February 23, 2009

Checking In On Two Pacific Heights Apples: 2155 Buchanan Update

Apples-to-apples sales tell us the most about how the market is moving, but non-sales can provide some hints as well.

And while 2155 Buchanan Street #9 is in contract up in Pacific Heights (purchased for $1,000,000 in June 2006, listed for $950,000 in November 2008, last asking $885,000), the listing for the "reduced to sell!" and vacant 2155 Buchanan Street #7 has expired without a sale (purchased for $899,000 in July 2005, listed for $960,000 in August 2008, asking $850,000 at expiration).

Perhaps we’ll soon see a sign in the window for number seven and another unit of rental inventory to be absorbed. We’ll keep you posted on the contract price for number nine.

UPDATE: After 24 hours off the MLS as "expired," the listing for 2155 Buchanan #7 has been turned back on. No adjustment to the price (still asking $850,000) and now an official 186 days on the market (but we'll call it 185).

A Pacific Heights Apple Up In The Tree: 2155 Buchanan #9 [SocketSite]
Another Shot At A Ripening Pacific Heights Apple: 2155 Buchanan #9 [SocketSite]
San Francisco Rental Market Weakness: SocketSite Readers Report [SocketSite]

First Published: February 23, 2009 10:30 AM

Comments from "Plugged In" Readers

1612 Vallejo is in contract giving more credence to my $2M floor hypothesis. The hypothesis is that there are a lot of people with the ability to afford a $2M home purchase that want to live in a SFH in PH and they they will continue to buy these homes on the way down. Despite the unfortunate neighboring architecture -- this is a very nice home with good curb appeal (so long as you are wearing blinders!) @ $730 a sqft -- this will likely end up being a good deal.

Back on target -- not sure where the condo price floor is but its clear that it's somewhere below $850k for a 2/1 with parking in PH. There was a 2/2 that sold on Laguna a few months back for $750k after languasing for 150 DOM and 150k drop in price. So maybe the floor is around that number, but this was a few months ago Could be closer to $725k to live in Prime SF in a 2/1.

Posted by: eddy at February 23, 2009 11:35 AM

eddy,

Agree with your findings for now. Plan A locales won't ratchet down again until Plan B's do, etc. (Sorry Sparky)

Thing is, well off folks are more dependent on equity than housing markets and equities are grinding everyone into tuna sashimi. Housing was a leading indicator, now it's lagging. Friends and acquaintances from all across the socioeconomic spectrum are capitulating en masse lately. Instead of meeting for dinner, it's more like a shot and a beer.

(45yo - listening to 'Two Hearts Beat as One' - French mix)

Posted by: The Red Pill at February 23, 2009 12:02 PM

I'd been telling people for a while now that 2 bedroom condos in prime PH/Cow Hollow will be 750k. However, I'm not really optimistic there's a real bottom out there these days. Still, 750k still seems like a good deal to me for a two bedroom. With at least 20% down, that's pretty close to current rents for similar properties.

Posted by: sleepiguy at February 23, 2009 1:15 PM

sleepiguy,

Do you see falling rents posing a problem for PH and/or your 750k estimate for 2br condos in PH?

Posted by: badlydrawnbear at February 23, 2009 1:23 PM

750k for a 2/2 in PH, with parking (and this was on Laff park, rear facing with outdoor space)is / was a great deal. Needed some TLC but it was a good deal/value for the area.

People always say the sky isn't falling; in this case, it's the floor that you have to look out for!

Posted by: eddy at February 23, 2009 1:48 PM

How do you know it's in contract and wasn't just yanked/expired like #7? I had assumed that #9 expired becuase I couldn't find it with the "Act. Cont." status on the MLS.

[Editor's Note: Not to be glib, but because we checked. Keep in mind that listings that are in contract but no longer "contingent" are hidden from the public MLS search results.]

Posted by: esther at February 23, 2009 1:56 PM

Yes and no...

With falling rents, prices for condos in prime Pac Heights will continue to fall. However, the quality of rentals in D7 is pretty poor, which makes buying somewhat more attractive in the below 750k range.

It's odd, but many of the apartments here are in absolutely terrible condition. Many have been owned by the same landlords for decades who simply can't afford to adequately maintain the buildings. So, to some extent, it's a quality of life issue. That said, no one is buying anything if they're worried about getting laid off or they suspect their company may go under.

Obviously, my statements are based on anecdotes and not any type of quantifiable trend. Regardless, the desire for young couples to buy is there and with prices falling very quickly, it seems more achievable for financially prudent people than at any time in well over a decade. Of course, we may all be living in cardboard boxes in the Civic Center by this time next years, so who knows!

