November 17, 2008
QuickLinks: Three Under Four Which We'll Call The New Five (Or Six)
First Published: November 17, 2008 7:30 AM
Comments from "Plugged In" Readers
looks like the link for Silver Terrace was botched.
[Editor's Note: That it was (but isn't any longer).]
Posted by: vapor94103 at November 17, 2008 8:08 AM
I wonder if the editor will consider providing links to Redfin (or another listing site) in addition to or instead of MLS links. MLS links lack information, are hard to read and expire over time without any trace IMO.
Posted by: chuckie at November 17, 2008 8:28 AM
About that Bernal Heights listing, is it underpriced? Any clients ready to pounce out there?
That sold in October 1997 for $280K, or 12% under its current asking price. Looks like 1998 pricing to me. I know it's all very micro in BH, so I'm sincerely asking what people think it's fair price is today. Whatever is happening in the market,I think we can agree - foreclosure in BH at $380 psf? We didn't see that in 2004.
Oh, and it looks like WAMU ate the loss on that foreclosure. They extended (at least) $677K on that property. I wonder what comps the jeniuses in the appraisal business were using! I hope no one got their good cash caught up in down payments on houses that used those comps.
Posted by: Laughing Millionaire Renter in Marin at November 17, 2008 8:38 AM
I like this new feature by our esteemed editors -- since properties in the $300k range basically compete head-on with rentals, its interesting to see where you would be living if you bought instead of rented.
(The fact that you can even make this comparison at all now is an indication of how much things have changed in the last two years).
So, for example, instead of a 2/2 on Polk St., I could live in my very own house next to the 280 freeway?
Posted by: Jimmy (Bitter Renter) at November 17, 2008 8:39 AM
The "Bernal" 3/1 at 840 Sq feet is being sold "as is, tenant occupied"?
Posted by: dub dub at November 17, 2008 9:02 AM
Continuing what LMR was saying-
Yeah, Wamu took the loss, after writing a $677k mortgage in May of this year
That's a pretty quick 50% loss/implosion.
BTW dub dub, SFHs aren't subject to rent control, so when the tenant lease expires you can just set the rent to $100k/month and you'll get the tenants out quickly enough. (its unfortunate for all of the SFH renters out there)
Posted by: rr at November 17, 2008 9:33 AM
rr: I'm curious to hear what you know about SFH and rent control. I'm renting one... and the management company appears to believe I'm covered (got a 2% increase this year). Are there exceptions? Or could it be some sort of "rent control lite"?
Posted by: Po Hill Jeff at November 17, 2008 9:43 AM
hum... i think i'll take the 2/2 on polk. unless you have a family, what's the point of living in a house that's smaller, has less bathrooms, and is a "fixer"?
i definitely think it's interesting that the rent vs. buy comparison is starting to get more in line, but you still need to bank on appreciation for it to work out.
Posted by: yao at November 17, 2008 9:48 AM
If you're looking for a place to live you could also do an OMI or even Ellis if the tenant is protected.
I don't support evictions for investment properties but I don't think it's wrong if you're going to make it your home.
Posted by: Michael at November 17, 2008 9:49 AM
I'm no expert but I'm pretty sure that for SFH, tenants only enjoy "limited" protections under the rent control laws and ordinances if the tenant moved in after 1/1/96 (as is almost surely the case here - it changed hands in 97).
No limit on rent increases, as rr notes above, so it's pretty easy to get a tenant out I'd imagine. There are some limitations on evictions, however (need one of specified "just causes), but as Michael notes, no problems doing an OMI.
Bottom line, the tenant here should not be such a big deal. Obviously a hassle, but about 98% of the housing stock in SF is a hassle in one way or another.
Posted by: Laughing Millionaire Renter in Marin at November 17, 2008 9:56 AM
@LMRM - I wouldn't draw too many conclusions about Bernal Hts. from the Milton listing. It's a bit of a stretch to even call that area Bernal. In my book, Bernal ends at Mission St. This triangle between San Jose and Mission is kind of a no-man's land.
Posted by: BernalDweller at November 17, 2008 10:18 AM
Jeez, this is even more Glen Park than Bernal, as far as either go (which isn't very far). I call this are Outer Mission, but that's just because I've never taken the time to figure out what Alemany/Silver is called..
