Purchased for $575,000 ($832 per square foot) in 2006, the buyer of the one-bedroom unit #533 at the Palms (555 4th Street) was in default with over $270,000 in past due payments and fees owed at the end of 2015.
Listed for $785,000 ($1,136 per square foot) in May of last year, a buyer failed to materialize. And in September, 555 4th Street #533 was foreclosed upon with no bidders at $724,466 ($1,048 per square foot) in cash on the courthouse steps.
Listed by the bank’s agents for $730,900 ($1,057 per square foot) at the end of last year, the asking price for #533 was reduced to $697,000 ($1,008 per square foot) in January.
And as of Monday, the list price for 555 4th Street #533 ($664,900) is now back under $1,000 per square foot ($962), with an assigned spot in the building’s garage and a couple of televisions (that weren’t worth moving) thrown in for free.
Awful photos. Geez. Hire a professional.
What’s the point? It’s a pretty generic floorplan.
Exactly, my thoughts also.
Hey, they said take a photo. It’s a photo.
I know, I do the same thing with my dating profile on Tinder. Just took a selfie of myself in the bathroom stall at my office. But I think Tinder must be broken, ’cause I’m not getting much interest. I mean, the way something’s presented in photos on the Internet doesn’t matter right? It’s what’s inside that counts, that’s what Mom said.
I prefer to see property in its natural state w/o staging. The homeowner buyer market for this unit is long gone. At this point, sophisticated buyers/investors make purchase decisions based on numbers. This portends other likely foreclosures for others who bought at the peak.
Maybe folks are seeing that the emperor has no clothes – as in the poor value one gets for the money in terms of the actual housing stock. Buyers seem to have been generally willing to overlook that when the prices were going up at almost double digits every year, but no longer – given that condo appreciation has significantly slowed and is likely to be flat for the near/medium term future. .
This is no harbinger. This is just a weird outlier where someone managed to make no payments for 10 years before finally being foreclosed. The mystery is why it wasn’t foreclosed about 8 years ago. What is that story?
Unit 534 sold for $565,000 in 2006 then sold again for $740,000 last July. Even peak of the bubble buyers of a subpar place like this did just fine in the long run (although they got hammered if they had to sell during the crash). There isn’t going to be some new run of foreclosures of 2006 purchases because 99% of them could just sell today for about 30% more than they paid.
The real take home here is the lack of buyers at even $730k. Every seller has a story, but when the market was hot buyers swarmed on everything. Last July was last July, now is now.
And it’s hard to know if this was an outlier without more detail. During the last boom there were all kinds of crazy loans, Loans that started at greater than 100% LTV, Interest Only and Negative Amortization. Could be a balloon payment, could have hit the NegAm cap. There was also a few waves of mortgage modification pushed by the government to try and fix the last mortgage crisis. It was far from unusual for modified mortgages to fall back into default and be re-modified one or more times. There were various voluntary and not so voluntary foreclosure moratoriums due to the robosigning and other bank scandals.
565 in 2006 is worth 683K in today’s dollars, according to the CPI calculator.
So in real terms, this is a decline of about 3%, which isn’t much, but I wouldn’t say it means that the buyer in 2006 did fine. Of course being listed for 665K doesn’t mean it will sell for that much, so we’ll see.
Finally, there is a lot of similar inventory in better buildings, so I can see how in 2006 this unit might have been worth more than in 2016, because there was less supply of these types of units, without this generalizing to, say, properties in Nob Hill.
Point is that there is not going to be some new wave of foreclosures from 2006 bubble peak purchases. Look at 2315 Divisadero St, just closed. Purchased in October 2006 for $935,000. Worst possible timing as this was right at the peak of the bubble. Yet it just closed for $1,250,000, up 33%. Kitchen was remodeled so call it about 30%, kept up with inflation plus about 10% beyond that. Not a recipe for mass foreclosures. Certainly not the greatest investment ever, but even those who bought in SF at the very peak of the bubble have done fine 11 years later.
Sure, the foreclosure crisis dumped a lot of inventory on the market, but that doesn’t mean that this is the only way to increase supply. We have a lot of these SOMA condos now without any foreclosure crisis — probably more for sale condos in SOMA today than in 2009-2010.
The buy/rent decision on a unit like this heavily favors renting in a flat or down market.
