May 30, 2007
Shouldn’t A Rising Tide Raise All Boats?
Two months ago, and after two months on the market, a motivated seller of a studio in the Opera Plaza reduced his price to “below what he paid” seven months earlier ($375,000 on 8/31/06). Today, 601 Van Ness #808 remains available. And we wonder, shouldn’t a rising tide raise all boats or is there something else that's going on?
UPDATE (8/6): This condo closed escrow last week at contract price of $335,000.
∙ Listing: 601 Van Ness #808 (0/1) - $369,000 [MLS]
First Published: May 30, 2007 3:07 AM
Comments from "Plugged In" Readers
Surely THIS is the sign that the market is doomed and all properties in SF will be below $200,000 soon. Right?
Posted by: doomster at May 30, 2007 10:37 AM
Or maybe it's the high HOA and leased parking. After you total all that up you realize you can go out and get something better.
Posted by: D_INC at May 30, 2007 10:40 AM
$464 HOA fees PLUS $180 in monthly parking fees?!?!
That's $644 a month. Not to mention $3690/year in property taxes which brings your monthly total to $951.50 + mortgage payments to 'own' a studio. Stick to renting...
Posted by: stunned at May 30, 2007 10:41 AM
No, I'm sticking to my theory. I'll be able to buy the penthouse in One Rincon for $200,000 next month. You heard it here first.
Posted by: doomster at May 30, 2007 10:49 AM
It’s interesting because this isn’t a one off house for which there are no decent comps to help guide value. Lots of condos and turnover at Opera Plaza so I’m assuming the seller had decent comps to help guide the purchase price last year. If last year “the market” set the value for this place at $375K and this year it isn’t moving for $369K wouldn't that suggest that “the market” isn’t exactly on fire?
Posted by: Michael at May 30, 2007 11:21 AM
Love how the photo of the living space makes the interior look darker than the inside of a casket.
Posted by: Former Lurker at May 30, 2007 11:35 AM
Hmmmm, it's a dank rathole with a kitchen that's coffin-sized. No square footage listed (which probably means it's about 400 square feet) in a less than desirable corridor.
Wonder why it's been languishing on the market. This is just someone who bought the wrong property and is now paying for it. Morale of the story: Don't buy dumps.
Posted by: Anon at May 30, 2007 11:36 AM
"Hmmmm, it's a dank rathole with a kitchen that's coffin-sized."
As it was last year when "the market" set its value at $375K. Even "dumps" were appreciating over the past couple of years when it seemed like you couldn’t loose money in San Francisco real estate. This isn’t a sign that the market is crashing but it is a sign the market has changed.
Posted by: Michael at May 30, 2007 11:56 AM
Someone once told me "There's a lid for every pot." While I don't think I could ever smoke enough pot for me to want this particular lid, someone out there would love it. With the right agent, photography, and marketing, even this glorified closet should sell in today's market. Maybe they should throw in a Prius - which could double as a guest bedroom.
Posted by: Anon at May 30, 2007 12:38 PM
"Shouldn’t a rising tide raise all boats or is there something else that's going on?"
Sounds like words intended to spark a debate....
I think anyone who's been following the market knows what's going on. Trophy properties (those loosely defined as over a million and/or in "prime" locations) are still moving. Plenty of millionaires out there wanting to one-up their friends at the yacht or country club. These people aren't worried about the tightening of mortgage credit or selling in 2-3 years.
Meanwhile, the entry level stuff historically targeted at "regular" San Franciscans (loosely defined as white collar cube dwellers making under $300K/year) is generally sitting. When guaranteed appreciation is gone, you need to be able to financially justify leveraging yourself to the gills just to buy something. It no longer makes sense for many of us at current price levels.
It's the dichotomy of the market. Don't expect that penthouse to go for $200K anytime soon, if ever. But also don't expect studios to go for $500K anytime soon.
Posted by: Dude at May 30, 2007 1:06 PM
But, BUT, .... San Francisco is still a BARGAIN compared to London and New York. Buy this now for "everyone wants to live here".
