Yes, it’s another “apples to apples” comp in the making for a nice single-family home in Noe Valley. Purchased for $2,265,000 sixteen months ago (on 10/31/2006), 480 Duncan is back on the market today with a list price of $2,249,000.
We’re quite fond of the curb appeal, outdoor space, and many aspects of the remodel (which we believe pre-dates the last sale). The website provides a nice overview (including floor plans). And now’s the time to go on record with your forecast or forever forfeit your rights to write, “I told you so!”
Keep in mind that Noe Valley has often been touted as out as one of the “hottest” markets for single-family homes in San Francisco over the past couple of years.
UPDATE: This home is listed with Coldwell Banker but we’ve included the Redfin link in addition to the property website as it was our source for the previous selling price.
∙ Listing: 480 Duncan (4/3.5) – $2,249,000 [480duncan.com] [Redfin]
Well, the website link certainly doesn’t work. Not off to a good start. Obviously they are trying to cut their losses by using Redfin. We’ll see.
Apples to apples would be same home, listing price vs. listing price or same home, sold price vs. sold price… You’ve shown same home, sold price vs. listing price. That’s not necessarily an orange, but it’s more like a pear.
[Editor’s Note: Agreed. You might want to re-read that first sentence (note the “in the making”).]
Well, Goog is down again today and approaching the 300s (I was *so* ridiculed when I mentioned it was approaching the 400s a month ago when it was at 515, and now it’s in the 420s), but it’s a very pretty house, so I’m going to say it sells for very close to asking.
This is like watching the sorority sisters in an all out brawl: with hair pulling and screaching. First, the investors stop giving away money, which means less money for the homeowners, as the investors put much more of it in their own pockets. No problemo, the homeowners start taking the money out of the hands of the realtors by going to the discounters. A home like this would never have been at a discounter in the past. But with prices falling fast, what’s a seller to do?
As it spirals down, it’s going to get ugly with every party trying to rip whatever they can out of the hands of the other. The real loser, of course, will be anyone who buys now. But 50K in commissions on this home got torn out of the real estate economy.
Apples to Apples in Bernal:
49 Samoset, sold in ’05 for 890K. Sold last week for 1.09M. The difference? They opened up one staircase.
480 Duncan is listed with Coldwell Banker not Redfin. We included the Redfin link in addition to the property website as it was our source for the previous selling price.
Hmmm.. I think it will sell for asking. It’s not overpriced and potential buyers will like that it hasn’t been marked up from the previous sale. It’s a nice house in a good location with no obvious faults. But then again, what’s in the disclosure package?
This is the right strategy, in my opinion. Price it low and/or at value and hope it goes over because multiple buyers will be enticed. I predict this will go quickly and over asking.
Saw it last time and it is a nice place. A usual anderson remodel, which means that each floor is smallish and the upstairs needs to deal with the sloped ceilings. These drawbacks make it sub par competitor in the 2.6M-2.8M 4bd/3bath space in Noe, hence the 300K-400K discount.
As for apple to apple, this case is tricky, I suspect the seller doesn’t care to lose some money here. Check property shark to see it’s a relocated executive, probably relocating again. Employer lent th money and I suppose will take the hit on the potential money lost to the ‘middleman’
“I predict this will go quickly and over asking.”
This should be a good test of the dub dub trademarked (or patented indicator).
10/31/06. GOOG: $473.84
03/10/07. GOOG: $413.62
(BTW, another absolute slaughter for GOOG today. Hope you guys are short!)
If what Someone wrote is on target, this is a great apples-to-apples comparison. Many houses that would sell for a loss are pulled off the market because the sellers are loss averse. This loss aversion distorts the data (it’s a form of selection bias), making the houses that DO sell more likely to be “winners”; again, leading to a systematic bias in the data even when looking at “apples to apples” comparisons alone.
If this owner is having someone else pay the commission, and perhaps eat any potential capital loss as well, the seller will be less loss averse, and so the apples to apples comparison will be less tainted by behavioral bias, and therefore LESS “tricky” IMO.
Property Shark indicates that Genentech lent $1.06M on the purchase in 2006. Wonder if they sold this mortgage off? DNA has a pretty strong balance sheet so they probably don’t care much about a loss on an executive relo. But they’re not immune from the rest of the market – anyone know if they are downsizing, hiring, firing, etc.
“49 Samoset, sold in ’05 for 890K. Sold last week for 1.09M. The difference? They opened up one staircase.”
