It’s like one of those puzzles you might have enjoyed as a kid; can you spot at least five simple (and cost effective) things that have changed between the following two photos?
2620 Hyde Before
2620 Hyde: Old Dining Room
2620 Hyde After
2620 Hyde: New Dining Room
The first is from when the entire property (2618-2620 Hyde) was on the market for $1,850,000, and the second is post sale, remodeling, and re-listing for $2,368,000.
The two units are available as TICs as well ($1,169,000 for 2618 and $1,199,000 for 2620). And in one of those puzzles you might (or might not) enjoy as an adult, 2620 Hyde is also being offered for rent at $6,000 per month (asking not secured).
UPDATE (2/22): 2618 and 2620 Hyde closed escrow today with reported sales prices of $1,100,000 ($69,000 under asking) and $1,145,000 ($54,000 under asking) repectively.
∙ Listing: 2618-2620 Hyde Street (2/1 & 2/1) – $2,368,000 [2618-20hyde.com]
∙ Listing: 2618 Hyde (2/1) – $1,169,000 (TIC) [MLS]
∙ Listing: 2620 Hyde (2/1) – $1,199,000 [MLS]
$6000 / 2br – Beautiful two-unit Edwardian Home [Craigslist]

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Comments from “Plugged-In” Readers

  1. Posted by arlo

    $6,000/month for a 2/1 in Russian Hill seems really high – but it’s still cheaper than buying the unit for $1.2M. There are a lot of rental listings in the $3K per month range – and some as high as $9K – although I’m sure there’s a wide range of quality. Does anyone have a sense as to the validity of some of these high-end Craigslists ads? Are people really paying $6K, $8K or $10K per month for 2BR condos? It seems like there are always a few ads on CL with outrageous prices (often from Wavro or Coombs). Are these just super high-end places or are these ads just a wish price?

  2. Posted by Rillion

    1 – It’s been staged.
    2 – It’s been painted.
    3 – Someone washed the windows.
    4 – Added a Chandeller in dinning room/recessed lighting in living room.
    5 – Refinished the hardwood floor.
    6 – Removed the phone jack next to the pocket doors.

  3. Posted by redseca2

    7 – Got rid of the cheap 24-Hour Mini-Blinds.

  4. Posted by smarty

    arlo, I doubt many of those places get rented. I look at Craigslist rentals daily, and the same units from Wavro & Coombs get posted repeatedly & don’t seem to go away. I especially love how Coombs lists a place for 9k and doesn’t provide any photos or much of a description – or a phone # to reach him. If I could afford 9k a month, I’d want to know about every inch of the place I’m thinking about renting before I use my valuable time to see it…
    I actually emailed Coombs awhile back to inquire about one of his units – and he never got back to me (but continued to list the unit, so clearly it wasn’t taken). I’m wondering if this guy is simply the worst rental broker on the planet, or is there something about him I don’t know (undercover CIA agent, drug launderer, etc?) Anyone know?

  5. Posted by missionite

    “$6,000/month for a 2/1 in Russian Hill seems really high”
    This is decidedly true. Here are some sample requested rents within an eight block radius:
    2BR 2BA $3500
    http://sfbay.craigslist.org/sfc/apa/541471521.html
    2BR 2BA $2875
    http://sfbay.craigslist.org/sfc/apa/541488756.html
    2BR 2BA $3995
    http://sfbay.craigslist.org/sfc/apa/541807720.html
    2BR 2BA $3250
    http://sfbay.craigslist.org/sfc/apa/541494620.html
    You would have to be stark raving mad to pay $6k a month for this place.
    “but it’s still cheaper than buying the unit for $1.2M.”
    This is actually debateable. On the face of it, assuming they can find a renter for $6k (which I think is impossible, but that’s not the comparison you have chosen to draw), and assuming there is at least some appreciation in the property, it would be cheaper to buy the flat for $1,199,000 then to pay $6k a month for it.
    However, if the property does not appreciate at least a half of a percent over a five year period then renting is cheaper.
    The numbers change dramatically if we revert to a rent that is closer to market rate, which I’m going to peg at around $3k a month: At that point you need annual appreciation of around 6.5% to break even. Given current market conditions, this is unlikely.
    It almost appears to me that the requested rent was based on this rent vs. buy calculation rather then what the market has said is a fair rent for a decent 2/1 apartment in Russian Hill. In other words, it’s a flipper’s pipe dream. Rent can’t be deferred to the future by using option ARM’s, it needs to be paid every month. So if homeowners think they are going to be able to raise the rental market to their level, they are going to run into a rather brutal reality.
    Facts and figuring are here:
    http://spreadsheets.google.com/pub?key=pM4Gw0s2zSeBvHO4Mnl45cQ

  6. Posted by eddy

    The market is getting killed today and anyone that thinks homes in san francisco are going to appreciating over the next 18 months or thinks that SanFran is immune to price declines has stepped into an alternate reality.
    2008 is only getting started.

