465 Hoffman: Bath
Plugged-in people got the pre-preview super sneak peek last week (sorry, we couldn’t resist). Now 465 Hoffman is listed with a few more photos, an asking price of $3,900,000 ($886 per square foot), and a new placeholder for another website that’s “coming soon.”
And yes, there’s been a listing brokerage and agent switcheroo (originally “coming soon” with Paragon, on the market with Vanguard).
∙ Listing: 465 Hoffman Avenue (4/4.5) – $3,900,000 [MLS]
465 Hoffman: Architects Unveiling This Evening (And On The Market) [SocketSite]

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Comments from “Plugged-In” Readers

  1. Posted by sparky-b

    Preview party was good stuff. Did you go Mr. Editor? I was looking for you.
    [Adam's Note: I managed to make an appearance but spent most of my time talking with Joel and unfortunately couldn't stay to enjoy the drinks. Cheers.]

  2. Posted by The Milkshake of Despair

    Interesting bathroom. It looks like a cross between a “temple of bathing” and an operating room.
    The uniformity of color palette makes for a seamless looking place.
    I like it. Though I couldn’t justify it.

  3. Posted by sparky-b

    My problem with the bath is mirrors. The shelving is right up on the sinks. I would also want a little bit bigger shower (depth wise) and more storage. But, it is really well done and the tile work is interesting and well executed. Also, master suite has a walk in and another closet so there is other storage.

  4. Posted by colorplease

    I’d be afraid to get the bathroom … uh, dirty. A little too sterile for even my cold taste.

  5. Posted by Robert

    Still don’t understand why the last sentence of almost every article on SS has to start with the phrase “And yes,” – this continues to create an unwarranted atmosphere of smugness and “arent’ we all smarter than the rest of the world” that pervades this site and extends to so many of the reader’s comments. Similarly, do we have to hear for the 10,000th time that a listing is not really “new” and that the subject home was previously listed at a higher price? This is useful info, but the constant implication that every new such listing is a “fraud on the market” has gotten very old. And does every article about a price on a home being reduced need to insinuate that the owner and/or listing agent must have been “too smart for their own good” to have initially sought a higher price?
    The banality and single-mindedness of these postings makes SS less interesting than it could be. Perhaps try to mix it up a little more? And yes . . .

  6. Posted by LMRiM

    …the phrase “And yes,” – this continues to create an unwarranted atmosphere of smugness and “arent’ we all smarter than the rest of the world” that pervades this site and extends to so many of the reader’s comments.
    I agree with the analysis, sort of, I guess….
    To me, the language just seems a natural extension of the smugness that seems to pervade SF, especially in relation to “flyover” country, the East Bay, “boring” Marin, etc., which we also see in the posts constantly. My favorite is when once in a while I’ll relate something about growing up in the Bronx in the 1970s, or historical conditions in some other area that had fallen on tough times like Detroit (unexpectedly, I’m sure, to the residents who invested their hopes and dreams in the area and were doubtless not morons), and posters will immediately jump all over it with dismissive snide comments pointing to the supposed superiority of SF to anywhere else.
    LOL, maybe it’s just confirmation bias on my part (or hindsight bias, but I’d hope that I’d have enough credibility on market movements to avoid that trap in most people’s eyes), but looking at the obviousness of the real estate bubble, the average dollar size of the losses in real estate so far in the Bay Area and even in “primo” SF (the largest of all the MSAs in the entire US), and the breadth of the declines, I’d have to say that many in the Bay Area truly played the role of “sucker” to perfection.
    And yes, everyone still seems very smug (myself included), so I guess I’m not as bothered as Robert by the use of the phrase :)

  7. Posted by sparky-b

    To play devil’s advocate; you (and others) do ride anonn for being from Ohio while you are from the Bronx.

  8. Posted by Piedmont(Italy)

    It’s good to know that being from Detroit myself I have at least one thing slightly more in common with Annon than LMRiM.
    It’s an interesting point the smugness as most everyone I knew in California came from somewhere else. I was happy to be able to leave MI, but didn’t think the worse of it for those back home. Everyone does what they want to do. More with money like SF and hence this site and outrageous prices.
    And yes, the time though for those of us who have rented for a long time and are now mostly liquid will come. I’ll have my retirement place in Bernal for cash if prices were to fall to LMRiM’s 200x rent formula.
    That bathtub by the way is what I was looking at for the house I am restoring here in Italy. It goes into the SS picture file for when the joyous days of deocoring actually come.

  9. Posted by anonn

    Forget about the topic of real estate for a second. Read any blog. The fact of the matter is that it’s simple and easy to be a little drole or humorous while dismissive on the internet. Particularly with a built in audience. Try doing the same while writing positively without being cloying. It’s much more difficult.
    But I gotta say it. “Primo SF” is the largest MSA? Freudian slip?

  10. Posted by anonn

    And, for what it’s worth, this little mini discussion about smugness is being contained within a thread anchored by a $3.9M Noe Valley home. Say what you will, but even the thought of such a house did not remotely exist in the first part of this decade.

  11. Posted by Louis

    thank you robert and lmrim for saying it. you couldnt be more right. we are pervaded by either smugness or bitterness in anything having to do with real estate. nyc same thing.
    and back to the listing i think this is a really nice design, unusually so. but its hard to see it selling even in a good noe location for over $2.9 MIL. any time soon.

  12. Posted by tipster

    Smug? This isn’t smug. You want to see smug: go back and look at the 2006 threads where all the postings were from flippers at Infinity and ORH as to who was going to double their money sooner.
    THAT was smug. Ha ha, they aren’t so smug now!!

  13. Posted by justme

    Hmm. Sort of like the house. Love the stacked slate wall. Really, really want to Three-Stooges-slap whoever wrote the copy on the MLS listing.
    And yes, I think it’s a bit pricey, too.

  14. Posted by FormerAptBroker

    Robert wrote:
    > Similarly, do we have to hear for the 10,000th
    > time that a listing is not really “new”…
    It is hard not to point this out when an overpriced home that has been on the market for well over a year shows up in the MLS (at the same price) as a “NEW” listing and the agent runs ads saying “HOT NEW LISTING!!!” “SUBMIT OFFERS SOON, THIS HOME WILL SELL FAST!!!”…

  15. Posted by Trip

    LMRiM wasn’t saying SF is the largest MSA but that the real estate losses in the SF MSA have been the largest of any MSA.
    Is the SS tone smug? Sure, but probably deservedly so. The editor was pretty out in front in pointing out the SF bubble and the games the RE industry plays to cook the stats. And SS is still a needed counterbalance to the RE sites in town, where the message is basically that the market is flat in SF and now is the time to buy. I can’t imagine anyone is still falling for it, but people do seem to be gullible about these things (LMRiM’s point about the unearned SF smugness in general). Who was the bigger sucker — the guy in Antioch who saw his house fall in value by 50% from $400k to $200k or the guy in SF who has seen his place fall in value by 20% from $1.5M to $1.2M?

