CFAH

181 8th Avenue
While we missed it a plugged-in tipster now notes that the sale of 181 8th Avenue closed escrow on October 14 with a recorded contract price of $1,725,000. As some are sure to point out, that’s only 12 percent under its 2005 sale price for the “gorgeous [home] w/wonderful light & perfect [location in the Lake] district.”
Of course that’s also 22 percent ($490,000) under its sale for $2,215,000 in May 2008 for the “Elegant Victorian home located in one of the city’s most desirable neighborhoods.”
∙ Sold: 181 8th Avenue (4/3.5) 3,464 sqft – $1,725,000 [Redfin]

Comments from Plugged-In Readers

  1. Posted by ex SF-er

    I know I’ve said this before, but I’m always astonished at the short holding times of so many of these properties.
    I feel like the SF market is bifurcated. There are the homes that are held for generations, and then another set that comes up for sale every 1-5 years.
    I’m not sure why these people don’t just rent. Yes, yes, I know… the mythical job transfer. in that case SFers really must have a hard time keeping their jobs! 🙂
    on a side note, it is nice that there is so much turnover, because it helps us to see trends in SF real estate despite the miniscule number of homes that change hands every year.
    ===
    I can’t see the pics on this link, and I’m not sure Trulia’s link is correct… because this house looks massive…
    also looks very liveable.
    but I just can’t believe that house is that big…
    http://www.trulia.com/property/1058630103-181-8th-Ave-San-Francisco-CA-94118
    I’m definitely a big fan of the neighborhood, fog and all.
    seems like a nice place.

  2. Posted by kthnxybe

    It’s a cute house in person. There’s a few little problems with it – in order to the in-law or the garage from the main living area, or to the back yard directly from the in-law apartment, you have to either be very short or very careful. Which is too bad because the in-law is nicer than it looks in the pictures.
    Another minor quibble for some would be its proximity to St. James, if you don’t like church bells on Sunday mornings or the sound of kids playing when the preschool is in session.
    The fog is not so bad most of the year compared to the Sunset or further out in the Richmond, and it’s really a nice and livable neighborhood.
    (You can see in this picture – http://thumbs.trulia.com/pictures/thumbs_4/ps.14/c/7/a/9/picture-uh=f2d428a932c912662e4326ea2afa0-ps=c7a9507b72704bad8a922554a0de915.jpg – the deck overhead would make anyone over five ten or so have to crouch to get outside from the downstairs. Likewise, the stairs going down inside the house are too close to the ceiling at certain spots.)

  3. Posted by Marcie

    So right about certain homes being constantly on the market. I live next door to a house that has sold four times in the last 16 years. It’s been fascinating to watch it grow from a three bedroom ‘house’ into a four bedroom ‘mansion with wine cellar’. Each new owner ripped out the ‘old’ kitchen and put in a new one. It’s currently being buffed and shined before it’s put back on the market yet again. Let’s hope someone will see its virtues and want to live in it for more than a couple of years.

  4. Posted by A.T.

    Really nice place in a great neighborhood. And under $500/sf. Nice half-million dollar discount from just 2 1/2 years ago. One could fund three kids’ Ivy League educations or fund about 1/3 of a very comfortable retirement with that. Stings even more that one can’t deduct this substantial investment loss.
    This fits in nicely with the general picture in SF. Take the peak price and subtract about 20-25% for top-notch places in great neighborhoods, or about 30-40% for so-so places or in lesser neighborhoods. Some deviations in both directions, but that gets you in the ballpark just about anywhere in SF.

  5. Posted by Brahma (incensed renter)

    ex SF-er wrote:

    There are the homes that are held for generations, and then another set that comes up for sale every 1-5 years. I’m not sure why these people don’t just rent. Yes, yes, I know…the mythical job transfer. In that case SFers really must have a hard time keeping their jobs! 🙂

    I get the implied humor, but I still. I think that some people need to frequently relocate in order to keep their high-paying jobs (the so-called ‘Relo’ class) and the frequently-turned over houses you’re seeing are an indicator of that.
    And it’s not mythical, here’s a New York Times article that I remembered reading from a while back describing people in this class who live on the east coast, but from what I’ve seen when I had a job that required dealing with people in this category a few years ago, entirely consistent with the corresponding people in California (or more precisely, people here to work for a short time because their job placed them here), The Five-Bedroom, Six-Figure Rootless Life:

    …She herself is a veteran relo, having moved three times in the past 10 years to help keep her husband’s career on track. She admits she is beginning to feel the strain of her vagabond life. “It’s like I’m on a hamster wheel,” she says.
    Ms. Link and her husband, Jim, 42, a financial services sales manager for the Wachovia Corporation of Charlotte, N.C., belong to a growing segment of the upper middle class, executive gypsies. The shock troops of companies that continually expand across the country and abroad, they move every few years…hopscotching across islands far from the working class and the urban poor.
    As a subgroup, relos are economically homogenous, with midcareer incomes starting at $100,000 a year. Most are white. Some find the salaries and perks compensating…

    I’d be willing to bet that Ms. Link’s husband’s career is still “on track” even after the hit Wachovia took in the recent “financial crisis”, and I’d be willing to bet that a lot of folks that buy and resell these million-dollar plus houses are couples just like the Links.

