Completely remodeled by Zack | de Vito Architecture in 2016, the “spectacular Noe Valley home” at 725 Duncan Street, which features “stunning Downtown, Bay, and Bridge views, paired with dramatic modern architecture and design,” sold for $4.1 million in January of 2017.

The modern 3,200-square-foot home was then further upgraded, with the addition of a custom designed gas fireplace in living room, a designer staircase and railings, high-end wood panels in the kitchen and a whole host of other functional (closet) and cosmetic (landscaping and tile) additions.

And in June of 2018, the upgraded home returned to the market listed for $4.25 million and re-sold for $4.1 million, representing total appreciation of 0.0 percent since January of 2017 (not accounting for the six-figure cost of the aforementioned upgrades and despite the fact that the “median sale price” in San Francisco was “up 29.7 percent!” overt the same period of time).

Last month, 725 Duncan Street returned to the market anew, priced at $4.295 million, a sale at which would have represented total appreciation of 4.7 percent since the fourth quarter of 2018 / first quarter of 2017.

And the re-sale of the move-in ready, four-bedroom Noe Valley home, which is “warmed by luxury design elements” and features a “seamless indoor/outdoor flow,” has now closed escrow with a contract price of $4.15 million, representing total appreciation of 1.2 percent since the fourth quarter of 2018 / first quarter of 2017 on an apples-to-apples basis.

At the same time, the Case-Shiller index for Bay Area single-family home values has increased 21.5 percent since January of 2017, including a 5.5 percent bump from November of 2018 through August of this year.

Comments from Plugged-In Readers

  1. Posted by ST

    When you are up there in the $4M range, it is hard to turn a profit, unless you get really lucky. I have a friend who is currently in escrow to purchase a $3.5M SFH, and the flipper is losing $500K on the flip…

  2. Posted by Brahma (incensed renter)

    The seller sold the house for a little over what they paid for it, a little over two years ago. Two years is what I, as a non real estate agent, non flipper, not a person in “the real estate game” would call a short-term hold. The seller managed to not lose money in nominal terms, selling into the face of a pandemic. That is a win for them.

    • Posted by SocketSite

      Profit and appreciation are two different things. And in this case, the seller’s transaction costs, which typically kill the profitability of short-term holds, were likely around $300K (not accounting for any holding/opportunity costs, nor utility, along the way).

    • Posted by qt

      Brought in January 2017 for $4.1 M and sold in November 2018 for $4.1M. The SF Housing Bubble Peak in 2017.

    • Posted by qt

      BTW, the Pandemic occurred in March 2020. So no where near “selling into the face of a pandemic” since they listed it in June 2018. They brought properties hoping to flip it and the renovation took longer than expected. Not to mention the renovation costs, transaction costs, and holding costs, they lost quite a bit. With that said, they still got lucky. Imagine if they try to sell it now.

      • Posted by sparky-b

        we don’t have to imagine, it recently resold for $4.15m. Above the height of the “peak”. And of course the renovation and holding cost were done by the person who bought it for $1.05m in 2013.

  3. Posted by loftlover

    Zack | de Vito Architecture is my favorite architect in San Francisco. This place is simply breathtaking. I’m sure the owner really enjoyed living there.

    • Posted by emanon

      It’s nothing but a cookie-cutter example of every current design trend highlighted on SocketSite.

      • Posted by RA

        Say what you will. I’d be happy to live there. Looks beautiful. Just send me the $4,000,000. I have the $ .1 million.

        • Posted by loftlover

          @RA I’m with you. I wasn’t having a great day today, and I just came back to Socketsite a few times to look at it because it made me?. There is nothing better than seeing great design, materials, and artistry come together to build a beautiful home. Mr. de Vito, hats off to your crew.

          • Posted by sockettome

            de Vito is a she – Lise deVito

  4. Posted by doaner245

    So if I’m reading this right this you have a bunch of real estate speculators trying to make a profit by buying and selling this property three times over the last three years? No one is really trying to make this house a home? That’s kinda sad because it’s a nice house.