  16. Posted by anonn

    Who was the bigger sucker — the guy in Antioch who saw his house fall in value by 50% from $400k to $200k or the guy in SF who has seen his place fall in value by 20% from $1.5M to $1.2M
    Have we seen an anecdote where a 1.5M house sells for 1.2M? I don’t remember one. Regardless, IMO, the SF guy has a better chance to recoup if he manages to stay pur for a while. Given the price point of 1.5M, I think most people who bought in that range probably were thinking about putting down roots.

  17. Posted by LMRiM

    Have we seen an anecdote where a 1.5M house sells for 1.2M? I don’t remember one.
    Why, of course we have. 651 27th Avenue in NV springs to mind, and it exactly went for $1.5M in 2007, and for $1.2M in 2008.
    http://www.socketsite.com/archives/2009/02/an_apple_with_an_asterisk_651_27th_street_closes_escrow.html
    Also, let’s not forget the sucker who blew up $500K in Ingleside Terrace (25 Mercedes).
    Back in NV, although it’s not sold yet, it’s pretty safe to say that 714 Duncan is not going to sell for more than its current ask of $1.2M (in light of the DOM), and that one was purchased for $1.413M by some sucker.
    There are many others I’m sure, and many many more people who are simply trapped (and so we won’t see the anecdote explicitly until it becomes clear that the price is never coming back and they throw in the towel).
    About Trip’s point regarding who was the biggest sucker, the buyer in Antioch or in SF: individual circumstances will always vary, but on average, I’ll say the SF buyer was more likely to be the sucker in any given transaction. Plenty of people in SF risked their own cash (as anonn often points out – not always of course, but often), while many of the Antioch buyers were 100% no money down. That’s a smart bet – heads I win, tails you lose. Definitely not a sucker bet when dealing with a bubble asset.

  18. Posted by anonn

    Oh yeah. As soon as I typed that I remembered Mercedes, which so far takes the cake IMO. But I forgot about the 27th street one. So let’s go ahead and say SF guy loses 20% every time. What the hey.

  19. Posted by Robert

    Another pet peeve (illustrated by the last few posts) – why do you and so many other people on this site insist on calling anyone who buys an asset that later declines in value a “sucker”? You act as if every decision to purchase real estate that later declines in value creates a “sucker” who must have naively believed some “false hype” when they bought. The fact is, real estate is simply an asset that, more often than others, has mostly gone up in value in our lifetimes. In fact, real estate (more than other assets) is something that people often do not buy as an investment, they buy it often for family reasons or simply to have a nice home. Was every person who sought to buy a house or condo in San Francisco in 2006 a “sucker” because of the time frame in which they were shopping? The ridicule on this site for anyone who makes a “wrong bet”, even if it wasn’t even a “bet” in the first place, is astounding.
    Now all of that being said, certain real estate in San Francisco can be amazingly overhyped and investments in such real estate are certainly sucker bets. Witness people who bought units at the Beacon at $1,000/square foot. Even if real estate values generally had not declined in SF, these investments would likely have turned out poorly, given the price/quality ratio going in. At the Brannan, despite the buildings’ higher quality than the Beacon, anyone who has had the unfortunate experience of dealing with Paul Lobosco and his “if you don’t buy today you’ll be the loser” shtick has seen the side of San Francisco real estate that is justifiably pilloried at this site. Can there by any real estate agent, or even any human being, more amazingly and consistently rude and annoying as that guy?
    Oops sorry, feel into the trap of being overly critical myself, sorry. But my point is, try to limit your criticisms to buildings that are uniquely overpriced, even in a flat to positive market. The constant postings about how everyone who bought at particular times are “suckers” is not very helpful . . .

  20. Posted by LMRiM

    Well, Trip didn’t say “realized” losses. He was just talking about “value” declines. Economically it really makes no difference (opportunity cost argument), but psychologically it matters a great deal of course.
    People will hold on so long as they believe they will “recoup” their losses over a reasonable time frame. The Fed and the banksters love people like this. Psychologically, as well, people will seek to distinguish their situation from other anecdotes – this is simple defensiveness and refusal to consider anything but confirmatory evidence (similar to the phenomenon when mutual fund investors refuse to open their month-end statements).
    Over time, however, the evidence becomes too great, and the examples too close to home (therefore not distinguishable), and then the declines ensue with vigor. These dynamics, more than any other, probably explain “lags” in declines by neighborhood or across regions.
    Back on “value” wipeouts in NV (edge of NV, of course, and there’s that “defensive distinguishing” I referred to), let’s also not forget 3730 26th (more than 10% under its 2004 price) or 1507 Dolores (more than 16% under its 2006 sale price), neither of which is sold and both of which were featured on SS. Of course, there are also numerous examples of pulled listings where the value declines were in that range, and I’m sure there are many potential sales where sellers are simply discouraged and try to rent out the properties at a loss, subsidizing renters.
    These anecdotes will become more and more frequent and obvious as the year unfolds. The die is cast, and nothing is going to change the dymamics (at least nothing with any reasonable probability of happening). Most people will just absorb the losses, transformed into hold and hope investors. The Fed and banksters smile at this, and it’s the reason why the bailouts and inflation fears are dripped out bit by bit (so as to progressively lock people into their decision by encouraging continued commitments of capital in the hope things will turn around). Holding the declining assets is no big deal for those who looked at their housing decision for what it was (i.e., consumption), but for those who thought it was an investment it’s going to be a real lesson.

  21. Posted by anonn

    Most people will just absorb the losses, transformed into hold and hope investors.
    But that’s where you and others like you are wrong. “Most people” will go on living in their homes, as if nothing has happened..

  22. Posted by diemos

    “But my point is, try to limit your criticisms to buildings that are uniquely overpriced, even in a flat to positive market. ”
    But robert, everything in SF was overpriced by a factor of two at the peak and everyone who paid market price between 2005 and 2008 is a sucker. Unless they did it with someone else’s money.

