November 28, 2007

Something Tells Us That “By Far” Wasn’t By Accident

246 2nd Street (www.SocketSite.com)

Earlier this month the list price on 246 2nd Street #1306 was reduced by $20,000 and the following line was added to the property description: “Now Best Deal in SOMA: GO!” And while it doesn’t appear that anybody has “gone,” we will note that another unit on the same floor has come (on the market that is).

And while we can’t compare the views, light, finishes or layout (i.e., we haven’t been inside and there aren’t yet any pictures), we will note that 246 2nd Street #1302 is 52 square feet smaller, but is also listed for $74,100 less. And from the description: “By far, the best value in soma!” Damn neighbors bank (see UPDATE below).

UPDATE: Leave it to Dude (no, not The Dude) to note that #1302 is bank owned and “Priced $80K Below Last Sales Comp in Building!” Damn bank (and ex-neighbors) indeed.

∙ Listing: 246 2nd Street #1306 (2/2) 1,101 sqft - $919,000 [MLS]
∙ Listing: 246 2nd Street #1302 (2/2) 1,049 sqft - $844,900 [246-2nd.com]

First Published: November 28, 2007 11:35 AM

Comments from "Plugged In" Readers

i think that's the building across the street from cnet. great location if you work there.

Posted by: james at November 28, 2007 12:09 PM

"Damn neighbors"

Actually, "damn bank" would be more appropriate. The second listing is a foreclosure. Interior pictures can be found here:

http://246-2nd.com/

...leaving a bare mattress on the floor was a nice touch.

Posted by: Dude at November 28, 2007 12:15 PM

They are on different sides of the building, with different views and much different layouts.

Posted by: SFmike at November 28, 2007 12:21 PM

When I first saw the listing I assumed that the owner saw the proposed building at 222 Second Street (see virtual view from 555 Mission posted here last week) and decided to sell before the "commanding view of downtown" became a commanding view of some dude's office.

Posted by: anon at November 28, 2007 1:01 PM

What's a foreclosure?

Posted by: Jimmy (Bitter Renter) at November 28, 2007 1:14 PM

Propertyshark shows #1306 was purchased with 100% financing on 9/24/2004 for $719,000. Should make for a tidy profit but wonder if the sellers would be able to qualify for the same purchase today?

Posted by: Michael at November 28, 2007 1:25 PM

Can you give us the lien history for #1302? I smell helocs.

Posted by: diemos at November 28, 2007 1:28 PM

It looks like 1302 faces the city and has an incredible view, while 1306 faces Rincon Hill.... I don't think 1306 will be getting 70k more...

Posted by: phatty at November 28, 2007 1:39 PM

Actually, "damned asset bubble" is the most appropriate.

Posted by: scurvy at November 28, 2007 1:41 PM

Regarding #1306, they are asking $919K - $200K over the sale price from Oct 2004. So how depressed is this market when they're asking for a 9% compounded annual return? Of course you have to factor in the "extensive upgrades" like the Bose system.

Posted by: FSBO at November 28, 2007 1:47 PM

My bet is that most if not all of that "annual return" will have resulted from the huge runup between '04 and '05. So it probably doesn't tell us much about the _current_ market at all. And of course, we don't know what this unit will actually sell for right now.

Posted by: Amen Corner at November 28, 2007 2:02 PM

Kind of a wierd building as far as mid-rise condos go. Pretty much no amenities whatsoever. Not even a daytime front desk person (the lobby doesn't even have room for a such).

There are better alternatives in the immediate nearby area such as Hawthorne Place for lofts or the upcoming Blu for condos. Even 301 Bryant would probably be a better pick...

Posted by: anon at November 28, 2007 2:03 PM

""extensive upgrades" like the Bose system. "
Is it just me, or does anyone else feel that if they are spending close to $1M for a small condo, shouldn't it at least come with a nice built (in-wall or in-ceiling) speaker system, rather than tacy wall-mounted speakers that look white-trash?
How hard is it to add this to an existing condo? You don't own the walls, right? Just everything inside them - so can you even do this?

Posted by: phatty at November 28, 2007 2:14 PM

Yuck! The Bose system is a ridiculous selling point.

I would have them take it down and repair the holes from the mounts.

Posted by: akrosdaybay at November 28, 2007 2:40 PM

A 2BR on 2nd St. for under $900k is pretty rare.