    • Posted by Cave Dweller

      Housing is art. Trophy Art – keep it clean, painted and photogenic. It’s all fun and games when everyone is making money!

  5. Posted by Jim

    There’s another Zack | De Vito house at 3526 19th Street which is on the market. The lot previously had a one-story “garage/residence” (shack) which was sold in 1999 for $507,000 and demo’d without a permit. The current 3574 sq ft structure (single family house with au pair, addressed as 3524 and 3526 19th St) was custom built for a client in 2002. In 6/2007 it was cited for being used as unpermitted short-term rentals. There is a rental listing online for $9950/month “taken off market 12/18/2017.” Current asking price, $5.995m, or $1677/sq ft. Somewhere along the line, they dumbed it down by painting out gorgeous wood cabinetry in the kitchen, master bath, wetbar, etc. Probably the current realtor since white box is the flavor du jour…

  6. Posted by TS

    Engineers will specify ballast to either offset wind uplift or provide UV protection to prolong the service life of the membrane. The sparse river-washed stone on the roof in the last photo is doing neither. I wonder if there was more and it was blown off due to the low curb heights or it’s an optical illusion and there is soil or fill under the stone.

    • Posted by sparky-b

      That river rock was not Engineered. A SFH home engineering plan is not going to count on some rocks for any of their calcs. The rocks are there to distract/absorb standing water on the “flat” roof that doesn’t get over the seam of the roofing (as one example). I do think there probably used to be more of them.

      • Posted by tipster

        Those rocks are the type of thing my decorator would have me put in to cover a plain ugly roof. I doubt it was more than that. And she’d tell me to make them sparse, exactly the way they are.

  7. Posted by Cave Dweller

    Out of curiosity — based on the visible finishes, could someone be kind enough to provide a cost break-up (guess) estimate:

    1) Land Lot cost
    2) Materials cost
    3) Labor costs
    4) Engineering/Permitting + other soft costs

    I expect #2 to be generally in-line with costs with rest-of-the nation (perhaps minor variations). Just curious to see the spread between input costs vs listed price.

    • Posted by Ohlone Californio

      1. That lot? meaning, a view fixer on Duncan? ~2M.
      2.”Materials” ? everything from concrete to steel to hardwoods to sheetrock to finishes? I roll this answer over to point 3.
      3. Labor? A good contractor will cost a consumer $625/sq ft, so ~2M to build that property.
      4. 250K: carry during construction, engineering, permitting, architect

      You could not build this house now, in this market, if acquired for market price, and expect to turn anything close to a profit IMO.

  8. Posted by soccermom

    #1 $2mm+ – View lot in Noe Valley

    #2 $2.56mm = $800psf*3,200sf Labor + Materials
    Not really meaningful to separate labor vs. materials as contractors bid plans.
    If an owner starts wading in to buy the materials him/herself, asking for trouble and a bigger bill. Also, your assumption about costs vs. the rest-of-the-nation doesn’t really hold up when the supply chain ends in the SF Bay area. There’s no arbitrage with buying ready-mix concrete and rebar in Peoria and trucking them to Noe Valley.

    #4 $300k ($200K design, $100k permitting).

    #5 $X?k Actually finding a vacant lot in Noe Valley, and/or wading through 2-3 years of getting permission to tear down a small house and replace it with the house you want, fighting neighbors, fighting the planning department.
    +/- Well over $5mm and 2-3 years to recreate this.

    • Posted by TBK

      1) Let’s say you can find a lot for $1.5M … good luck.
      2) $700 – $800/sf is accurate
      4) No architect will work on a house like this for less than 10% of construction cost. Not in SF, having to deal with the ridiculously time consuming permitting process.
      5) As Soccermom points out, the carrying costs are substantial and need to be considered (rent + construction loan payments, minimum 12 months construction if things are slow, more like 18 – 24 months when things are busy)

      • Posted by MistressPants

        While we are playing this game, what’s the typical price per square footage for a high-end luxury renovation in Pac Heights or Russian Hill? We have been quoted over 1k (not a new build but high end renovation by home owners)

        • Posted by soccermom

          Sounds about right.