  23. Posted by nnona

    “but looking at the obviousness of the real estate bubble, the average dollar size of the losses in real estate so far in the Bay Area and even in “primo” SF (the largest of all the MSAs in the entire US), and the breadth of the declines, I’d have to say that many in the Bay Area truly played the role of “sucker” to perfection”
    Many in the world played the role of “sucker” to perfection. If you want to go by dollar (or pound sterling or ruble equivalent) SIZE of losses, it is people in “primo” NYC, “primo” London, and “primo” Moscow who will have played the “sucker” role most “perfectly”. By far.
    ———————————————-
    “It’s an interesting point the smugness as most everyone I knew in California came from somewhere else.”
    I can’t speak for LA or the rest of CA but there is a strong “more Catholic than the Pope” tendency among a good number of transplants in SF.
    Some sincere questions to people from other cities with a lot of transplants (NYC, Wash, Atl, LA, etc..). Is this a mentality natives of these other cities observe (and complain about) as well?
    ———————————————-
    “But that’s where you and others like you are wrong. “Most people” will go on living in their homes, as if nothing has happened..”
    Anonn, good job taking something way out of context.
    In the original post, it’s obvious that “most people” refers to “most people who’ve experienced value declines from the purchase price” and not “most people (who own homes in SF)”.

  24. Posted by anonn

    What was taken out of context? I was directly addressing LMRiM’s latest point, not the original post. Did you not see that? It was the post directly above mine, and I quoted verbatim.
    Regardless, my point stands, as “most people” do not consider themselves “investors,” but rather homeowners who have put down roots. Most of them will go on living their lives, and if it should be the case that their house is worth less than they bought it for, they will think about it from time to time. If they enjoy the home, though, that’ll be pretty easily rationalized.

  25. Posted by DanRH

    on the sucker front….i agree with Robert that a lot of purchases are more to do with life-timing. Are the folks claiming ‘sucker’, people who also could have bought in ’06, ’07, or ’08 (had the cash to do so) but chose not too?? if you didn’t have the cash to do so, then I wouldn’t be so quick to calling others sucker as you might have done the same thing. If you did, but chose not to, then please raise your hand if you’re now about to purchase (or just recently did) as then kudo’s to you for timing things well and getting a 10-20% discount. But if you’re renting for eternity, well, then, do you want to compare your investment decision with someone who purchased in say 1997/1998?
    Also, would you say ‘sucker’ to someone who bought in the recent time period but purchased something well within their budget (ie, didn’t overextend) and can ride out things for a long time?
    I would rather say to someone who’s been saving up for the past 5 years and by luck of timing, is now finally in a position to purchase: ‘congrats…’, then to call the opposite folks ‘suckers’.
    Only ‘suckers’ i see are folks that purchased waaaay beyond their means (regardless of when).

  26. Posted by anon

    Good to see Robert explain his post a bit more – I completely assumed that he was talking about the smugness of Satchel/LMRiM in particular during his first post, not the smugness of real estate bulls.

  27. Posted by anonn

    not the smugness of real estate bulls.
    Um, read it again?

  28. Posted by Robert

    What does the board think that this house would rent for? Personally, I don’t think they would get much more than 4K for it.
    (this is the macro-Robert, not the anti-smugness Robert.)

  29. Posted by NoeValleyJim

    LMRiM’s point about the unearned SF smugness in general
    What, as opposed to your own earned smugness Tipster? Give me a break.
    Only someone who was very unhappy with their own existence would object to the happiness of others. How is it any skin off your back if someone else is self-satisfied? Would you be perversely happier if others were miserable? What an odd philosophy to approach life with.
    People who made outsized bets on real estate and missed should be the ones who should have to suffer the consequences, not the people who avoided the risk. Everyone who takes a chance and fails is not a sucker. If there are any suckers in this game, it would be poor taxpayers who are left to clean up the mess.

  30. Posted by tipster

    “What, as opposed to your own earned smugness Tipster? Give me a break.”
    Um, NVJ, if you are going to argue with a quote of mine, at least make sure you are using a quote of mine, as opposed to a quote of Trip’s, like you just did.
    Trip, I just took a bullet for you! I’m smug enough to take it!
    What’s funny is how the conversation has turned from will the bears predictions come true to whether the bears should be smug now that their predictions ARE coming true. I’ll take that conversation any day, because it means that the truth of our predictions is now beyond argument and the only thing left to argue about is how we should feel about it! Ha ha!

  31. Posted by NoeValleyJim

    What does the board think that this house would rent for? Personally, I don’t think they would get much more than 4K for it.
    I think you are off by quite a bit. I am sure it would get $6k+, probably much more. It is hard to tell since the property is so unique for this market, but it is huge and new with views, so it would command a premium.

  32. Posted by NoeValleyJim

    Sorry man, that was meant for Trip not you, but you can be smug about it too, if you like! :-P

  33. Posted by LMRiM

    Rent on this place – definitely more than $4K. There are still people with cash, and renters who have the scratch to pay $4K+ per month (meaning that they were smart enough to avoid buying an albatross in 2004-07) would recognize the value. I’m with NVJ, at least $6K per month, you might even get $7.5K from someone who wants to enjoy the new house smell for a while and observe the continued decline of SF values from a nice perch.
    About “smugness” and “suckers” I’m enjoying this mini-discussion very much.
    But, as someone who tends to use the word “sucker” very often, I feel I should clarify what I mean by the term, starting with what I don’t mean.
    I don’t mean that everyone who bought was a sucker (although I’m sure the majority of people who did buy at the peak were suckers). I also don’t mean to imply any lack of intelligence or anything like that. Some people will recall that I always bring up the fact that Sir Isaac Newton fell hard for the South Sea Bubble and no one in SF is as smart as Newton, that’s for sure (well, 99.999% sure).
    I simply use the term in the PT Barnum sense I guess.
    A system was set up – partly intentional and partly as the result of an ever increasing number of cumulative distortions – with the express purpose of creating asset bubbles. For housing, it starts with the unmoored currency, continues through labyrinth regulatory and tax distortions, and concludes with a partnership between the banksters and the USG in which the tacit understanding is that the foolish taxpayer (and the population through inflation of the currency) will clean up the banksters’ gambling messes. To my understanding, this constitutes a large “game”. You don’t have to agree with my characterization, but that’s where I’m coming from.
    The “sucker” is the person who enters this game without understanding the parameters, rules, risks, etc. In short, that person is the “mark”.
    Looked at this way, it’s easy to see that many purchasers of houses were not suckers. People who understood the risks, quantified a downside and/or are willing to accept with equanimity (without wailing for a bailout) whatever comes were definitely not suckers. On the other hand, people who stretched to get into a home, risking a meaningful portion of their own resources, because they thought they would beat the bankster’s/USG’s game of asset inflation and didn’t understand that this was a game are suckers. That’s why I tend to look at the Antioch buyer with 100% no money down with some small admiration: he understood the rules of the game (if only intuitively), wisely offloading the risk onto someone else. Good trading!
    I do think if we had a more rational system, more stable currency, and less governmental involvement in the economy, these sorts of bubbles would never grow so large as to become systemic risks. Others disagree with me on that, and that’s cool – it’s an ahistorical conversation anyway because we’ve never been able to examine a modern economy without these sorts of micromanagement and governmental insurance/welfare schemes in action.
    I just want to win at the game. That’s my role. About the general idea that bears are happier when others are miserable is silly, at least from my point of view. I am extremely saddened to see resources squandered, as well as to see the evolution of society influenced to such a great extent by the massive concentration of political and finacial power in Washington, and coordinate diminution of personal resposibility and extra-governmental institutions. But that’s the hand we’ve been dealt, and there’s no use getting too upset – better to figure out how to profit from it. (Believe me, that’s the way the banksters and bureaucrats look at it – I guarantee it.)

