255 Berry Street #512
Eight months ago we caught some flak for pointing out a potentialtroublesome trend” at 255 Berry (and then again two months later). And today, we can’t help but notice that of the four Active listings in 255 Berry three have been reduced (as were the two that are currently Active Contingent).
Of the three reduced listings, one in particular caught our attention: 255 Berry #512. It’s a nicely upgraded two-bedroom/two-bath on a high floor with courtyard views; it has been reduced three times (for a total reduction of $80,000 or 8.2%); and it’s now listed at just under $700 per square foot (in an upscale building that’s barely two years old). Perhaps there is something to be said for the relationship between supply, demand, and pricing.
A recap of the neighboring new developments: 235 Berry is roughly 40% sold and available for occupancy; Park Terrace (325 Berry) is approximately 10% sold and should be available for occupancy by the end of the summer (2007); and Arterra (300 Berry) should be ready for occupancy early next year (2008), appears to have already reduced some prices, and is offering additional buyer incentives.
A Troublesome Trend? [SocketSite]
More “Pseudo-Omniscient Pretense” (And 255 Berry) [SocketSite]
∙ Listing: 255 Berry #512 (2/2) – $899,000 [Pacific Union] [MLS]
235 Berry Street: 40% Sold (Really) [SocketSite]
Park Terrace (325 Berry): A Little Over 10% “Sold”? [SocketSite]
Evidence Of A Price Reduction At Arterra? [SocketSite]
Incentives (And Insight?) At Arterra (300 Berry) [SocketSite]

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Comments from “Plugged-In” Readers

  1. Posted by Anonymous

    This is not a post to take part in the dispute over “established neighborhoods” vs. SOMA and Mission Bay, but the number of units coming online both in the Berry Street area , and throughout SOMA scares me with their flood of inventory. The one thing Russian Hill, Pac. Heights, and all have going for them is that you never have to worry about the 10 or 20 other units for sale in your building problem that could develope in some of these new projects. Living in a new building may have advantages, but not when it comes time to sell with so many other new buildings going up all around you.

  2. Posted by Dude

    True, but I still think any pricing changes will affect the whole city to some degree.
    If someone is in the market for a 2-bedroom condo and is price-sensitive / neighborhood-agnostic, I’d wager they’d rather buy something brand new in SOMA for $700/sq. ft. than in an 80-year old Russian Hill building for $900/sq. ft. I could be wrong, though.
    Either way I think this is a great thing for this city. For decades SF has suffered from a shortage of housing, which has made our housing stock absurdly expensive vis-a-vis local incomes. Now there’s light at the end of both tunnels – more inventory to choose from and prices finally starting to come down.

  3. Posted by Anonymous

    Don’t you think that the flood of inventory in the area is a temporary problem? If you’re looking simply to flip your property, this may not be the best investment. Of course, you could argue that now isn’t the best time for a short-term buyer, anywhere in the bay area.
    I’d think that in 5 or so years, when all building in the general vicinity is complete, the issue will have stabilized.

  4. Posted by TrailerTrash

    I’d think that in 5 or so years, when all building in the general vicinity is complete, the issue will have stabilized.
    That is wishful thinking, IMO. Before the excess inventory is fully depleted, developers will be identifying other areas (including parts of the city which do not have high-rise buildings now) where the housing density can be increased. The city, in a bid to increase the supply of housing (as well as its own tax base) will happily go along in sanctioning more high-rises willy nilly.

  5. Posted by Anonymous

    There is something more than supply and demand that influence the pricing at 255 Berry. With the exception of the side facing the channel, the entire building is or will be boxed in by the surrounding developments. This is really a case study in the pricing of views.

  6. Posted by John

    Price drop for this unit is not as bad as it looks. Sellers first listed it as being over 1400 sq feet as reflected in tax records. It turns out the unit is in the 1200 sq foot range.

  7. Posted by eyeswideopen

    The problem with Berry Street isn’t just the high density corridor that is being created with buildings planned on every parcel up and down the street. There is also a HIGH amount of BMR housing units. Two buildings specifically will be 100% BMRs. Combine these two facts, and I think Berry street is a bad investment.

  8. Posted by Anonymous

    I was at a conference where the Mayor spoke about housing plans for SF. They are making up for limitations in the 1990s on growth and new projects are planned to continue well beyond 5 to 10 years. Of course if the market takes a big dip, thos projects will be put on hold. Unless you are really certain about the immediate area in SOMA and plan to be there beyond 12-15 years, I would avoid it.

  9. Posted by Anonymous

    eyesqwideopen:
    What exactly is wrong with BMR units? It’s not like it’s the projects or anything.

  10. Posted by Dan

    “The city, in a bid to increase the supply of housing (as well as its own tax base) will happily go along in sanctioning more high-rises willy nilly.”
    SF historically has not permitted increased density in established neighborhoods. Mission Bay and Rincon Hill were (mostly) devoid of residents to block the new towers. A proposal to increase housing density in the Central Waterfront was defeated at the ballot box, despite promises of more affordable housing.
    After Mission Bay, Rincon Hill and the Transbay Terminal area are built out, there is still the Octavia/Mid-Market area. And there will probably be housing at Hunter’s Point and Candlestick, but that’s not going to compete with the Mission Bay condos being sold now. And the current Board of Supes appear insistent on continuing the moratorium on the development of industrial land for market-rate housing.
    So I think there is a limit to the number of high-price new condos that can be built, and that the numbers will be peaking over the next few years.

  11. Posted by Michael Novia

    #512 was overpriced to begin with. $899k is the right price. It will sell. 255 Berry is a very nice building with some great units. I think the problem for now anyway, is with all of the construction in the area. Park Terrace, Arterra, and the empty lot across from 255 which will be developed eventually, not to mention the land just south of Mission Creek. The whole area is basically a construction zone and pretty ugly. It’s amazing that units are selling as quickly as they are. Once Philz coffee shop goes in next to the library and Panera Bakery goes in, and some of that construction in the immediate area slows these units will be much more desirable. The neighborhood will begin to take shape.
    I think this city needs all the housing it can get. I would like to see more homes in the $500k to $700k price range though.
    [Editor's Note: We couldn't agree more (and #512 is now in contract). Thanks for "plugging in!"]

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