Purchased for $1,250,000 in mid-2019, at which point it established a building and neighborhood comp for other sales at $1,437 per square foot, the two-bedroom, two-bath unit #513 with two deeded parking spaces in the boutique Mid-Market building at 1075 Market Street (a.k.a. Stage 1075) returned to the market listed for only $1,025,000 last year.
Dropped to $949,000 this past September, re-listed for $899,000, reduced to $849,000, further reduced to $769,000 and then relisted anew for $695,000 three months ago, the resale of contemporary condo which “checks all the boxes,” on a high floor “in the pulsating center of San Francisco,” has just closed escrow with a contract price of $675,000, which is officially “within 3 percent of asking!” according to all “pivotal” industry stats, aggregate reports and “market scores” but down 46 percent from the second quarter of 2019 on an apples-to-apples basis.
What are the three most important words in Real Estate again??
The location isn’t the best, but it wasn’t the best when it was sold in 2019. You can’t explain an over 45 percent drop in value over an almost five year hold with just the location, even when accounting for the neighborhood’s street condition deterioration over that same time period. This seller must have really wanted to get up, rip the bandage off, stop the bleeding and start over somewhere else.
Or they had a good year and wanted the tax write off
I’m not a tax attorney, but my understanding is that for one’s own residence, you can’t deduct capital losses from the sale of property.
Of course you can take capital losses when you sell for a loss. At least part of your statement is correct, you are most definitely not a tax professional.
Not a tax attorney either but given the initial listing was already at a loss, hopefully they did consult a tax attorney. Moving primary residence and converting this property to a rental etc may help in some circumstances. When you’re facing a loss of this much it’s always a good idea to spend a bit and seek professional advice.
Yes, and clearly some owners are availing themselves of the rental option. As of yesterday, by my count there are six (6) units currently available for lease in this building, including Apt 808, a 2-bedroom, 2-bathroom 870 ft.² top floor unit comparable to the one described above for $4,125 per month. I haven’t worked out if that’s cash flow positive for the owner, though.
SanFranSeeYa: I was (as I said above) talking about the sale of a principal residence. Given that assumption, I don’t think your assertion that one can deduct a capital loss on the sale of property is correct.
I am going by (as I indicated, a layman’s reading of) IRS Publication 523, Selling Your Home, where it clearly says under the section headed Figure your gain or loss (amount realized minus adjusted basis):
Perhaps you are thinking of what steps an investor or other kind of player in the real estate “game” can take, because you’re an investor. I agree, that’s a different story.
Although when your real estate agent calls you and says that you’re going to need to provide a large amount check from your own funds to close the transaction (because your down payment’s been vaporized and you had no equity), I suppose that you can sell those shares of C3.ai, Inc. that you bought at $46 per share last year for the current market price to generate the necessary cash, and deduct that capital loss if you wanted to. Maybe.
$675k for a relatively new construction 2 bedroom condo within a short walk of downtown is shockingly low!
@Juan – shocking how this ain’t 2018 any more. Work at funny-money single-vowel startups has evaporated, and much of what remains has gone remote – to places like (pulling one out of the hat) Virginia Beach, VA, if not out of the country altogether. Go check out what $685k buys you outside CA, that’s where the market’s moving to.
I can’t stop laughing about the archetype of the would-be SF real estate tycoon who top-ticked an AI pump and dump. It’s funny because of how many of those guys there are in real life.
Daniel: It’s true that there has been a lot of startups shutting down. According to Pitchbook, over 3,000 private venture-backed startups failed in the last year. Of the startups successfully raising money, 19 percent were funded at a lower valuation than in prior funding rounds.
But you know what? Earlier this week CNBC’s Deidre Bosa did an on-air interview of the one and only Adam Neumann, former CEO of WeWork, on his new real estate startup called Flow, which was recently valued at about $1 billion. Who knows, in addition to the current generative AI hype train, conditions might be pivoting, like the real estate agents quoted in all those articles from local media outlets keep saying.
Adam Neumann you say? Who’s going to be left holding the bag this go-around?
I think his plan this time is for retail investors to get left holding the bag, post IPO or De-SPAC.
In 2019 it wasn’t unreasonable to be optimistic about that area turning around.
interest rates were a lot lower and anyone who could buy this place without financing wouldn’t live there and the location makes it utterly not even airbnb-able. reality has set in for the owners. 6th Street-ers don’t even need to cross the street to sleep or poop in the doorway of the building. not sure what’s worse – the smells or the noise.
“What are the three most important words in Real Estate again??”
Layoffs, layoffs, layoffs?
Location Location Location
The overpriced market beginning to correct itself?