Exceptional West SoMa Loft Finally Secures an “At Asking” SaleOctober 2, 2020
Purchased for $1.135 million in March of 2015, the “exceptional TOP-FLOOR” unit #28 with “soaring double height ceilings” in the award-winning brick & timber live/work loft building at 380 10th Street returned to the market priced at $1.199 million this past April, a sale at which would have represented total appreciation of 5.6 percent for the condo on an apples-to-apples basis.
The 1,550-square-foot unit “in the thriving SoMa neighborhood” features an “open flexible floor plan on two levels,” with an upper-level master suite, two full baths, a bonus space “ideal for an OFFICE,” and a designated parking space in the building’s garage.
And having been reduced to $1.149 million in May, to $1.100 million in June, to $1.099 million in July, to $1.049 million in August, and then to $998,000 on August 23, the resale of 380 10th Street has just closed escrow with an “at asking” contract price of $998,000 but down 12.1 percent from the first quarter of 2015 on an apples-to-apples basis.
Comments from Plugged-In Readers
Hope the buyer enjoys the $850/mo HOA
Keep in mind that the HOA fees for the unit, which are currently $827 per month, includes building maintenance, grounds maintenance (there’s a roof deck), homeowners insurance and management of the building, along with all water and garbage bills.
In Diamond Heights Village, the HOA on a 2 bed is $200 less and you get Earthquake Insurance, a pool and gym.
Yeah, but then you’re stuck up in Diamond Heights.
In SoMa, “grounds maintenance” usually also includes daily (including Christmas Day) cleanup of public sidewalks and private areas around and accessing the building to clear filth, feces, trash. Usually involves a pressure hose too. Homeless wake-up service may be extra. Swabbing entry ways, lobbies (inside and outside the building) involves a strong cleaning solution, not just a mop and water. Takes a crew hours.
Wow. All those fancy schmancy condos in SOMA/Mission turned out to be disastrous investments. Glad I bought a single family home in the Sunset. Unsexy as it was.
While the condo market is more volatile, it remains a leading indicator for the market as a whole.
And in fact, the average sale price per square foot for single-family homes in the Sunset is down around 6 percent over the past six months alone.
If these SOMA/Mission condos get cheap enough, it’s time to buy again! Use that equity from Sunset, buy, buy, buy.
(still Way too expensive right now)
If you bought with the plan to rent it out, yes. If you’re buying and living in it, with no plans to leave, then the jury is still out.
Owning an expensive home (relative to the cost of renting) is not an investment. An investment is something that cash flows. Or, in Silicon Valley, will cash flow… some day. A personal residence might be a store of value but it is not an investment.
I see this pattern a lot. The owner thinks they bought 5 years ago, so they should be able to get at least their purchase price, plus the real estate commission and transfer tax. Thus, the 5.6% added to their original price in the original listing. “Maybe someone will fall in love with it like we did,” they hope. A bunch of gushing realtors tell them, sure, no problem: multiple offers. The market then tells them that’s not gonna happen.
In the end, they lose ~$200K with taxes and fees. So many of the new listings are just fantasy. Had they faced reality in March, they might have limited their losses to $100K-$125K, but they weren’t ready to accept that, and chased the market down.
I’m sure there were some realtors telling them to price it correctly from the start, and they kicked them right to the curb. $200K is gonna leave a mark.
They did get to live there for 5 years. Was it worth potential 100-200k loss, maybe, maybe not.
The non-deductible property tax, HOA and mortgage interest cost them about as much as the rental value. That money was already gone, THEN they forked over $200K after tax dollars.
You can think of it as if they essentially enslaved themselves for a year. They paid all of their income for a year to the government and the prior owner just for the privilege of moving in, and, THEN paid full rent for that year and the rest of the time while they were there. Pointless.
tipster, I don’t doubt that some sellers of condo units like these mindlessly add 5.6% to their original price and expect to get it, but in this particular case I think the sellers were just the unlucky.
Unit #26 in this same complex was listed in January for $1,199,000 and sold a month later for $1,313,500, for a 2.2% per year gain. #22, also a 2 bd, 2 ba unit that went on sale soon after the Stay at home order went into effect, sold in July for $1,300,000 for a 3.0% per year appreciation.
So I don’t think adding five or six percent to their purchase price was pie-in-the-sky thinking by the sellers or that their agents didn’t pay attention to what the comps were telling them when they were providing advice on the asking price.
Long term, and I’m talking 10-20 years, I think this buyer probably did very well for themselves. Western SoMa will continue to replace industrial uses with mixed use projects, improving the safety/lighting/landscaping/restaurants/cafes and general desirability of the area. The homeless situation will eventually reach a breaking point and a Guiliani-type moderate mayor will come in. I”m bullish on Western SoMa long term, mostly due to location combined with the above.
I’m 64 and have no time to wait for the myopic weaponization of “compassion” in SF to implode fully enough to be rectified. I’m taking all my money and moving to Hawaii. Very low property taxes for residents there.
From Camp Agnos to the present, the homeless problem is not improving in San Francisco, and waiting or expecting it to, within the foreseeable future, is a fool’s errand. While moving to Hawaii is desperate, there is another approach. One can buy, according to one assets, an acceptable residence in a neighborhood without homeless, in the City or nearby, and live a “quiet life.”
It is the same sort of solution available to an investor who despises the San Francisco leftist approach to rent control: if you are Mom & Pop, buy elsewhere, or stay away from real estate altogether. It has been repeatedly proved that Trump would be a far richer man if he had simply invested the money his father gave him in a S&P index fund.
The best way to enjoy living in San Francisco is to arrange your life to avoid the problems that are here, especially those which are unlikely to change in your lifetime. This seems like common sense, but it is amazing how many San Franciscans deliberately place themselves in the middle of the City’s known handicaps. And then complain.
Agreed. I live near the Panhandle and the homeless situation does not impact my daily life at all. Parks galore, ride my bike to the beach, easy freeway access for a day trip. I’m always mystified at people putting all of SF into one bucket. Avoid the quadrant of the city including the Mission/SOMA/Tenderloin and you’ll have a great time.
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