  7. Posted by Satchel

    I have to give some props to those Wavro jokers. There was a big house out here (1 Rosewood Way) – 4000 sq ft 4/4/+2 car garage, unobstructed ocean views, etc. It sat empty at a wishing rent of $4k for – no joke – 12-18 months. They finally got Wavro on the case, and Wavro delivered. Looks like a corporate (transplant) couple. I guess they don’t care how much they are paying.
    I’m also starting to see a LOT of flipper fiascos who, having failed top sell, are now trying to rent properties at foolish prices. Here is one of my favorites:
    http://sfbay.craigslist.org/sfc/apa/542077990.html
    Here’s another foolish listing (not a flip, just a greedy long term owner who pays almost nothing in Prop 13 taxes):
    http://sfbay.craigslist.org/sfc/apa/538688103.html
    I had a conversation with the agent about 5 months back and told him (in my inimitable way) that he was fooolish to expect that sort of rent. He told me that he had been in the business for a long time, and that I “didn’t understand” the SF rental market. It’s been vacant ever since (of course), and only a fool would pay that sort of rent for that.

  8. Posted by sanfrantim

    Have question your logic there, eddy. The more the stock market plummets, the more precious my modestly-appreciating SF real estate looks.

  9. Posted by Dan

    Chronicle says average asking price for a rental in SF is $2285, up 14% in a year.
    http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/01/17/BUEGUGEIB.DTL

  10. Posted by Satchel

    Just a data point. My rent for my SFH has not gone up 1 cent in 6 years. It’s still only *slightly* below market for around here. And it is 25% lower than it was in 1998.

  11. Posted by secki007

    Oh Oh!
    8 – Can lighting in Living room – Sweet, I got one!

  12. Posted by secki007

    Oh man, read it again – Rillion got that one. Shoot!

  13. Posted by eddy

    sanfrantim, your logic is fine. I guess its a question of which loses value faster — your home or your equity portfolio.

  14. Posted by smarty

    “The more the stock market plummets, the more precious my modestly-appreciating SF real estate looks.”
    ???? We’re in a market that’s in near collapse because the real estate market has already crashed, and you think your real estate looks good??? What planet is this real estate on – your home planet?

  15. Posted by arlo

    missionite – good analysis and good spreadsheet.

  16. Posted by sanfrantim

    Hmmm, Let’s see, smarty: (1) my stock portfolio that just shed 20% of its value in weeks; or (2) my home (which incidentally I can live in) that over time, history says, will appreciate 2-3% a year (leveraged, that’s 10-15% a year). All things considered, I am pretty deliriously happy to have real asset to balance out my stock holdings right now. Where’s your money, smarty? under a mattress?

  17. Posted by smarty

    My money is shorting the market right now, and doing much better than your 1 & 2.
    And are you seriously sitting here and comparing your stock portfolio’s performance in the last several weeks with a historical performance of real estate?!?!?!? Thats even more asinine than your orginal comment… try comparing both historically? Or maybe both over the last year?
    I think I’d rather have a stock portfolio with a net gain in ’07 of .5% that I could easily transfer into a money market overnight to ride out this storm than a house who’s value has already fallen far more than I could sell it to cover the mortgage, if I could even sell it – which is a big if.
    Thanks for trying… play again soon.

  18. Posted by nonanon

    “my stock portfolio that just shed 20% of its value in weeks”
    If that’s the case you need a new broker. The DJIA is down 8% YTD and 3% YOY.
    Median home sales price dropped 2% in December so leveraged you’re down 10% right?

  19. Posted by sanfrantim

    Oh yes, and I forgot to mention that (a) my broker still gets paid and (b) I owe taxes on mutual fund distributions despite negative returns.
    Nice try, but you’re utterly un-convincing if you’re trying to argue that you are better off not owning real estate and holding only stocks, or shorting them, or whatever your singular investment strategy is.
    I’m not playing that.

  20. Posted by SocketSite

    And now back to 2618-2620 Hyde Street in specific…

  21. Posted by missdemeanour

    They now have a Thomas Church garden. I wonder if that’s a change.

  22. Posted by eddy

    Does anything this this is a good investment?

  23. Posted by SocketSite

    2618 and 2620 Hyde closed escrow today with reported sales prices of $1,100,000 ($69,000 under asking) and $1,145,000 ($54,000 under asking) repectively.

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