July 30, 2008

Another Mid-Century Modern Casualty: A Shift In Tastes Or Appetites?

2209 9th Avenue: Living

While the list price on the Henry Hill designed mid-century modern home at 2245 9th Avenue was reduced $100,000 last week, the listing for the Henry Hill designed mid-century modern home at 2209 9th Avenue has simply been withdrawn from the market.

Shifting buyer tastes or appetites?

Mid-Century Modern That’s Been Remodeled: 2209 9th Avenue [SocketSite]
Think Of The Decorating Damage You Could Do At DWR With 100 Grand [SocketSite]

First Published: July 30, 2008 12:30 AM

Comments from "Plugged In" Readers

Selection bias in the data: this 2209 9th Avenue listing is a perfect example of what I was talking about in yesterday's thread on Case Shiller:

http://www.socketsite.com/archives/2008/07/may_spcaseshiller_san_francisco_msa_declines_as_does_th.html

(See "Posted by: Satchel at July 29, 2008 1:22 PM")

Fluj gave us some excellent info about this property in the original thread on 2209. Purchased in 2005 for $1.126M WITH A NEARLY $300K OVERBID, and then RENOVATED EXTENSIVELY.

Now, is there any doubt that this property, apples to apples, is WAY DOWN from that crazy bid in 2005? Fluj estimates that it is worth $1.09M now, and while I am not an expert on Forest Hill I know it pretty well, and I think that makes sense.

But, of course, the owner here - while foolish enough to make a ridiculous overbid in 2005 - is nevertheless solvent enough today to continue to make the payments on the asset. (Someone in the original thread said that it was his dentist's house.) So, now he gets to absorb the economic loss associated with the loss in value from what he perceived it to be, and with every principal and interest and tax payment that he makes on the overvalued asset, a little bit of his wealth is progressively siphoned off into the pockets of the true masters of the economy, the banks and bloated state government (but mostly the banks). Which is exactly what the Fed would like to happen for all homeowners who purchased in the last 5-8 years (depending on region, of course). You have to marvel at the genius of the banking cartel, which convinced the gullible public that of all consumer goods, housing should have increased in real terms far in excess of just about any other.

Anyway, enough of philosophical/worldview ramblings. The main point here is that this house has gone down in value, probably fairly dramatically on an apples-to-apples basis since 2005. But this decline will not get into the data. Selection bias - in other words, at the $1.2MM price, this house did not place in the 2008 beauty pageant, after having won it in 2005.

In District 4, prices are down on an apples to apples basis by an average of about 10-15% since early 2006 (basically the peak IMO out here, although some variation by neighborhood). Don't let any realtor tell you otherwise - get a list of the pulled listings if they will give it to you!

Posted by: Satchel at July 30, 2008 6:40 AM

Nice house, but had some “defects," such as only 2/1, overall square footage small, very small kitchen, carport only, no garage. Also, it looks out onto very high (3-4 story) next door neighbor house that was built after this house was purchased, cutting out its light and view. See also 2155 9th Ave at 1.94M for a wild overbid.

Posted by: fred at July 30, 2008 9:06 AM

2209 (the withdrawn one) Mapjack link, verifying everything Fred said, though the small kitchen and carport was there when they bought it.

http://www.mapjack.com/?R4vmWrapbFkF

I suppose this is fair warning to anyone purchasing a home with a certain amount of light and a view that it could change at any time.

It's probably especially bad for these guys as a lot of the windows seem oriented at what is now their next door neighbor.

Posted by: tipster at July 30, 2008 9:34 AM

I've been in this house a couple of times. From the inside you barely notice the new house next door. There's minimum negative impact. Maybe some views from the 2nd floor but the outside area which comes right off the main level is completely private. The problem with this house was that the current owners way over paid.

Posted by: 94114 at July 30, 2008 10:08 AM

I would have bought this house for $650K. they should have just kept lowering it. I really love mid-century architecture. maybe I can buy it for that in 2-3 yrs

Why was this flagged?

Posted by: Spencer at July 30, 2008 11:08 AM

"Shifting buyer tastes or appetites?"

I think it's neither, actually, but rather just another sign of a soft market. MCM is cool, but it can take a lot of time (and money) to update properly, at least one of which is in short demand right now.

Posted by: Foolio at July 30, 2008 12:26 PM

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