The merger of two adjoining units on the twenty-second floor of the Four Seasons Residences to create a 3,600-square-foot “super unit” with three parking spaces below was approved by San Francisco’s Planning Commission last year.
The two units, 765 Market Street #22A and 765 Market Street #22B, subsequently hit the market listed for $5,950,000 and $1,550,000, or a combined $7.5 million, touting an exclusive opportunity to merge the two.
Purchased for $1,750,000 in 2008, the sale of the 836 square-foot unit #22B is now pending. While the asking price for the 2,757 square-foot unit #22A, which was purchased for $3,420,000 in 2006, has been reduced by $1.1 million to $4,850,000 and the unit has also been reduced to a shell.
So a loss on the smaller unit since 2008 and a yearly gain of just under 6% on the larger unit. Definitely not the double digit gains we were seeing a year ago.
Folks scoff at those who believe there will be an actual price pullback (as opposed to just a stall) but the smaller unit is proof a pullback can happen and many signs point to that.
The area I exchanged my California home to has seen around a 4% yearly gain recently. Not too far out of line with the larger unit’s gain here.
Definitely IMO a repositioning of SF prices relative to the rest of the country will happen in the next years. Not saying SF will come down to those levels by any means. Just that the imbalance between SF and the rest of the country (most of it) will shrink.
I wonder if these units are on the side of the building where the views would be affected by the new museum?
When are they actually going to start construction? There was a ceremonial groundbreaking earlier this year but the projected July commencement date has long since passed. Did they decide to wait out the threatened litigation?
remember, the chump had to stroke the monthly condo fee too.
True. the gain on the larger unit may have been less. I am just saying.
Indianapolis recently surpassed SF in population and is booming with a more diversified economy. Rentals are snatched up quickly but are “cheap” by SF standards. If one is an investor and, with the unsustainable SF appreciation coming to an end seemingly – that is another reason prices will likely fall here.
Maybe this was held as a rental in which case depreciation and such would have raised the return a bit.
But, either way, the emperor has no clothes it seems and folks are maybe realizing that.
The interesting thing is how this might impact pipeline projects, relatively small ones such as the 33 condo project at the edge of Jackson Square or the 10 story condo project proposed for close to Market/Van ness.
Or for that matter the cluster of condo towers developers and the City are trying to foist on SF at Market/Van ness. A slowdown puts, or would put, all in questionable status. Which is good for SF if not for developers.
Do you honestly believe that Indianapolis has better prospects than San Francisco?
I am using Indianapolis as an example. There are other similar markets such as KC, Jacksonville, Dallas.
I think these markets have better prospects than SF if one is an investor or a young person looking to relocate.
I think these markets have better prospects to emerge as multi-industry business centers with much more healthy jobs/housing mixes than SF.
This is in the context of housing prices falling some in SF and growing pricewise not so, so much faster than other more economically diverse job and population growth markets such as mentioned above. KC has been growing 7% plus a year recently.
This IMO will put a damper of SF price increases and once rate are raised that will add to that damper. Historically, modest rate increases have not resulted in home price decreases. Counter-intuitive but not really if you think about it.
However, in markets such as SF at historically high unaffordability levels relative to local incomes, a rate increase does have an impact.
According to the US Bureau of Economic Analysis (namelink), the KC MSA real GDP grew by 2% between 2013 and 2014, which is lower than the national average of 2.4%. Moreover, from 2007 to 2014 the KC MSA real GDP grew by only 6%. And KC MSA’s average real GDP growth rate over the past 10 years is 1.2%.
the prospects for SF looks pretty good from my viewpoint. Its gowing and industries here are booming. Its still by far the center of tech. Its also one of the top 2 biotech centers, and both of those industries are growing. We still have the most venture capital, have the best weather in the country and is one of the top areas for outdoor activities. If I were a young highly educated person, there’s very few places i would rather go. An it is still affordable with multiple roommates for young people.
How the hell would a no-go on C’s/M’s units of housing be good for SF?
Actually, SF recently passed Indianapolis in population, per the 2014 US Census. SF has definitely grown faster than Indy for several years.
FWIW, Indianapolis has more than 7 times the land area of SF. SF would have to incorporate all of San Mateo County down to about Atherton/Woodside/San Gregorio to be as large as Indianapolis.
A more apt comparison would be the Indy MSA vs the SF MSA. The SF MSA is half the land area, more than twice the population, and nearly 4 times the income. And the SF MSA adjoins the Santa Clara MSA which is also much wealthier than the Indy MSA. The Indy MSA borders on cornfields.
There is no “2014 Census”; there IS, of course a 2014 Population Estimate.
