1409 Sanchez
It’s a “total fixer” or “tear-down” which makes pricing a bit tricky as “potential” value is not only in the eyes, but also the hands of the beholder.
That being said, over in Noe Valley 1409 Sanchez was briefly in contract this past January when listed for $1,100,000. After falling out of contract, however, the list price for the property was subsequently reduced to $995,000 in February, to $940,000 in March, to $849,500 two weeks ago, and to $799,500 yesterday.
As a plugged-in reader notes, the property last changed hands on 12/30/05 for $868,000. But we don’t know whether or not it would have been considered a “total fixer” or “tear-down” at the time. Or if anybody has attempted to pursue either path since.
UPDATE: From a plugged-in reader: “I really like this area of Sanchez and Duncan and remember when it was sold in late 2005. The owner had died and the place was a total mess. No garage, a small lot, and a complete tear down.” And with that we have an apple.
∙ Listing: 1409 Sanchez (2/1) – $799,500 [MLS]

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Comments from “Plugged-In” Readers

  1. Posted by Jimmy (Waiting for Ragnarok)

    When it gets to $99,999.00, I still wouldn’t buy it…
    $1100 psf for a teardown that would probably take you a million years to demolish (if you could do it at all?!).
    Insane.

  2. Posted by haikusue

    The prices in Noe are beyond crazy, why would anyone even a contractor consider this rat hole? Sanchez and 27th isn’t that tony of a neighborhood!

  3. Posted by Craig

    What is the deal with Noe? I can understand wanting to live there, but not at the prices that are being commanded lately. I just don’t get it.

  4. Posted by LookingToMoveToSF

    I’ll take it for $525,000

  5. Posted by fluj

    At 700-750K it probably makesd sense to contractors.

  6. Posted by client9

    To me, this going out of contract in January 2008 was the leading indicator that we were at the peak in Noe Valley. I know there were a few tear downs that sold a few month prior to 1409 Sanchez at ridiculous prices.
    I really like this area of Sanchez and Duncan and remember when it was sold in late 2005. The owner had died and the place was a total mess. No garage, a small lot, and a complete tear down.
    I hope that property values stay up as I live in the area but I am starting to notice a lot more price reductions on SFH in 94114 and 94131.
    Any realtors have thoughts on the market in Noe?

  7. Posted by Foolio

    “To me, this going out of contract in January 2008 was the leading indicator that we were at the peak in Noe Valley.”
    Good call!

  8. Posted by anono

    Where are the price reductions for SFR’s in Noe? I would love to see meaningful reductions in this neighborhood, as I’m sure a lot of people would. Which is probably the reason it won’t really happen.

  9. Posted by unearthly

    Price reductions will happen when the money supply tightens, and thats happening right now in the credit markets. The less exotic mortgage instruments available the less people will be able to overstretch themselves to buy in Noe at the current price levels. How many people bought houses in Noe on 100% LTV like this house?

  10. Posted by unearthly

    Most contractors are looking for lipstick on a pig, not a tear-down with a potential 1-2 year wait time while planning looks for ‘architectural significance’ in this 1900 gem. As I stated in the other thread this house looks interesting below $600k, but really closer to $500k to account for continued downside pressure. It’s RH2 so the best you could make is 2 units and potentially 3 floors at the 40′ height limit with one of the floors being for the garage.

  11. Posted by fluj

    We bought a property four years ago a block away. It was in a similar state, although it was a two unit. We paid 750K with 5 % down, borrowed around 400K, fixed it up, lived in it for two years, and then sold it for $1.55M. But we had permitted plans that included a two car garage, money was available and cheaper, and gas prices weren’t making nearly every construction item more expensive.
    It’s a great area I agree. But come to think of it this property would probably only make sense to a non end user for around 650K or so. In order for it to be a $~1.5M house it’s gonna require at least 600K I’d think. Those margins are very thin for any developer. Plus these lots are small. There aren’t any views. One would need to lift it up or else get a demo permit and both of those permits will take some time.