  34. Posted by Robert

    I could see 6K, sure. But, the problem is, you are really fishing here. Even assuming a tax basis of 30%, you would need to earn more than 300K to afford 6K/month on rent.
    As I pointed out in previous posts, there are only a few hundred households in all of SF that are willing to pay more than 3K a month in rent. I am excluding vacation rentals, insurance rentals, group quarters, etc.
    Let’s say there is 500 such, and tenure is 3 years — that means your maximum demand is 14 households/month. At the same time, you are competing with tons of other inventory on the market, in all the different neighborhoods. How many of these 14 would rather live somewhere else — they could live basically anywhere. Let’s say, of all the neighborhoods in the city, diamond heights is the “dream” neighborhood for 8% of our wealthy 14. So, you are down to 1 household/month that would even consider renting this place.
    Now, look at household size. This is a huge house in a city with small household sizes and a dearth of children. Of course a DINK couple could rent this place anyway, but they would probably get more utility from a smaller unit with a better view, or other amenities than redundant rooms. This cuts down your target market. Let’s say by 20%. Now, you are down to 1 household every 5 months that would even be in the market for the same property type/neighborhood/price point.
    Now, let’s say this specific house will win out 20% of the time against the competition — which is, of course, way too optimistic, as a long run equilibrium, since there will be much more than 5 houses for rent, and they will take steps to fight for the same market.
    So, you are looking at mean time between renters of about a year, with the average renter staying for 3 years. In other words, the effective rent would be still be 4K/month, even if they succeeded in renting it out for 6.
    You can see where I’m going. The problem with trying to rent out something that appeals to such a small market in an environment with short tenure means that there is an effective cut off beyond which you are playing the lottery while your effective rent hits a ceiling.
    I claim that this ceiling is about 1K a bedroom, for houses with 3 or more bedrooms. The reason is not that the house isn’t desirable, but precisely because housing in general is desirable, and people still believe that they are “throwing money away” by renting, and so your average 300K will just buy a place, and if they can’t they will under-consume to save up to buy.

  35. Posted by NoeValleyJim

    As I pointed out in previous posts, there are only a few hundred households in all of SF that are willing to pay more than 3K a month in rent.
    Where do you get this notion from? Sorry for not following all the posts here, but I am too busy. You can just point me to the conversation and I will catch up if you don’t want to have to recapitulate.

  36. Posted by ex SF-er

    NVJ:
    First, I’m not sure I fully buy Robert’s thought experiment, although I find it intriguing. I do agree with the statement that it is difficult to find a person willing to pay $6k/mo or more in rent however.
    I don’t know what data Robert uses, but I use Census data.
    First of all, I find it unlikely that a person making less than 100k/year could afford or would pay rent of $4k/month IMO, and especially not $6k/year. So I will ignore all renters making less than 100k/year. others may disagree with me of course.
    only 390 households in San Francisco rent AND make more than $100k/year, AND pay 35% of their income or more in rent.
    (that would be $2917/mo or more)
    90% confidence interval is +/- 161.
    so a good maximum initial estimate would be 451 households paying over $2917/mo or more in rent. (minimum initial estimate 229)
    for comparison:
    45,751 renters make more than 100k/year
    -33900 pay 20% or less of their income in rent (74%)
    -6983 pay 20-25% of their income in rent (15%)
    -2697 pay 25-30% of their income in rent (6%)
    -886 pay 30-35% of their income in rent (2%)
    -390 pay 35% or more of their income in rent (1%)
    there are 905 additional households (2%) that are not computed. it is unclear where they lie in terms of percentage of income paid in rent. however, given the trend above it would be unlikely that they all fall in the 35% rent paid or more category.
    I’m sure there would be intense disagreement as to the distribution of the 905 extra households. If you use percentages above, about 1% of them (9 households) will pay more than 35% of income on rent.
    extremely liberal interpretation would be that they all pay more than 35% of income on rent.
    I think it’s even liberal to suggest that half (452) pay more than 35% of income on rent given the percentages above… but it is possible if due to some quirk of selection bias all the top rent-payers weren’t computed.
    Thus, adding it all up:
    there are 229-451 “confirmed” people in this category.
    then likely add in 9 (conservative), 452 (aggressive) or 905 (improbable) to that figure.
    looks like 500-750 households, maybe even 1000 residents isn’t a bad estimate, out of 800,000 residents.
    but remember, we’re only talking about the number of people willing to pay more than about $3k/month!!!!
    and this unit is theorized at $6k-$7.5k!!!!!

    that all said, Robert’s argument does hinge on a fair number of assumptions which weaken it IMO. one area that changes Robert’s argument is time of rental tenure. If it is less than 3 years, then there is more turnover and thus it increases the chance of renting this property out.
    I have a hard time believing that many people will rent a place for $6k/mo for more than a year or two.
    in the end, the essential premise makes sense. not many people rent places for $6k/mo, even the affluent. that’s pretty much a given. people in that income bracket tend to buy, even now. if they’re renting, it’s often because they are worried about their income which causes them to pay less in rent than otherwise. especially in this economy. it’s not like a bunch of newly minted millionaires are showing up in SF right now.

