1580 Masonic: Living
A plugged-in tipster notes another price reduction on the listing for 1580 Masonic (this time by $200,000 or 5.6%). And while the price reduction might not be all that telling (in and of itself), and perhaps it simply wasn’t “priced right” to begin with (as some like to say), our tipster also notes that this nicely finished Ashbury Heights home is now listed for $105,000 less than what the sellers paid for it in March of 2006 ($3,500,000).
And no, asking price and selling price aren’t the same thing. But we will keep you posted (and plugged-in).
∙ Listing: 1580 Masonic (3/2.5 and 1/1) – $3,395,000 [1580masonic.com] [Alain Pinel]
Three Good Sized Homes, Neighborhoods, And (Mostly) Reductions [SocketSite]
Sometimes It’s Simply The Small Things: 1580 Masonic [SocketSite]

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Comments from “Plugged-In” Readers

  1. Posted by tipster

    OK, so maybe prices in SF DO go down. But not on MY block. At least not the even numbered houses.

  2. Posted by diemos

    Houses being offered for less than what was recently paid?
    Quelle idee! Ou se trouve les europeans pour acheter cette maison? (I though I would throw that in since people are hearing a lot of french at open houses these days.)

  3. Posted by mps

    We toured this house and while it’s beautifully decorated and has interesting spaces, the kitchen addition is clunky, finishes will not suit everyone’s tastes, and layout/flow awkward. (The chandelier above the staircase is amazing, though!)

  4. Posted by bird_man

    So will this become a trend or is this just one abnormal case where someone got in over their head?

  5. Posted by gh

    Big price for that neighborhood…they could be in for a tough time. And still no bargain at $896/sf.
    The redone flats on Delmar around the corner are great though.

  6. Posted by fluj

    Heck yeah the person overpaid in the first place. That’s the bottom line here. $3.5M, with no views ?? That was a price paid without real precedent. Supposedly the person who bought it had his or her job situation change. Since they only lived there 10 months or so I highly doubt this loss is greatly affecting their well being. I heard they received some sort of housing allowance or moving fee in the first place.
    I’ve been in it, twice. Really unique wraparound layout. Perfect for outdoor entertaining. But also some smallish rooms, and the finishes are a bit dated in some areas. There’s only one small room with a peek a bo northwest view, and for Ashbury Heights or, Haight Ashbury on the border of Ashbury Heights, you want views. There are loose tiles on the floors in places, too. Not a tremendous amount of care was put into getting it shipshape for sale. It’s as if the sellers have moved on, and merely want it sold as an afterthought. I think this is a good deal for someone at around $3.15M to $3.2M or so.

  7. Posted by Michael

    “Heck yeah the person overpaid in the first place. That’s the bottom line here. $3.5M, with no views ?? That was a price paid without real precedent.”
    Something tells me that’s not going to be the only time we hear that “they overpaid” line. In 2006 they didn’t overpay, they paid market value. The market determines the value right? The problem for the sellers and neighbors is that in 2007 the market is determining that it’s now worth less rather than more.
    Funny regarding “precedent”, any buyers or sellers in Ashbury Heights over the past couple of years see this comp show up at $3.5M to justify a nearby purchase/sale price?

  8. Posted by Foolio

    Well, I think people are starting to catch onto the blame the house game–it’s in an undesirable neighborhood, it’s on a busy street, the walls are green, etc.–so now, it’s blame the (last) buyer.
    This too shall pass.

  9. Posted by dub dub

    “…in over their head…”

    @bird_man — amusing metaphor, given the painting over the fireplace… 😉

  10. Posted by gh

    They shouldn’t ‘blame the house’ if they take what will probably be a $500K loss on this place, they should blame themselves for spending $3.5M for a Masonic address and having incredibly poor timing!

  11. Posted by eddy

    I’m more curious as to why a person would buy in March of 06 and plan to sell in less than 24 months. Sure things come up in life, but the common wisdom says that you need to live someplace for more than 4-5 years to realistically justify a home purchase.

  12. Posted by badlydrawnbear

    any easy guess, and it is just a guess, would be that someones 2/28 arm is about to adjust and they cannot make the new payment and since lending standards have tightened and prices have stagnated they cannot refi into a new mortgage so they are being forced to sell or face foreclosure.

  13. Posted by Michael

    “I’m more curious as to why a person would buy in March of 06 and plan to sell in less than 24 months.”
    If fluj is correct: “Supposedly the person who bought it had his or her job situation change.”
    “the common wisdom says that you need to live someplace for more than 4-5 years to realistically justify a home purchase.”
    That’s true but assumes that property values are appreciating during those 4-5 years. This would suggest that they’re headed in the opposite direction and holding for another 2-3 years might make it worse rather than better.

