.
1994 sale – a small nominal decline, but most of the of the decline came from inflation
1999 sale – a massive 70% appreciation in 5 years. dotcom is blowing a bubble in housing (fluj will say gentrification).
2005 sale – woah watchout! the bubble started by dotcom is in full bloom.
2010 sale – in prime sf, some air has leaked out of the bubble… unprecedented actions by government have slowed down the price adjustment to historical mean.
2015 sale – (I’ll predict the place sells for $500K) a couple making about $150k buys the place. most of the nominal declines are done.