Posted by: sleepiguy at February 23, 2009 1:57 PM

"With at least 20% down, that's pretty close to current rents for similar properties. "

Not even close. At 500K with 20% down for a 2bd in pac hts, then it is close. But $750K is not close.

There is a certain person who rents a 2 bdr in this building for $2150 and there are plenty of 2bd apts to be had in PH for under $3K

Posted by: spencer at February 23, 2009 2:45 PM

sleepiguy said:

> Many (District 7 Renatals) have
> been owned by the same landlords for
> decades who simply can't afford to
> adequately maintain the buildings.

When I was selling apartments I met a lot of apartment owners and while I'm sure that there is at least one owner who has owned in SF for "decades" who can't "afford" to maintain their building most just don't "care" about maintaining their buildings since even crappy apartments will quickly rent in SF...

Posted by: FormerAptBroker at February 23, 2009 2:46 PM

Eddy -- 1612 Vallejo is a home sitting in the busy Franklin / Van Ness corridor (definitely not PH) on liquefaction that hasn't had any interior or structural work done on it in over 30 years. While we don't yet know where it traded, even if it traded at $1.8 million (highly unlikely) the buyer would have overpaid. We'll see if they have the ability to close!

Posted by: dozer at February 23, 2009 2:53 PM

Just ran the numbers. I think average 2bd condos in PH need to be around $525,000 to be near equivalent going rents... $3K per month.

Posted by: spencer at February 23, 2009 2:54 PM

Formeraptbroker...and because of RC, why incentivize long stays with renovated units? I'm all about the granite/stainless, but that's because I'm renting condos sans RC.

Red pill, make sure you don't OD on all those 80's remixes!

Posted by: 45yo hipster at February 23, 2009 4:29 PM

Btw, what ever happened to 'prime'? Did he stop posting? Wonder what his take is ok these PC condos.

Posted by: 45yo hipster at February 23, 2009 4:35 PM

dozer, 1612 Vallejo is certainly in PH. If it is on liquefaction than that would certainly be an interesting data point -- but I'm not sure that you are correct. Did you verify this fact? This place is pretty huge at 2700 sqft and although it may need updating, you still have a D7 SFH for aroun $2M. A 1700 sq ft SFH just went into contract on Clay at over $2M asking in under 10 days. And the home had no yard to speak of, and had one of the worst SFH floorplans I've ever seen, with little expansion potential. I'd take 1612 any day of the weak if forced, but I passed on both since I wasn't!

Posted by: eddy at February 23, 2009 4:49 PM

After 24 hours off the MLS as "expired," the listing for 2155 Buchanan #7 has been turned back on. No adjustment to the price (still asking $850,000) and now an official 186 days on the market (but we'll call it 185).

Posted by: SocketSite at February 23, 2009 5:35 PM

This happened to me with 123 Laurel coming off market and then right back on market. Ah well, it happens.

I noticed that 2674 Filbert that was in contract for a months is no longer listed as such. Back on the market. I was actually surprised when it went into contract so fast. So not surprised to see it fall out of contract. I thought this was way over priced at $3.75.

Posted by: eddy at February 23, 2009 6:32 PM

Edit on 2674, it was originally listed at $3.995. MLS has it listed at $3.75. Note to agents, update your interactive tour and kill the Truman Show music; then again, maybe it's appropriate given how closely we're watching the market!

Posted by: eddy at February 23, 2009 6:35 PM

eddy -- yes, definitely on liquefaction. There are a few places in PH and CH that sit on filled in ravines and this is one of them. The report on the 1906 quake described massive destruction around the Vallejo / Van Ness intersection.

I disagree on this place being comparable to one in the heart of PH. Would you say the same for a place that actually sits on Van Ness, on the D7 side of the map?

That said, I hear you on today's market -- the fact is that folks pay what they want to pay and believe what they want to believe. While I looked at 1612, my analysis was that it wasn't worth anything near $2.0 million given the work involved in making it livable. Clearly someone thinks differently, and they'll be the happy (or unhappy) owner of it!

Posted by: dozer at February 26, 2009 7:01 PM

Redfin has this as sold @ 11M on 5/3/12 but its says its part of a multi lot sale so its not clear if that was the final sale price for the whole property.

http://www.redfin.com/CA/San-Francisco/2100-Vallejo-St-94123/home/1738877

Posted by: eddy at September 20, 2012 9:14 AM

Interesting. That would explain some things. The 25-30 feet left of the main house is defined as a separate lot. It's technically 2110 Vallejo. So, I'm sure the 11 million is for the entire grounds. Good job. Great price. Nice home. Look forward to seeing the end result.

Posted by: Denis at September 20, 2012 11:40 AM

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