Francisco Court
Purchased for $880,000 in October of 2005, this two bedroom (but only one bath) Francisco Court condo in District 8 (Russian Hill) is back on the market. And as a plugged-in reader notes, it’s currently listed for $865,000.
1135 Francisco Street #5
One deeded parking spot. We’re guessing the $55,000 monthly HOAs are a typo (most likely $550). And despite the palm tree, not to be confused with the all TIC Francisco Palms development down the street.
∙ Listing: 1135 Francisco Street #5 (2/1) – $865,000 [MLS]
The Francisco Palms (1229 Francisco) [SocketSite]

23 thoughts on “Despite The Palm Tree, It’s Francisco Court (And #5 Is On The Market)”
  1. This is probably just a technique by the brilliant realtors. Obviously, everything is up HUGE in District 8 since 2005, so this is just an attempt to stir up the “mother of all bidding wars” by pricing it LESS than what it sold for 3 years ago.
    BTW, from prop shark it looks like this one has $792K of loans on it (both from Countrywide, so perhaps neg am/option arms?), so these bitter homedebtors put $90K down in the “first loss” position.
    Wow, after taxes and even assuming a neg am loan these guys paid a LOT to live here for three years. Unfortunately for them, they won’t know just how much until it sells. I wouldn’t count on getting any of that $90K downpayment back – that’s gone IMO.

  2. satchel, your bitterness is very unfun as of late. stop internalizing your frequent real estate valuation errors. let it all roll off your back. you’re becoming difficult to read.
    [Editor’s Note: Please feel free to disagree and debate, but as always, attack the argument and not the individual.]

  3. Wow…these apple threads are getting a little old. We’re essentially talking about this person taking a 10% loss (give or take a few percent) during the worst housing depression of our time. And the only reason they are taking a loss at all is because they have to sell. For thousands of others who aren’t selling, this is just a paper loss… not really any different than many other poeople who had double digit paper gains in 2005/6. Come to think of it, I have a huge paper loss going in my 401K so far this year, but I’m not too worried about.

  4. Lance, leverage hurts a little more than that.
    Paid $880k
    Current mortgage is $792k
    Via downpayment and mortgage payments, they put in $88k in “equity”.
    If the house sells for $865k, they need to pay at least 5% to the realtors, which is ~43k
    $88k – $15k – $43k = $30k
    $30k/$88k = 34%. That’s a 66% loss.

  5. Noseeum – you are correct about the loss that this person will experience, and I understand the impact of leverage. My point is that unless you have to sell, this is a paper loss. Also, home prices have only declined around 10% in SF (arguably less). That’s not too difficult to overcome over the next few years. In real terms, it might still represent a loss at the end of the day…. but your 401K is likely going to face even larger real losses during that same time frame.
    A 10% drop in prices is not that big of a deal for most folks in the short term.

  6. My 401k will likely endup down about 30% this year in a worst case scenario because I have a decent amount of fixed income exposure. There’s no leverage.
    So you are incorrect to say my 401k is likely going to face even larger losses.
    A 10% real estate decline means a 50% haircut for anyone with 20% equity. 10% in real estate is more painful than 30% in the stock market for the vast majority of home owners. No matter how much your 401k goes down you won’t end up owing anyone money. I don’t think the people holding upside down mortgages these days feel 10% drop was insignificant.
    Sure, if you’re living there and don’t plan to move you don’t mind. But not planning to move and being stuck somewhere for 5 years are two different things.
    If you’re 40 you don’t really mind your 401k either. Anyway you slice it, the paper loss is much higher in the house than it is in the 401k.

  7. as to the property:
    it is cute but they NEED to get rid of the Pool table.
    staging is key in a buyer’s market. most people don’t have a pool table and won’t want one in their 2/1 condo. Thus, when they walk in that room all they think about is “wow, a pool table”. You’d be surprised, but many prospective buyers don’t have the ability to mentally switch it to a DR table, even though it’s the same size/scale.
    who knows what this place will sell for, but I’d be willing to bet it’d sell for more (or at least sell more quickly) if they swap the pool table for a DR table.
    other than that: is there anything else “wrong” with this property besides the pool table and just 1 bath? I feel like there are a lot worse properties that have sold for more $/sq ft than this place, but I’m not familiar with the place.

  8. I always enjoy the discussions about “paper loss”. It’s funny that no one tries to burst anyone’s bubble when there are “paper” gains!
    Getting back to this condo. Unit 2 sold in May 2008 for $869K. It was a 2/2, with 1200+ square feet, so it went for $720 psf. Cam’t get a better “comp” than that.
    This condo is listed at $820 psf, and with 1 bathroom I would think it’s a little less desirable than the 2/2. And the financial markets are much worse than they were just last May.
    There will be $50K+ in selling expenses (people always forget about the transfer tax, but I guess realtors are only getting 5% these days – still about 80% too much IMO).
    At anything less than $775 psf, the entire $90K downpayment will be imploded. Below that, an additional check will have to be written, or a credit rating sacrificed.
    I disagree with Lance. Whatever this sells for today, I think it will fetch less in 5 years. Like I always say, we’ll see who turns out to be right! If there was any way to get short SF real estate like this that was efficient (case shiller futures really aren’t) I would! Short sellers are very important for true “price discovery”, probably one of the reasons why real estate price cycles are so much longer than stock price cycles.

