CFAH

As we outlined a few weeks ago, the 4-bedroom Bernal Heights home at 600 Gates Street was taken down to the studs, completely remodeled, and then sold for $1.720 million in August of 2016.

The “luxurious, comfortable home” features an open lower level with a separate entry, wet bar and full bath; an open kitchen and great room above; a main suite with a private rear deck; and a one-car garage with room for a workshop and direct entry into the home.

And having returned to the market priced at $2.095 million, or just $815 per square foot, last July, reduced to $1.995 million in September, and then lowered to $1.945 million in October, 600 Gates was then relisted anew for “$1.595 million,” a sale above which would be considered to be “over asking!” according to all industry stats and perhaps a “top overbids!” report or two.

The sale of 600 Gates has now closed escrow with a contract price of $2.060 million, up 19.8 percent on an apples-to-apples basis since the third quarter of 2016, representing average annual appreciation of 3.3 percent for the remodeled Bernal Heights home while the Case-Shiller index for single-family home values in “San Francisco” was up 54 percent over the same period of time.

And yes, the sale was officially “$465,000 over asking!” according to all industry stats (but $35,000 below its original list price).

Comments from Plugged-In Readers

  1. Posted by jenofla

    I guess this just goes to show what a mindf*** list price is these days.

    Why didn’t it sell at 1.95? Are all the buyers presuming everything is listed 500K low and limiting their search? It’s not like there are that many houses on the market in a specific neighborhood that you would have to do that, a serious buyer would check out the ones with price drops. Unless the sellers were in the same mindset back in Oct (expecting 2.3)? Or just no buyer (or two) surfacing until now? It’s like a family drama that only the people involved know.

    May all involved be happy with the outcome. The price seems reasonable for size, amenities, and location, the last which appeared not ideal per prior commentary.

    • Posted by wilson

      Or they just overshot the market in July and were saved by inflation.

      A rough look says that the $2.06 sale was about 3.5% over the $1.995 September list. Inflation was about 3-4% over that period. People fixed on nominal prices can get saved when inflation lowers real prices to what the market will bear. At the current inflation rate they could have even held on to their initial $2.095 ask and probably eventually would have gotten a bite. In the same way that inflation can lower salaries when companies are loath to make nominal cuts.

      Inflation since 2016 was roughly 18.2%, so responsible for the majority of the nominal 19.8% gain.

      • Posted by Never In Doubt

        Today’s reminder that the CPI ≠ housing inflation.

    • Posted by Sierrajeff

      > Are all the buyers presuming everything is listed 500K low and limiting their search?

      Roughly that’s what I was told by my realtor (who’s also a friend, i.e. so I trust her more and feel she’s being truthful). Not $500K per se, but more like things are priced 15% to 20% below where it will probably land. So if the max I can afford $1.25M, there’s very little point in me looking at things listed above ~$1.10M or $1.15M, because I’ll be outbid every time.

      The only caveat on this is that her statement was in February; with rate rises and market uncertainty (inflation, oil prices, war…) that could be changing.

      • Posted by SocketSite

        In terms of pricing, that’s been true for single-family homes, with the average contract price in January and February having run at right around 116% of list. For condos, the average sale in January and February closed at 105% of list.

  2. Posted by soccermom

    Yes, it’s funny that the editor here loves to mock and airquote the low-list high sale approach, but as a one off case study this home sale shows that as a strategy, listing low can work to the seller’s advantage.

    • Posted by SocketSite

      We’re pretty sure we’ve never mocked the approach per se but rather how “over asking!” results are reported, aggregated, and presented as anything other than a function of pricing, particularly when a “nearly $500K over asking!” result is actually below the original asking price (or at a real loss).

    • Posted by Jeff

      Low-list effectively sets up an auction, especially when combined with hard bid deadlines and counter-everyone. I believe it was an SF innovation around 2007 that spread to a few other metro regions since eg LA.

  3. Posted by The Milkshake of Despair

    A house on my block sold for an unusually high price last week. A few weeks earlier a similar “outlier” high price was paid for a similar house the next block over. I’m wondering whether we are seeing a rush for the entrances of buyers seeing affordability slipping away as interest rates rise.

  4. Posted by AY

    Just got a mailer from a Compass agent for a nearby home that “Sold for $740K over asking with 15 offers”. Haven’t looked to see how it was priced.

  5. Posted by Ohlone Californio

    There are a lot of pretty amazing apples happening nearly every day. Forty one eighty four 25th st is one, 477 Day another, 737 Castro, etc etc

Comments are closed.

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