According to Case Shiller, the 2005 appreciation was running 20% (which would amount to the entire appreciation of that property) and it looks like the 2006 and 2007 appreciation has now been completely erased. I think you are just reinforcing the point that all of the 2006-2007 appreciation has been erased in the last few months, and if the trend is down, which I think it is, and we are now about to start eating into 2005 appreciation.
It’s telling that the Realtors now have to make comparisons with 3 year old prices!
Satchel, are you shorting GOOG, or just advising others? If so please post your selling price and let’s talk again at the end of Apr.
As for GOOG being an indicator to anything, I was only able to pinpoint one recent pricy purchase to Google employes.
I still think that this house will sell for at/more than it sold before. When people refer to housing prices going up/down, it’s a discussion that ignores transaction costs. I’m not saying it’s right or wrong, all I’m saying that it is irrelavent to housing pricing kind of discussion.
Withdrawn/not put on the money properties clearly bias the state of the market.
BUT if you believe that in general pricing is a demand/supply kind of thing, I don’t think that your point matters much. In an inventory constrained market prices sustain thier levels and if flat pricing causes less supply this is fine. The people who chose not to sell can obviously afford to do that.
The rise in inventory as of late, is also VERY biased toward the less affluent/established neighberhoods. There is very little in dist 5 compared to the past 4 springs.
Someone – could you post how much inventory there was in district 5 during each of the last four springs? Because today there are 170 places for sale compared to only 49 in January. And spring hasn’t even started yet.
Genentech recently offered a severance package to their employees in South city, including management. But then again, they’re hiring for their new Portland location. So I believe on balance, their actually hiring more California-wide (they’re also opening up a Oceanside plant), but reducing the work force in the Bay Area.
Assuming google can hold 400, I predict it will go for around two million (say, after a token 5% or even 10% reduction) — 2006 prices.
If google cracks 400, then relative price will track google accordingly. At 350, for example, it will sell for fall 2005 prices, 300 early 2005, etc (whatever those are).
I earlier mentioned a “sun microsystems 2001” model for google (amazing balance sheet, all the way down), but I am shocked how quickly it is happening, and wouldn’t presume to predict the future. I merely claim the stock is a proxy for “desireable” bay-area real-estate, and it explains why a buy versus rent analysis will not get you a nice house in Noe (at least while google stays above 100).
P.S — nice house, horrible website.
Tipster, you know not of what you speak.
The property was purchased off market in summer ’04 for 670K. Several upgrades were made. It was flipped five months later at 890K in like late ’04 early ’05. After that, it remained static and the property went up another 200K in value over three years time.
I have not “erased” anything nor “have I had to make” comparisons with anything. I reported a flat apples to apples property.
And wasn’t ’06 the avowed peak, anyway? By everyone? Yourself included? I think it was. So whither, “erased” ??
It’s so funny. I knew this would happen. Everybody asks for apples to apples. When I finally see one, where does the “spin” come from? LOL.
genentech is growing and hiring and they do these relo packages a dime a dozen. In fact, this buyer is definitely not losing anything.
The relo packages usually include a free downpayment bonus(b/w $75K and 250K,depending on level), free closing costs, Genentech also pays agent’s commission + very low interest loan. As long as you stay with the compnay for 3 yrs, then none of it (except loan) has to be repaid. Although this person is selling for less than his/her purchase price, they will actually be making money.
“Genentech recently offered a severance package to their employees in South city, including management. But then again, they’re hiring for their new Portland location. So I believe on balance, their actually hiring more California-wide (they’re also opening up a Oceanside plant), but reducing the work force in the Bay Area. ”
This is not true, not sure where this person got their info. Genentech in SSF is still growing quite rapidly
Someone,
I’m just having fun with GOOG! Yes, I am short. Sold at $568 or so. I posted my analysis a while back:
https://socketsite.com/archives/2008/02/now_about_that_google_effect_on_san_francisco_real_esta.html
(Take a look at the first comment, which was promoted to a “post” I guess from another thread.)
It’s pretty much going as I expected, albeit a little more quickly. I have a tight stop, so I may or may not be in it at the end of April. We’ve had fun with the GOOG indicator on this site, but now that GOOG has fallen into the dumper, people are understandably not posting all the “breathless” comments about how the Bay Area is this fantastic wealth machine, look at Google, etc.
