Purchased for $4.94 million in June of 2016, the 3,600-square-foot, 4-bedroom Noe Valley home at 481 Jersey Street returned to the market priced at $5.6 million this past February, a sale at which would have represented total appreciation of 13.3 percent for the “exceptional modern home…on one of the best blocks of Noe Valley” over the past four years.
In addition to “well-proportioned living and dining rooms,” which “flow harmoniously into the kitchen and lounge area,” there’s a south-facing yard with an “outdoor kitchen, gas fire pit, and secluded spa with a hot tub.”
And having been reduced to $5.4 million in June, the sale of 481 Jersey Street has just closed escrow with a contract price of $4.95 million, representing total appreciation of 0.2 percent for the exception home since the second quarter of 2016 on an apples-to-apples versus “median price” basis.
The Case-Shiller index for Bay Area single-family home values was up 22.5 percent over the same period of time while the “median sale price” in Noe is up over 40 percent (!) since mid 2016, driven by mix not values.
Can’t wait for the agent crowd to dismiss this datapoint on the basis of a light fixture or wood stain that’s “so 90’s”.
I’m bullish on SF in general, but even I’ll admit this category of home is likely to struggle. Many families have been holding out in SF because one or both parents have to commute into their downtown / SOMA office five days a week. Assuming even a 3 in office / 2 at home split, many will opt for their suburban dream home in a place like Orinda with more space, better weather, and high quality public schools.
This home is also way too fancy to be converted into a rental for young people, which I think is a viable path for more moderately priced SFH’s.
This is a nice home. I like it and I can imagine a small family (2+2) being quite comfortable. But I would not be able to justify $4.95 million for this home even if I had that kind of money. I’d be curious to hear the “pitch (or advice)” the buyers get when spending this kind of money for a home like this. I wonder what the exit strategy is for the new buyer. A hope and a prayer the market doesn’t crash further? Or is this a case of “look at that $450k deal I got!”
The exit strategy is for the new buyer to commit to living in the house and paying down the mortgage (unless they paid cash) for substantially more than four years. If they decide to move sooner than that, they will probably be looking at some kind of a loss.
I am beginning to the see the logic here. $300K/yr for rent — assuming the said occupant provides a high level of value to any of the local tech companies.
If the house appreciates in 4 years — take profits or keep it if the said local tech company does well.
If the house depreciates — write the loss off as increased rent payments against the loss in down payment and move on. Small speed bump.
I am just making a guess that who ever will occupy these homes will probably bargain rent/mortgage payments as part of their base salary package. The downside is limited but the upside can be substantial if the market moves up.
I recently bought an SFR not too dissimilar to this one. I have 3 kids and eventually plan to go back to work in the South Bay and my wife may go back to work south city. We love the East Bay but decided it would be too far to commute. Peninsula had a lot more baby for the buck but the lack of diversity and soul made it too hard to make the jump. Plan to stay for 10+ years after which we will look to downsize.
A hefty down payment means that our $2M IO mortgage @ 2.65% costs about the same as our old $625K 15 year mortgage. Biggest difference is the 4X+ increase in property tax.
@freeloader Congrats on the new home! I’ve also been running the Interest Only math with a big down payment vs a typical fixed rate mortgage. It’s pretty enticing especially if you have some prudent investment opportunities for the monthly mortgage savings. I’m wondering if you could share your LTV and the bank you used. No worries if you rather not, but thanks in advance!
First Republic. If you include a $500K HELOC, it was 60% LTV. One of the reasons I went with interest only is so that I can pay it and the HELOC down after I sell my condo.
What I don’t understand is why 537 Grove is still sitting even after a significant price cut. Looks very nice and Hayes Valley is a great neighborhood.
The I in DTI took a hike away from San Francisco — I think.
If It weren’t for wildly successful tech companies the last 2 decades and with all that increasing property tax revenues for the city/county, I just don’t see how SF can continue the way it’s been carrying on.
Maybe some people have wised up to what may be coming and fled to better parts wherever.
Priced at $4,750,000 in February and since reduced three times to $3,995,000 (as of two months ago), the “thoroughly modern home on a grand scale” at 537 Grove Street remains on the market without an accepted offer in place.
What “family” needs “more space” than 3600 square feet? I know, I know, a bigger patch of grass which you dump ever more scarce irrigation water on, but a statement like that is the same category of American consumerist gluttony that demands a 6,000 pound truck for trips to the grocery store. And I know at this price point we ARE talking the glutton caste, but still…
I hear you. 3,600 is plenty of home square footage for most modern families these days who don’t like dusty formal sitting rooms which never get used.
Yes, I’m referring to a bigger patch of grass, and also not having to pay 100K/year for private school between two kids because you don’t want to deal with the SF lottery system, especially now that Lowell HS is not merit-based.
I think “Consumerism Gluttony” is the desired and expected outcome. It is the engine that drives our economy/GDP. While also absorbing the inflation. Without that level of wanton consumption we cannot support the dual mandate of employment and price stability. The inflation in housing market is trickle down economics in action. The population displacement because of pandemic is economic dispersion from economic concentrations is also trickle down economics. These are all intended and expected outcomes of financial liberalism and economic progressiveness. If you disagree, do let me know.