          • Posted by sockettome

            If new construction is $800 per square foot – how is a renovation 1K per square foot?

          • Posted by Cave Dweller

            @sockettome — my guess is starting clean is lower overhead than tearing down existing structures. Though there is time cost to starting clean and time saving when working with existing permitting in place. My guess is that +$200 overhead is cost of time in a high labor demand situation.

            There seems to be no significant labor cost arbitrage .. thus far anyway. But if the owner has the patience to put into the foot work, maybe they can outsource the build job to someone from say Sacramento or elsewhere?

            I don’t really know .. but the time arbitrage seems plausible to me.

  9. Posted by Cave Dweller

    Thank you soccermom & Ohlone Californio

    Looking at homes with similar finished elsewhere (outside of SF/CA), at a cursory glance, it seems similar finishes can be had for $300 or less (labor+materials). I am guessing bulk of the finished cost is also because of higher labor costs, yes?

    I am amazed at the $2M cost for lot. Exactly why is it valued so much?

    In my (outdated) thinking — I tend to arrive at costs based on rent potential. Alternately another argument could be made about earning/opportunity potential because of residence in that particular area. But there seems to be another potential at play here, which it seems is speculative/subjective ..?

    For a similar sized lot in the neighborhood without the views, how much would that cost?

    Also why are the lots in SF with view so expensive in relative comparison to lots in San Mateo/Burlingame/Hillsborough (with similar-ish views) or lots on the coast-side (with better views)?


    • Posted by Ohlone Californio

      There is a fixer upper at 350 Day st which is the same size lot. It’s slated to close in a week. That will tell you what people are willing to pay for a similar Noe Valley address, except non view.

    • Posted by Anon

      Would you consider this a house with a view? It seems like you can only see something from the roof or upper rooms(bathroom/bedrooms).

      • Posted by Ohlone Californio

        There are downtown views from the front of the house’s main level. Look at the mirror reflection in the second image.

      • Posted by Cave Dweller

        Anon, in my limited opinion — this isn’t a complete view property. A sliver maybe. Because it doesn’t seem like its a direct view into the living room or the backyard. From the top bedroom (I assume there are two or three but only one with a view), its probably nice. But who spends all their time in the bedroom? It certainly is eligible to be a talking piece among new friends.

        Now this is a view. Its visible from all three floors of the residence and will be unobstructed. How much do you think this view is worth?

    • Posted by marxtect

      I haven’t seen it in person, but you won’t find these custom interior finishes anywhere in the country for 300/sf. Those are 1998 prices. A cheap flip could do a poor man’s version for that much. The quality of the exterior finishes appear to be more run of the mill, but I won’t get into it.

      • Posted by Cave Dweller

        Check out the homes in Santa Barbara/Pacific Palisades/Montecito etc.,

        You can get same or even better finishes for $300 sqft. So the big difference between those regions and SF is density of wealth and liquidity. I think cost of labor is significantly higher in SF owing to market demand and time cost. Also, the property turnover rate in those markets is significantly slower than in SF. I would also imagine their delivery timelines are also relatively relaxed.

        The contractor in SF will charge you more but he is also going to help you deliver the product in a timely manner — that has value from an investment and exit strategy, imo.

        • Posted by Ohlone Californio

          You’re going to have to provide examples of SB/Montecito or Pacific Palisades custom finishes for $300/ft. I doubt anyone here is swallowing that claim.

          • Posted by Cave Dweller

            Half acre lot with Ocean Views up and down, List price: $1050/sqft. Apply: 30% land, 30% views+location, 40% construction costs .. ~$400/sqft.

            Another one. Just go to Santa Barbara or Pacific Palisades MLS and search for available + sold listing in the last 6 months .. it’s right there.

            The finishes are way above and beyond in comparison. Do your research. Construction cost has always been overpriced in SF. A couple of friends of mine imported their construction labor from Vancouver, BC and had them housed locally for the duration of their project.

            If you are paying $600+/sqft you are paying to not deal with it and to get stuff done in time — that is really it, in my view.