  37. Posted by ex SF-er

    duh. link.
    Here’s the link

  38. Posted by LMRiM

    That’s some interesting info about renters’ incomes and preferences from Robert and ex SF-er.
    Anecdotally, $3K does seem to signify some sort of “break point” for rental SFRs, above which natural demand becomes extremely sensitive to the perceived value of the asset, almost certainly for the reason Robert identifies (owning housing is perceived as very desirable and therefore people are reluctant to spend significant resources on rental arrangements).
    Two components of rental demand for pricey SFRs that escape the census statistic musings, however, are 1) corporate relocations and 2) temporary accommodations for families who are renovating primary residences. Neither of these situations is of course long term, but having looked in the $4K+ market (wishing prices) for SFRs a few times in the Bay Area, I was surprised at how significant these demand drivers were.
    I suspect that those drivers are drying up, however, compared with a few years ago,although good friends of ours in the Forest Hill Extension area just rented their house (quickly, btw) for $3200ish to a local family that needs a place while their house undergoes a major remodel. It’s a large 2/2 + large office, very nicely redone kitchen and large rooms (including formal dining room), with ocean views. (Our friends are moving to Tiburon and renting a townhouse – the annual rent is about 1/2 the cost of the total private school bill for their two kids.)
    Interestingly, they told us that the rent received on their FHE house will just about cover their carrying costs on the asset, which was purchased about 13 or 14 years ago and not significantly HELOC’ed (about $100K was pulled out for remodelling/landscaping). The house would probably sell today for about $950K, down from an estimated peak of about $1.2M in 2007.

  39. Posted by Geo

    ex SF-er: Did you include people who would move back into the city as a population that would rent that place for $6k…as well as relocations to SF? I agree someone in this bracket would most likely not rent for more than 3 years, but as someone who has searched for a decent-sized family-acceptable house to rent, it is not easy here..

  40. Posted by Geo

    Fundamentally, I just find it tough to see this price in this market/location currently…a qucik search on redfin in the last 3 years only one house sold for more than $3 in NV — 625 Duncan, with 5 at $2.9…one down.
    What a time to try an push the envelope to the next level. Interesting strategy.

  41. Posted by anonn

    @ Tipster
    to whether the bears should be smug now that their predictions ARE coming true. I’ll take that conversation any day, because it means that the truth of our predictions is now
    Not really. Many of you were saying that collapse had already occurred in SF during 2007 and 2008. It hadn’t. Sea change — 9/2008. Period.

  42. Posted by Robert

    Hi NVJ, SFS,
    I did use the census, have some issues with SFS’s analysis:
    1. When looking at the rental burden histogram (Table B25074), there will be households earning 290K in the pool of 100K and above, and for these households, 6K/month will fall into the 20-25% range, so they need to be counted, too.
    What you really need to do is find the income distribution, which you can infer from a different table, armed with the knowledge that income tails follow power laws. You can cross check this against other data (e.g. top 5% bottom limits, etc.)
    Once you’ve done this, you can go back to the table that SFS mentioned and start adding in all the contributions from the various income buckets. It would be even better to replace the buckets with a curve there, too.
    2. Having said the above, you also cannot infer that the 100K+ distribution in table B25074 will continue to hold for higher incomes, particularly as it is collapsing so dramatically throughout the table. I.e. the following is the proportion of households paying more than 20% of their incomes on rent, listed by household income buckets:
    income spends more than 20% on rent
    35-50K 89%
    50-75K 75%
    75-100K 54%
    100K + 26%
    This collapse will not stop at 100K. So, at 150K or more, an even smaller proportion will be paying more than 20% of their income on rent. In the same way, the value for 100-150K will be higher than for 100K+, because of the tail effects. You need to tease this out. In fact, the collapse in willingness to pay is the key point I was making, so you need to look at all of B25074, including the lower incomes, and model the decay rate, just as you need to model the income distribution decay rates.
    3. About tenure considerations — the census has this data as well, but it’s certainly not the case that shorter tenure always helps landlords.
    Generally speaking, if tenure is denoted by T, then your want to minimize the expression X/(2T) + T, where X is the probability that a given household will rent your unit times the total pool of households that is in your price point (i.e. the result of step 3).
    Any deviation from the “optimal” T value, either positive or negative, will cause you to have a lower effective rent, since this expression is the discount factor that you apply to convert from paying to effective rents.
    Although to be fair, in the example I gave, the “optimal” value for T is about a month :). In any case, that’s the short story :P If there really is more interest, I can provide additional details.

  43. Posted by Dan

    Kind of a weird diversion of the thread, given that the house is not up for rent. But the asking prices for 4 bedrooms in Noe Valley on Craigslist are $5200-$8800, all for much more modest places than the Hoffman house.
    But this isn’t a rental house. It is unlikely that the seller or the buyer (at whatever price) would intend to rent this place out.
    As for what $3000/month will get you, for $3050/month (including 1 car parking), you can have a 1000 SF 2 bedroom at the Beacon:
    http://sfbay.craigslist.org/sfc/apa/1161573895.html
    Whatever the Beacon condo ultimately rents (or sells) for, I think the 4400 SF house on Hoffman is worth at least 4 times that amount.

  44. Posted by Michael

    San Francisco didn’t start falling 9/2008 but that is when it became obvious to even the most obtuse.
    “That said, yes, there’s something happening. What is is, exactly, we don’t know.” – fluj/anonn 1/2008
    http://www.socketsite.com/archives/2008/01/san_francisco_sales_activity_in_december_down_again_244.html

  45. Posted by tipster

    “Many of you were saying that collapse had already occurred in SF during 2007 and 2008.”
    C’mon, anonn, now we’re stupid or blind? No one with any credibility was saying the collapse had already occurred in 2007 or 2008. We saw the medians and the prices. What we were saying was that, by 2007/8 it had started on the fringes and was inevitable in the real SF. All of that has proven to be true. it was the bulls who kept stating that the problems were (you) and would be (others) limited to D10 or busy streets.
    As for myself, I have maintained that the real problems would show up at the end of 2009 and into 2010. I’m pleasantly surprised that prices are dropping now. Homes and condos that can fetch a post 2004 (!) price are becoming rarer and rarer, though they are still out there (TICs- nearly impossible). We’ve seen a 15-20% price drop in the best parts of SF, even with a foreclosure moratorium. As the effects of that moratorium start to unwind (there are now MORE foreclosures in the pipeline because of it), it’s only going to get worse.
    And even if there are near zero foreclosures in SF, it doesn’t matter. If foreclosed homes in the East Bay were selling for $1, it would be tough to sell a $950K 2 bedroom condo in SF.

  46. Posted by anonn

    We saw the medians and the prices. What we were saying was that, by 2007/8 it had started on the fringes and was inevitable in the real SF. All of that has proven to be true. it was the bulls who kept stating that the
    No you weren’t. You, and others, routinely pointed at individual properties and predicted sales prices based upon an internalization of possible future events. In error.
    Even now, you’re on about “post 2004.” That in itself is an error. Look at SF’s 2004 sometime. You’ll see.
    For the record, Diemos is the only one who continually said 2010.