How is one able to rack up $270K in past due payments and fees before getting foreclosed upon? Did they just stop making mortgage payments two years after purchase?
Exactly!!
We don’t know the terms, of course, but even w/ 100% financing and a sub-prime rate – both of which are consistent w/ defaulting – this sounds like 4 or 5 YEARS worth of payments.
Could it be that some sort of balloon payment was missed/not refinanced? I’m not sure where to find all of the loan details. $270k is too much to rack up for this place.
If you ever take a look at the paperwork for a subprime mortgage that went into default, the details will astound you.
I helped my neighbor organize her documents so she could file for bankruptcy in 2007. When such a loan goes 30 days late, the servicer starts tacking on fees, penalties and interest, and then after the second late, partial or missed payment, starts tacking on fees penalties and interest on top of the amount in arrears which of course includes the previously applied fees, penalties and interest. And from there it just snowballs until the amount of accumulated fees, penalties and back-interest swamps the original payment’s principal and interest.
How about HOA fees? Is this really worth more than 400k??
It’s worth whatever its purchase price is.
i would take a look at this unit if it got below $500K. Im sure there are buyers at $700K, but its kind of a garbage building
Looks depressing. Limited natural light.
I think another part of the story is a convergence of the price/sqft differential between new construction in large condo buildings with high HOA fees, and remodeled condos in smaller 2-6 unit older buildings.
Someone will buy it.
Perfect for the young bizdev or programmer person who works at a startup (or Apple) from 8a-8p.
Perfect for any High Earner Not Yet Rich individual looking to set aside 50% of take home in mortgage payments for next 30 years.
So what? Isn’t it their decision to make?
Spoken like a banker who knows the gummint will [bail] him out when the loan goes bust.
If I was a HENRY, shouldn’t mortgage as % of my take home decrease after 3-5 years?
Hahaha, HENRY, Im going to causally slip that into conversation today.
Depressing.
if the next sale price does not cover both the amount owed to the bank and the HOA delinquency fees, who will get paid first? assuming the bank gets paid first, does the HOA have any mechanism to recover the fees?
Even if the bank gets paid first, I think they have to pay the HOA fees that are due. Whoever buys it next should make sure the HOA isn’t going to come after them for any past due amounts.
Once the bank forecloses and is the winning bidder, the asset is theirs and the remaining debt is gone. They get what they get and they don’t have other recourse. The money is applied based on chronological seniority. If they bid the amount they were owed, then this wipes out all subsequent liens, including in most cases an HOA claim. If an HOA lien was not wiped out, we would assume the bank is offering free and clear title (having paid off any outstanding liens) to a potential buyer, unless the bankers are being idiots.
The televisions are screwed into the walls, hence they are technically fixtures and part of the unit, unlike a television that sits on a coffee table, which is personal property. Same goes for your light fixtures, faucets etc. Consult a realtor, or someone who holds a real estate license if this distinction is unclear.
I was told by my realtor that with a condo, you own everything from the paint in. So I would not consider those TVs part of the unit.
That’s a separate issue from what’s considered to be a fixture.
If you were selling your condo with the TVs attached, you’d have to disclose that they weren’t included in the sale.
Whatever is the final price for this unit, it will set a comp. for other units in the building. As for HOAs, too many delinquencies in a particular building will hurt other owners and the HOA ends up with expending legal expenses to recover its fees or have to write them off (not good for existing condo-owners of the building.)
Transaction History
555 4th St #533, San Francisco, CA 94107
Transaction History
Transaction History provides records for the past ten years. To request additional information, please contact your local Sales Representative, Customer Service Department, or for an additional fee you may click here .