Posted by: EH at November 17, 2008 10:53 AM
The Milton listing is a 3/1? At 840 sqft? $381 psf is overstated.
I think, in Bernal, the story continues to be lack of sales and rising DOM.
A couple of apples-in-making (22 and 24 Coleridge) I was tracking, don't show up on Redfin any more. IMO both would have shown painful losses for the sellers, so much so that the sellers might pick 100's of dollars of monthly negative cash flow of renting out instead. Maybe someone has the scoop :)
Posted by: chuckie at November 17, 2008 11:17 AM
Every property in SF is covered by eviction control. You can raise the rent to market on a SFR, but if you raise it to $100K, that's an eviction without just cause for which you will be sued.
To get the tenant out, you can Ellis, for which there would be no real ramifications other than payment for relocation and giving the former tenant first right to come back if you rerent, or you can OMI, which is fraught with opportunities for getting sued if you don't move in right away and live there for three years. You would also have to pay relocation. OMI is a very foolish thing to do if you don't intend to stay.
So it's not risk free, even in an SFR. Though it's much, much easier than a non-SFR building.
Posted by: tipster at November 17, 2008 11:25 AM
do they leave out the "south" from south van ness purposely to trick people into thinking it's on other side of market? i got excited for a few seconds when i saw the address when it first appeared on the MLS.
Posted by: condoshopper at November 17, 2008 11:49 AM
Po Hill Jeff-
tipster's post is why I don't make a living in rent control laws. I would refer you to the SF tenant's union
What I do know comes only second hand through friends who lived in a SFH and had an attempt to raise their rent raised to an extreme amount when a new owner bought the place.
I suspect your management company probably manages several types of properties and would either A) want to make it logistically simple by raising all current tenants' rents by equal amount or B) want to avoid splitting hairs or getting sued and simply raise the rent by an amount they know you won't fight or find unreasonable.
Who defines 'market rate'? Can I raise the rate to what it would cost to have an operating profit monthly, even if that might cause them to move out? Sure, 100k/month is obviously ridiculous, but where is that line defined?
Posted by: rr at November 17, 2008 11:55 AM
rr, and anyone else who knows: I received a very formal letter from the management company explaining the 2% increase was permitted by law and suggesting that I contact the Rent Board if I had any questions about it. Of course my response to the increase was not anger, but delight that I might get away with a perpetual 2% upper limit on the growth in my housing cost. Could they have made a mistake?
Yet another unintended consequence of rent control... Makes buying seem even less desirable.
Posted by: Po Hill Jeff at November 17, 2008 12:37 PM
Yes, PHJ, they made a mistake in your favor! (Assuming you rented the place after 1996). My guess is they are simply too lazy to keep separate tabs on the SFRs and condos, which are outside of the rent control ordinance.
Posted by: Trip at November 17, 2008 12:41 PM
Po Hill Jeff-
I agree with Trip. They could raise it more, but are probably too lazy.
Posted by: rr at November 17, 2008 1:05 PM
And in the "It's all really quite micro, bro" department, look at today's Murray street sale for $830K or thereabouts. Click on the map. Note the location, and take notice of the facade. Then compare it the Milton street property.
Posted by: fluj's intrepid e-assistant at November 17, 2008 2:41 PM
Condo are the same as SFH - no rent control, only eviction control if rented after 1997. But, "protected tenants (ill or over 55 or 65?) can stay as long as they want unless they forget to pay there rent.
I bought a condo that had a tenant and wanted them out. The OME can only occur once in a building and is difficult to execute. Instead of the the OME, I spent an hour with a lawyer discussing how to remove the tenant and found the easiest way was to raise the rent to market rates. This works if the rent is low. In order to determine "market rates" we surveyed comparable nearby units on craigslist over a few weeks. We printed out ads to build up a case that the tenant was paying 30% below market rates. They we send the tenant a notification of rent increase with 65 days notice of the increase. The tenant gave notice 35 days before the rent increase and we had an empty apartment. The lawyer had charted this path for us and it worked. Two months after we closed the unit was empty and we moved in.
Posted by: evil landlord at November 17, 2008 2:44 PM
The sale of the bank owned single-family Bernal home at 127 Milton closed escrow on 4/28/09 with a reported contract price of $375,000.
Posted by: SocketSite at May 20, 2009 6:21 PM