  14. Posted by gh

    “his or her job situation changed”
    (Meaning they’re at home these days watching Montel Williams in the afternoon.)
    Sorry, I just had to say it.
    I think SF real estate will be fine in general, but in this extreme case, money is going to be lost.

  15. Posted by fluj

    I bring a real perspective to the table, having followed this specific property, and having visited twice. I actually know some of the back story as well. Yet I get slagged for spouting the company line.
    To the point that this property was purchased for market value, I disagree. The whole thing was speculative. They actually marketed it for $3.8M at time of purchase. That’s right. They bought it for 300K under.
    I just looked. Only three homes have ever sold in 5-B for over $3M. The other two are twice as large as this one. The property was purchased for a record amount. Then it was put on the market inside of one year, with no upgrades.
    If you want a counterpoint, look at the 17th Street property everybody on here raved about. That one is supposedly going to sell for $3.9M.
    I get slagged all the time for spouting “anecdotes.” This is an anecdote of someone spending an uprecedented amount, and then getting a job somewhere else and needing to sell. I don’t care how hot any market is. Buying a 3000 foot property with no views and not doing a damn thing to it, and then trying to sell at a profit is dicey in ANY market.
    This wasn’t a stock. It was a home. This person has lots of bucks and decided to live elsewhere. Bad timing for them. WOnder if the company is going to foot the bill for the loss.

  16. Posted by missionite

    “They shouldn’t ‘blame the house’ if they take what will probably be a $500K loss on this place”
    Yep, the difference between renting and owning this particular place (assuming it sells for this listing price) looks to be around $500k.

  17. Posted by rg

    What person whose job situation even MIGHT change in the future plunks down $3.5 million on a house??? That’s a lot of money for someone without solid backing to spend. Are people just nuts in this city? Or maybe they said to themselves, “Honey, let’s go for it! Even if I loose that janitorial job in 10 months, we can always sell quickly for 1/2 a million more than we spent and move to Cabo.”
    Again, I’m baffled by this “market determines value” talk. I’m no economist, but when the “market” is only speculating AND money is easy and cheap to get, aren’t the “values” that are being thrown out there totally WRONG??? (especially when they come from appraisors and agents looking to make more commission)

  18. Posted by fluj

    Buyers determine value.

  19. Posted by fluj

    And again, if they were looking to profit, you’d think they would have glued down some of the various loose tiles throughout the property. No. They decided to up and move, and that’s what happened. Rich folks move into stuff and capriciously change their minds all the time in real estate. We see it often.

  20. Posted by DavidQ

    rg, “value” can mean different things. Value can mean “the price someone is willing to pay”, which is how it’s being used by fluj. It can also have a more ephemeral meaning that refers to some sort of fundamental benchmark, implying that there is a single correct valuation for a given good. This is the same dichotomy that you find in pricing a stock. A lot of the argument here boils down to disagreement about which of these points of view is a better strategy. When the price of a house you want doubles in five years, you can claim that the fundamentals of the house itself make this a nutty situation. However, try offering $400,000 to a non-distressed owner asking $800,000 and see how far that argument gets you. I’m sympathetic to the argument myself since I can’t afford a house, but practically speaking it’s not that simple.

  21. Posted by Mark D.

    Fluj is using the term “value” inconsistently.
    On the one hand, “buyers determine value.”
    On the other hand, the buyer of this property in 2006 “overpaid.”
    If “buyers determine value,” then how can anyone “overpay” for anything? How does the term “overpaid” have any meaning at all?
    This is essentialy the same (correct) point that Michael at 9:38 a.m. made.

  22. Posted by Michael

    It doesn’t matter if this was a speculative purchase, if the sellers have all the money in the world or whether or not it’s profitable to sell a property after only holding for a year or two.
    The buyers paid exactly what they thought this property was worth in 2006. If the market is going up then it should sell for more in 2007. Period.

  23. Posted by timkell

    “The buyers paid exactly what they thought this property was worth in 2006. If the market is going up then it should sell for more in 2007. Period.”
    This is a pretty huge oversimplification. If this were competitive bidding, the buyer could have gone over what he wanted, but he just wanted this house regardless.
    A buyer can know he is overpaying, but it’s worth it “to him.” Same as companies acquring other companies often pay much more than it’s actually “worth”, but it’s based on what it’s worth to them.
    Especially in housing, hardly anyone, particularly in the last 5 years) buys based on “what they think it’s worth to everyone else”. They find a house they really want, and they buy it based on what they think it’s worth to them. In a market like 2002-2006 with low inventory, resale value is only one facet, and often a small one. Things like “my sister lives down the street. It would be perfect!”, “I’ve always wanted to live in Ashbury Heights!”, etc. etc. play a huge role in an individual’s willingness to pay more than might be their idea of true fair value.