          • Posted by soccermom

            The second house is a lot of bang for the buck, but those finishes are not at all comparable with the subject of this article. There is a lot of photoshop tuning in the photos and the kitchen has ikea cabinet pulls bolted on to East Star cabinets. I mean, I like it. The flippers are trying hard, but this house and your second example are not at all the same animal.

          • Posted by Ohlone Californio

            Yeah I was going to mention that but I switched off Socketsite and went full bore Election 2020 nerd. One of these things is not the same thing there, Cave Dweller Surely you see that?

            And I don’t know if I follow the quick math on the former, the Yankee Point property, either? Those aren’t $300/ft finishes. You’ve not made that point. “30% views location” ? The property sold for 900K back in 2014.

  10. Posted by Cave Dweller

    When I lived in San Francisco (1999 thru 2012) .. this was the undesirable part of the town!

    But towards the end I do remember Noe Valley being touted as the “hot” stuff.
    How things change!

    Thanks again Ohlone Californio

  11. Posted by RA

    I don’t think Noe Valley has ever been an undesirable part of town. Especially during that period. Maybe time to come out of the Cave?

  12. Posted by Cave Dweller

    a ruffian, i was once
    certain parts of town did provide twisted joy thence
    cost it did only a few pence
    for a swig, twig and loss of innocence
    mindless then of any consequence
    but now i reflect from experience

    It wasn’t too far from mission. For sure there was a lot of shady stuff going on in the mission back then. But i really don’t know how much of that crept into surrounding neighborhoods or specifically into Noe Valley. Its likely that I am being prejudiced and I could very well be wrong. It was a neighborhood i didn’t much care about then – that much I remember.

  13. Posted by Jim

    When I moved to SF in 1977, I moved to Noe because it was cheap. It was very very shabby. An old Irish/German working class neighborhood that had gone out of fashion. 24th St was a dismal collection of outdated shops and not a decent restaurant. Noe is where all the young people in my office moved because it was what they could afford. Then the gays moved in….

    • Posted by Cave Dweller

      Maybe a lot of people don’t know – in the lower Noe Valley was a super active hedo-scene which was a strictly “invite-only” affair. Whole bunch of interesting stuff in that “fear & loathing” kind of vein. Lot of wild children, you could say the fore bearers of a certain festival in the desert. But you wouldn’t know them from other people because they blended in well during work hours.

      This was why all the hedonists (well, I was young) hung out in Mission or around there for their hijinks. But only so since we could keep our “play” away from our homes and business elsewhere in the city. Then the gays had to come in and be all fabulous about it. When the gays moved in, initially it was a great dating scene for both LGBTQA+ and straights. Then the tech-bros got the wind of it ..

  14. Posted by alan foden

    Sure, great looking house but if you have that kind of $$ why ? You still have to put up with a city in decline, walk the neighborhood and that ask yourself, how many homeless crazies will I see to-day?

    • Posted by Ohlone Californio

      One does not encounter homeless and/or mentally ill folks walking around in Noe Valley, actually. Do you really know what you’re talking about here? Or are you merely repeating a rote dis you saw someone else say somewhere?

      • Posted by techie

        But if you don’t leave Noe you may as well be in a cheeper suburb somewhere else.

        • Posted by KOBking

          What you are saying is that someone who hates the city shouldn’t live in the city. That’s obvious.

          • Posted by alan foden

            I hate what it has become ..thanks to the progressive idiots who run the city

      • Posted by alan foden

        I guess you have not been there ..Ohlone (?)…I lived on 24th street take a walk and see for yourself.

        • Posted by Ohlone Californio

          I am there on that street all the time. All the time.

  15. Posted by Cave Dweller

    I agree with Alan Foden. If I were an investor, I would be looking at rate of return and risk diversification for that kind of money. Should I invest $850K on a single property or would I better off diversifying across a portfolio with different levels of risk in different geographies?

    For $4.25M acquisition price, it would need to sell it at $4.5M to just cover the selling costs (@ 5%) and break even. At about $15K/Month (approx — assuming 4% interest) carrying cost, assuming 6 months of listing time, that is another $100K on top of $4.5M. The longer it sits on the market, a bigger hole it is burning in some one’s pocket if the market isn’t appreciating.