  12. Posted by North Beach Tony

    Hmmm. Nothing like the perspective a few months will give. In January, $1.1M just seemed like the apparent (though still astronomical) price of entry into a charming neighborhood.
    Now, five months later, it seems completely ludicrous. Completely.
    $799K still seems completely ludicrous, too, and not at all the realistically adjusted price of entry.
    Has the madness finally subsided?
    whew.

  13. Posted by unearthly

    You sold it 2 years ago at what could potentially be the high water mark for the forseeable future, good timing. I doubt you you could put down 5% and borrow over a $1M in todays climate. BTW how many blocks is a few blocks away and does this property have an address? How long did it take you to get the permits approved? And finally did you have to raise the house or make structural changes? These are all questions someone looking to buy 1409 Sanchez should be asking.
    I’ve been to quite a few of these open houses and I’m surprised at how little most buyers know about what it takes to fix up a ‘fixer’. Is Upper Noe considered a first-time buyer area in the SFR market?

  14. Posted by tipster

    So has the market really fallen 25%+ in 3 months?
    From 1100 (which was a market price back then) to 800 (assuming it sells for the L.P.) is more than I would have expected in such a short time frame.
    Of course, if I had said prices would fall by that much in 3 months for ANY kind of real estate, even tear downs in this nabe, I would have been laughed at endlessly.
    Yet, here we are.
    And those people who actually paid those prices a few months ago are basically fixing those properties up for free, assuming prices don’t fall further.

  15. Posted by client9

    some clarifying points:
    1. When i say alot more price reductions ,I mean I have started to see more for sale houses/condos reduce their prices after sitting on the market for a while(like 1409 sanchez).
    Some places there were listed and pulled in late 2007 are now lowering their list prices. This was not happening nearly as much a year ago.
    2. We dont know what price the house went out of contract back in January 2008. Clearly since the house didnt close at $1.1MM, $1.1MM was not the market price, so to say prices have fallen 25% is slightly inaccurate.

  16. Posted by Dude

    Hold on there, tipster. We all know Noe prices have been going nowhere but up. So I’m still waiting for someone to explain why this place is listed for 8.5% below its 2005 price.
    Regarding Noe apples, 423 27th seems to be approaching its 2005 sales price as well: sold for $1,410M in October of ’05, now listed at $1,495M, or $830 psf. And it’s fully renovated.

  17. Posted by Dan

    Tipster: You can’t assume the market has dropped 25% based on this shack. No one was willing to pay $1.1 million; it never sold at this price. At best, one can say the value has decreased from the last price anyone was willing to pay ($868k) to the current asking ($799.5k), a difference of about 8%. But we don’t yet know what it will sell for, and anyway, you can’t generalized the value of all of Noe Valley based on the price someone is willing to pay for one teardown.

  18. Posted by NoeValleyJim

    Let’s watch and see what 1566 Sanchez St sells for. It is on the market for $799 right now and I expect it will start a bidding war and sell for $1M. If it does, the market has not changed. If it sells for asking or less, this is really the Spring when Noe finally cracks.
    Has anyone been inside?

  19. Posted by joeblow

    i dont think 1566 sanchez has parking either so that
    will hurt it chances of selling for more than $1mm.

  20. Posted by unearthly

    About 423 27th, the current owners put down $200k (15%) on a house purchased for $1.41M in 2005. Loan 1 & 2 are ARMs purchased from WaMu which is going into the toilet. Assuming the ARM is 3/1 the owners may be trying to exit before the primary loan resets.
    If the work was done recently then it was done without permits and certainly no architect was involved. The builder grade kitchen cabinets, mid-quality appliances, and the cheasy tract lighting scream early 90′s remodel. This is not what I consider fully remodeled.
    MLS Listing for 423 27th St.
    Folks give it some time, the dominoes are starting to fall and with it the house prices…

  21. Posted by curmudgeon

    hey you real estate folks…shouldn’t the price of tear downs be more volatile than fully renovated housing, given the great degree of risk any contractor will take (particularly at this time)? In that case, I wouldn’t be surprised if this property does drop significantly from the peak market valuation, but I wouldn’t wouldn’t apply that percentage to Noe Valley generally. Does that make sense?
    And I’m agreed…I can’t imagine the headache to take this project on right now. I would expect we’ll see lots of lowball on properties like this.