  24. Posted by Jimmy (Bitter Renter)

    Rich people with tons of disposable cash can do whatever they want, and if they lose a few hundred $k on a property, they won’t lose much sleep over it I bet.
    Maybe we should all focus on becoming like the buyer of this place, i.e. so rich you don’t care about petty outcomes like the price of your house!

  25. Posted by Foolio

    Oh, those wacky rich folk and their loose tiles. Hmmm…sounds like blame the (previous) buyer is in full effect…overpaid in 2006, and now they can’t even bother to glue some tiles down! No wonder the house is still sitting. It’s the tiles!

  26. Posted by Dude

    I feel compelled to back RG up on this one. As Warren Buffet has said many times, “Price is what you pay, value is what you get.” The true value of housing as shelter has not changed substantially in the past few years, has it? Especially not for this property, which has not been renovated and is in a stable, established neighborhood.
    Price and Value parted company some time in ’99/’00 and haven’t seen each other since. It happened around the same time that real estate stopped being just shelter and turned into an investment mania. But Price and Value are finally starting to reconcile, even here in “fortress” San Francisco.

  27. Posted by anon2

    “Especially in housing, hardly anyone, particularly in the last 5 years) buys based on “what they think it’s worth to everyone else”.”
    in that case realtor comps and appraisals are completely meaningless and i’m guessing you don’t realize how big of a problem that is.
    the market has been completely detached from economic fundamentals over the past five years? that’s strangely reminiscent of another late 90’s bay area phenomena…

  28. Posted by rg

    timkell – “in a market like 2002-2006 with low inventory, resale value is only one facet, and often a small one.” ??? Maybe I’m not getting your point. In a market like we’ve recently had, I’d argue that 95% of buyers bought for ONLY resale value! Very few people bought the house that they wanted to live in for years, they knew (or thought) that they could make profit in a year to two.
    Houses DO have fundamentals! I’m an architect, so I deal with the fundamentals of a house on a daily basis – price of fixtures and materials, quality of construction, grade of lumber, condition of the structure (all that stuff that you can’t see that could cause your house to collapse on top of you), deferred maintenance, let alone the quality of the design and flow of the space. And then there are the obvious – neighborhood, size, views, etc. AND the one that SFers never seem to care about – age. Educated appraisers (of which my step-mom was one) are suppose to take each of these elements and determine a value for a house. And I would argue that this “value” IS the value. Not what someone with a funny mortgage, or a stated income, or a huge inheritance is willing to pay. Or even what the house down the street sold for, unless it is a true comp. – something that SocketSite is great at pointing out when it is “apples to apples” or not. Has anyone here ever wondered why the price of a brand new condo in SF is the same as a condo that is 100 years old? I personally think that San Franciscans have lost all rationale when it comes to real estate.

  29. Posted by timkell

    I love how one comment turns me into a foolish bull. I’m one of the more value oriented posters here, but I understand that might be missed.
    At the same time, there are reasons why people made the decisions they made in the past 5 years. We’re really not disagreeing RG. I know houses have fundamentals, which is why I’m renting.
    I also know if I were in the market for a $3.5 million house, I would be a little less concerned with fundamentals and a little more concerned with, I want to live right here, in this place, and I don’t really care how much it costs me to make it happen.
    That’s not to say someone would pay double the value, but if you say to yourself “this place is worth $3.4”, but you really want to live there, and you’re worth $100 million, and someone else bids $3.45, you probably won’t have a problem raising your price to $3.5 if it’s the exact place you want. In particular, given that very few of them were available for purchase last year, that might make you even more willing to raise your offer.
    I’m not saying that’s the case here. I was replying to the huge oversimplification of “the buyers paid exactly what they thought the place was worth in 2006… Period.”
    That MAY be true, but it also may not be true. There are stupid buyers in every market, and their are buyers who are less price sensitive in every market. This is especially true when you’re talking about where you plan to park your butt every night, which is much different than a stock. You really should never overpay for a stock -it’s a piece of paper after all- but there are perfectly logical reasons to overpay for a house.

  30. Posted by Craig

    rg, from my experience I have always found new construction to command a premium over 100 yr old condos in SF. Usually on the order of $200/sq ft or more.

