1255 California #603
A month ago (and after two months on the market) 1255 California #603 was listed as: “Reduced! Fast sale wanted! Vacant! Gorgeous view! Renov kitchen! Fabulous opportunity. Owner is in contract on house purchase in palm springs. Must sell. All offers considered.”
And today it’s still a “Fabulous opportunity,” but apparently it’s “Also available for rent!” (long gone are the references to a fast sale, “must sell,” and “all offers considered”).
Purchased for $975,000 three years (and three days) ago, a sale at the reduced price of $1,099,000 (originally listed at $1,168,000) would represent average annual market appreciation of 4% over the past three years for this Nob Hill condo with views. And yes, that average includes a strong 2005.
Oh, and if you’re looking for the wood burning fireplace it’s hidden behind the television (naturally).
UPDATE: A plugged-in reader picks it out of the Craigslist rental line-up. They’re asking $4,500 a month which would pencil to a cap rate of roughly 3%.
∙ Listing: 1255 California Street #603 (2/2) – $1,099,000 [MLS]

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Comments from “Plugged-In” Readers

  1. Posted by Portland Outsider

    That’s less than 2% annual appreciation after deducting the 6% sales commission. Not exactly a stellar ROI, but at least they’re not losing money.

  2. Posted by anon

    Wonder how much the rent is and whether it would cover the mortgage?

  3. Posted by spencer

    bordering the tenderloin……$1M for a 2bdroom…..no thank you

  4. Posted by john

    well, it was purchased at the peak of the market. and yet they still expect a profit. is this roi term i see a lot, written in stone?

  5. Posted by Portland Outsider

    is the ROI written in stone? no, but obviously it looks like they are trying not to lose money, at least on paper.

  6. Posted by Trip

    No way would the rent cover the mortgage plus taxes plus the $828 HOA dues (unless the owner put a huge amount down, in which case renting rather than selling still ties up money that could be earning returns elsewhere). This looks like one of those cases where the owner would be smart to recognize that he paid too much, cut his losses, and list at a realistic price rather than increasing his losses each day he holds on to it.

  7. Posted by PaulG

    It’s listed here on Craigslist for $4500 per month.
    That’s 4.9% of the sales price. Does anyone know what the market rental yield is?
    [Editor’s Note: And that's a Cap rate of around 3%.]

  8. Posted by spencer

    no one is going to pay that rent either. I don’t think they will be able to get over $3000 per month for this.

  9. Posted by john

    methinks the palmy springs market has at least as much potential on the downside as s.f. intrepid speculator/apt owner has gone from the frying pan into the fire. time will tell.

  10. Posted by jeccat

    Of course someone will pay more than $3000 per month– have you been looking at Craigslist rents? Someone rented the 2-bed across the street from us in the lower haight two months ago for $3250.

  11. Posted by potrero

    I have to say, rents are up pretty steeply in the last two years as prices have been relatively flat. It’s a long way from converging still, but I expect that the market will not just balance through lower housing prices, it seems like rents will continue to climb relatively quickly as well.

  12. Posted by jon

    2 bedrooms. With 2 people, that’s 2250/each. Do-able. I think this economic boom is getting a bit long in the tooth. This should affect housing prices. S.F. has always had high rental prices, I doubt this building boom will change that a whole lot. I’m assuming the renters still have jobs. I’m more than slightly concerned about the owner and his multiple, high priced dwellings.

  13. Posted by tharpo

    There’s no indication it was the current owner, but this unit has undergone pretty significant renovation. I looked at another unit in the building and was shocked at the cabinets and layouts in both kitchen and bathroom. Somebody put in a lot of money to fix that. The common areas are another matter….

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