Priced at $10.495 million in September of 2019, a subsequent $1.55 million “buildout incentive” failed to move the 5,223-square-foot penthouse shell #41B atop the LUMINA tower at 201 Folsom Street and the list price for the “spacious dual level corner home…that offers unique potential and 270 degree views” was then reduced to $7.995 million.
Further reduced to $7.495 million last year, the unit was then withdrawn from the MLS and listed anew with a $5.995 million list price two weeks ago, a sale at which would now be considered to be “at asking” according to all industry stats and aggregate reports (but is 43 percent below its original list price and expectations).
And with an official “13 days on the market,” again, according to industry stats, the penthouse shell is now in contract to be sold.
Everyone I know with money is leaving California/has left. 43% doesn’t surprise me.
“everyone” has left. Yet 90% moved to another spot in the Bay Area? Cry me a river.
This apartment was never worth $10.5 million.
Your own article says out migration from the bay area was over 50,000 people and about half of them were from San Francisco to somewhere out of the bay area. Nowehere did that article state that 90% of the people who left stayed in the bay area.
And the people who priced this apartment sold hundreds of apartments in the same building. I’m pretty sure they had a good handle on what things were worth and had no desire to lose $5M on it by mispricing it.
It’s not even an apartment. It’s a shell, so add at least another $700/SF for making it into an apartment. That may look like a steep price for an interiors job, but at this price point, doing anything less doesn’t make sense since there are much cheaper shells to be had.
That puts the finished product at over $10M when you take all the soft costs into account.
No way you’re doing the buildout for $700/SF. Working in high rises is slow due to everyone and everything traveling in elevators. High rise renovations tend to run 20-25% higher because of this, plus the buildings often have restrictive hours of operation, which can also extend the overall timeline.
Good to see that more people are looking into the USPS forwarding data. Since that data set has specific “from” and “to” addresses there’s a wealth of information there. It seems as though if someone was to cross check addresses with property records you could estimate how many movers were owners vs renters which would be interesting to see.
This shows again why looking at the broader Case-Shiller index is misleading for SF city. Anecdotally, this migration pattern is putting the squeeze on many people trying to leave the city. So many people targeting the clean&green parts of the bay area has made for stiff competition there for buyers and combine that with price weakness for selling in SF city puts many would be leavers on the wrong side on the market on both sides. If you bought in 2000, getting 2015 pricing for your place is just a little less icing on the cake. But if you bought in 2015/2016, especially with aggressive financing, you might find that the entire cake has disappeared along with the icing. Anecdotally, this is pushing some people to look to move further out.
It’s also worth pointing out that net migration from the wider bay area, which was already negative, nearly doubled. It would be nice to see a destination breakdown for that migration as well.
The exodus from the Bay Ara had started prior to Covid. The only reason the Bay Area had population growth (anemic) was due to immigration from other countries. What will be interesting to see is population estimates coming out this year for San Francisco – and for “boom” cities like Phoenix, Seattle and San Diego.
In Marin and Sonoma it is a seller’s market with multiple offers and above asking the norm. Sacramento prices are rising quickly as the exodus from the Bay continues. New developments are braking ground in the Sacto area that feature larger homes and larger lots – by Sacramento standards.
The trend of moving from the inner parts of a metro area to the periphery is not just an SF phenomena. As much as Seattle has seen its home price index surge, the further out counties have seen a larger increase. I have properties in Washougal which is on the edge of the Portland metro and the median price YOY increase per Redfin is about 20% – significantly more than Phoenix, Seattle or San Diego..
Looking further out for housing is a growing phenomena and especially with telework. People want larger homes, more land and space between them and the neighbors. San Francisco can’t/doesn’t offer that.
Of course not everyone who can is leaving SF. Many are however and, of those, some are moving to the other Bay Area counties, the Sacramento area and San Diego which had the third highest year over year increase in its home price index nationwide – after Phoenix and Seattle.
Condos are less desirable in the new emerging normal hence situations such as these and what is happening around the TTC in terms of condo prices. I suspect further price decreases in SF condos are coming as more jobs exit the city and there is a concomitant population drop.
not everyone is moving, as noted by this shell being in contract. That is the story here not another off topic discussion of Seattle Phoenix USPS and U-haul.
The “Well somebody bought it” argument that has been popping up recently is not really that useful except to attack the strawman that *everyone* is leaving SF. Just like the comment “I think even the fact this nob hill property sold is a sign that market is recovering,” for a nice place that went for 17% under 2015 price, this place that sold for 43% under original expectation (both post-vaccine) is providing insight as to what equilibrium between buyers and sellers will settle in at.
