The sale of unit #521 at the Palms (555 4th Street) has closed escrow with a reported contract price of $690,000 (with all appliances intact). As we wrote in December:

In August the sale of unit #421 at The Palms (555 4th Street) closed escrow with a reported contract price or $700,000, purchased for $789,000 in 2006. The sale was “subject to lender’s approval,” however, so perhaps not a “real” comp.

Then again, as a plugged-in tipster notes 555 4th Street #521 has been on the market for seven months and the price reduced five times. Now asking $699,000 after a month at $749,000, and once again, purchased for $789,000 in 2006.

We’re going with “to comp.”
To Comp Or Not To Comp, Perhaps We Have An Answer [SocketSite]

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Comments from “Plugged-In” Readers

  1. Posted by tipster

    So the person who could wait a few months got a higher floor and paid less money.
    Waiting as long as possible is the current strategy of choice.
    Of course, if you can’t wait then you should buy immediately, unless of course you can rent, which for this building and virtually every other condo building, is currently an easy option.

  2. Posted by anon

    Hmm. So from August 08 to Jan 09 units in this building dropped 10K. OMG–the sky IS falling.

  3. Posted by steve

    Can anyone tell us if the “x21″ stack faces the dark interior courtyard? If it is, then these were way overpriced to begin with.
    [Editor's Note: They're outward facing.]

  4. Posted by jessep

    Who the hell would pay that kind of money to live at “the Palms?!”

  5. Posted by Dude

    “So from August 08 to Jan 09 units in this building dropped 10K”
    Yup. And it seems they’ve dropped $100K since 2006. But either way, I guess we could spin it to say they’re “only” losing value by $2,500 per month. ‘Tis but a scratch!

  6. Posted by chuckie

    Ok, so losing $2,500 per month… will get to its FMV of $400K in about 10 years!

  7. Posted by tipster

    The comparable unit was a lower floor. #421 sold for $700K a few months ago, #521 just sold for $690K. If you assume $20K for the higher floor, it lost $30K in 5 months, about $6K per month.
    Kind of tough to swallow flushing $8K per month in total down the toilet after taxes for a place you can rent for under $3K.
    It would be more fun to take a stack of 50 $100 bills and light them on fire. Every month.

  8. Posted by grrr

    Anyone selling in this market is simply in a bad financial situation. Has nothing to do with the property. This person was obviously an overextended would-be flipper.

  9. Posted by tbonestk

    what’s the scoop with the retail downstairs? it’s been empty for 2 years and i keep hearing different rumors on what’s going to be there but it never happens.
    it looks lonely empty …

  10. Posted by (Sorta)NewBuyer

    ON A TOTALLY UNRELATED NOTE…
    Some very surprising and positive housing data was just published today…
    … strange… no mention of it on SocketSite…
    http://money.cnn.com/2009/01/26/real_estate/existing_home/?postversion=2009012612
    [Editor's Note: We'll let the "totally unrelated" comment slide but add the following context to the "positive" news: "The median price dropped to $175,400, down 15 percent from a year ago, the biggest decline since records began in 1968 and probably the biggest in seven decades, according to the group. Sales of distressed properties accounted for about 45 percent of all sales last month." And as another reader points out below, sales remain down on a year-over-year basis.]

  11. Posted by jessep

    Maybe that’s because people on SocketSite on perma-bears?
    Hopefully they can all swoop in and buy their properties on Green Street for 400 dollars/sq ft when the bottom comes.
    I am calling the bottom. THERE. I SAID IT. BOTTOM.

  12. Posted by tipster

    “The National Association of Realtors said that home sales increased to a seasonally-adjusted, annualized rate of 4.74 million units. That’s up from a revised pace of 4.45 million units sold in November”
    Good grief, first they revise the November number down, seasonally “adjust it” and then compare December to, what? November? and you want to call a bottom?
    Try this, prices DOWN, volumes DOWN.
    From the same article:
    “Still, December’s existing home sales are down 3.5% compared with December of 2007″
    Nice try.

  13. Posted by SFHawkguy

    SortaNewBuyer,
    I don’t think the month to month increase in sales volume is the great news you seem to think it is. Another way of looking at it is that there was an unprecedented level of foreclosure sales and inventory is at an all time high and more foreclosures are on the horizon. And, the median prices are dropping like a rock.
    http://www.ritholtz.com/blog/2009/01/existing-home-sales-fall-35/
    What’s the bull argument here? That not enough people are getting the good news that foreclosure sales are at an all time high and ergo, presto, real estate prices are about to go up, up, up? Or that but for these nasty perma bears on the nasty internets talking your asset down we would have rising real estate?
    [Editor's Note: And now back to the Palms (or at least San Francisco).]

  14. Posted by anon

    I’ll agree that that month to month increase probably has a lot to do with foreclosures, and that’s not really great news at all.
    But why does the bull argument need to be up up up? or that all those bears are talking it down?
    I think the rational bull argument is probably “the San Francisco marketplace has slowed greatly, largely due to lending’s implosion, but prices have proven to be surpisingly sticky. Also there seems to be more buyers around right now (Obama bounce?) but will it last?”