Same goes for “green/LEED” construction on a 5000 sq ft home with 3-car garage in a city with many transit options.
Or my favorite….a “Green” 5,000 square foot house on a five acre lot in some air conditioning dependent, fire prone exurb like Seattle Dave’s beloved Camino or rural Sonoma County. “But it has a Tesla roof!”
in times like these where home prices have reverted to ~2016 prices, are homeowners who bought within the last several years, especially new condo owners, applying en-masse for re-assessment of property tax?
No because they are in denial.
Beautiful home, great locale, and high quality design. Wonder how a “Top-Drawer la 2020” domicile will endure through the ages, aka, say an art collector moves in. Where would the paintings all go? Nails in the art-installation-level-wood-accent-wall? What if, God forbid, someone wants to actually hang drapes someday? I’ve seen modern places in Palm Springs that go eclectic pretty well, but a look this specific….the whole great room thing might have a shelf date, and this sort of structure would take a lot of work to have any other ambiance than what it has right this second.
Similar to a lot of modern homes/remodels in San Francisco, it appears to have been designed for someone with not a lot of furniture.
or no kids
The home photos show several paintings have been hung throughout the house. You hang them on the white walls as shown in the pictures, not on the wood accent wall. And, who really has drapes anymore? But, you can easily install blinds. Also, the top windows are frosted, which negates the need for either blinds or drapes.
I think you are looking for problems that do not actually exist. Just say it’s not your cup of tea. It is not my preferred style either (I like a more traditional home), but I don’t see any issues with the place.
I appreciate interiors both minimal, old world, and eclectic, though admittedly it could be a challenge to have all in one domicile. Though indeed it can happen: the sets in the Sowden House in LA, for example, as seen in I Am The Night, showcase more architect-crafted spaces with a relatively respectful overlay of collectibles. Custom drapes can be quite a show, though, probably only for certain stages, though indeed I’ve seen them installed more minimally in better modern interiors, in box valence insets, etc. Not to crawl up on the drape cross too far, but even in reserved spaces, if crafted of wool, silk, etc, can lend eye-catching texture, and take the edge off noises and temperature extremes.
Am I the only one noticing this has either an illegal unit behind the garage, or a full ADU / 2nd unit on the ground floor? Kind of surprised Planning approved that. I wonder if the pricing assumes potential rental income down there…
Why assume it’s illegal? Why would you be surprised Planning approved a second unit, they (along with the Board of Supervisors) have been pushing hard for unit and not single family houses. It will be surprising in the future when there are actual large SFHs and not “lives like a SFH”.
It’s surprising because it is not listed as an ADU or second unit, and does not comply with the Planning Department’s “Rooms Down” policy – it has a direct connection to the public right of way, and there is a stair connecting it to the main dwelling unit that is easily blocked. To be legal it would need to either:
1 – Be completely disconnected from the main dwelling unit and registered as a second unit or ADU
or
2 – Have a visually and spatially open connection to the upper floors via a staircase that is not easily closed off by a door.
Alternately, they could convert the full bath on the ground level to a half bath, but as is it appears to be an unrecorded illegal unit.
I get that Planning is encouraging multifamily use in single-family zoning (and sometimes flat our coercing unwilling homeowners who are seeking discretionary review of larger projects), but it is not going to become common for SFH properties to have secondary units in SF without major changes to the residential real estate market, renter protections, and permitting. I served on a committee looking into how to encourage homeowners to develop these units, and it’s not financially viable for most people, given the outrageous cost of construction here. The timeline for payoff on the investment is a decade or more, and that ignores the fact that most people who can afford a SFH in SF don’t want to be landlords to tenants in their own building.
It’s not like they snuck the plan past anyone. This was a vertical and horizontal addition, so a full review and 311. Plus it was DR’d. So, it seems like the planning department looked at the connection and no sink/kitchen down different than you. You can have a full bath down.
And what I am talking about is new applications that are similar to this one, so not a situation where a finished house has the outrageous costs of adding a unit. I am saying the permits for vertical and horizontal additions will now be required to have a sizable second unit. Then at sale it will say things like, “Buyer could take permits forward to design two condominiums or perhaps 2-units that function as one home. Also could work as-is by an owner-occupier with rental income from the second unit.”
It has all the charm of a citibank branch.
I was one of 8 that lived in 4400 SQFT 6 bedroom/4 bath home on the Peninsula. It was on a .25 acre corner lot. We felt like we were drowning in space. We sold the place in 2003 for $1.85M. It’s now zillow-valued at $4.5M. I think my parents paid $80K for it in 1960.
I’m also now gazing at the 3 story, 5400 SQFT home next door, on a hill in SF, and on a double lot. Only 2 people and a dog have ever lived in it. Then they moved to Palm Springs. It’s been empty for 3 years. I hear it’s a Pocket Listing but perhaps the $5.8M listing price is scaring folks away? Hey – it has a great yard and views galore!
They applied for the permit all the way back in 2008 though. Much has changed wrt ADUs and second units since then.
For those who prefer a more traditional look and feel: Upgraded Home Drops Below Its 2015 Price.
This house just sold for asking