History Record # 1 : SALE/TRANSFER
Buyer: Wells Fargo Bank Series 2006-B Seller: Nbs Default Services Llc
Transaction Date: 09/14/2016 Sale Price: $724,466
Recording Date: 09/22/2016 Sale Price Type: Full Value
Recorded Doc #: 00000K332146 Title Company: Title 365
Document Type: Deed Transfer Vesting Type: N/A
History Record # 2 : FORECLOSURE
Recording Date: 05/02/2016
Recorded Doc #: 00000K239036
Document Type: Notice of Sale Vesting Type: N/A
History Record # 3 : FORECLOSURE
Recording Date: 12/24/2015
Recorded Doc #: 00000K181001
Document Type: Notice of Default Vesting Type: N/A
History Record # 4 : FORECLOSURE
Recording Date: 12/21/2015
Recorded Doc #: 00000K179338
Document Type: Release of Lis Pendens/Notice Vesting Type: N/A
History Record # 5 : FORECLOSURE
Recording Date: 11/09/2015
Recorded Doc #: 00000K154393
Document Type: Notice of Default Vesting Type: N/A
History Record # 6 : SALE/TRANSFER
Buyer: Mclaughlin Michael Seller: Kelly D Stevens Trust
Transaction Date: 10/22/2014 Sale Price:
Recording Date: 10/23/2014 Sale Price Type: Unknown
Recorded Doc #: 00000J965042 Title Company:
Document Type: Deed Transfer Vesting Type: N/A
History Record # 7 : FORECLOSURE
Recording Date: 09/19/2014
Recorded Doc #: 00000J952645
Document Type: Notice of Sale Vesting Type: N/A
History Record # 8 : FORECLOSURE
Recording Date: 11/19/2013
Recorded Doc #: 00000J785670
Document Type: Notice of Sale Vesting Type: N/A
History Record # 9 : SALE/TRANSFER
Buyer: Stevens Kelly D Trust Seller: Stevens Kelly D Trust
Transaction Date: 07/03/2012 Sale Price:
Recording Date: 07/03/2012 Sale Price Type:
Recorded Doc #: 00000J442017 Title Company:
Document Type: Deed Transfer Vesting Type: N/A
History Record # 10 : FORECLOSURE
Recording Date: 06/30/2011
Recorded Doc #: 2011 208114
Document Type: Notice of Sale Vesting Type: N/A
History Record # 11 : FORECLOSURE
Recording Date: 08/03/2009
Recorded Doc #: 2009 809940
Document Type: Notice of Sale Vesting Type: N/A
History Record # 12 : FORECLOSURE
Recording Date: 07/21/2009
Recorded Doc #: 2009 797100
Document Type: Notice of Default Vesting Type: N/A
History Record # 13 : FINANCE
Mortgage Recording Date: 08/07/2008 Mortgage Transfer Type: Refinance
Mortgage Document #: I625846 Mortgage Rate Type: Fix
Lender: Cardoza Law Offices Inc Mortgage Term:
Document Type: Trust Deed/Mortgage Vesting Type: N/A
Loan Amount: $15,902 Mortgage Rate:
Borrower 1: Stevens Kelly D Living Trust Borrower 2:
Borrower 3: Borrower 4:
History Record # 14 : FORECLOSURE
Recording Date: 07/02/2008
Recorded Doc #: 2008 606946
Document Type: Notice of Default Vesting Type: N/A
History Record # 15 : SALE/TRANSFER
Buyer: Stevens,Kelly D Seller: 555 Fourth Street Assocs Llc
Transaction Date: 06/20/2006 Sale Price: $575,000
Recording Date: 08/16/2006 Sale Price Type:
Recorded Doc #: I230155 Title Company: Chicago Title
Document Type: Deed Transfer Vesting Type: N/A
FINANCE
Mortgage Recording Date: 08/16/2006 Mortgage Transfer Type: Subdivision
Mortgage Document #: I230156 Mortgage Rate Type: Var
Lender: Bank Of America Mortgage Term:
Document Type: Trust Deed/Mortgage Vesting Type: N/A
Loan Amount: $460,000 Mortgage Rate:
Borrower 1: Stevens Kelly D Borrower 2:
Borrower 3: Borrower 4:
FINANCE
Mortgage Recording Date: 08/16/2006 Mortgage Transfer Type:
Mortgage Document #: I230157 Mortgage Rate Type: Variable
Lender: Bank Of America Mortgage Term:
Document Type: Trust Deed/Mortgage Vesting Type: N/A
Loan Amount: $82,541 Mortgage Rate:
Borrower 1: Stevens Kelly D Borrower 2:
Borrower 3: Borrower 4:
Can someone translate the above? It looks like the note was sold and then defaulted on again?
Has no one mentioned the fact that the building is undergoing litigation under SB800?
UPDATE: The sale of 555 4th Street #533 has closed escrow with a contract price of $626,850 or roughly $907 per square foot.