The multi-level South Beach loft unit #5 at 340 Ritch Street, which features dual catwalks, designer finishes and a private sunroom with access to the building’s rooftop deck, returned to the market priced at $1.129 million this past July, having been purchased for $1.125 million in September of 2017, as we outlined last month.
In addition to nearly 1,500 square feet of living space, the unit comes with an assigned parking space and secured storage in the boutique building’s garage.
And having been reduced to $998,000 at the end of August, the sale of 340 Ritch Street #5 has now closed escrow with an “over asking!” contract price of $1,005,000, which was 10.7 percent below the price the condo fetched in the third quarter of 2017 and within 6 percent of its value in the fourth quarter of 2014 ($950,100).
At the same time, the widely misrepresented Case-Shiller index for condo values in “San Francisco” is 18 percent higher than in September of 2017 and 44 percent higher than in the fourth quarter of 2014.
Seems like good unskewed pricing by the realtor if it sold within .7% of the asking price. Loss seems commensurate with city wide downturn in condo pricing. Who crowed about “over-asking!” ???
The unit sold for within .7% of its reduced asking price. It was actually priced by the realtor at $1.129 million, or roughly 11% more than it fetched, this past July, as outlined above.
Seems like the realtor and the seller worked together to get the best outcome.
Obviously the seller would have liked to obtain a higher price, but after a reasonable amount of time on the market, the offer was repriced. I might have followed the same strategy had I been the seller.
If there is a better way of determining price discovery for an illiquid asset in a rapidly moving market, I would love to hear your ideas.
I would say this was a job well done by all in disappointing circumstances.
Didn’t you tell us you use quotation marks for quotations? So again, who are you quoting with your “over-asking!” mock enthusiasm?
This sale would be counted as “over asking” in every industry report of “sale versus asking” prices, a metric which is frequently quoted in newsletters and the media.
But with an exclamation point?
Yes!
Found the listing agent
“If there is a better way of determining price discovery for an illiquid asset in a rapidly moving market, I would love to hear your ideas.” + 1 to this.
Five year hold, designer pad), and 10% loss. Inflation, civic demoralization, tech jobs evaporating/migrating. Fasten your seatbelts, it’s going to be a bumpy night. At least the fog is back.
High interest rates is also crushing the market…
Keep in mind that the “high” 30-year mortgage rate as of today is still below its long-term average.
While noting you are indeed correct, how many buyers care this is less than the long term average? They probably don’t know that or even look at it. They care about what they have to pay now, and their context is the last few years of mortgage rates.
We completely agree. But that could be a big problem, as what many perceive to be or are being told is a transitory “blip” might be closer to a return to normalcy, which has significant consequences, particularly with respect to the cost of capital and future values.
This argument makes me crazy. I hear it from my dad all the time….”when I bought interest rates were at 18%” Ok – but you also bought a 4 bedroom 3 bath 4000 sq foot Single Family House for $178,000! There’s no comparison when that same home trades today for $2,500,000.
I look forward to further crushing. Then SF might actually be an attractive market to buy in, rather than rent. It’s not there yet.
Considering the number of vacancies, SF possibly would be an attractive place to rent in, assuming the theory of supply & demand were in effect – which it isn’t, because monopolistic market makers who control nearly 50% of the US rental market use a program that creates artificial scarcity. See “Rent Going Up? One Company’s Algorithm Could Be Why. ” at ProPublica.
Not everything is a conspiracy. It’s also true that covid exported high salaries to far flung cities through remote work arrangements and that migration pushed up rents.
If only we could distribute our fentanyl problems so easily.
Not everything that contradicts ones belief system is a conspiracy theory, but thank you for illustrating the pernicious usage of a gaslighting pejorative to slyly throw shade on serious, scrupulously documented journalism.
You are not being gaslighted every time someone points out your over-the-top criticism with crying emojis and denials of the field of economic study.
You do say crazy stuff – that’s fine – but try to own it.
As for the rent pricing algorithms, I read the piece in the NYT. I know you don’t believe in supply and demand, but the answer if prices are being raised is to supply more housing.
My sandwiches at the deli cost 15% more than last year. Is there a sandwich cartel? I mean, they all raised prices….
“I know you don’t believe in supply and demand.”
You don’t know what I believe or how I arrive at my beliefs, and you’re distracting from the article’s premise by gaslighting me instead of attempting to dispute what the article documents.
Comparing durable shelter that doubles as a speculative asset, such as a residential tower condo, with a consumable consumer good – a sandwich, of all things – unintentionally and hilariously betrays a deep misunderstanding of economics in general and S&D theory in particular. Arguing with you about how S&D theory functions – what it can and can’t do, how it works, where and when it works, what conditions must obtain for it to work as depicted in your Econ 1 textbook, how the real world is more complicated than a simple two variable plot, and the complications of resolving a somewhat quantifiable variable with a qualitative variable – is like arguing with a cat about, er, string theory.😂*
*I use emojis to help boost demand for local pixel jockey labor, my little contribution to help boost SF real estate prices!
Isn’t a clearer and more mainstream way to get at some of what you’re talking about to merely point out that obviously demand for an asset increases when expectations for its future price performance are high?
The fact that demand for housing skyrockets when people expect housing to make them rich is less conspiracy and more common sense in my view.
If you put a condo on the market for $1M that came with $1.5M of cash in the closet, of course you’d get demand and speculators from around the globe. And of course you could never build enough to supply that demand. And of course if that $1.5M in the closet disappears then demand would crater.