  6. Posted by The Milkshake of Despair

    “I think that some people need to frequently relocate in order to keep their high-paying jobs (the so-called ‘Relo’ class) and the frequently-turned over houses you’re seeing are an indicator of that. “
    You’d think that the employers footing the relocation costs as well as the gypsy employees would realize that a better home is available at a lower cost via rentals vs. purchase. “We’ll kick in $100K for relocation costs if you accept this new position. It is up to you to decide whether you rent or own but our SF relocation expert says renting wins hands-down.” That $100K would be gobbled up by the transaction costs alone if the employee went the purchase route.
    Still my family relocated a lot (eight cities in eighteen years) and switched from renting to owning as soon as it was within reach. I think that was mainly because there was always an intent to stay longer but other influences caused a premature move.

  7. Posted by lyqwyd

    These people may exist, but they are still only going to be a very small fraction of the total market.
    If you know you are going to be moving every few years, it doesn’t make any sense to buy a home.

  8. Posted by EBGuy

    Eschew obfuscation. I prefer 179 Eighth Ave. The former owner looks to still be rooted here. Or not?

  9. Posted by sfrenegade

    I wonder if anyone claimed any remodeling on this place. The last permit pulled for exterior work was in 1988 (under 179 8th), and there have been no permits pulled for interior work that are listed. There was a permit pulled for parking under 181 8th.

  10. Posted by ex SF-er

    Thanks for the link Brahma, I found it quite interesting.
    I agree that there are clearly “relos” out there, I have a few acquaintances that are sort of in that group, although now that I’m in the midwest I see it much less… since most of my close friends and family are in Medicine, Tech, or Finance they tend to change jobs but not locale as often.
    On a side note, that article just reminds me of what hell Atlanta and environs is!

  11. Posted by eddy

    Was this a short sale? Who takes this kind of loss?
    I’m usually one to find or look for a hole, or a story to explain the decrease in value, but this is a pretty good comp and a demonstration of the bubble up / bubble down in action. The reality is that a lot of SFH properties in prime areas of D7, and the better parts of Laural were pushed up over $2M and these fringe places like 8th ave started to look like viable alternatives. But location, location, location still holds true and these fringe places are showing big losses, as are the places in D7 and Laural, but the bigger impacts on these types of homes. I think the buyers here got an OK deal, but I don’t know that they couldn’t have done a touch better IMO. And I’d be curious if all of the 3000+ sqft were actually legit. Some of those bedrooms look like converted attic space. The $/psf does seem low. Nevertheless, good to see the comp and congrats to the buyers.

  12. Posted by anonee

    “Of course that’s also 22 percent ($490,000) under its sale for $2,215,000 in May 2008”
    guess they should have rented and taken this down payment $$-leveraged it 5:1 and put it in the s&p.
    if they survived the margin calls (big if) i wonder how they would have done over this time frame?

  13. Posted by The Milkshake of Despair

    Why must investments be leveraged ?

  14. Posted by R

    They don’t. But I think anonee’s point is that RE is.

  15. Posted by Legacy Dude

    And what a great point it is, R. Assuming they put 20% down, the magic of leverage turns this 22% nominal loss into a 100% real loss. Total down payment wipeout after commissions, etc.
    To use anonee’s (aka paco’s) hackneyed comparison, they could have bought the S&P 500 at ~1,400 in May of ’08 and watched it fall to 1,228 today. A 12% loss nominal loss which, even if comparatively levered, would have been less of a hit than buying this place. Or they could have parked that money in CDs and been up 1-2%.

  16. Posted by anonee

    great advice legacy dude. keep renting and put your $ in cds. sooo savvy!

  17. Posted by A.T.

    Yes, losing your entire $450,000 down payment and more is far better than keeping all your principal and earning only 1-2% on it because, well, you know, because then you were a “savvy owner” (the opposite of a “bitter renter”).

  18. Posted by anonee

    riiight a.t.,
    going forward that’s what you advocate; keep renting and put your $ in cds? that makes you a savvy renter eh? hate to sound like a broken record but those who violate the first 3 rules of real estate-and then pay full retail (aka overpaying), and then sell after a short hold…
    well, you know…

  19. Posted by A.T.

    Well, the 2005 buyer of this place did quite well paying “full retail” with a short hold! Buying in a fast declining market, like we have today in SF, is generally not a good idea. Yes, keep renting and stick your $$ in CDs. You’ll come out way ahead. 2-3 years from now the picture may be different.