  31. Posted by reality check

    i love the rampant speculation on this message board. regarding this house. the current owner bought this house while they are remodeling an even larger house across the street. i don’t know if it’s her plan to move into the other house once it’s finished, or turn around and sell it too. But, there seems to be enough cash that it doesn’t really matter. this isn’t someone with an interest only, 2/28 mortgage forced to sell. wake up people.
    A house this size would rent for a minimum of 10k / month, so even if the owner takes a loss, they can write it off vs. just flushing rent down the drain.
    also, the house is completely ridiculous inside. poor layout, no views. the first floor powder room is mirrored. no, it doesn’t have a mirror, the whole thing is mirrored – walls, ceiling, the works. you can see yourself going the bathroom from 20 angles. the whole house is like that. it’s insane.

  32. Posted by rg

    reality check –
    can you ask her if she’d give the house to me?

  33. Posted by fluj

    Huh. I was told by someone hosting an open house that it was a work-related move. They’re only moving across the street. Well, that backs up my point about not really putting a huge effort into the sale.
    The “tiles” issue is only indicative of that. They just want to sell the place. Can some of you stop dissecting my every word? Somebody on here posited that agents and appraisers set value. Somehow the consumer is always blameless …

  34. Posted by Sabrina

    Regarding “moving for work”- it does happen in the corporate management world quite often. Many people move every year or two for corporate jobs (Vice President, General Counsel, President, CEO type jobs.)
    I know someone that moved three times in two years to three different major cities. They bought a house two out of the three times. They sold the first one on Long Island after 8 months and managed to make about $10,000.
    The second house, which they bought in 2006 and they were in for about a year, was a loss of $60,000 but the new company is picking up the difference so they didn’t care (in the relo package.)
    They are now renting in the third city (which I told them was the wise thing to do.)

  35. Posted by anon

    So basically, she was just planning on flipping this thing.

  36. Posted by rg

    well, fluj, isn’t the whole purpose of having a career called “Appraiser” to determine the value of a house based on set fundamentals? When my mother heard that, in SF, sellers and agents were setting their own prices, she was shocked. In fact, I believe that in some areas it is only an appraiser who can set a price. This would seem reasonable to me – brain surgeons are the only people allowed to perform a brain surgery, architects the only people allowed to design a building, why should everyone and their cousin be allowed to appraise a house? Seems to me that we’ve lost our basis for determining value because of this.
    I fully understand that someone worth $100 million is going to have a different view of “value” than someone worth $50k, and that’s fine. If they want to pay $3.5 million and feel comfortable doing so, then go for it. But what if they are the only people who value the house at that? What if they are the last people on Earth that are worth $100 million? Then the future “value” of the house is going to be judged by people worth far less, and that’s going to send the whole SF housing market into a confusing tailspin (which I think we are beginning to see). Because of no basic evaluation standards, everyone is praying the $100 million family comes to THEIR open house. Remember that 7×7 magazine cover a few years ago showing a little Sunset house with a thought-bubble over it saying, “I feel like a million bucks!” Feeling is very different than reality.
    Craig – interesting, I haven’t really seen the difference. If there is one thing that I remember (and understood) from my “real estate finance and investment” class at Haas, it was that when a newer property goes up next to your old house, the value of your property depreciates UNLESS you upgrade your property to current levels of finishes, fixtures, etc. Studs only rot people.
    What I would be really interested in seeing is a comparison of monthly mortgage payments. Say a person bought a property for $1 million within the last 5 years or so. If they bought at the lowest interest rates or with a funny loan, how much have they been paying per month? THEN, at today’s rates, without the sub-prime stuff – taking out a standard 30-yr fixed, what would that same monthly payment translate into? I bet you the payment that used to afford them a $1 million mortgage only covers a fraction of that now. As I’m always saying on this board, when median price has no correlation with median salary, the party has to end sometime!

  37. Posted by fluj

    RG, you’re way out of pocket nearly everwhere on this thread.
    Sellers have the last say on what try to sell their home for everywhere in America. Buyers decide if they want to spend X amount on said property everywhere in America.
    Becoming an appraiser involves a full year of apprenticeship. Please take note:
    Two to 3000 hours, OK?

  38. Posted by james

    there’s an interesting thread on trulia voices going on about appraisals and comps. the problem i have with the status quo system of appraising property is the transactions in the same hood in the last 90 days. what happens when you don’t have any? what happens when none of them are comparable? what happens when it’s been more than 90 days since anything remotely comparable has been sold? this is a fatal flaw in the process and makes the system a joke in my opinion which lead to part of the current problem. you can point to this flaw and say these comps don’t compare or aren’t relevant to justify a higher price for your unique property. at the end of the day, in our free market the market does indeed determine the price for anything exchanging hands between two parties (except for eminent domain) but i still think this takes a lot of credibility away from our current system of evaluating property by restricting it to last 90 days of activity.