  47. Posted by NoeValleyJim

    Those numbers don’t pass the sniff test to me.
    There are 26,976 households paying over $2k/mo for rent but only a few hundred paying over $3k?
    There are 86982 households paying between 1k and 2k on rent, so the ratio of the two is .3. If rents follow the same dropoff (big assumption, I know, but if anything it is likely to be too conservative, due to rent control) the amount paying between over 3k should be .3 times the amount paying 2k-3k, or .3 * 26976 = 8092, over 10 times your estimate!
    As a reality check to these numbers, let’s look at how many are asking over $3k on Craig’s list. Right now I see over 400 posted in the last two days (I am not going to try and dedupe this set, but the assumption is anyone posting in the last two days has not rented out yet). At a roughly 5% vacancy rate, that would imply 8000 rentals. And this is only from landlords that actually post on Craig’s list. And even if you assume that asking rents are 25% higher than actual rents, there are over 200 listed at $4k+, which would give 4000 at the 5% vacancy rate.
    Do you believe that the vacancy rate for $3k+ rentals is over 50%?
    I honestly believe that there are individual buildings with close to 100 renters paying over $3k amongst some of the new construction in SOMA.
    Some landlords don’t even post on Craig’s list, I don’t know what percentage.
    There are 70 people asking over $6k on Craig’s list right now, btw.
    This does leave the question of where these people are on the income tables, but that will have to wait for another time as I need to leave for a Mother’s Day celebration.

  48. Posted by ex SF-er

    When looking at the rental burden histogram (Table B25074), there will be households earning 290K in the pool of 100K and above, and for these households, 6K/month will fall into the 20-25% range, so they need to be counted, too.
    This is true of course.
    but less than 5% of SF households make $290k/year (the lower limit of the 5% group is $266k/year).
    And the vast majority of those households buy, not rent.
    as I said in my post (it was me, not SFS) above, these are all going to have to be rough guestimates…
    so I agree with you that there may be a few number of people making $300k/year who are in the 20-25% of income paid in rent bracket who could afford a $6k/mo rent, and maybe even a very few people making $1,000,000/year in the 10% of income paid to rent bracket… but those numbers are small, if for no other reason than there aren’t many people who make more than $300k/year.
    clearly (and logically) there are few people who can afford $6k/month in rent. even in vaunted SF
    the absolute numbers of people in the >100k/year category are skewed significantly towards the lower bound, and thin out from there as you get to higher incomes.
    ===
    For the record, Diemos is the only one who continually said 2010.
    anonn:
    just to add to your record, I have very clearly maintained for some time that SF’s RE downturn was inevitable and would be prolonged. I’ve often used the date of Dec 2011 in fact.
    and I can’t count how many times I’ve said “SF’s RE downturn will be like watching the paint dry on a painting of grass growing.”
    However I do agree with your assertion that there were a few uber bears who would make “blood in the streets” style proclamations about the general SF RE market when individual properties did poorly back in 2007.
    that said, in general SS in general was a pretty bullish place back in 2007. most of the posters at the time held strongly to the “SF is different” and “SF is special” beliefs, and seemed unable to understand that SF was simply yet another city acting just like most of the RE markets across the globe.

  49. Posted by shza

    I agree with NVJ, both that this is an odd turn of thread and that the rental numbers (re a supposed $3k hard stop) don’t pass the smell test. It’s nearly impossible to find a rental apartment with at least 3 bedrooms for at or under $3k. The ones advertised as 3BR at around that price point are typically (a) in the Excelsior, Bayview or Hunter’s Point (or maybe in the far-out outer sunset) and/or (b) 1 BRs or 2BRs where either a living room or dining room or both are being called “bedrooms” in the ads and (c) don’t have parking. There’s nothing I’d actually live in that’s being offered at less than $3600 or so.
    For now though, I’m perfectly happy renting the place we’ve been in for 3 years with no price hikes at $2250/month (annual rent = ~6% of gross HHI).

  50. Posted by anon

    The ACS has a notoriously difficult time getting useful data from dense urban cities. Their basic methodology has an extremely difficult time accounting for roommate/multiple household in one unit situations – of which MANY +$3000 per month rentals end up being. I don’t know how many people I know that live (or have lived) in a $3500 per month four bedroom Mission flat split four ways (or something similar like three UCSF med students living in a $3000 a month three bedroom in the Inner Sunset).
    Now, it may be unlikely that this unit would be used for that purpose, but it DOES affect many other units in the +$3000 price range, especially in many of the “Real SF” neighborhoods.

  51. Posted by tipster

    Anonn, I think I’ve gone on record as stating it would be the third or fourth quarter of 2009:
    “But then as the option arm loans reset, you’ll see it start to shift. But note, the option arm NODs aren’t going to be a big problem for 6 more months and then add 6-9 months on top of that before they show up in the foreclosure stats. So you just aren’t going to see foreclosures become a big issue in the better areas for another year. Most of the trouble brewing in better areas is in option arms and those loans had longer terms.”
    Posted by: tipster at July 7, 2008 11:36 AM”

  52. Posted by anonn

    Maybe you said that. You also looked at numerous individual properties and proclaimed armageddon, and predicted sales prices that were easily surpassed. Yourself, Foolio, meananon, too many to mention ….

  53. Posted by tipster

    Actually, I’ve been as accurate as anyone on my individual price predictions.
    Here I predict one price, then later drop to another price in the same thread:
    http://www.socketsite.com/archives/2008/10/up_for_auction_with_no_reserve_but_a_starting_bid_of_28.html
    It sold for 4% UNDER my LOWERED prediction.
    http://www.socketsite.com/archives/2009/01/no_reserve_no_kidding_but_perhaps_a_shock_1357_9th_aven.html
    So do you want to try that again?
    You yourself famously went way over on a certain Caselli property.
    I DID predict a much lower price on the first resale at ORH, and that later appeared to have so many suspicious characteristics as to appear to have been a sham.
    So I’m missing your point. The only thing I predicted armageddon about was that anyone buying 3-6 months ago was a complete IDIOT, and prices have fallen about 5-10% since, proving that anyone who bought six months ago could have waited and gotten a much better deal.
    http://www.socketsite.com/archives/2009/02/another_friday_another_price_943_church_street_one_and.html
    I think your memory of what was said and what was actually said were two different things. What I have been saying is that people who wait will get lower prices. It’s true!