  20. Posted by anonee

    “Yes, keep renting and stick your $$ in CDs. You’ll come out way ahead.”
    it sounds like you are able to talk yourself out of buying no matter what the market. good for you.
    i’m quite happy to continue to own rental property in this town and amazed that rents continue to be so high.
    what is even better tho, is re-fi rates right now. heck, you could loan me 4.6% money for 30 years and greatly increase your yield. i’ll keep taking that mort.int.deduction and wow-everyone’s happy!

  21. Posted by A.T.

    anonee, I own my place. You’re right that rates are (were) great and I just refi’d a few months ago at 4.1% for a 15-yr loan. I’m considering buying a bigger place, but not yet when prices are dropping so fast. Rising rates will just accelerate things. It will be time to buy again soon enough, but not now.

  22. Posted by anonee

    interesting at,
    so is your place down 20-35% as you claim for the entire city?

  23. Posted by El Bombero

    ^ There’s nothing more satisfying than seeing a 2008 buyer losing more than 600k after costs on a fairly ordinary “nice” house. By the time this house was purchased, only the most gullible or dumb couldn’t see that the market was going to tank. It was the smart people who were parking money in CDs in spring 2008, and they were paying a lot more than 1-2%.
    These debates of real estate versus “stocks” are always fun, but the truth is that anyone dumb enough to buy a house in sf in 2008 was also dumb enough to have most of their other money in stocks. It’s not either/or, it was “both”.

  24. Posted by A.T.

    “so is your place down 20-35% as you claim for the entire city?”
    Probably down that much from 2007. I bought in 2000. As I have often noted, we were ahead on the rent vs. buy question on day one; I’m amazed that people buy homes for which this is not the case. If we buy a new place, I may hold on to this one and rent it or we may sell it if selling prices are wildly above the projected rent stream. We’ll decide later.

  25. Posted by Legacy Dude

    Well, paco, CDs don’t make for “savvy” blog puffery like your real estate empire does, that’s for sure. But most asset prices – from real estate and stocks to fine art and muscle cars – are down 10-20% over the last few years. When the “market perform” is -10%, +2% is a 12% alpha. Not bad for an investment that features ZERO effort or friction – no upkeep, no maintenance, no permits, no commissions, no market watching or timing, and no stress.
    I’m like most people – I have no desire to be a landlord or fix/rent houses for a living, am just looking at real estate from a primary residence perspective. Renting a Soma condo instead of buying one has been a pretty good financial decision so far, savvy or not.
    But back on topic, how do you explain this place? You love pointing out how good real estate always outperforms stocks – so what happened here, and to that place tipster pointed out on the other thread? This is a great house in a nice area which has underperformed the S&P. Don’t tell me they overpaid – nearly everyone who bought real estate over the last 5 years overpaid. And short hold? Not buying it unless you’re saying the place will be worth $2.5 million in 2013.

  26. Posted by Skirunman

    For whatever it is worth:
    http://marketnews.intersectmg.com/wp-content/uploads/2010/12/image002.jpg
    Obviously time frame picked, last 10 years, had S&P 500 at “bubble” prices. Still, SF RE up 50%+, stock markets nada.

  27. Posted by Legacy Dude

    Sweet. But how did real estate fare against Apple stock? Or Intel? Or Lehman Brothers? My point wasn’t to start a pissing contest between stocks and real estate, only to dispel the foolish notion that real estate always outperforms stock and is the best investment a person can make. For many Americans, in fact, it’s turning out to be the worst investment they ever made. BTW, Skirunman, how’s gold done over 10 years?

  28. Posted by Legacy Dude

    Footnote to my comment above – I’m not giving advice or advocating investing in anything. Everyone should do their own research and not take advice from blogs (I’m not an actor, I just play one on TV, and so forth).

  29. Posted by anonee

    “You love pointing out how good real estate always outperforms stocks”
    “, only to dispel the foolish notion that real estate always outperforms stock and is the best investment a person can make.”
    please quote me saying such a silly thing.

  30. Posted by Legacy Dude

    If you’re really not paco, then I apologize for misquoting you. SocketSite has echoes.

  31. Posted by anonee

    apology accepted-no worries.

  32. Posted by Skiruman

    @Legacy Dude: I think you know the answer to your gold question, it has done tremendously well. I wish I was smart enough to have invested in gold before the run-up. My point in posting the link to the 10 year comparison was just FYI for SS readers. Draw your own conclusions. I personally believe investing in RE is and will continue to be my best investment class and certainly has outperformed any other broad investment classes for me including stocks, bonds, and commodities such as gold. Note: I don’t consider the home you live in to be an investment, but consumption, so the above applies only if you are actually investing in RE.

