$345K Over Asking! ($2.5 Million Under Original List)May 10, 2023
The English Tudor “trophy home” at 3212 Jackson Street, a four-level, 6,100-square-foot home in coveted Presidio Heights, hit the market priced at $9.8 million three months ago.
Reduced to $8.9 million after a month on the market and then to “$6.995 million” last month, the sale of 3212 Jackson Street has now closed escrow with a contract price of $7.34 million, a sale which is officially “$345,000 over asking!” according to all industry stats and “sale-to-list” price reports (but $2.46 million, or a little over 25 percent, below its original list price and hopes).
At the same time, the asking price for the stately Presidio Heights home a few blocks away at 3516 Clay Street, which hit the market priced at $9 million in February has just been reduced to $7.15 million with an interim reduction to $7.95 million last month. And yes, a sale at $7.15 million would be considered to be “at asking” according to all industry stats and strength of the market reports.
Comments from Plugged-In Readers
$1,200 a foot for a home of this stature? It needs a few touch-ups here and there but overall it looks great.
We’re starting to see some deals…
It is a lovely home. And, while it is certainly a buyer’s market, the home is only a deal for the multi-millionaires who can afford to purchase it. This home is still far beyond the reach of even the merely affluent.
“Deals” in the context of recent years’ prices, but we will see what things look like in 5 years. The sellers may be the ones that history shows got the deals, as they got out before the end of the great reset.
The Dotcom Crash – a local economic catastrophe – and 9/11 only dropped single family homes in SF by ~10%.
The Great Financial Crisis dropped houses in SF by ~27%, but the upper third of homes like this was affected much less.
I could see a house like this dropping perhaps another 10% but no more.
We will see. I think we are at the beginning of several significant shifts, none of which are likely to benefit high end SF real estate. In any case, in the short term, the market in large houses in and around Pac Heights is saturated with more houses coming on the market weekly, and the buyer demand at current prices being very soft. The next 12-18 months will see clearing prices certainly drop further. There is simply nothing pushing them where they once were.
Not sure about that. Predictions are for 30 year fixed mortgages to drop to the 5%-ish range by the end of the year. Some are starting to call for the return to office. The S&P500 is up 8% YTD. Moderates are winning over the Far Left in SF.
That reads a lot like “people say.” Perhaps even with tears in their eyes.
But if you’re holding on to “predictions” that were being regurgitated from Freddie Mac last year, “[w]hile we’re obviously fans of Freddie Mac’s repository of data, their forecasting skills (“We forecast rates to average 3.6% in 2022 and 3.9% in 2023.”) leave a lot to be desired,” as we outlined eight months ago.
That being said, one could simply look to the averages and relevant timeframes, based on market conditions that we endlessly track and contextualize. On top of which, Freddie Mac’s most recent forecast, which didn’t make as much of a splash in the industry press or agent newsletters, is actually for the 30-year rate to average over 6 percent in the 4th quarter of this year, which shouldn’t catch any plugged-in readers, other than the most obstinate, by surprise.
Ah but the fine print!! Many of those predictions are also predicated on there being a Recession along with it.
The “calls for return to the office” started a long time ago; the problem is the people who actually decide that don’t seem very impressed. And of course SF has issued that are largely independent of the pallatives listed: online shopping has cut into the demand for physical retail space, which – combined with reduced travel from Asia – means Union Square isn’t as attractive as it once was…regardless of the office workes returning/crazies not returning.
But you could be right…guess that’s what “we will see” means.
Pac Heights is its own market. Big houses come to market, sure. But they often need to be scraped. In that area and surrounding, that sort of remode expense is akin to buying the house next door as well.
It will be interesting to see what the collapse of FRB has on the upper end of the market, though I’m out of the loop a bit these days. Love this home and A+ block. Not sure if it’s the deal of the century, but great house for a decent price.
Why should it have any effect? No depositors lost any money.
Do you think FRB mortgage origination was a significant part of high end SF real estate sales? And if so, that it won’t be easily replaced?
What do I win if I answer “yes” to any/all of the above?
This answer is almost certainly yes…and the reason I say that is I went through a few of these high end listings and referenced a paid subscription that has details on the owners and mortgages, and while I am of course going to respect people’s privacy, I can say my rough estimate is anything bought in the last 5 years 50% seems to have gone through First Republic and in a few cases re-financed for these high end homes. Anyone have an idea how good they were compared to “standard” low rates of 2020?
I’m curious, because I see a pattern of a few people buying up a 2-4 properties, can investment properties get 30 year mortgages and if not what the best they can in this environment?
I’m sure you can or soon will be able to dig through filings to find exact numbers, but some reports have shown FRB to have a particularly large loan book, with a chunk of it being interest only loans. (Which is a bit stunning when you think of how low interest rates were, taking an IO at 3% or below is really levering up vs what you could do at todays rates with a normal loan).
To answer your second question: No, I don’t think that type of lending will be easily replaced. That type of high end non-conforming exotic lending was more the province of regional banks. And regional banks are right now feeling squeezed on many fronts. Deposit flight to bigger banks, Rising rates depressing the value of their existing loan book, weakening property values, hits to their stock price and soon to be hit with increased fees/scrutiny to compensate for the bailouts of SVB, SI & FRB.
I think there will be a big chill in high end exotic lending.
Still weird to me that while the kitchen and bathrooms clearly saw some recent work, they did not see fit to add a washer and dryers to the oversized second level linen closet, leaving one with no choice but to take laundry down to the basement for washing, before lugging the clean cloths back up. I know people in these sorts of houses have maids (there’s even very clearly a maid/ au pair room next to the garage), but still.
Might have just been more trouble than it’s worth to plumb that closet? I won’t pretend to know—maybe this is the mild PTSD of living in and working on a fixer upper for over a decade but I wouldn’t add a washer/dryer to a top floor if I already had one in the basement. My brain just sees it as one more thing that can fail catastrophically, regardless of your means.
Broker pretty proud of this over listing sale.
Thanks for posting that, the annotation is appreciated. The estimated value of 3212 Jackson St. before this sale was, according to Realtor dot com, $8,732,000 or over a 17 percent difference from the closing price shown in that image from the agent.
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