  54. Posted by ex SF-er

    a poll:
    how many people here pay more than $3k/mo in RENT? how about more than $6k/mo in RENT? how many of you know somebody who pays more than $6k in RENT?
    I find it interesting as example that shza on one hand talks about not believing $3k/mo as a “hard stop” but then on the other hand lives in a place for $2250/mo. off the top of my head, I only know one person who rents for $6k/mo (a Googleaire)
    most of my friends/family/acquaintances who make good salaries ($100-200k/year or so) who rent are in the $2500-$3k range. you can get very decent housing in SF for that.
    there will always be problems with data no matter what data one uses. the data I posted is as good as any IMO. I’d be happy to read any other data out there, please provide it. not third hand stories… I’d rather first hand accounts etc.
    For instance: we all know there are lots of places with ASKING rents about $3k in many new buildings… but how many people are actually getting those rents (besides Paul Hwang’s two customers who foolishly paid $7k/mo when there are units in the same building for $5-6k)?
    I’m not saying that census data is inviolate. far from it.
    but it does give info of a significant sample size that shows the demographic mix of rents in the city.
    and this data seems plausible. $6k/month comes to $72k/year. that is a HUGE amount of cash for anybody. only the people in the very top income brackets can afford that. and people at the top income brackets tend not to rent. they buy.
    I’m waiting for the stories of all those trust fund babies whose parents pay $6k/mo in rent, or all the rich foreigners who pay such outrageous rents.
    when you think rationally about it, $6k/mo is a very niche product, like a $10,000 shower curtain or a $200,000 car. It doesn’t mean it doesn’t exist, just that it’s rare… which is part of the definition of luxury.

  55. Posted by anonn

    You yourself famously went way over on a certain Caselli property.
    Nope. I said properties in the area COULD go for 900 a foot. And one did, about a month later on Mono.

  56. Posted by anon

    ex-SF-er – my point was that many, many of the $3000 plus places are NOT rented by one single household. You’re right, I don’t know many (any) trust fund kids paying $6000 a month for rent, but I do know dozens of college students, med students, and mid 20’s folks living in communal situations paying between $3000 and $4000, which to me calls the data being used into question.
    If you’re a single person in a place that costs $3300 per month, but share it with three people, you probably tell people that you pay $1100 a month in rent, not that you live with three people who pay $3300 total. You may report this information correctly on the ACS survey, you may not. I would guess that most of these household situations don’t bother to fill out the survey (or decline participating). Ditto with large groups of immigrants.
    These reasons have already been shown to make urban cities incredibly difficult to survey for population reasons (which is the easiest part of the survey!).

  57. Posted by Robert

    I have 3 friends who rent a 3BDR house in upper NOE for 2400/month. I vaguely know three people that are planning on getting a 3BDR house for 3K a month. By my own experience, the 1K per bedroom is a good estimate for the “ceiling” on demand. I.e. those attempting to rent out a 2 bedroom for 3K a month should find it vacant 1/3 of the time. Ask Argenta how 3K asking for 2 bedrooms is working out for them :)
    There are many 3 bedroom houses, so there will be much more than a few hundred such renting out. I think 8-10K sounds about right.
    So, NVJ, I retract the statement of a few hundred demand at the 3K price point, although technically the example was for 6K and I threw out 500 households as the demand at that price point.
    SFS/NVJ,
    I’m modeling the tail of renter household income as the exponential: y = 3.533exp^(-0.0155X), where X is thousands of dollars in household income, and y is thousands of households that have this income. This model is for the tail — i.e. incomes above 50K/year. It fits the data pretty well — you are free to abuse it, to see if it makes any silly predictions.
    Using this model, there should be 2K renter households earning more than 300K, and about 460 renter households earning more than 400K.
    Combining this with the un-adjusted rental burden table gives about 1000 households that can pay 6K or more. SFS — almost all of the demand comes from the upper brackets, not the .06% of the 100K bracket — that sample is basically a rounding error, IMO, and should be zeroed out.
    All the demand comes from the higher incomes paying a lower share of their income.
    How did I get from 1000 households at 6K to 500 households? I modeled a set of rental burden decays for the higher brackets as well. However, I’m currently fiddling with this model again. If there is interest, I will post the spreadsheet online somewhere for you to downloand and play with yourself.
    In all of this keep in mind that there are 200K renter households, so even 10,000 3K households are really only 5% of the total pool. It is certainly not “common”. The upper quartile median is about 1700, IIRC.
    As far as craigslist goes, I think you can get a lot of useful data out of it. For example, it would be interesting to look at how the listings drop off with asking prices. I bet that the decay rate, if not the absolute value, has real information.
    I think understanding the true rental demand is actually an integral part to the valuation process, and is not sufficiently appreciated on this board. When you rent, you are doing so with your own money. Asset values are about expectations and leverage provided by third parties, but rent prices are about sustainable real incomes. I really think that a lot of the dismissals here are based on clinging to the expectations model, and is indicative that we have a *long* way to go, at least psychologically.

  58. Posted by Dan

    “I have 3 friends who rent a 3BDR house in upper NOE for 2400/month.”
    I have a friend who rented a 3 bedroom house in Noe for $2000/month– in 1992. She had to move out, though, when the house sold in 1996, for about $600,000. I doubt either would be available at the same price in 2009.

  59. Posted by San FronziScheme

    Dan, I rented a 2BR house in upper Noe (3 blocks from Castro at 24th) last year for a bit more than 2400. You can find nice places in this neighborhood for less than 50% of total ownership cost. Of course, there are also corporate rentals that can charge 2K for a 2BR floor in a house (tried that one too).
    I could have bought a house in that area in 2006-2008 but decided otherwise. Maybe I was wrong. I saw a house bought ~400K in 98 valued at 1.4M 10 years after. Not an apple, some work was done though. Still a hefty markup for newcomers for what I think is an overrated neighborhood.
    Telegraph Hill gives more bangs for the bucks for a similar price range.