  22. Posted by unearthly

    Dan: $868k was the purchase price over two years (12/30/2005) so has the market come down 8% from early 2006? and how much from early 2007? I’m guessing lots of people in Noe who didn’t get Google stock options over extended themselves in the last 3-4 years to purchase homes in a frenzied market. IMO 1409 Sanchez and 423 27th are representative of overstretched buyers, no doc ARM loans, and 100% LTV.

  23. Posted by client9

    i am 99% sure that 1409 sanchez was purchased purely for speculation to improve and flip.
    I recall the realtor (back in Jan 2008) was including some architect/floor plans with the purchase, that were plans for a 2 unit building. My assumption is that the current owners drastically underestimated the time and cost to complete this plan or the found out the neighbors were going to block them every step of the way.
    I also assume that the current realtor has to disclose the problems or issues that the current owners ran into as they tried to teardown and rebuild. (please correct me about the duty to disclose as I am guessing here).
    I would guess that is why this price is now below its asking of 2 years ago. At least 2 parties (the current owner and the people who were in contract in Jan 08) did their due diligence on the teardown, and discovered more problems than previous expected, which are now factored into the eventual price.

  24. Posted by fluj

    Please, let’s not judge “the market” by one property for cryin out loud. As far as the property I referenced before, unearthly, I’m not going to divulge any more info on here. I know what will happen. Six people will get on their soapboxes to start telling me how dumb I was/am.
    No thanks. No, I was just trying to illustrate a point as to how overpriced this thing is, and for that matter, was. Because there is no doubt one cannot borrow that much money for that cheap any longer.
    Look at 1566 Sanchez. It has a 25 foot deeper lot, it’s totally liveable, and it has curb appeal. It’s pretty darn cute if you like Victorians. I think the 799K pricepoint is likely angling for 900K. The lack of garage hurts it a bit. See 1556 Sanchez, the same house plus a garage listed at $1.195M. And again in February that doghouse at 439 Clipper went for 850K with no garage — as screwed up as that one was it also was a better property, tho.

  25. Posted by 94114

    We all have our anecdotal evidence of where the market is going. Someone just closed on a single family house on the 400 block of Liberty Street for 500K over asking. Yes, it was listed for 1.7 and sold for 2.2. That’s hardly a sign of a market boom but nonetheless evidence that the market has not yet collapsed here.

  26. Posted by unearthly

    fluj: How could anyone tell you how dumb you were when you cleared over $300k on the place in two years. I’d say you made a good move. Ultimately its just anecdotal since I don’t have a history report of the property since there’s no address. If 1409 Sanchez property sells for $100k over current asking I’m sure people would make a value judgement. Can’t have it both ways, though…

    There are quite a few properties for sale in Noe in various price ranges and states. The sale price of these properties will tell us a lot in the coming months.

    1566 Sanchez St.: 2-Bed/1-Bath, No garage, 1015 sqft, Listed for $799k ($788/sqft).

    1556 Sanchez St.: 2-Bed/1-Bath, 1+ car garage, 1214 sqft, Renovated in 1987, Listed for $1.2M ($984/sqft).

    1409 Sanchez St.: 2-Bed/1-Bath, No garage, 1214 sqft, Teardown, Listed for $1.2M ($772/sqft).

    423 27th St.: 3-Bed/2-Bath, No garage, 1116/1800 sqft, Renovation date unknown, Listed for $1.5M ($831-$1340/sqft).

    17 Newburg St.: 2-Bed/2-Bath, 1+ car garage, 800/? sqft, Unpermitted Basement Renovation, Listed for $1.1M ($?-$1370/sqft).