    This property would need to sell atleast $4.75M (approx) in a year to just beat inflation and recover interest on $850K down.

    Seems super risky to me. But what do I know, I don’t have that kind of money to play with.
    If anyone think I am being stupid (which I usually am), feel free to correct me.

    • Posted by Ohlone Californio

      You’re not being stupid. But some people want to be in Noe Valley, SF, in a great house. I bet this house rents for 15K a month at least. Over two years that’d be at least 360K spent. I mean, here’s a similar home in the same area basically asking 22.5 a month.

      • Posted by Cave Dweller

        5B/5Ba at $22.5K = $4.5K/Br+Ba that is a tad bit hit for single bedroom with shared common spaces.

        Assuming 30% after taxes spending for rent, it would require about $70K (after taxes) in monthly income or about $1.4M income (pre-taxes) between a couple. I don’t see a double-income no kids couple spending that much for rent. I also do not see double-income with kids spending that much when they could carry a $2-$4M homes in San Mateo/Santa Clara/Alameda with top notch schooling.

        Coming to the above property, assuming $15K for 4B/4Ba .. $3750/Br+Ba still high for split rental but can be managed. Then again the owner would be barely surviving and is carrying risk (disproportionate to potential income), imo. I am just using rough guesstimation on the conservative side. I think the numbers will be much worse (for whoever is carrying) if examined closely with a critical eye. Btw, I forgot to add property taxes. +$4K a month. Or $5K/Br+Ba .. that is just too expensive for anyone who wants to save some money.

        But then again, I am speaking from a place of being unable to afford that much and I certainly don’t have that level of income. So I could be wrong.

        • Posted by Ohlone Californio

          You’re speaking from the standpoint of someone with good income and a balanced financial plan. You’re not speaking for someone who does all the same things and also has X amount of capital and wants to live in a nice part of SF and can afford to send his or her children to the SF school of his or her choice. . Split rental? no, not applicable. Why go down that road? I’ve shown you how the same home could have potentially cost more in rent for the past two years. That’s it.

          • Posted by Cave Dweller

            It seems patently expensive — for what benefit? What does that kind of rent deliver in terms of physical comfort, social connections? I don’t follow the logic here. Why not go live in Tiburon/Belvedere, Hillsborough or San Mateo and ride a helicopter (or maintain a personal chauffeur) to the city and still save money?

            I can understand paying that kind of money in rent if it were a kind of place that improved social graces and/or improve social standing. But Noe Valley (imo) has less social weight than say Pacific Heights and living in a box home like that for that kind of rent, doesn’t exude a positive value statement.

            It seems to me the strategy here is one of hope of prices rising so as to be able to make a profitable exit ..that also seems to be the case after examining the history of the property above.

          • Posted by qt

            There is a difference between asking price and paid price. SF rents are 30% down YOY. Tech companies are allowing WFH and many are allowing it permanently. At this point, it’s safer to speculate in the stock markets then to try to be a real estate investor in SF.

          • Posted by SocketSite

            San Francisco rents are not down 30 percent, year-over-year. At least not on average (or yet).

    • Posted by wilson

      I think what made this worthwhile in the past was appreciation. Look at the 625 Duncan apple from 2014 that the editor posted up top. 21% per year appreciation for 3 years.

      At a $4.25M acquisition price with that kind of appreciation you’d be looking at some serious profit. 21% per year really is eye popping, but I heard anecdotes back then of some lesser but still very large yearly gains. Now in this market with 1.2% total appreciation over 2017, I agree that the math didn’t work so well.

      A 79% total 3 year gain back then vs a 1.2% 3 year gain really shows you how much the market has shifted. And this property and the bernal one that also hit 2017 prices are both 4 bedroom places in nice hip areas of the city. Many of the other apples now look to be 2015 or below.

      • Posted by Cave Dweller

        RE in SF is largely a game of musical chairs. The real story is what happens when the music stops. This is pretty much the conversation we are having in this post.

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