August 28, 2007

That’s A Lot Of Lot Value (646 Balboa)

646 Balboa

A reader notices that 646 Balboa (“I've looked at this house sit neglected and run down for the past 2 1/2 years that I've lived in the Inner Richmond”) has “finally” hit the market. According to the listing it’s in major disrepair and uninhabitable. And they’re asking $700 per square foot (for what’s currently standing).

The listing notes the potential to remodel or “build your dream house.” And although the “[b]uyer should investigate allowable uses/restrictions with City Planning Department,” the listing also touts that the lot is zoned “RM-1 (good for up to three units).”

∙ Listing: 646 Balboa (3/1) - $1,295,000 [MLS]

First Published: August 28, 2007 3:00 AM

Comments from "Plugged In" Readers

Early August 2007: You know, it's not that bad. We could get some hard hats for the kids. And the granite/stainless steel/flat screen/travertine could go here, here and here.

Late August 2007: No.

Posted by: tipster at August 28, 2007 6:39 AM

What about the bones? Looks like a possible scrapper...

Posted by: Michael L. at August 28, 2007 8:42 AM

From a relative value perspective, this thing is overpriced. $700/sq.ft. for an uninhabitable structure? In the Richmond?

Don't get me wrong, I like the Richmond. But I like Sunset as well. You can get fixers in the Sunset right now for $500/sq.ft. (or less in some cases), and you can actually live in them while you fix them up.

Posted by: Dude at August 28, 2007 9:11 AM

Underpriced!

Remember, they are not making any more run down old houses in San Francisco.

Posted by: redseca2 at August 28, 2007 9:27 AM

"Remember, they are not making any more run down old houses in San Francisco."

Oh they are so! With the typical overstretched SF homeowner, that's the one thing you can *guarantee* they'll make more of...


Posted by: VultureBoy at August 28, 2007 9:48 AM

I was being serious. Check these out:

1379-1381 7th Street: 2-unit fixer listed at $410/sq.ft.

2566 23rd: $550/sq.ft. for a SFR, and it's nicely renovated.

1362 7th St.: 2-unit fixer at $467/sq.ft.

There's a ton of them out there in Sunset. On the Richmond side:

700 Cabrillo: 5-unit building priced under $600/sq.f.t

249 4th St.: 6-unit building priced at $480/sq.ft.

Do sellers even look at comps and the market when they price properties?

Posted by: Dude at August 28, 2007 9:49 AM

Does anyone know what the $/sq ft land value is in Inner Richmond?

Posted by: steve at August 28, 2007 10:04 AM

My ex lived in a 3000 square foot 3 unit dwelling that went for $1.25M in February, so we're talking $400-$500 for something in decent, but not stunning condition (it was not a fixer, and it had some minor remodeling, but it wasn't top notch either).

I totally agree with the above figures.

Posted by: VultureBoy at August 28, 2007 10:10 AM

All I can figure is that this is more of what appears to be a new RE marketing trend in SF -- ask a ridiculously high price in the hope that you can then sell at a huge markdown (but still good price) because the buyer will think they're getting a deal. See Droubi house.

Posted by: Trip at August 28, 2007 10:16 AM

You know what this reminds me of? They have those gag postcards you see down at the Wharf...I recall one that showed a dilapidated hovel with a for sale sign that said "California Real Estate - fixer upper - $1,000,000."

Posted by: Dude at August 28, 2007 12:06 PM

That thing looks like a barn. I hate those types of buildings. They belong in Kansas. Tear down that piece of poop.

Posted by: sanfranvalues at August 28, 2007 12:20 PM

1362 7th Ave (not St).: 2-unit fixer at $467/sq.ft -- I went there for an estate sale. I got me some nice power tools there. The owner tried to sell at $2mm I think few months ago. Somebody please check... They dropped the price... Having seen the inside, it's not a total tear down. The building has good bones. Just need an interior/exterior overhaul. Downside is it's on a busy street with a yellow line in the middle...

1379-1381 7th (ave) 2-unit fixer listed at $410/sq.ft. -- This one is tricky. From MLS it seems it's rented. Duplexes that are partially or fully tenant occupied are selling at a tremendous discount because of eviction rules in SF, so nobody wants to touch units that are tenant occupied. Not worth the hassle... Once the unit is completely vacant the value shoots up even if it's a fixer upper.

Posted by: anon8mizer at August 28, 2007 12:26 PM

I saw a real estate brokers blog where he said he knows an agent that is getting so frustrated with people low-balling, that he is now overpricing his properties so that the low-ball offers are in range. Then the blogger said that he is considering doing the same thing.

I have an idea: Charge a reasonable price for the property! Of course, that means going back to 2004 prices or earlier (when 20% down was still a requirement), but no seller is willing to accept that fact of life yet.

Posted by: Brian B at August 28, 2007 12:27 PM

anon8mizer - I pulled those listings in like 5 minutes on pacunion.com - was just trying to show that there are a TON of properties in this city, fixers in similar parts of town - with more potential and at a better value than this place.

Posted by: Dude at August 28, 2007 1:38 PM

"I have an idea: Charge a reasonable price for the property! Of course, that means going back to 2004 prices or earlier (when 20% down was still a requirement), but no seller is willing to accept that fact of life yet." - Brian B

Come Q1/08 and that vision will be a reality.....

SF is not positively disconnected from National fundamentals and in reality is quite negatively disconnected by the loan to income values that have pushed our need for stated income type loans especially in SF. We have seen the end of that practice in many respects and that will take most buyers {and especially ordinary flippers that cant pay full price cash} out of the buying market PERIOD.

If anyone feels different I would invite you to have a conversation with a mortgage broker who has been in business for more than 15 years with regard to their overall view of current trend and how things look for the next 12 months.

I am not a broker and I am also not involved in the real estate business. I AM involved with bank related funding.

Posted by: Dave at August 28, 2007 2:06 PM

Dude - I hear you... one additional data point to add to your observation: check out 1422-1424 14th ave... a vacant duplex in great shape, 2500sqft (per property shark) for $1.195m (or $480/sqft).

Posted by: anon8mizer at August 28, 2007 2:08 PM

"Do sellers even look at comps and the market when they price properties?"

They look at how much they owe on the property and then add how much they need to retire. Sheesh. Don't you know anything about pricing assets?

Posted by: diemos at August 29, 2007 9:00 AM

I can't comment on the house or comps but that part of balboa just sucks. It's just an ugly area even for the Richmond. If it were located on one of the avenues it would more desirable(even as a tear down).

Posted by: samadams at October 10, 2007 12:01 PM

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