Purchased for $1.21 million in November of 2015, the 1,003-square-foot unit #303 in the classic Russian Hill building known as Bellaire Tower (1101 Green Street) returned to the market with a $1.195 million price tag this past August.
Five weeks later, the list price for the “light and bright home” with “ample windows overlooking the neighborhood and Golden Gate Bridge” was reduced to $1.095 million, a sale at which would have represented depreciation of 9.5 percent for the unit on an apples-to-apples basis over the previous two years.
And this morning, 1101 Green Street #303 was listed anew as “an opportunity to own coveted 2 bedroom / 1 bathroom condo in San Francisco’s iconic Bellaire Tower” for $988,000 and with an official “1” day on the market, and no reductions, according to all industry stats.
Keep in mind that a sale at asking would now represent “apples-to-apples” depreciation of 18.3 percent for the Russian Hill condo since the fourth quarter of 2015 as the conversion of the former one-bedroom into a two (notice the now enclosed archway between the remodeled kitchen and former dining room) occurred prior to its purchase in 2015 while a contract price of $988,001 or more will now constitute an “over asking!” sale.
Once again, if you think you know the market in Russian Hill, now’s the time to tell. And yes, this is the building atop of which former Mayor Gavin Newsom once lived.
The common charges are a killer. $1253/month for what was a spacious 1/1 and is now a less generous 2/1 with a (sorry) awful 1980’s, cheap kitchen remodel.
That monthly payment, if converted into a mortgage payment would yield about $250 K in principal.
That $250K plus the ~$1M in purchase price could get you (very close to) a nice 2/2 in one of the neighborhoods with common charges a fraction of these.
The HOA fees were $1,162 a month when the same unit in the same building and the same neighborhood traded for $1.21 million in 2015.
Makes sense. A little over 3% escalation in fees per year.
I know photographs don’t really capture the feeling, but I don’t get “light and bright” from these images. More like “boxy and low ceilings and dark”.
Terribly staged, as well.
i wonder if the new tax reform will hit properties in this price range especially disproportionately. the person buying this is likely to have a salary where he pays right around ~10K in state income taxes, which makes all of his property tax non-deductible. The monthly total of HOA + property tax is gonna be about $2300 (with annual increase) all of which is non-deductible, making this less attractive to own than before.
Unless of course the buyer was hit by the AMT anyway, which means their SALT deduction was already limited or eliminated. There are some potential buyers just below the current AMT threshold that will now be priced out. But my uneducated guess is that there at least as many new buyers generated by the substantial cut in top tax bracket rates that were already SALT-less thanks to the AMT.
hm, good points.
How do you figure? A buyer of a $1M place probably makes ~$250K, which means his CA tax liability is probably ~$20,000. If her income were closer to $140K, her CA tax liability would be ~$10K.
I would wager that the vast majority of Bay Area homebuyers (not necessarily homeowners) pay at least $10,000 in state income taxes.
of course there’s a wide range of possible financial profiles of the buyer here. with stock options (or simply appreciated stock investments) and other windfalls i tend to envision buyers commonly having more than a minimum down payment for these condos. but i agree there’s a good chance most buyers here pay more than 10K in SIT.
Lets do some math with this. Assuming a 1,000,000 sales price at a tax rate of 0.012 yield an annual tax of 12,000 a year (1,000 a month) + ~1,100 for HOA.
Simply the monthly tax and HOA for this unit is 2,100 or a burn rate of over 25,000 a YEAR! That only assume you pay cash and won’t even include bank interest on a 20 percent down loan. You are better off renting at these numbers.
And as a side? Why is this HOA so high? I would assume there is an elevator which would cause the spike but do they employ a doorman as well? These HOA prices generally go with gym facilities and other perks which I doubt this facility has.
For clarity, the seller’s listing says the HOA is $1253/month.
Old building that is costly to maintain is my guess in pristine condition is my educated guess.
A well maintained older building with a doorman. Also parking is done offsite with valet service, which is a nice experience, but not cheap. A cell antenna on top offsets some of the expense. These are my recollections from looking at a place years ago, so I could be mistaken. IMO it’s a nice place to live, especially since the upper units have fabulous light and views.
With a couple of exceptions, I can’t imagine that some of these grand-dame buildings aren’t going to take a hit. Newer units in slightly less attractive areas just offer more amenities, better floor plans, more reasonable hoas, and just lighter and brighter living spaces. It’s a trade-off I’d wager more people are going to be willing to make as particular addresses start to lose their cachet value…
The cheap remodeling will definitely hurt this unit’s resale value. The new kitchen looks dated and tacky. What I assume was a nice dining room or den has been converted into the tiny second bedroom. The bathroom looks cheap and unattractive. The whole remodel was a flop, which is a shame since the building is elegant and beautiful.
The photographer needs to invest in a tilt-shift lens for external shots instead of hurting our eyes with ridiculous perspective correction in Lightroom.
On a building this tall you’ll still get whacky distortion with a T/S lens. A less distorted photo could be made by flying a drone half way up and shooting straight on. But that is probably illegal.
$960K. Down $160K from my original guess. Owner is racking up non-deductible property taxes and HOA to the tune of $2400 per month, plus another $2000 on his mortgage after taxes and will be more desperate to get out. If he dicks around, he’ll be out another $15K in those items alone.
The loss of property tax deduction blasted $105K off the sale price at current mortgage rates, and it didn’t sell at 1.095, so it’s worth something south of 990. His ask of $990 is not really lower than his ask of 1.095 two months ago and he didn’t get that.
He’ll be out something like $220K. His total after tax cost on this unit will end up being close to $12,000 per month.
Does your math include the assumed remodel costs?
The Bellaire is an Uber-trophy building attractive to many an Art Deco aficionado willing and able to pay the price. The views, location and the fact they don’t do buildings like this anymore assures its viability.
Then why hasn’t it sold already, if not the price being too high?
Because you can still live in the poop-addled Mission for twice that. Idk, things are wacky right now.
20% off 2015 and it still didn’t sell.
UPDATE: Conversion in Classic SF Tower Fetches 22 Percent under 2015 Price