The big question post vaccine is if buyers will be rushing back or will sellers be giving up.
No one ever said EVERYONE is moving. It’s simply enough if a few % of higher earners move — and that ship sailed many months ago.
So you are saying a shell in contract at 50% discount is sure sign that someone is staying? Well, maybe though a shell does not a home make. Equally likely is that this is an investment and won’t be occupied anytime soon, may even stay a shell as it has for some time now.
By that theory any unsold shells are just investment tools as well, so they aren’t part of them market.
Everyone was already using “everyone” before I used everyone, so why didn’t you say this to Anyone else?
I also don’t think the % of sale of an unfinished shell vs. it’s various prices tells us anything. It was reduced to 7.5 in February of last year with restaurants and amenities. It sells for $6m and construction is much more expensive.
“I also don’t think the % of sale of an unfinished shell vs. it’s various prices tells us anything.”
But it seems that you and Ohone are always arguing that just looking at apples to apples sales is limiting. And ‘inthemarket’ and Ohone have tried to rationalize some of the price declines as due to losing the ‘new condo premium’ and general aging respectively. Here we have a non-apple and as a shell it’s hard to argue that it has gone out of date or suffered any wear and tear.
I think that apples provide a better look then something like this property, but since if anything the fashion has been to under list in hopes of generating bidding and over-asking results, I think a result this far under prior expectations tells you something.
wilson: yes you are correct on my take on Apples. I see them as if they were actually Apples to stretch a metaphor. Someone buys a new apple at the farmers market and holds onto it for a week and then go to resell it. Will this apple be worth more than the new apple at Safeway. The buyer may think the new apple from Safeway it much closer to the once fresh apple from the market, and if something is wrong with it he can return it vs. getting it second hand. Also there are other stores with new apples some are gala some are honeycrisp some are jazz. They are all new and not exactly the Braeburn from the farmers market but NEW. anyway, that’s enough of that.
On to the shell. Construction materials are way up, somethings are 70% up, labor is us 12% from a year ago. That is on top of the premium to work in a condo building like this and there is the additional time to get it built with COVID protocols. Then an over the counter permit takes over month and anything else takes ages. So it hasn’t gone out of date or have wear and tear, but it got a lot more expensive to carry and finish out.
But aren’t construction costs way up because in general the housing market is booming? COVID protocols are in place nearly everywhere. Anecdotally from people trying to buy fixers or just spruce up places in other parts of the bay or the country, it is turning out to be much slower and more expensive then expected. But that hasn’t translated to lower purchase prices in other parts of the country where demand is high.
wilson,
They are up for lots of reasons. Tariffs, Covid shortages, Workers Comp rates, are a few.
sprucing up aSFH fixer and a highrise shell are apples and oranges on many levels. One of them is a difference in the Covid protocol.
Anyone who can purchase an unfinished shell of a condominium for $6 million is clearly someone with a lot of money.
Which penthouse are we talking about here? The photos are for the North-East facing penthouse (the more expensive one), while the floorplan is for the South-West facing penthouse.
Unit #41B is the south facing unit and we’ve since removed the gallery for the penthouse shells (which did feature unit #41A on the northern half of the tower).
Have to ask why buy a condo downtown ? Until ( if ever ) downtown has “opened up ” ..restaurants, shopping and music venture etc. …
everything will be fully open by July
There was nothing in this neighborhood before COVID
Prospect, Waterbar, Epic Steak, Ozumo, Perry’s, Yank Sing, Boulevard, Angler, Anchor & Hope, Temple Bar, Local Kitchen & Wine……yep. That’s a whole lot of “nothing”.
Nice Berkeley Hills ($2m ish) is seeing tremendous interest and bidding.
All the boomers are so gloom and doom. (I honestly don’t know why the Seattle Dude is so obsessed with the predicting death of Bay area real estate. Are you in the market to buy or you holding a lot of property here?)
I am in the market now to buy in SF now, (i.e the name), so I’ve started looking. One of the reasons that I started to follow this website. The multiple bids and bid over asking happens on several units I looked at (basically any unit that don’t have major flaws are selling really fast). Obviously I am not looking at $5 million dollar shell units.
I think I mentioned before, this is will be the first wave of millennials who drive the rise in the market. (The last run up from 2012 to 2016 was not most driven by millennials, as the first batch entered job market during recession, and most didn’t have money, by 2016, most feel missed out. And many vowed to buy once market drops next time).
Even some of my friends who moved away when Covid first started are coming back flush with cash (saved while living with parents, or some vacation spot that are cheaper) looking to buy. The market is coming back fast.