  27. Posted by unearthly

    Damn copy paste…

    423 27th has a garage and 1409 is 1035 sqft and is listed at $799k not $1.2M.

  28. Posted by fluj

    1381 Sanchez went pending after two weeks @ 899K. 311 30th, same thing. 728 27th got into contract a week ago after two weeks. In fact most of the properties in Noe Valley that are in contract or pending seemed to have a good deal of activity. Of the 30 SFRs 12 are in contract or pending. Of the remaining 18 there are only about four stale ones. We’ll see what happens but I bet the two nicer Sanchez listings get offers pretty soon.

  29. Posted by Miles

    curmudgeon: 100% correct. The value of land (which this essentially is) is significantly more volatile than the price of improved houses. Basically, the majority of value swings are caused by the value of the land changing, not from changes in the value of the improvements. So yes, land shoots up in value at phenomenal rates when it is a hot market, and drops like a stone in cold markets – both at significantly larger percentages than improved houses rise and fall.

  30. Posted by unearthly

    Fluj: 1381 Sanchez was a trust/probate sale that went pending fairly recently but the sale price is still unknown. Until it closes and gets recorded we won’t know more as far as a comp. I went to that house and it had issues, especially in the basement and potentially the foundation.

    144 Valley St.: 2-Bed/1-Bath, 1+car garage, 850sqft, odd shaped lot, Currently listed for $995k ($999/sqft). This one has been on the market for a month.

    557 Duncan St.: 3-Bed/2-Bath, 1+ car garage, 1050-1648sqft, Listed at $1.25M ($755-$1185/sqft). This one has been on the market for a month.

    1502 Noe St.: 3-Bed/1-Bath, 1+car garage, 627sqft, Converted attic, Currently listed for $949k ($1513/sqft).

  31. Posted by Someone

    The market for total fixers is different than the rest of Noe. It’s mostly for builders and/or people planning on building their house of dreams.
    That market has got out of control, there were few recent sells (26th/Sanchez, Clipper/Castro & 25th/Douglass) all at higher prices. All would be challenging for a developer. I expect very few new/rebuilt homes two years from now, which would create pressure at the higher end.
    1409 Sanchez must be problematic from a development stand point. If you pay $1M for a lot, and need to factor in $300/ft of construction and another $50-$100 in soft costs (financing, permits, etc) and expect to sell for $800-$900. You *HAVE* to build at least 3000 sqft.
    The current owner didn’t manage to get the plans and the sucker who got into contract earlier realized it early enough.

  32. Posted by unearthly

    Someone: You are correct except at 3000 sqft the price per sqft you can sell at in Noe drops to $700-750/sqft putting even more pressure on the developer. Not to mention space needed for a two car garage and limitations on how much yard space can be used for the structure on a 2000sqft lot. Plus 1 year for permits and meanwhile your paying interest holding the land.

  33. Posted by "Dave"

    Two turds right by this place sold between 850-900k. One was on Clipper (the dog house) and I forget the location of the other. To list this at $1.1m was completely idiotic. It sat for months (while rain poured into the hole in the roof) while the other two properties sold in 2 weeks.
    Also, nobody’s mentioned the place in the 1700 block of Sanchez that sold last week for $1.0m. It was 968 sq. ft. A cosmetic fixer, but not a teardown like this place.
    I have heard some theories that teardowns are more attractive and can fetch a higher price than cosmetic fixers because contractors can more easily knock them down without fuss. This place does indeed come with architectural plans. Maybe the neighbors barked about a bigger property popping up in its place?
    I think it’s obvious why this place would be cheaper than its previous 868k price. That was a speculative price and the project obviously didn’t get off the ground. Now they want someone to come in and pick up the pieces. Despite the desire to live on the street, fewer people want to wait for a year-long construction process. The other SFRs nearby will sell much more quickly. Both the 1500 block places are move-in ready. Small, but ready.

