The sale of 848 Potrero closed escrow this past Thursday with a reported contract price of $750,000. Sold for $849,000 in November 2005 and then again in April 2008 for $920,000, call it an apples-to-apples drop of 11.7% below its 2005 value but 18.5% below its 2008 value for the remodeled single-family home with unwarranted one-bedroom below.
∙ One Less Listing (But Without A Reported Sale) [SocketSite]
∙ Inner Mission Apples-To-Apples-To-Apples To Be At 848 Potrero [SocketSite]
My prediction is that the value of this property will decline over the next few years. So, if there is another sale, it will be at a lower price.
As a casual observer, I see re in SF going up and down together, except in rare occasion. If this property decline in value in the next few yrs it’d mean the re value in SF has declined across the board. I honestly don’t think that’ll happen.
I’d want to compare the tenant situation in the ‘unwarranted one-bedroom’ before I’d call this an Apple.. But 18% down for a, shall we say, less than ideal location? Not bad.
Paying $920k for this in 2008 was very foolish. Then again, $849k in 2005 and $750k in 2010 aren’t smart buys either. No shortage of suckers in this 7×7 city, that’s for sure….
18% drop ($170,000) in 2.5 years is not bad? I’d hate to see what you consider bad.
Compared to other larger drops, yes, I’d say an 18% drop isn’t bad for this location. Could of been a lot worse. Of course, I didn’t lose the money.
Once again, we’re just talking about degrees of weakness. When an 18% drop in 2.5 years is considered “not bad,” even though in any other context it would be considered cataclysmic, you know you’re talking about something far, far worse than anything we’ve seen in our lives. Assuming 20% down, that’s a 100%-plus loss after transaction costs in a very short time, and in a neighborhood that’s touted as beating the norm.
Where has anyone touted Potrero Ave as ‘beating the norm’?
Well, it’s “not bad” as compared to other locations within the Bay Area (or even SF). Has anyone looked at the prices in Emeryville or West Oakland recently? We’re talking 50% drop in a the past 3 or 4 years.
Properties south of 280 in SF are often 33% down from the highs.
“You know as well as I do that if you dug through every “apple” sale from peak-to-recent you’d see a consistent 20-35% decline all over town.
Posted by: A.T. at November 18, 2010 6:02 PM”
Except for, apparently, a little house on a very busy street.
In other words, not bad.
R, you’re seriously quibbling with the difference between 18.5% and 20%? Really? $170,000, probably the entire down payment, pissed away in just 2 1/2 years, and it’s “not bad”? You really think so?
You also did a nice job of cutting off the very next sentence in my prior post: “A few outliers either a little above that or a little below (more above).” And, of course, the April 2008 sale was already after the bubble peak. And, yes, many here (e.g. fluj, 45YOH) have proclaimed, correctly, that the Mission has not been slammed as badly as most areas. This is a clear example that proves my earlier point, and you can try to bend it and twist it to show things are “not bad” all you want. But it ain’t working unless you re-define “bad” beyond all recognition.
Once again, anybody with the time could show you many Mission examples that indicate otherwise. I also question the use of the term “apple” when in the meantime a renter gets put into an unwarranted space. Because there goes the downward expansion.
On the other hand a renter provides revenue to help pay the mortgage.
It had the unwarrented unit when the previous sale happened, so yes, it is an apple to apple comparison.
This ain’t the mission. I know what the Realtor maps say, but Potrero Ave ain’t the Mission.
And for a small house on a crappy street to be below your low end, yes, that’s not bad.
So there was no renter and now there is? Definitely not an apple then.
Why is this not the Mission? I live on Potrero Hill. I can tell you that Potrero Ave feels a lot more like the Mission than it does Potrero. I always thought that it was part of the mission (the sub-region known as Tortilla Flats, maybe).
I walk from the hill down through this part of the Mission often. Usually along 24th, but sometimes along 20th. I feel like I’ve entered the Mission once I cross Potrero Ave. Where do you consider the Mission to begin?
West of Potrero. But not on Potrero.
It’s kind of like you’re not really in Seacliff on California St, even though the realtor maps include it.
Yes, some will argue, go ahead. But nobody can argue this isn’t a crummy location.
The location was just as crummy in 2008 and 2005. The quality of the location is and was priced into the market price. And the market price has now gone down considerably. But, hey, they can recapture that 2.5 year loss and break even by saving just $1000 every month for the next 14+ years — or instead of maxing out their 401(k), they can just contribute nothing to retirement for the next 14 years. And they’ll break even. No big deal.