Posted by: anon at May 30, 2007 1:33 PM
I think Dude's got it basically right. Although while we've seen a fair number of trophy SFRs go quickly, I'm seeing an awful lot of very nice SFRs and condos at all price levels just sit on the MLS and not move. So I think the slowdown is pretty broad. Pretty simple -- basically, any property priced reasonably seems to be moving fine, while those that are not just sit.
We have not seen prices plummet -- but they are definitely flat to slightly down (look at the Case Schiller data and numerous other data points). It seems like the most significant change is in market mentality -- gone are the days when the prevailing view was that you must buy now because prices will only go up. For the last few years, that mentality drove up prices. But the clear consensus now is prices are not going up and they may come down -- so there is nothing to be gained by rushing, buying a nasty place, or overpaying.
Posted by: anon at May 30, 2007 2:07 PM
OP is a commodity building and exhibits the extreme of whatever the marketing is doing. In and of itself, it is unappealing, has a high renter occupancy level and always has lots of units on the market. When the market is hot, these units are way overvalued (because they are the only thing available to entry level buyers). When the market is soft these units compete against each other in low-price battles for sales. It's a truly dismal place. (And the HOA fees and leased parking don't help matters!)
Posted by: seehsee at May 30, 2007 2:55 PM
I've sold real estate for almost 20 years here in SF. I've shown condominiums for sale at Opera Plaza, but I've never in my carreer actually sold one. In general, Buyers report that OP is too dated, too institutional, and has high monthly fees without appropriate quality ammenities. Long ago, I stopped showing my Buyers property in OP, as why would I want my clients stuck with a difficult resale properties in the future?
Posted by: Pam at May 30, 2007 3:38 PM
I agree with Pam. OP is Over Priced. Always has been.
Posted by: MysteryRealtor at May 30, 2007 4:17 PM
I agree with Dude's outlook, but I have to take issue with even a loose economic definition of "regular" San Francisco families as "making under $300K/year". If your family income is $250K/year, you can afford a single family residence in the city. If your income is $75K/year (the estimate for median 2005 family 12 month income from the Bay Area Census), you can't.
Posted by: RegularGuy at May 30, 2007 4:53 PM
Some of you are quite out to lunch, but it's a free country. I toured this unit, and considered buying it for a while. It is not dark, and it is not a dump. The floors are beautiful, and the deck has wonderful views. In the end, I bought something a little smaller, but with a better floor plan, at The Hayes. Pam is spot on. Opera Plaza does have high HOAs, and is rather dated, given all the new development. However, I have many friends who live there, and they love it. And by the way I don't make 300K or even 100K. I bought in a location that was poised to appreciate in the East Bay six years ago and I was very fortunate (as a single buyer no less).
Posted by: Ebayj at May 30, 2007 7:21 PM
It isn't a dump, it is just overpriced. Sure, there are lots of rich people who like to show off around here. Even the stupid rich wanting to show off still try to get the most for their money. Quite opulent and well located manses used to cost around one or two million after the last across the board haircut. The selection was also much better when the prices were lower, as it will be again.
Sometimes property markets are hot, and sometimes they are cold. In cooled property markets real prices may merely hover. Inflation does the work. The last boom was much smaller and the resulting downside amounted to around 30% in the Bay Area at least according to the Chron. Things are different this time? Of course, until they aren't.
Posted by: Mole Man at May 31, 2007 12:13 AM
Your missing the obvious 70' banner across the street that reads 'new homes from the $300's.' hard to sell a +20 year old studio for the same price as a brand new unit...
Posted by: Developer at June 6, 2007 3:18 PM
Closed escrow with a contract price of $335,000.
Posted by: SocketSite at August 5, 2007 10:36 PM
$335K, what you used to pay for a studio, now gets you a one bedroom. #509 is for sale for $317K, just a little over its 2003 price.
Posted by: tipster at December 2, 2010 11:12 PM