  15. Posted by condoshopper

    what does this area look or feel like at night? do the elements over on 6th St spill over to here?

  16. Posted by lolcat_94123

    Anyone selling in this market is simply in a bad financial situation. Has nothing to do with the property. This person was obviously an overextended would-be flipper.
    Not always the case. Friend of mine had a bucket load of equity in his place, and just sold because he wants to get that equity out and rent while the prices go down. Then, he’ll put that money into a new place.

  17. Posted by Chris

    @condoshopper:
    “what does this area look or feel like at night?”
    Its not too bad. Some decent restaurants nearby, and certainly feels plenty safe. The Utah is, of course, a classic.
    Mind you, I bet the 4th-street “sub”-way is going to mess this street up big-time for a while…

  18. Posted by robert

    “surprisingly sticky”?
    This place just sold for 13% less than in 2006. That place on 27th isnt selling for 20% less than in 2007. Luxury condos are selling for 20% less than last year.
    Buyers lose a couple hundred thou in equity and you call the market surprisingly sticky? What kind of nonsense is that? Let me guess, a realtor playing with clients money?

  19. Posted by anon

    Clearly I was talking about the market in general, in response to someone else’s general, summary comments. I could point you to something sticky if I wanted to. But I don’t like your tone, so I won’t. Think what you will.

  20. Posted by sfrob

    great – blame realtors when a buyer wants to buy. amazing the assumptions that buyers are stupid and gullible enough to blindly follow an unethical or unknowledgable realtor’s advice. are Buyers really that stupid?
    and to assume that all sellers are flippers is ridiculous. i guess i should ignore the dumb comments and only focus on the smart ones, but come on. haven’t you known anyone to relocate, or lose a job? why is everyone a flipper when they sell???
    as for the article – it says “Existing home sales in the West surged 13.6% to an annual rate of 1.25 million in December, up 31.6% from a year ago… median prices down 31.5%” So sales are up… but we already knew this from the Dataquick post – lots of buyers snapping up foreclosures for cheap in outside of SF causing the surge.
    finally – to nearly talk out of both sides of my mouth – i do think the buyer over paid on #521. so did the buyer on #401. these two were on for MONTHS with no takers – so why did they go near their last offer price? i would have offered $650k on #521 and $550k on #401… so….
    …how & why did they sell at their prices? Did the buyers say “lets just do the best we can, but i want this place” or did the agent say “sellers refuse to go any lower so take it or leave it” or did the agent say “this is a smoking hot opportunity and you better get in now or else you’ll regret it for the rest of your life and prices are going UP UP UP so NOW is the time!!!!”
    oh – #521 – right across from the elevator facing due west with views just over the roof top of the building across the way. #421 looking right at the top of the building.

  21. Posted by The Milkshake of Despair

    “amazing the assumptions that buyers are stupid and gullible enough to blindly follow an unethical or unknowledgable realtor’s advice. are Buyers really that stupid?”
    Disregarding the characterization of realtors being ‘unethical or unknowledgable’ I certainly think that *some* buyers will follow the recommendations of the expert that they have contracted with. It isn’t a big reach of logic to assume that the agent that the buyer has agreed to compensate with a large chunk of the sales price will dispense expert advice with integrity.
    Most buyers do their own due diligence and apply their independent judgment. Most realtors are ethical businesspeople. But that doesn’t mean that there are no gullible buyers coupled with unethical realtors out there.
    So what exactly becomes of that small minority of unethical realtors ? Are their licenses revoked ? Or are they allowed to continue to practice and submit their membership dues ?

  22. Posted by (Sorta)NewBuyer

    I know the Palms location very well.
    I work about a block away.
    There are *some* nice restaurants near by, and certainly a few conveniences… especially grocery stores (Safeway and Whole Foods) and transportation.
    Homelesness is not a *big* problem, but it’s definitely not a strong suit.
    In my opinion, you’d have to be nuts to drop those kind of numbers on a location like this, when you could get a nice place in Pac Heights or Nob/Russian Hill for the same price.
    The Soma story is very clear: people thought that it was ‘up and coming,’ but when bubbles pop, those ‘up and coming’ units become the first to plummet as people change their taste to ‘safe and secure.’
    This is why Infinity and Palms are down 15 – 20% in the last few months, and Pac Heights has gone down much less.

  23. Posted by HappyPalmsResident

    I’m a homeowner and live in the Palms and I’m definitely happy to live there. For those who take the train to work, it is so convenient. Low HOA surely helps, and convenience to downtown, grocery stores, and restaurants nearby. The 24-hour security/concierge is definitely a plus.

  24. Posted by lol

    Jessep called a bottom in January 2009.
    I am calling a second dip. THERE. I SAID IT. SECOND DIP.

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