  33. Posted by anonee

    i’m with skiruman. i think the balance is tipped in favor of sfre as a good (and local) investment b/c one has the ability to continually and steadily add value.
    favorable tax treatment more than makes up for the nuisances of maintenance and such, imo. of course, ymmv

  34. Posted by sfrenegade

    “favorable tax treatment more than makes up for the nuisances of maintenance and such”
    This statement sounds very much like paco from the quick review I mentioned above. Paying 4-8% in interest solely to save 1.3-2.6% in interest is hardly the way to be a financial genius, and this tax treatment is already priced into the selling price of the house.

  35. Posted by Your equity will be assimilated.

    dollars to donuts, paco is kid char is anonee. troll, imo.

  36. Posted by anonee

    @your identity will be assimilated,
    this is a bizarre blog but i think i get it now.
    the editor posts something about sf real estate and the acolytes rip it up. anyone who goes against the grain is shouted down.

  37. Posted by anonee

    @sfrenegade,
    “Paying 4-8% in interest solely to save 1.3-2.6% in interest is hardly the way to be a financial genius, and this tax treatment is already priced into the selling price of the house.”
    its telling how you spin that. its inaccurate to say one is paying interest solely to save interest. rather, the amount of interest you pay is discounted by a govt. tailwind tax wise. that means its cheaper to borrow $$ to use for leveraged investments.
    i see you have not addressed my point about being able to actively add value. i have also yet to hear from you any ideas about how to invest savings.
    for the record, i do not believe buying an interchangeable luxury condo is a positive investment. i cast a gimlet eye on most national reits. i think the commercial re shoe will fall very hard. but i do believe there are many entry and exit points for good buildings in good districts in sf.

  38. Posted by Your equity will be assimilated.

    On a thread about a “gorgeous [home] w/wonderful light & perfect [location in the Lake] district” that declined 12% since 2005 and 22% since 2008, paco, only you can come and talk about tax deductions, leveraged investments, actively adding value, good buildings and good districts in sf.
    yeah, you have rattled our cages, paco.

  39. Posted by anonee

    ok stalker dude, are you saying that you believe this is the “perfect [location in the Lake] district”?
    does it matter that some overpay and then sell quickly?
    are you not worried that your recent purchase in the suburbs may have been too soon (since everyone here thinks sfre is going to pre dot com levels)?

  40. Posted by Your equity will be assimilated.

    oh yes, they should have help it longer. that explains everything. and of course, it must not be the best location. anyone in the trenches know these basic truths. silly me!

  41. Posted by anonee

    nice non answer stalker dude.

  42. Posted by Your equity will be assimilated.

    no paco, i agreed with you they should have held longer. even a 5 year hold would have lost them 12%. and by definition, if they are getting their ass handed to them on a platter, it must not be in real sf. you are in the trenches, i am not. what am i gonna say?
    why don’t you tell us what you are buying?

  43. Posted by hangemhi

    YAAAAAAWWWWWWWWWWWWWWWNNNNNNNNNNNNNNNN
    Anonee seems like the alter ego of tipster. Both can always win their own arguments even if they make little sense to anyone else.
    Sometimes I think the editor is both people just to stir the pot and keep the comments going.

  44. Posted by sfrenegade

    “its telling how you spin that. its inaccurate to say one is paying interest solely to save interest. rather, the amount of interest you pay is discounted by a govt. tailwind tax wise. that means its cheaper to borrow $$ to use for leveraged investments. ”
    Not that I’m going to convince you, but rational asset pricing already accounts for the discounted interest rate. The price of houses is higher solely because interest is deductible, and if we removed this deductibility, the price of houses would slowly adjust lower (since housing is a very inefficient market) to account for the loss of deductibility.
    I will stick by my original statement: people who buy a house solely because of interest deductibility are not financially savvy. There are plenty of good reasons to buy a house, but tax deductible interest alone is not a good reason.
    As for what to do with savings, putting them in housing is a relatively volatile “investment” in the short-term. I can find plenty of equally volatile short-term investments, many of which probably have better return over the short-term. And if you look at the long-term, most real estate without a fundamental market change barely beats inflation.
    Housing isn’t an “investment” except for professional investors who know what they’re doing. Casual investors deserve to lose their shirt, as they often do in an investment where they don’t adequately inform themselves.

  45. Posted by sfrenegade

    “about being able to actively add value”
    “b/c one has the ability to continually and steadily add value. ”
    Oh, you want me to address this? Do you mean that you can improve housing stock to add value? Or do you mean something else? If you’re saying you can improve housing stock, most improvements don’t recover the cost put in.

  46. Posted by The Milkshake of Despair

    There are some improvements that have a good RoI and aren’t the traditional reno work. Changing the zoning status of a parcel ups its entitlement and potential without driving a single nail. I think here TIC conversions are a classic example though that might not always yield the desired result these days.

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