While the list price for the Mission District penthouse unit #504 at 3590 20th Street and Valencia (a.k.a. the “V20” building) has been further reduced to $2.398 million, which is now $197K below the $2.595 million which was paid for three-bedroom condo back in July of 2015, it appears to a reader across the street as though the unit was just de-stagged but without a reported sale.

At the same time, the two-bedroom V20 unit #205, which was purchased for $1.625 million ($1,461 per square foot) in mid-2015, has been on the market for three months without a sale despite a $1.549 million ($1,393 per foot) price tag.

And block away, the list price for the two-bedroom unit #206 at 3500 19th Street, which was purchased for $1.8 million in early 2014, is now down to $1,699,000 or $1,092 per square foot.

15 thoughts on “Sub-2015 Pricing in the Mission Take Two (or Three)”
  1. Wait til 1 or 2 VC’s decline to fund or add funding to a few start-ups and there will be a cold chill rushing through the property market…… Especially as peep’s are buying at such inflated prices…..

    1. The VCs turned the tap off years ago. You should watch Tech Crunch’s “The down Round”. BUT, Have you noticed how tech companies are making very very real and solid earnings? Apple is going to crush the fourth quarter.

      Amazon just signed a 180k sq ft lease downtown in SF.

      1. There are the FANGs and everyone else. Apple is in a different universe than any of the thousands of startups in the US, e.g. SNAP and APRN.

      2. But right now we have frothy startups, multi-billion dollar money losing companies, low interest rates, price momentum and Apple & Google. No one is predicting a future without Apple & Google, but the weakening or loss of all those other factors is sufficient to impact prices significantly.

        Apple is certainly one of the best tech companies out there, with great market position, huge profits and real technology. Does the market see this greatness and grace Apple with a P/E of 1000x or 500x or even 100x??? No! Even after a gangbusters quarter Apple gets a fairly humdrum PE of 18x, just slightly higher than average. The error in “bubble logic” is that valuations can become completely untethered from reality. And you get people paying far far higher valuations for far far worse companies.

        Are many of these condos the “Apple”‘s of the condo market? At just slightly higher then US average valuations?

      3. What, no mention of local startups like Hampton Creek? They’re crushing it, absolutely crushing it, raising some $220 million from top venture capitalists over the six-year life of the company.

        What’s that? Oh. From Bloomberg, Target Begins Removing Hampton Creek’s Products From Stores: “Target Corp. said it began removing all of Hampton Creek Inc.’s products from its stores, a potential blow for the food startup.”…The Target spokeswoman said the company received allegations of food safety concerns as well as accusations of manipulation and adulteration of Hampton Creek’s products. She said one concern involved reports of pathogens found in a manufacturing facility used by Hampton Creek. Target also received allegations that Hampton Creek products had tested positive for salmonella and listeria. Target said it hasn’t confirmed these allegations.”

        Like they say in the blogosphere, go read the whole thing.

  2. I’m surprised nobody has tried to blame the unit yet, you guys are slipping. Maybe it’s the bad layout, or the ugly curtains, or it’s not as nice as that project down the block? Fact is, the easy money spigot has been turned off, and at the same time, SF has lost it’s lustre for a lot of people. The party is not over yet, but the beer has run out and the band has stopped playing.

    1. I saw this unit when the building first opened. It’s five blocks from either mission bart station, and no muni lines nearby. Joking. The roof deck is awesome. That said, my guess is the finishes didn’t age well and now looks mismatched and cookie-cutter. The ceiling height is modest. Plus, the HOA fees are probably ridiculous, without corresponding amenities like swimming pools and doorman like some of the SOMA buildings.

      This would be okay value at 1200/sq ft, not the listed 1333 sq/ft. At 1200, you can get some really nice older remodeled condos with high end finishes, that just age better than the junk they are building these days.

    2. They’re caught in a bind: they can’t blame location for this one like they often do, because Mission/Valencia is ground zero for the ZIRP-induced wave of gentrification that the RE/banker boys and girls are riding, like Slim Pickens on the bomb, waving his Stetson, or Robert Duvall on a surfboard, oblivious to Charlie…

  3. Supply and demand plain and simple.
    Lots of new condos in the last 5 years, prices now declining slightly.
    Very little SFH construction, prices still going up for those.
    Bottom line, buying and reselling a commodity like a cookie cutter condo in less than 2 years is a great way to lose money.

    1. Supply and demand, yes. But maybe not that simple.

      Not too long ago people were wringing their hands that prices were going up in spite of new supply being added. In fact many people started opposing new development because they saw a correlation between building new units and rising prices. But then, as now, correlation is not causality.

      The demand for $1M condos which people expect will go to $1.6M is insatiable. The availability of supply pales in comparison to the demand component. If you were selling $10 bills for $5, you could hardly run the printing presses fast enough.

      When the gale force tailwind of price momentum dies down, that’s when the trickle of supply becomes more significant. And that’s one of the reasons that it’s unstable for prices to stay flat at this high level.

      Suppose that #504 gets a buyer at $2.6M and other similar units get similar results for a while. Buying a $2.6M condo with the associated high property tax, interest payments/opportunity cost in a flat market is not a great investment, which removes a huge component of demand. But it’s still a high enough price that it’s very motivating for builders to add supply at this price point and for owners of existing units sitting on large appreciation to cash out.

      At some point the slow trickle of supply, among other factors, causes wide spread price declines. And a $2.6M condo on the down slope has a very limited appeal. And negative price momentum then builds up into a significant headwind!

      Plainly supply and demand, but the slope of prices has a huge effect on demand!

  4. its just nuts that people were paying pac heights prices to live in the mission. Its almost guaranteed that the [people] paying $1400/sq ft were newly wealthy and new residents of SF and probably under 40. No one in their right mind who knows SF would’ve paid that for this location. It was $600/sq ft just five years earlier.

Leave a Reply

Your email address will not be published. Required fields are marked *