I wouldn’t make any specific recommendation to anyone to do anything with a stock. Everyone should consult his or her adviser tomake a determination as to appropriate investment decisions. My guess is that if the next earnings numbers are set to disappoint, then GOOG will announce large layoffs to “placate” Wall Street. I sort of predicted that in that post above (that they would go into reduction mode), and now the always slow mainstream analyst community is saying the same thing:
http://finance.yahoo.com/tech-ticker/article/5619/What-Happens-When-Winners-Like-Google-Hit-the-Skids
I will say that based on *other* stock situations, the recent GOOG stock collapse (and it has been an utter collapse) has all the hallmarks of insider selling because they know the numbers will print badly. Some of this is typically done in full view through standard SEC disclosure (which arrives late of course), and some is done through swaps with banks, who act as prime brokers for hedge funds. Some of these funds *mysteriously* find out this info, which also gets out because the banks are hedging by shorting the stock in the open market. Let me stress that I don’t have any specific info about what GOOG and its execs are doing, but that is the way it worked in 1999/2000. I mean, did anyone ever wonder why all the banks back then had equity derivatives desks set up in SF when nothing really much finance-wise was going on here? If you look back at all those tech IPOs back in the day, the floats were incredibly small, and typicaly the stock prices collapsed before the worker bees’ lock-ups expired. Hmmmm, I wonder where all that money came from to buy all those mansions in Atherton!! Those companies certainly weren’t EARNING any money!
Perhaps I didn’t explain myself, so here goes:
According to Case Shiller (using the NEW GOOGLE SEARCH OF SOCKETSITE!) prices went up about 25% in 2005, about 10% in 2006, 0% in 2007 and have dropped about 10% in the first three months of 2008 (!).
https://socketsite.com/archives/2008/02/december_spcaseshiller_san_francisco_msa_hits_doubledig.html
If you just go by Case Shiller, the price of your samoset home should have gone up by 23% in 2005, 10% in 2006, held steady in 2007 and dropped about 10% recently. Thus, that home, had nothing been done to it should have risen about 20-25%. (the 10% up and 10% down doesn’t quite cancel, but it’s close). Which leads directly to your price.
The list price on the home that is the subject of the socketsite posting should have gone up a bit in 2006, held steady in 2007, and so far in 2008, dropped down by a little more than it went up. And that’s about where it is now.
My point is that the Case Shiller numbers, which every realtor and homeowner has laughed at (“not in MY neighborhood! My neighborhood only goes up!”) seem to be pretty accurate.
The only sure fire way to find a gain is to go back 3 years. Now an average is just that, some will be higher, some lower, but as prices absolutely collapse, it’s becoming more and more difficult to cherry pick from 2006, and you are now reaching into 2005 purchases to find a gain.
So what got erased? The 2006 gain. And look at that Case Shiller chart again: things ain’t improvin’. Next up: 2005’s gain, down the toilet.
No “spin” to that at all. My point was that when someone sells the same house in 2008 that they purchased in 2005 and they sell for more money than they paid, it does not mean prices are currently going up.
Quite the contrary, it shows that Case Shiller is right: prices have started falling like a rock.
Fair enough Satchel.
“great company” != “stock will grow indefinitely”, we are in agreement here.
I just don’t think the market’s recent peak (Oct ’07) is anywhere near the Mar ’00 levels, i.e. the 750 GOOG isn’t equivalent to $80 CSCO. And as a result barring major surprise GOOG is worth well over $100. I’m sure your hard stop isn’t $100 🙂
As for dist 5, I’ve been only paying attention to SFH. And based my comments on my aging memory. Fluj can probably dig some data. Looking at MLS dist 5 right now shows a lot of “Active Cont” which I ignore and if there is some surprsing excess it’s mostly at the low end pricing wise == Glen Park.
My guess is that if the next earnings numbers are set to disappoint, then GOOG will announce large layoffs to “placate” Wall Street.
Why? GOOG has a two-class ownership structure, so they don’t have to worry about a hostile takeover. The most serious problem that they have with a falling stock price is that it hurts employee morale and thus retention and productivity. Layoffs hurt employe morale a lot more than a falling stock price does, so would serve no useful purpose.
Regarding GOOG layoffs, anyone else catch the recent interviews with Kevin Ryan, former DoubleClick CEO?
http://finance.yahoo.com/tech-ticker/article/5619/What-Happens-When-Winners-Like-Google-Hit-the-Skids
@ Jake –
GOOG cares about its stock price because that is its currency. It doesn’t earn a lot of real $$ (about $1B max free cash flow per quarter while Microsoft generates that in about 10 weeks or less).