We’ve been through this before. When the market weakens, crummy locations take a disproportionately large hit. In a sellers market, not so much.
Is this really difficult to understand?
That’s not a truism but wishful thinking.
When the market weakens, crummy locations take a disproportionately large hit. In a sellers market, not so much.
Sure, just like in a seller’s market the above-touted W Oakland & Emeryville got pumped up more than other locations. Maybe an easy way to explain this to my untrained brain is that “crummy locations” are more susceptible to market forces (bubble) and perhaps salesmanship?
Allow me to chimp in, Potrero Ave is not a crummy location. I think people who thinks that just look at the map, see the four traffic lanes and automatically assume that it is. Then, they’d also consider Bay St and Marina Blvd in the Marina crummy location, which they are definitely not.
When I lived on Potrero Ave, all my neighbors and I mean all of them loved living there. Love the convenience of that location, the view (yes, many houses in Potrero Ave have views), the neighborhood, and would never consider moving. I don’t dispute that there some negatives, mostly the ambulances blasting their sirens at night and the aforementioned uptight neighbors who get on your case for dirtying the sidewalk because they see themselves as the HOA.
if by “crummy location” you mean a place that generates this much love, then give me a crummy location any day.
If this house is closer to 24th then I can see maybe it’s a little bit less desirable because of its proximity to the project and the slowly gentrifying South Mission; but a few blocks make a big difference, Potrero and 20th is absolutely fine.
You can’t tell me that a 2/2 condo in the Union is worth $725k but an actual house (a real frickin house with land and yard and your own garage and it’s updated!) a couple blocks away with similar sq footage isn’t worth around the same. Son, there are always new condos being built but they aren’t building more land.
@R
The unit was already intended for use as a rental, so the fact that there is now a tenant renting it does not change the sale from being apples. Just like if somebody changes the color of a bedroom, it does not invalidate apples comparisons.
A remodel, or a reasonable amount of money spent on upgrades would make it no longer an apple, but a space being used for it’s intended purpose does not cause a change.
When the cost of shelter drops, I consider that a good thing. The problem is speculators have gambled on that cost increasing and lost. Same thing happens with pork bellies. Really, the focus should be on housing purchased as an investment in where to live becoming more affordable, and less on speculative investment.
@lyqwyd: Maybe you haven’t had to deal with tenant law in San Francisco, but being vacant versus having a tenant is a very large difference, depending on the situation.
I’m aware that there is rent control in SF. Given that rent control existed prior to the last sale, it does not change the nature of the property.
Having a tenant is not just dealing with rent control. Especially since this space is unwarranted, the new owner is liable for a whole ton of crap if the tenant wants to make a fuss.
I agree it doesn’t change the “nature” of the property, but it does affect the value.
Having a tenant does depreciates the value somewhat, it’s a case by case basis; but I believe that is already factored into the price.
Yes Sam, but apparently there wasn’t a tenant before, but now there is. Hence my contention that this isn’t a clean “Apple”.. circumstances have changed between the two sales.
R, I’m not disputing that this isn’t a clear apple. I’m expanding on the idea that the house may have fetched a higher price if it is completely vacant, thus the 18% dip may have been even smaller. Some “crummy” location this is.
For the record and to correct all of the misinformation, this property status is “two family” according to the 3R Report and the tenant is the same one who was there when the seller purchased the property.
Thank you, Rebecca. Some people here like to grasp at straws and believe anything to pretend that prices are not falling fast.
Then it sounds like it is an apple. -18.5% Apple.
You could say -18.5%. I prefer to contemplate the fact that someone lost $200k+ in a few years, all the while living in a 1/1 on Potrero with a tenant downstairs. To each his own.
– el bombero
This discussion has become so ridiculous. Can you take the name-calling and negativity else where?
In any case, no one here seems to really understand buying a property means – some buy properties for investment, some buy for speculation, but some buy because they want to live in it. The seller may have experienced a large loss of down payment in this sale, but has anyone considered how much happiness the property may have brought him or her? It’s so easy to be so arrogant and cold about these properties, but each owner has his/her own reasons. For those commuting to the Penninsula, this part of town is great with easy access to the freeways. Imagine commuting from the Marina for instance. Also, friends visiting the house for dinners have easy time parking in the neighborhood. Emergency room isn’t located right across the street, so this part of Potrero Ave is quieter than the other end. The views from the MLS listing is wonderful. So have some thoughts about actually living in this space and you may have a different perspective.