Listed as the most desirable one-bedroom with den floor plan at SoMa Grand, with a balcony and coveted “Views, Views, Views!” from both the living room and bedroom, 1160 Mission Street #1502 sold for $840,000, or roughly $1,100 per square foot, in March of 2014.

Returned to the market at the beginning of this year, the 764-square-foot condo was priced at $865,000, or $1,145 per square foot, a sale at which would have represented total appreciation of 3.0 percent over the past three years or a little under 1.0 percent per year for the Mid-Market unit within walking distance to Twitter and BART, but with a parking space in the building as well.

And yesterday, the sale of #1502 closed escrow for $863,000.

Call it total appreciation of 2.7 percent, or an average of 0.9 percent per year, since early 2014 for the coveted condo and likely front ended, which is why we’re currently on the hunt for solid 2015-era “apples” (email tips at SocketSite.com).

15 thoughts on “Coveted SoMa View Condo Fetches 3% More than in 2014”
  1. Another example of a poor result for the 2017 seller (transaction costs kill you) coupled with no bargain at all for the 2017 buyer. $1145/square foot for what is really the edge of the Tenderloin? With $673/month in HOA and $159/mo for parking on top of that. Seriously? That was Pac Heights pricing just a few years ago. Far better to be a seller than a buyer in this market, and I don’t see any indication that will change anytime soon. But at least prices are just inching higher rather than zooming higher.

    1. That was SoMa Grand pricing just a few years ago, as well. Or at least within 3 percent. And do you really believe that 3 percent was straight-lined over the past three years and condo values are currently inching up?

      We’ll note that the new condo pricing index has inched up 3.5 percent since early 2014 to today. Of course, having zoomed up 17 percent from early 2014 to the third quarter of 2015 it has since declined 14 percent. But it’s still up versus 2014!

      1. SocketSite: can you do a post/analysis of condos in the east bay/oakland? I live in pacific cannery lofts in west oakland….there are a few condo/townhome developments in the area, and since July 2015 (peak insanity in SF) it seems that prices are up 10% or so across the board, and rising. each new sale in my building surprises me – they keep going up! its much more of a microtrend there (west oakland is changing fast, new condos/townhomes being built), but it is totally bucking the SF trend…

    2. Comparing this listing today versus Pac Heights pricing just a few years ago is the best way to talk yourself out of ever owning property anywhere. You can’t become a seller if you don’t buy first. Enjoy your rent receipt wallpaper if you stay in one place long enough to acquire enough to cover a wall.

      1. Well, the 2014 buyer ended up paying about $6000 a month (after tax breaks) to live in a 764 sf 1 bedroom at the edge of the Tenderloin. Had they rented instead of buying, they would now have about $60,000 or $70,000 more in their pockets. Buying at 2014 prices or even higher 2017 prices certainly does not guarantee being able to laugh at those “dumb” renters several years hence.

        1. Buying a home in SF is problematic now. IMO. If one can afford it, if one plans on living there for 6 or more years then go ahead. If not then, IMO, its better to rent and perhaps invest in a rental property in an affordable and up and coming market.

  2. San Francisco appreciation has certainly moderated however in general prices are still rising. We will see what happens after a bunch of the IPO’s on tap come to market. I would expect we may see meaningful additional price increases.

    However, take a look at the comps on the Peninsula and Oakland coming into March. Peninsula properties are trading 30%+ versus 2014 prices (wow) and this place in Oakland near the Rockridge BART station go for over $1,000/sqft. Peninsula is taking another sickening (or exhilarating) move upwards, particularly in the tier 2 locales like San Carlos, Redwood City, and Sunnyvale. Pretty incredible.

  3. This is an excellent Rent v. Buy calculator.

    The $6k a month figure is way off. Based on the calculator, the break-even point is about $4300 for a 3 year horizon, 20% down, 3.67% mortgage rate, 1% buying costs, 6% selling costs, 3% appreciation, and $800 a month carrying cost. All reasonable in 2014. A single/couple who can afford this place likely has a top marginal tax rate of 35-40% due to State taxes. I used a 38% figure.

    In short, I think this family did better buying than renting even if the property did not appreciate. It was a good gamble in the end.

    1. A couple things to keep in mind:

      1. The conforming rate was closer to 4.3 percent at the time of purchase. Of course, a shorter-term mortgage with a lower rate could have been employed.
      2. The appreciation in this case was 1 percent per year, 3 percent total.
      3. A closing cost of 1 percent would be well below average.
      4. The HOA’s alone were $830/mo.

      And we’re not sure what you selected for the cost of capital/opportunity cost, but the S&P500 and Dow were both up over 25 percent during that same time.

      1. Correct. And don’t forget transfer taxes and insurance. Opportunity costs on the down payment (at a conservative 4%) is about $565/mo. Using realistic numbers, you’re pretty close to $6000/mo. actual TCO. Probably lost about $2000/mo versus renting a tiny (although nice) place like this in a sketchy neighborhood.

        1. An opportunity cost of 4 percent would have been beyond conservative in this case. Figure an asset allocation of 70 percent stocks/30 percent bonds for a typical buyer of a one-bedroom, which would have yielded a blended average opportunity cost of closer to 6.5 percent per year on that down payment money.

          1. @anon, hoa, taxes and insurance are covered in the calculation. Transfer taxes are paid by the seller. Keep in mind with condo buildings, the building insurance is covered by the HOA, and the interior insurance is usually not that much more than renters insurance. I pay $1600 a year for a 1600 sq ft. condo

            @socketsite: A 70 (stock)/30 (bond) split is not a conservative allocation if you don’t have other conservative investments. In other words, if the entirety of my life savings is 200k and I had a choice between stocks (returning 6.5%) and owning a home (returning 1% or less), I would probably still choose owning a home. For someone with other property, assets, or investments, a 6.5% opportunity cost makes more sense.

            Sorry, I said 3%/yr appreciation in my post, but the calculations were based on 1% per year. I put in $800 for HOA.

            How are closing costs more than 1% for a buyer? Are you counting points?

            In any case, I redid the calculation using the numbers you suggested including 4.3%, 20% down, with 2% buyer closing costs. Break-even is $4800. 4.3% mortgage seems high to me for a conforming loan. I got a 3.875 conforming in mid-2013, and 3.625 jumbo in late 2015. Also, if your horizon is only 3-5 years, it would have made more sense to go with a 5 year ARM.

            These calculations caught my eye because I am in a similar situation.

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