Since the SF-OAK-SJ MSA borders on San Joaquin and Sacramento counties, it too borders on cornfields (and ours are better than theirs, I bet)
According to the US Census (Bureau), in 2014 SF had more residents than Indy. That is the most recent and reliable data AFAIK.
Now if you think there is some insight to be gained arguing about whether the annual population count done by the US Census is a “census” or only the decennial population count is a “census”, then have fun playing with yourself.
Have you ever BEEN in Indianapolis, Dave? I mean, your Oakland boosting is one thing, but now INDIANAPOLIS?
two adjoining units on the twenty-second floor of the Four Seasons Residences to create a 3,600-square-foot “super unit,” with three parking spaces below
Parking on the 21st floor seems very impractical.
Buying adjacent units, gutting the units, never finishing the renovation of the combined unit, then selling the shells of the units individually is not an investment strategy. How much the owner loses or makes on the two units does not reveal much about the larger market.
It may not be an investment strategy, but the lack of interest at the asking price may be an indication of the population of “greater fools” active in the market.
@Jake – The KC gdp grew by 2.9% in 2014 vs 2.2 % for the US. KC is a magnet because it is a diversified economy. Insurance, finance, IT, manufacturing and health/biotech.
I am using KC as an example.
Better examples are Dallas and Houston.
Dallas is the 9th largest city in the nation with a population of 6.3 million in it’s MSA. It’s the fastest growing city in the U.S. and it is expected to expand to 9.3 million by 2030.
So Dallas is already larger than the SF MSA and after 2030 will overtake the SJ and the SF MSA’s combined. Based on current projections.
@Moto – sorry SF is not the tech hub – that is in Silicon Valley. And young folks being happy to put up with roommates just to live here? That works till about 30 and then its like – is this where I wanted or expected to be at 30 with a high paying job?
Its not the best climate. Its one of the best, yes, but the SOCAL coast is better – and San Diego.
The problem is cities like Dallas and MSA’s such as Dallas are far less fragmented than the Bay Area. Not all, just using Dallas as an example.
So we have SF fighting to get a BART line down Geary which is absurd. At a regional level a BART line down the Peninsula makes far, far more sense. Or one between WC and Dublin.
The infighting in this region will hurt it relative to other more cohesive regions. Over time. Office construction, major office construction, in the upper Bay Area belongs in Oakland and not SF. SF has not the capacity to absorb many more jobs. it is ludicrous, IMO, to pursue that. Transportation and other issues make that obvious but no…. the infighting/rivalry within the Bay Area community of cities prevent that from happening.
Just saying.
i couldnt disagree more with almost everything you said. and I mean Everything you said. its like you are a satire parody poster
No, actually I am a realistic and look at the trends and numbers.
turn your computer screen right side up because you are looking at the numbers backwards
Dave Dave Dave. How to put this……I know you believe many things, but you are wrong on them.
Your claim that Oakland is the center of the Bay Area tech economy is based on nothing. Nothing. Obviously, there is more than one hotspot. SF is one, SJ is one, Cupertino, Sunnyvale. Oakland is like 15th on the list. Now is it possible that it will emerge as The Center Tech Place To Be in 30 years? Sure. Many things are possible. But there’s just no evidence of it and in fact all of the evidence is pointing the other way. (Have you heard of Apple’s huge real estate purchases in Oakland? You haven’t because they don’t exist. Are you aware of Apple’s huge real estate purchases in San Jose in the last year?)
I did not claim Oakland is the tech hub. I said the tech hub is “in the Silicon Valley” in reply to someone who said SF was “by far the center of tech”.
Oakland has the 3rd highest rate of violent crime in 2015 of any city over 300K people, ahead of Baltimore. it is not going to be the center of anything productive anytime soon.
Dave, earlier you claimed KC “has been growing 7% plus a year.” Now you claim it grew by 2.9% in 2014. Don’t know where you get your stats, but the US Bureau of Economic Analysis (BEA) is the primary source for these stats.
According to the BEA, in 2014 the KC MSA GDP grew by 1.96% in real dollars and the US GDP grew by 2.43% in real dollars. I have the official spreadsheets downloaded from the BEA website in front of me. BEA makes them very easy to find as their home page (bea.gov) features links to the national and msa datasets. Only takes a minute to download and see for yourself.
The reality is that the KC MSA has been a laggard for a long time. Your thoughts on the matter seem no more cogent than your grasp of the stats.