  39. Posted by Craig

    rg, here are some examples to show my point about new v old prices:
    1335 Fulton #303 854.53/sq ft
    1612 Hayes 969.50/sq ft
    1610 Hayes 856.82/sq ft
    1608 Hayes 896.03/sq ft
    636 Broderick 649.94/sq ft
    1820 McAllister 600.75/sq ft
    There are other examples nearby as well, and this is only one area (NOPA) that has both types of homes available for a more direct comparison.
    (Note: These are list/wish prices only, though the 2 “old” ones are in escrow)

  40. Posted by anon2

    “i love the rampant speculation on this message board.”
    and i love the fact that the “rampant speculation” was being driven by a realtor with “real perspective”.

  41. Posted by Craig

    BTW, 636 Broderick is freakin’ nice, but it is not the type of property one would see featured on this site as it is likely to sell for over asking. I would be willing to bet my last cent on that prediction too.
    (Says the man to the anon world of the internet…)

  42. Posted by fluj

    huh? being driven by a realtor with “real perspective” ?
    What do you ever even mean anymore? Do you even have a point at all? Because it seems like you just zip down to wherever my name appears in topics. You don’t read what’s going on. You assume I’m wrong. And then you add your typical nonsense mean-spirited slam.
    So what’s your point, pal?

  43. Posted by rg checker

    As I’m always saying on this board, when median price has no correlation with median salary, the party has to end sometime!
    And as many others have explained before – median salary means jack when 66% of the population rents – and many, many of those in rent-controlled apartments! Median earners are not buying the top third of housing, so why would we look at things that way?!?!

  44. Posted by diemos

    Fine. I’d be more than happy to look at the long term trend in the ratio of home prices to the median salary of the top 34% of earners if I had that number. But I don’t.

  45. Posted by anon2

    fluj at 9:14am: “Supposedly the person who bought it had his or her job situation change. Since they only lived there 10 months or so I highly doubt this loss is greatly affecting their well being. I heard they received some sort of housing allowance or moving fee in the first place.”
    fluj at 11:42am: “I bring a real perspective to the table, having followed this specific property, and having visited twice. I actually know some of the back story as well.”
    reality check at 2:30pm: “i love the rampant speculation on this message board. regarding this house. the current owner bought this house while they are remodeling an even larger house across the street.”
    that’s my point. i don’t think i’m assuming anything. and it’s not supposed to be mean spirited.

  46. Posted by fluj

    I already mentioned that I was told differently by an agent hosting an open house.
    I also said that my overall point stands. That point being, tey don’t really care. They don’t need it to sell for more than they purchased it for. They spent a record sum for the area, and it doesn’t phase them.
    Whatever dude. Get off my jock.

  47. Posted by Dude

    Um..sorry to interject…but back to determining value. It’s noteworthy to mention that appraisers are hired by lenders, not buyers or sellers, for determining what a bank is willing to lend against a property. The role of appraisers is not to justify a value between buyer and seller. It’s to protect the lender and make sure there’s sufficient collateral to support the loan. So in other words, both fluj and rg are right on this point.

  48. Posted by fluj

    Not really. In a typical purchase the buyer pays the appraiser. For a refinance the homeowner pays the appraiser. Lenders have preferred appraisers, or in-house appraisers. Sometimes they will pay for the appraiser, sure, if you’re going to use them. And RG said that any shmoe can be an appraiser. They can’t. It takes a lot of time and dedication. Two thousand hours? That’s an entire year of full time work.

  49. Posted by rg

    Fluj, I would have to say the same thing about you. However, I don’t personally attack your comments because I know that they are driven by your career and your need to feed yourself, which I hope is going okay in this crash. At the end of the day, I know that what I bring to this site is a rational perspective driven by broader thought and not commission. I am well-educated and well-traveled, and, especially the later, makes my viewpoint more realistic. You can call me a bitter renter here in SF, but when I see people living off less than a dollar a day in Uganda or Bali or Costa Rica, it puts these housing prices in a very different light. I, for one, don’t want to forget that.
    Anywhere else in America, a mortgage would never go thru if not at the appraisor’s value. I remember a friend buying a little N. Berkeley bungalow about 5 years ago for $500k. When they applied to their Texan credit union for the mortgage, the broker called them back and said, “What sorta mansion are you trying-a buy out there!” I know very well the education and hours that appraisers must go through. I can vividly remember my step-mother going through it, which makes me question recent actions more. I can remember the tremendous stress that was involved in getting the valuation correct – meaning both that your peers would agree AND that the price was one that would sell the house – not “start a bidding war” or be a jumping-off point for people to bid OVER. What I do know is that elsewhere, a seller/agent STARTS with the appraiser. Correct me if I’m wrong, but in SF it seems that the appraiser is brought in at the end to justify the mortgage amount. Hence why it was reported in the Chron. that 80% of appraisers admitted to feeling “pressured” by realtors to “make the numbers work.” It’s also interesting to note that New York is investigating fraudulently inflated appraisals – http://www.nytimes.com/2007/11/08/business/08mortgage.html
    Fluj, you often respond to listings here with your opinion on the asking price, and it is always only a TAD different than list. You started this thread with your opinion that a good price is “around $3.15M to $3.2M or so.” Has it ever dawned on you that 5 years ago you would have been saying, “I think $1.2 is a fair price.” Or 10 years ago that you’d be saying “it should go for $600k.” Doesn’t that seem a bit ODD to you??? Have the fundamentals changed THAT much? I’d love your honest opinion.