Yes the building doesn't have any amenities, and yes the Bose system is stupid, but I think it's actually a reasonable price given the adequate size of the unit and the location. Unfortunately, it's on the 13th floor so my superstitious ass won't go anywhere near it.

But throw in the mattress and I'll think about it.

Posted by: will_h at November 28, 2007 3:14 PM

Nothing to worry about, I heard the owners of #1306 are multi-millionaires who don't mind losing money.

Posted by: Foolio at November 28, 2007 3:35 PM

what about that fabulous red camping chair tucked away in one of the pictures?

and the craptastic bottom of the line appliances/finish in the kitchen

Posted by: james at November 28, 2007 3:35 PM

That red camping chair is "tucked away" to feature the fabulous storage space. Good eye. As for the straw woven window blinds, I personally think that's the selling point! This is top of the line 2008. This is gonna sell fast.

Posted by: perusinghomeowner at November 28, 2007 4:09 PM

1306 was originally purchased for 725K in 2000. Something strange is going on, given it was sold for 719K 4 years later...

I looked very closed at this building but decided against it (because of the yet to built at that time) Courtyard Marriott that would block the views. The location is excellent - far better than the MET or ORH. However, I don't think it will go for 919K. In this market expect further reductions.

Posted by: Willow at November 28, 2007 4:36 PM

I agree with anon at 2:03pm that this building is a bit of an odd bird. No every unit has a parking space, no doorman or security staff, yet the elevators are visible from the sidewalk (instead of being tucked out of view from passers-by). It's a giant stucco-covered monotone thing in an odd location. In my opinion, it will seem even less desirable as the neighborhood gains more residential buildings. Had it been squeezed into a space downwtown--Lower Nob Hill, or closer to the area around 199 New Montgomery--it would have made more sense. But it seems out of synch with its current location.

Posted by: seehsee at November 28, 2007 4:39 PM

1302 is not a bad deal considering I marketed and sold unit 902 a few months ago for $900K.

Posted by: Paul Hwang at November 28, 2007 5:19 PM

Good to hear that others have sold units in the recently for $900k on lower floors. I only hope that your buyers are not reading your posting here.. ie Paul hWang. This is not a cheap at you (ie unit 902 broker) I just wouldn't boast too soon.

Posted by: Amazan8 at November 28, 2007 5:36 PM

Over valued

Posted by: Michael L at November 29, 2007 9:12 AM

Inferior real estate that will really get tested in this market, if you ask me. More and more on this board I hear people saying that t"he owners are multi-millionaires who don't really care about taking a bath"...sounds like a BS excuse to me. This building and this location will only sell well in a bull market...and those days are over. $1M is much better spent elsewhere. Right now it's just more commodity product in an over supplied market down there.

Posted by: gh at November 29, 2007 9:44 AM

these places should be marketed to the girls at gold club, just around the corner. or to their most loyal clientèle. think about it guys, you could easily stagger home late at night with no money left in your wallet, every night.

Posted by: james at November 29, 2007 9:54 AM

"Regarding #1306, they are asking $919K - $200K over the sale price from Oct 2004. So how depressed is this market when they're asking for a 9% compounded annual return? Of course you have to factor in the "extensive upgrades" like the Bose system.

Posted by: FSBO at November 28, 2007 1:47 PM"

this is what they are asking but it hasn't sold . after teh one or two dedcutions that are more than liekly, i anticipate this property to sell for less than $850K.

Posted by: Spencer at November 29, 2007 10:47 AM

If Spencer is right and it goes for $850k, then they will have netted about $50k vs. their buying price of $719k (total transactions costs to buy and resell around 10%). Meanwhile, they will have paid around $4000/mo to live their (after tax deductions). I'm not sure how much rent would be on an equivalent unit - I'd imagine less, but not a lot less (it would have to be almost $1500/mo less to have made renting a better deal, and it's certainly not that low).

So they'll probably make a profit, but not a whole lot. Maybe $40k, assuming it doesn't go *too* far below asking? Almost surely they would have been better off selling a year ago.

Posted by: mike at November 29, 2007 11:12 AM

They have comps above $1K / sq ft.

http://redfin.com/stingray/do/printable-property?external_id=847792

Different market now.

Posted by: hello at November 29, 2007 12:56 PM

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