  34. Posted by someone

    @unearthly
    We are in agreement, especially given the smallish lot, I missed that.
    One thing though, I don’t think 3K sqft goes for 700-750, more like 800.
    Show me a place that size that sold for under 2.5M?
    (ignoring those builder specials on Valley/Castro)

  35. Posted by unearthly

    @someone
    Let’s look at what’s selling today (the market has changed over the last month or two), I find 5 SFR properties in district 5-C over 2500sqft; selling @ $680-$808/sqft.

    4148 23rd St/2650sqft/$1.8M selling @ $680/sqft
    1325 Guerrero St/2550sqft/$1.9M selling @ $743/sqft
    3373 22nd St/3000sqft/$2.1M selling @ $698/sqft
    1901 Diamond St/2815sqft/$2.3M selling @ $808/sqft
    1217 Dolores St/Unknown sqft/$2.5M

    They all look pretty equal in terms of remodel quality. My guess is that none will sell for over $750/sqft and one of these may be the comp killer on the high end of Noe SFRs.

  36. Posted by Someone

    I was talking about fully renovated/new space in a good Noe location (at least as good as 1409 Sanchez). I was thinking the house on 4xx of 27th st that went for 2.5 or the one on homestead that sold for 2.8, etc..
    1217 Dolores was very slightly updated on a noisy street. Diamond is very far, 22nd st is in the mission, 23rd has no parking.
    On a related note 4385 25th just sold for $1.09M (998K asking).

  37. Posted by crafty

    “Let’s look at what’s selling today (the market has changed over the last month or two), I find 5 SFR properties in district 5-C over 2500sqft; selling @ $680-$808/sqft.
    4148 23rd St/2650sqft/$1.8M selling @ $680/sqft
    1325 Guerrero St/2550sqft/$1.9M selling @ $743/sqft
    3373 22nd St/3000sqft/$2.1M selling @ $698/sqft
    1901 Diamond St/2815sqft/$2.3M selling @ $808/sqft
    1217 Dolores St/Unknown sqft/$2.5M
    They all look pretty equal in terms of remodel quality. My guess is that none will sell for over $750/sqft and one of these may be the comp killer on the high end of Noe SFRs.”
    These are not good Noe comps.
    4148 23rd has no parking
    1325 Guerrero St/2550sqft/$1.9M selling has no garage and is located on busy Guerrero St.
    3373 22nd St is located east of Guerrero St., that is not Noe Valley
    1901 Diamond St is Diamond Heights, not Noe
    1217 Dolores St is on busy Dolores St.

  38. Posted by sky

    1325 Guerrero sold for 1.725MM

  39. Posted by fluj

    1381 Sanchez went for $1.05M, ~919 a foot.

  40. Posted by San FronziScheme

    1325 Guerrero sold for ~676 a foot. But I would not live on that street. Way too much traffic and this bloody center divider that blocks you whenever you feel like moving around. Technically in Noe, but so far from the real thing.

  41. Posted by fluj

    Right. That’s the east side of Guerrero between 25th and 26th. Calling something on that block Noe Valley is maybe even more of a stretch than the 22nd street listing across the street from the Lone Palm. Plus 1325 Guerrero doesn’t have a garage. It does have parking, but I think most buyers who looked at it probably want a garage on that block. Twenty sixth street has its share of problems.

  42. Posted by San FronziScheme

    4148 23rd street,
    (still no parking last time I passed by) which used to be offered for 1.8M in early 2008 and went as low as 1.5M in late july 2009 upped its asking to 1.549M.
    Is this a new trend? I’ve seen a few prices coming up here and there after the places lingered there for an awful long time. Is this an attempt to jump-start the “market reversal”?
    I don’t know if the market will follow but some strategies are just strange.

  43. Posted by auden

    4148 23rd St isn’t being snatched up because the seller refuses to lower the price on this stale offering to a point where it will create interest, combined with the fact that educated buyers know it has had an NOD filed against it in the past, and probably will again. Why not just pick it up at the courthouse steps?

  44. Posted by eddy

    Speaking of 1566 Sanchez: http://www.1566sanchez.com @ $2.4

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