  50. Posted by rg

    Woo, fluj, once again you seen to have some paranoia on this site. My last comment seems to be waiting “approval” by SS, so hopefully this one will go through immediately:
    I NEVER said anything REMOTELY like “any shmoe can be an appraisor” ???? On the contrary, I’m the one with an appraiser in the family! And I’m the one that thinks just the OPPOSITE! Appraising is a very detailed and difficult job, one that seems to have been trashed by the actions of realtors in SF. I, in fact, am seriously offended by what this market has done to the reputation of the very dedicated people who study to be appraisers. Fluj @ 6:37 is totally correct – lenders have “preferred” appraisers, but it’s already been proven that this was not the standard practice over the past number of years. Buyers found or were often recommended appraisers by their agent who would MEET the desired number. This would be why lenders are in billions of dollars of debt right now for mortgages that are not worth nearly what they were valued at.

  51. Posted by diemos

    I’d actually blame the mortgage brokers rather than the realtors for the corruption of the profession of appraiser.

  52. Posted by fluj

    Five years ago that house does not sell for 1.2Mil. Five years ago that house sells for mid two’s. It isn’t that great of a house, even. The backyard is cool. The wraparound design. That’s about it.
    You said, “Why should everyone be allowed to appraise a house.” Clearly, everyone isn’t. Sounds like our wires got crossed on that one. Sorry about that.
    You also said that values are set by appraisers and agents looking for a commission. That’s simply false. Buyers set values. By purchasing, attempting to purchase, sitting on the fence, or what have you.
    People like you continually discount my opinion, accusing me of touting the company line because of my career. As if I need it to be an up market, when I do not. I have clients just like many of you on here. They are for the right opportunity. Shit, I am too. I want a multi unit for a longterm hold. I have for a while now.
    I’ve been developing real estate for 11 years here. I’ve been buying and selling it professionally for five. I’d appreciate it if some of you would stop dissing me every chance you get. Or I’m gone. And this forum is Yogi, boo boo, the berensteins, Winnie the pooh, Smokey and whoever the hell else.
    Frankly, I am pretty annoyed. Not paranoid, because it’s actually happening. Do I chase anyone around the Internet calling them names? That’s not a rhetorical question. No, no I don’t. Someone on here chases me around the Internet calling me names. It’s getting very, very timesome.
    I say something like, “I’ve heard French spoken at open houses lately.”
    On this oh so balanced forum I receive, “I didn’t know they taught French in grade school.”
    Out of the blue, I’m called an “idiot.”
    I’m out there trying to get people houses and it’s just funny. I guess.
    Et cetera, et cetera. blah blah blah.

  53. Posted by movingback

    Fluj, I don’t know why you feel the need to try and educate people on this site – there are so many other sites where you insight and comments would be better received – or even valued – this is such a waste of your time and obviously upsetting to you.

  54. Posted by movingback

    Socketsite = Bitter Renters
    Socketsite = Anti – Realtor
    Socketsite = Anti – Buyer
    Socketsite = Doom and Gloom

  55. Posted by blahhh

    Just curious, is Adam still editing socketsite or has it been guest editors recently? I don’t mean anything by this. Socketsite just feels quite different lately…

  56. Posted by anonandon

    “Socketsite just feels quite different lately…”
    I have noticed the same thing. Could it be that what this thread shows is the current state of the market? The anger, anxiety, and fear are what some owners and “professionals” are feeling at this point. Their only release seems to be to lash out on this site and others at those who discuss current market statistics and situations. The same thing happened about a year ago on HBB, but the national news for real estate has become so gloomy, they finally gave up beating the drum. For some it would seem trying to “keep up the good fight” is the only way to pretend it is still 2004, but it is not.
    How long will they try to claim that each loss is really a “special” situation, when instead I see all of this news in a very positive way. There are many like myself that made a killing buying in 1992, and I plan on buying investment property after this whole mess shakes out in 2008. This listing is a perfect example of what the 2007 market has become. I appreciate the neutrality of this site and hope it continues to show both sides of the real estate story.