Stop. SFHs will always be strong, everything else is cratering SF/SJ
Moving back, this is high comedy.
I similarly know people moving back into SF / already moved back. Not high comedy.
This is going to be very much an age bifurcation. Anyone in their 20’s or 30’s without kids will want to move in / move back. This includes young people in Walnut Creek who couldn’t afford SF (yes, they exist).
Of course many older folks / those with kids have bailed permanently or are trying to.
I call it a wash, for the most part. SF will just get younger. Don’t sleep on the young people who wanted to be in SF and never could until now.
I don’t think any young people will want to be in SF until we get clear signals of a return to normalcy including opening indoor restaurants, bars, music venues, and clubs.
i think its pretty clear we will be near or fully normal by July. we have 60% of >65 vaccinated and will have >60% of total population vaccinate by May. the 1st dose provide 85% protection. I think the bigger worry is about families moving out due to school situation (especially since school are talking about not being full time in the fall), and increasing crime, lack of cities focus on kids & families, and general state of street scene
I’m not a boomer – not sure if you were referring to me. I owned a fair amount of rental property in California but exchanged out in 2015 to rentals in the Midwest and the Pacific Northwest – mostly Washington. I am in the market to buy more but not in California. I own my personal residence in SF.
Investors should steer avoid the Bay Area but especially SF. The ROI is awful and future appreciation will not keep pace with the national average. If one plans on living in SF for an extended period that is a different story. Mortgage rates are historically low and if you can find a place that won’t break your budget then go for it. Don’t confine yourself to SF – the Oakland Hills offer incredible value for the dollar with large homes on large lots and spectacular views. Over time they will out-appreciate SF homes..
I am also not a boomer.
Thinking of the buildout someday…glad I’m not one of the neighbors!
What is so surprising? You think people want to live with their parents forever? Right now because of Covid, all the bars and social life get shut down, City offer no advantages over suburbs. But people are getting antsy, after all people are social creatures, especially younger people. Anecdotally, I had one friend who moved to Ohio, he tells me he is bored out of his mind, will start the move back as soon as he get vaccine. Another friend, who had decided to decamp to Hawaii (which was always a temporary move, he always had doing month to month, and his stuff in storage).
You must see that framing things as “living with their parents” vs “living in a SOMA condo” is a false dichotomy,
versus “everything else is cratering” ? I don’t think so. The time to buy a condo was two months ago. Seems like a lot of people on here really blew it.
125+ properties repriced LOWER in SF in the last month alone. Yeah, people really “blew it” — if their goal was to pay more. 240 Lombard #229 (name link) just reduced to about breakeven on a 2005 buy.
None of my new college graduate hires has any interest in living in SF. Every one of them is planning to leave the area within the next 6 – 9 months.
Or as we outlined earlier this week, the percentage of homes on the market in San Francisco with a reduced list price has ticked up to 22 percent which is 8 percentage points higher than at the same time last year. And with inventory levels up around 50 percent, year-over-year, that’s 135 percent more reduced listings in the absolute.
And now back to the penthouse shell…
So things are going to go lower, you seem to be trying to say as you talk past me? OK. We’ll see. I don’t rate that you’re conversant with the real estate aspirations or life plans of recent college graduates you say you’ve hired in some nameless sphere of work in some nameless field.
I’ll point out though that the point was “cratering.” Neither you, nor the editor, who once again felt it necessary to address my words as opposed to an ill-disciplined “cratering” comment, are arguing in support of “cratering.”
No, we aren’t supporting cratering, but properties are still sinking in price. 2151 Laguna St #2 (name link) just cost the owner about 25% of the purchase price — in 2016. Did the buyer really blow it and wish they had bought 2 months ago when the asking price was $100,000 higher than he or she paid? Doubt it.
Really? You cite that 2151 Laguna property, the talk of the town for a week or so, as it was listed for 2.995M, and sold incredibly for 4.5M? Come on. You’ve got this shell atop the thread, and the starkly different year over year construction markets it entails, and now here at the caboose your example. Two unicorns? not instructive.
Nobody is saying the condo market hasn’t suffered or that it is not where the deals are to be had . But here we are, at the beginning of the end of a black swan event defined by human proximity. And the argument was that condos will be cratering from here. Why? I realize that plenty of people will be on here talking about how the market is going to collapse just wait for it, just wait for it. But they’ll be talking about the next crisis, probably a banking one to come. It won’t be this.
UPDATE: Penthouse Shells Finally Trade, One Intended as a Flip