  9. Sorry Lance, these apples discussions are not getting old by a long shot. Every other market index and statistic aggregates all the sales data so that the mix of the sales plays a huge role in the index appreciation/depreciation. Apples to apples is one of the only ways to really assess the strength/weakness of a particular submarket. And yes, the country is going through a pretty drastic residential real estate depression now, but that is not the case here yet so these apples to apples discussions really cut to the chase as to the health of the market. No other data source or blog is looking at the market this way and it is a huge service to buyers and sellers to get a realistic data point as to the market direction. These apples to apples comparisons are incredibly difficult to find and analyze properly, so thanks Socketsite for mining them out and bringing them to light.

  10. Another loss to consider is the loss from the apex. Say the property gained another 15% from 2005 to mid-2006/early 2007, that would have valued it at close to a round Million. All of this was vapor money anyway.

  11. Well, until recently, one could borrow against the “paper gain”. This is one of the factors causing pain in housing, and even in general economy.

  12. I agree with Lance: these apple threads are getting old — for the realtors and homeowners. They were perfectly happy to see them when they routinely showed small appreciation or were only negative in challenged locations or where the owner clearly overpaid.
    But here is a case where the owner did not clearly over pay, it’s a great location in an A+ district that has, so far, held up just fine, and yet, it looks like it might have started falling. That’s a VERY quiet street, and not too far from Polk Street shops and 5 minutes on the 30 bus to the Marina shops. You can also take the 30X and be downtown in ten minutes. Really great location. And a condo, not a TIC.
    That said, it hasn’t sold yet, and could sell for over: the owner doesn’t have to accept an offer for the list price.
    However, something tells me he might be in a hurry to sell. The pool table is quite telling. This was likely a young single guy who took out a 3/1 interest only loan when he realized that it was cheaper than renting. And surprise, surprise, it’s now just under three years from his loan date and funny thing, his attempts at refinancing didn’t quite work out on his $120K salary and $50K in assets. So now he sells.
    So not only are there going to be NO more buyers who are people like him, whatever HAD sold to people like that will now be sold.
    This is a very telling tip of the iceberg. Of course, those who refinanced in 2006 have some more time.

  13. “one could borrow against the “paper gain””
    It’s even more than that IMHO. Some poster on another blog posted a comment that I think is spot on and worth reprinting here:
    “That imaginary money has been counted as actual real money on every index, in every account, in every government statistic, and most importantly in almost everyone’s minds.
    Everyone’s been making their plans counting it as real money in the bank. Look at all the state and local governments that built all sorts of fancy government buildings assuming property taxes would continue to stay high with house values. I’m sure most of those buildings were built with borrowed funds, either via public bonds or direct loans to the municipalities, in anticipation of the continued bonanza of tax money inflows.
    Since it’s now being show to actually be imaginary money, things are falling apart. The perception of wealth does make a big difference in how people plan for the future, both individually and collectively.
    This is going to turn into a very rude shock for the majority of the US population.”

  14. Wow, my old building. Can’t say I am sorry to see this. This is the Marina by the way, it’s on the Marina side of Van Ness.
    I am pretty sure these are TIC’s, they were offering fractional loans.

  15. i think you’re mistaken, mikeW. this building is directly across the street from galileo high school, which, i think, makes it a poor indicator for overall performance in district 8.

  16. Lefty, you are right, the link provided to the old conversion was to “Francisco Palms”, which is accross Van Ness and similar in style. I got confused because they look so similar.
    This listing is in Russian Hill accross from the high school.
    These are condos, we looked at buying one four years ago.
    I don’t know about a poor performance indicator though. Pretty sure it was accross from the high school back in 2005 too.

  17. Pretty stunning drop in SoCal tipster. I think we may be fast approaching the time when we see an impact in the real San Francisco. What stage of the bubble cycle are we in here, FEAR? We may plunge right into capitulation and despair.
    But not quite yet! Here are the sales volumes and median selling prices for SFH’s and condos (in total) for the Sep 01 – Sep 14 period:
    Total SF
    2008: 125 sales, $725K median
    2007: 165 sales, $770K median
    2006: 191 sales, $785K median
    2005: 203 sales, $762K median
    2004: 257 sales, $687K median
    2003: 271 sales, $603K median
    Dist 5
    2008: 20 sales, $937K median
    2007: 28 sales, $840K median
    2006: 37 sales, $820K median
    2005: 24 sales, $857K median
    2004: 39 sales, $865K median
    2003: 35 sales, $675K median
    Dist 7
    2008: 9 sales, $1,525K median
    2007: 18 sales, $1,223K median
    2006: 15 sales, $895K median
    2005: 16 sales, $827K median
    2004: 19 sales, $830K median
    2003: 24 sales, $837K median
    This is a really short time frame (two weeks with a holiday) to draw any conclusions, but I thought we might see an impact from this market turmoil. I think that the coming weeks will be very interesting.

  18. Yes, today one got the sense that it’s over for awhile and there is no saving it.
    A very large law firm in the bay area is splitting up. Law firms are pirate ships and when there is no more booty to be had, they disband. The few profitable lawyers take off and the remaining ones get crushed under the overhead and their non-performing ways.
    My brother works for a public tech company. Upper management is just quitting: no job lined up. No chance to screw the company out of more bonuses, and the options are all under water, so they just walk away.
    Finance is in the toilet and will be for awhile.
    It definitely feels over.

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