  57. Posted by akrosdabay

    “You also said that values are set by appraisers and agents looking for a commission. That’s simply false. Buyers set values. By purchasing, attempting to purchase, sitting on the fence, or what have you.”
    I disagree. Buyers were at a disadvantage in the past few years with agents setting up bidding wars to drive prices up. Buyers don’t set values, appraisers do. Price and value are completely different beasts. Value for buyers is subjective. Value established by the appraisers should be objective and based on facts.
    Bidding wars are prime examples of subjective values placed on “homes” by buyers. Only thingsbuyers bid up in this world are Antiques, collectors items and art. All of which are very subjective. Houses should have been objective decisions like buying any commodity. Nobody overbids on gas, toothpaste, coffee or groceries or stocks even.

  58. Posted by diemos

    “Houses should have been objective decisions like buying any commodity.”
    You have to realize that consumed commodities behave very differently from assets.
    Supply and demand for consumed commodities has negative feedback. As price goes up demand goes down and supply goes up leading to prices going back down.
    Supply and demand for assets have positive feedback. As price goes up people perceive it as a winning investment and demand increases. Supply decreases as people hold on to their winning investment. This pushes prices further up.
    The cycle goes on until the system gets driven far enough from equilibrium that some exogenous shock breaks the cycle then the positive feedback drives the system in the opposite direction.
    As prices fall it begins to look like a losing investment and demand drops. People start trying to get out of their positions and supply increases. This drives prices down until it hits a floor given by the asset’s actual utility.
    For houses the actual utility is as shelter and you can determine what that value is by looking at rents in your area.

  59. Posted by Gradn

    Guys – Please remember that MANY people who hold real estate under 12 months are likely to lose money, especially in a competitive bidding situation. For every one of these places, there are just as many crazy overbids and new record highs.

  60. Posted by badlydrawnbear

    “I’ve been developing real estate for 11 years here. I’ve been buying and selling it professionally for five.”
    Well this goes a long way in helping explain fluj’s, and many people I know, psychology about the housing in the Bay Area. They have never seen a down market. The Bay Area market has been on an upward tear since 95/.
    I have a close friend/coworker who has been working the property ladder for 10 years she recently bought a rundown home in Danville for 700k, tore it down (except for a wall) and built a new one. They are now freaking out a bit because they have begged borrowed and stolen (not really stoeln) all the money they can to build the new home.
    Well now their income is slowing because one is a contractor and the other is a consultant and contracting business has slowed and the expected bonuses from consulting haven’t come through so they are trying to refinance the home or face losing it.
    They were caught by bit by surprise because they have never, in the last 10 years, experienced a down market so the market cannot possibly go down in their mind.
    It’s sort of similar to the mentality a lot of people have in the midwest who buy homes in flood zones. Even though the area clearly floods every 10-15 years they don’t buy flood insurance because there hasn’t been a flood since they lived there. But sure enough along comes a flood and their home is ruined and they are all shocked and talking about how they never expected this to happen.
    I just had two conversations over the holidays about how SF property values CANNOT fall, baring an earthquake, and that prices in the city will NEVER be lower then they are today so I should go out tomorrow and spend as much as a possibly can because it will work out in the end regardless. why do they feel this way, because they bought there first place in 2001 and it’s been good times since then and they just can’t conceive of prices declining and their not being able to refi or sell to cover whatever they owe.

  61. Posted by anonarch

    “I’ve been developing real estate for 11 years here. I’ve been buying and selling it professionally for five.”
    I have been an architect and developer myself for over 25 years and it has been interesting, to say the least, to see so many people jump into the business of building homes. I think they became confused between the profits earned from a rapid escalation run-up brought on by cheap easy financing, and times past when good quality product in good locations sold because of real established value and experience. It will be nice when this market shakes out all of the “developers” and “designers”.

  62. Posted by fluj

    Yeah, but where did I ever say that property values can’t fall around here? Nowhere. I never, ever said that. I never said to expect appreciation short term either. By the way, there have been dips in micromarkets along the way in the last 11 years.