Without its high stock price, it has to pay talented employees more real $$, just as Wall Street does in order to attract the best. Morale is important, of course, but more important is compensating good people. Every public company in the end finds morale is a second order consideration, when the master (i.e., Wall Street) cracks the whip.
GOOG also needs a high stock price to use to acquire other companies and technologies, again because it does not generate many $$ itself. As employee costs go up, it generates even fewer $$. So they make the choice to flush morale. All companies do in the end. One of the costs of being a public company.
@ Someone – $100 is my (admittedly very aggresive) TARGET. I HOPE it gets there, and quick! But my stop is around $445. If it goes back up there, then I’ll be stopped out, and I will only have booked a roughly $120 per share profit. It’s only 100 shares (a fairly small position for me), but every $ counts when you are staring down the teeth of the coming credit deflation monster!
@ Jake – sorry I haven’t looked at the numbers in a while, and I was typing fast. I meant that MSFT generates about the same free cash in TWO-THREE weeks that GOOG generates in a WHOLE QUARTER. Sorry about that!
Did Google pay for DoubleClick in cash or in stock? I can’t remember.
I don’t want to get in an irrelevant flamewar here, but don’t let dreams of Google finally bowing down before sell-side analysts and arrogant Google employees being kicked out on the street lead you astray.
This is a great listing as it will sell for sure. I suspect that this house will sell for less than the current asking and I wouldn’t be surprised to see a $1.9xM in the final closing price. The seller here is a company that will most likely act more rational than a person with pride and equity. I think the pricing here is the right strategy, but I still think that the markets have fundamentally changed (i.e., economic fundamentals) regardless of what continues to happen. I don’t think you will see a bidding war and I’m sure there isn’t an “offer date”. We’ll know the fate of this one in ~14 days or so.
This house, webster and the other Noe Apple are all indicative of what is going on here. I can’t wait for this to sell. Sort of tempted to go make a low ball offer, but I still don’t think we’re at the bottom of the curve here.
Tipster you are retroactively applying the Case Shiller Bay Area wide MSA numbers to a specific San Francisco area that has only climbed since 2005. I will not continue to entertain that sort of stance with further dialog in this forum. It simply isn’t valid.
Hold your horses. Nice but no privacy what so ever. No disrespect to the neighbors but from time to time one may want to indulge in a simple cannibis joint without the welcoming eyes of neighbors. Not that I would know…
I’m having a nightmare that I’ve stumbled onto some horrible chatroom where people who own 2-3 shares of Google endlessly debate it’s short term price movement and unrecognized or over-assigned value. Using stolen analysis from other web sites or regergitating content from CNBC to appear on spot with an analysis of GOOG does not impress anyone other than the other pro/anti GOOG trogs.
Please go to a Yahoo chatroom to discuss your GOOG stock play or somewhere to mourn the death of the inventor of dungeons and dragons or someother geek realm and leave this board to discussing the Duncan street property and/or the overall RE market.
@ Jimmy C – it’s exhausting, isn’t it? Never fails when Satchel shows up.
Eddy, I think you are wrong. This place will sell for around asking.
The high end market in Noe showed some recent very impressive recovery.
54 Homestead for 2.75M (150K over asking)
345 Liberty for 3.3M (350K over)
2212 Castro and 4xx 27th just closed.
xx Valley went for 2.4-ish
23rd st 2.6M (at asking)
I very well could be wrong — have been before on these boards and am not ashamed of it. It’s one of the good things about blog comments is that you can be held accountable for what you state. That said, I believe the recent stock market declines will surely impact the value of our local real estate here. And I think this place is going to be a great indicator of what is happening in the Noe market given the recent prior transaction. What makes this place unique is the fact that the company will sell this place and we will get an A2A comparison.
Satchel,
All this talk and only 100 shares? Come on.
Spencer,
I work at Genentech. That’s how I got my info.
Satchel wrote yesterday:
“BTW, another absolute slaughter for GOOG today. Hope you guys are short!”
Hope nobody just shorted Google on Satchel’s advice. Google was up $26 today to about $440.
MG, you must work in manufacturing. The Development and commercial organizations are still hiring like mad.
Spencer, you’re right, but manufacturing and ops are getting slaughtered, and I think in the end, it’ll probably balance out out the hiring in the other depts. But the VSP is incredible, so they must be desperate to get rid of us.
Straight to pending status after 12 days, apples to apples fans.
480 Duncan closed escrow yesterday with a reported contract price of $2,200,000 (2.2% under asking and 2.9% under its last sale at the end of 2006).