As for the Dallas-Ft Worth metroplex, well if you like fragmented and spreadout, that’s the place for you. Like the Indy MSA, the Dallas MSA is much larger in area than the SF MSA. It is so large that it is much closer in size to the SF CSA, which includes the Santa Clara MSA, and is roughly what most people mean by the Bay Area. I got nothing against Dallas-Ft Worth, have had good times and done business there, but they don’t have anywhere near the income levels of SF, or the SF MSA, or the SF CSA. The Dallas MSA income (household or per capita) isn’t even in the top 20, while the SF and SC MSAs are among the highest. I’m sure the Bay Area is ok with growing a little slower than Dallas while still growing much richer than Dallas.
I was referring to population growth. Then you mentioned GDP growth so I mentioned 2014 GDP MSA figures
Then you were wrong about both, as opposed to being wrong about the same thing twice. Here are the relevant population estimates from the US Census (Bureau):
Kansas City 2010 population = 459,787
Kansas City 2014 population = 470,800
Kansas City 2010 to 2040 population grew by 2.4%
KC MSA 2010 population = 2,008,342
KC MSA 2014 population = 2,071,133
KC MSA 2010 to 2014 population grew by 3.08%
Notice both KC and the KC MSA have annual growth rates well below 1%.
In case anyone harbors the illusion that this tepid growth rate is a recent issue for Kansas City, KC’s peak decennial population was in 1970. It went through a decline in the 1970s along with many other cities with large manufacturing segments. Not unlike what SF went through in the 1960s and 1970s with the decline of the port.
Plenty of evidence SF has figured out how to move beyond it’s mid-20th century peak, not so much evidence KC has.
Jake, you seem to assume the income levels will remain much higher here forever. That is a dubious proposition.
Tech is already spreading to other areas. The Silicon Valley is not guaranteed to retain its share of the tech industry going forward. With workers looking for less expensive areas and “in” cities like Seattle and Boston offering that to young tech workers, I think its inevitable Silicon Valley will see changes over the next decades.
My point is the prices in the Bay Area seem to have hit a ceiling and may fall. The disparity with other metro areas will decrease over time. Not a year from now or 5 years but a decade plus out perhaps it will be more obvious.
There was a time not too long ago when a young couple working in retail, Safeway, could buy a home in SF. I know as neighbors down the street did that in 1980. Today they point out it would be impossible for two retail clerks to purchase here. Short of a trust fund fronting them 400k or 500K as a down payment.
Change is inevitable.
Dave, you do just make things up don’t you. I haven’t assumed anything about “forever” in my posts on this thread. I’ve mostly just listed established facts. For most Socketsite readers and subjects “forever” is not the timescale of interest.
I’m not going to bother to guess what “tech” means to you. But in the real world, technology of all kinds is world-wide, with some distinct clusters and local specialization. Diffusion of technology is a human trait, perhaps even a pre-human trait, not some new thing.
FWIW, Silicon Valley lost most of it’s manufacturing base long ago. Just checkout a map of superfund sites to see where they used to make computer chips and such. There are still computer chip and hardware company HQ there and many of their highest paying jobs are there, but they do the dirty work elsewhere in less desirable locations in Asia, Oregon, Texas, etc.
In the dog-eat-dog world of tech, the dogs of the Bay Area have been eating choice cuts since Terman and Shockley. That’s generations of world leadership and fat profits, not just a few years. Plenty of reasons to think the Bay Area is nowhere near it’s historic peak and that it will continue to be a world leader for many more years, probably for many more decades, perhaps even for generations.
Prices in the Bay Area and in CA generally have a long history of boom and bust. And people have been complaining about prices in SF since 1849. The more recent ~40 year pattern for SF and the Bay Area has been a boom with RE prices increasing 50-100% followed by a recession with a 10-20% decline, big upside, modest downside, over and over again.
BTW, I’m not a fan of Safeway. If Peter Magowan made the money to buy the Giants or to build pacbellpark by underpaying his workers, I wouldn’t be at all surprised.
Change may be inevitable, but Dubious Dave is quite evitable.
I choose to remain dubious. Coincidentally I listened to a real estate overview yesterday for the country. Someone asked about Silicon Valley. The speaker said just because it is the center of tech now don’t assume it will always be. That its status as such can’t be sustained if the area remains increasingly unaffordable to tech workers.
Silicon Valley is among the largest tech centers in the world and may be the leading computer tech center, but there isn’t one place that is “the center of tech,” not now certainly, and not likely ever. People that talk/write that way are either ignorant of the variety of technology and/or the magnitude of technology diffusion or aware and intellectually lazy. Maybe that is you, maybe your sources, maybe both. When you demonstrate an ability to be other than dubious (not to be relied upon; suspect; likely to be wrong), then there may be a basis for thinking it is a choice, until then it seems more likely a feature, an ingrained feature.
UPDATE: Another Million Dollar Cut for That Four Seasons Super Unit Shell