  63. Posted by fluj

    (sigh) another dig. Thanks Duggo. Yeah, I see you.
    If you know what you’re doing you will always do well if people are buying. But thank you for lumping me and my 11 years in with the “Flip This House” crowd when you don’t even know anything about anything I’ve ever done. Rule of thumb. Don’t touch it unless you project 100% returns. We bought one property at the top of the market last year and sold this past spring for a %120 return. Whatever.
    But yeah, if you don’t know what you’re doing, don’t do it. If you’re a “flipper” don’t hire an architect and a contractor and a designer and a color consultant.

  64. Posted by movingback

    badlybrawnbear was right on that one! I have to agree.

  65. Posted by badlydrawnbear

    Fluj, I didn’t mean to single you out as much as I did. I was simply picking up on that comment about the last 11 years and expanding it to cover an overall psychology many have about the Bay Area and SF specifically.
    I meant it to be a broader comment about some of the psychology of the SF market and not about your specific thoughts or feelings on it.

  66. Posted by chuck

    We went to an open house a couple of months ago. We were also looking at properties in this neighborhood last year. We love this home but the owners paid way, way too much. These are Pac Heights prices in Ashbury Heights. We saw gorgeous view homes in this neighborhood for $2.8 last year. I think it is still overpriced with the reductions. My guess is that $2.6-2.8m would be a better range.

  67. Posted by Sleepiguy

    In fact.. there is a home for sale just a couple of blocks away on Ashbury that’s in contract for about 2.9. It was only on the market for a few weeks.

  68. Posted by Michael L.

    Gotta love the emotion this market brings…

  69. Posted by chuck

    Just found this:
    Another price reduction?
    Okay…I don’t know where to find the info on these homes, but last year, we saw a spectacular home on Delmar St (partial views, if I remember, that sold for $2.75-2.8. Then, there was a SPECTACULAR view home on the Cole St culdesac that was reduced to $2.3-2.4 m. The later home was my absolute favorite.

  70. Posted by Sleepiguy

    Yup! It’s now down to 2,995,000… Which is a more logical price for that neighborhood. Still, a $500k haircut has to hurt a little.

  71. Posted by Cloop

    “Especially not for this property, which has not been renovated and is in a stable, established neighborhood.”
    Just a small note, if you haven’t been in or don’t know any of the history, this house underwent MAJOR renovation shortly before the current owner bought it in 2006. It’s not in need of much major work at all.
    There are indeed a few loose tiles in a spot, which is disappointing, and that could put some folks off if they want a pristine property. However, realistically, at this price point, most buyers will want to do a bit of work to bring the property in line with their tastes anyhow, and gluing a few tiles is not much to do; neither is updating a few finishes. Would you fail to buy a house because you didn’t like the paint color? Yes, things like color and finish do influence subconscious decisions but many experienced buyers can see past them.
    Honestly, I would rather see a bit of superficial work to do on a property that has style and substance, rather than seeing yet another one of those sterile overfinished flips where a seller blows $500K to put in a bland granite and stainless kitchen or faux Arts-and-Crafts lintels or whatever, only to have the new owners rip that all out right after purchase because they have different tastes. Especially when the seller buffs the boring beige finishes but neglects the basics like seismic, as has been so common recently. For example, I suggest you look under the hood of those Delmar flats carefully…
    Agree that the neighborhood is great (hint: all “Masonic address[es]” are not the same — check the map, gh). Beats other “Heights” in town for convenience and community spirit handily at any price. And this property in Pac or Presidio Heights, if you could get it, would not be at this price, people, even now.
    I’m not a real estate person or a market apologist and yes, this place was overpriced to start based on past price paid. But this doesn’t mean the property is irredeemable. Most posters here at SocketSite loved this place the first time it was posted, remember? Now your tunes are changing in time with the bandleader here. I grew up in CA never expecting to own, because homes here have ALWAYS been expensive relative to incomes. But hey, maybe if you slag the market enough by posting on a website, you will scare enough people with the power of the New Media, and the market will crash, and then we can all buy! Yeah, great strategy, good use of your time! Have fun, folks.

  72. Posted by Cloop

    “Only three homes have ever sold in 5-B for over $3M…”
    Oh, and fluj, as you may recall from the open house, this place isn’t 5-B, it’s up the hill in 5-E or F, depending on where you draw the line. There was a very recent sale at 1660 Shrader for 3M on the day of the broker’s open (though this was after it was pulled from the market and a price reduction taken); there’s 21 Buena Vista E, also in contract for almost 4M (also a big drop from original ask), there’s the 17th street place that got raves here and sold right away, also snapped up at >> 3M… 5-E and 5-F are still potentially active areas, albeit with very very low inventory at the moment (understandably). Prices have been correcting but they can still be on the high side in 5E and 5F and this has been the case since before the most recent bubble and even before the dot-com runup…

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