  60. Posted by Dan

    There is a 2 bd 1 bath flat for rent in Now Valley for $2450/month right now, but it is not exactly comparable to the high end remodeled 4400 SF house on Hoffman:
    http://sfbay.craigslist.org/sfc/apa/1163618068.html#image_38

  61. Posted by ex SF-er

    Using this model, there should be 2K renter households earning more than 300K, and about 460 renter households earning more than 400K.
    Possible. there are only a tad over 16,000 households in SF that make over 267k/year.
    if 2,500 of them are renters, it would mean that 1 out of 6 households making 300k or more are renters.
    do you think that’s a reasonable assumption? 1 out of 6 people making more than 300k/year are renters?
    very few households make more than 400k/year. The mean (not median) income of the top 5% of SF households is only 464,000/year. that number is clearly skewed significantly by the super wealthy. thus, it’s doubtful that more than 2% of households make $400k or more per year.
    (as example if 9 people make 1 dollar, and Warren Buffet makes 100 million dollars, then the mean income of the group is nearly 10 million dollars)

  62. Posted by shza

    I find it interesting as example that shza on one hand talks about not believing $3k/mo as a “hard stop” but then on the other hand lives in a place for $2250/mo.
    Yes, but our place is a 2 BR (w/living room & formal dining room) and our two boys are sharing a bedroom. We have one more year here max. It’s too small. (I do fall into the camp of not caring that much about having a huge place though, since my wife and I are at work 90% of the time anyway and the kids are outside all day — and true, I’m happier banking $100k/year than $75k/year while we can). We also got in in 2005, which, despite being near-peak for buying, was a much cheaper rental market than today’s. But when we move — if we decide to stay in the bay area — I certainly won’t feel squeamish about renting for less than $3k. Spending less would mean moving to another 2BR (or moving to Hunter’s Point, etc.). Which (changing that) is the whole point of moving. Granted we make over $400k/year so $3k/month is fairly negligible (it’s roughly half of our child care costs) and the calculus may in fact be far different for someone making only $200k/year. I recognize we’re in an income bracket that’s somewhat irrelevant to this conversation (and which, according to the majority of people on here, supposedly doesn’t rent in SF).
    But the fact remains that there are basically no true 3BRs on Craig’s List for under $3k/month. There just aren’t. And as much as I’d like to believe LMRiM’s position on the softness of rental asking prices, I seriously doubt that the great majority of these places with $3500/mo or $4k/mo asking prices are actually being rented out for $2900 or something. The few anecdotes we saw in the post a few days ago about renegotiated or falling rents showed pretty minor 5-6% decreases from list — not 15-25% drops.
    If this conversation was secretly focused on 1BR and 2BRs, then fine — I’d feel like a sucker spending $3k/month on a 2BR. But it would be odd if those were (unbeknownst to me) the bounds of our conversation given that the listing at the top of the thread is for a huge 4BR SFR.
    I’m extremely bearish on SF RE but it’s absurd to suggest that (a) there’s a $3k mental cap on rents or (b) this very large and new place would only get $4k/mo. I’m with LMRiM and NVJ on this — this place would rent for $6500/mo; maybe $7k. Though admittedly *that* market (unlike the $4k/mo market) is very very small — personally, I would never spend more than 15% of gross income on housing (though obviously most SFers spend more than double that).
    I’ll re-invoke NVJ’s sanity-check at this point that this place is not (and mostly likely won’t ever be) up for rent. No way in hell it sells for over $3.5M either though. I call $3.1 (in
    ~six months).

  63. Posted by shza

    sorry, “less than” = “more than” in my first paragraph above.

  64. Posted by ex SF-er

    But the fact remains that there are basically no true 3BRs on Craig’s List for under $3k/month. There just aren’t
    I’ll modify your statement to “there are few to no true 3BRs on Craig’s list for under 3k/month in an area that a person making $400k/year would want to live in” (or even 200k/year), and then agree with that.
    the discussion was not limited to 1-2BRs. clearly, the data presented by me above includes studios,1,2,3,4,5,6 to infinity bedrooms. But one must recognize that the average rental in SF is not a 3Br apartment or 3BR SFH. it’s probably a 1 or 2 BR apartment. 3BRs are much less common. Few people need or can afford a 3BR in the city, and thus the data reflects that. Most can only afford a 1 or 2 BR. one reason of course why family size is so small in SF. (people with kids tend to move)
    I personally do not doubt that this property is worth $7500/month in rent. I’m only PARTIALLY agreeing with another poster that trying to rent out a place in this price range is difficult due to the few people looking in this price range. you get the same phenomenon when trying to sell a $20M house. It might take YEARS to sell, because there simply aren’t many people who can afford a $20M place.
    also, I never said people making more than $400k/year don’t rent. I said it’s a very very small percentage of SF Renters, and I said that people making above $400k/year TEND to buy, not rent.
    lastly:
    of course you can rent a 3BR apartment in a good location for under $3k right now.
    here’s one:
    http://sfbay.craigslist.org/sfc/apa/1164636798.html
    it’s in Richmond, 16th and Lake, right near Lincoln Park and a quick walk to Sea Cliff. looks nice, but no yard.
    there are several more in that price range throughout Sunset and Richmond. I assure you those are quality neighborhoods, having lived in them myself.
    but it’s true, if you restrict your search to only nice properties of 3 or more BRs in nice neighborhoods, then the rents go for more than $3k/mo. but those are not the bulk of SF Rental properties.

  65. Posted by anon

    it’s in Richmond, 16th and Lake, right near Lincoln Park and a quick walk to Sea Cliff. looks nice, but no yard.
    16th and Lake is more than a mile away from Lincoln Park and Sea Cliff. Maybe you meant Mountain Lake Park? Nice location, but it is right around the corner from the giant construction zone that is the former Presidio Hospital complex being converted to apartments. Right now it would have a LOT of noise.

  66. Posted by ex SF-er

    anon: sorry, you’re right. I did mean Mountain Lake Park. it’s about 8-9 blocks from Sea Cliff. And a mile as you said from Lincoln Park.
    that said, it was just the top listing that I chose. just do a Craigslist search for under $3k, 3BR, and SF.
    there’s a lot of properties available for that price and not all of them are in Bayview/Hunters Point etc.
    there are also a fair number of properties over $6k/mo. at a quick glance, most seem to be Pac Heights and Cow hollow/marina, Nob/Russian Hill, or Fidi. again: primo nabes. there are maybe 2-3 from Noe, and also a smattering in SOMA/SB

  67. Posted by mediated

    Just as you suspect LMRiM, I don’t agree with:
    do think if we had a more rational system, more stable currency, and less governmental involvement in the economy, these sorts of bubbles would never grow so large as to become systemic risks. Others disagree with me on that, and that’s cool
    How did this current RE bubble NOT get instigated and propagated by lack of proper gov’t oversight? The changes made in 2004 allowed the Banks to make ever bigger and bigger bets on RE. There was very little requirement for capitalization. The insurance companies were allowed to make side bets on the companies making these RE bets. They STILL are being allowed to make these side bets.
    Greenspan’s policies of super low interest rates fueled the whole thing even further. Or is that what you mean by less involvement? Set the Fed rate to 8% and walk away? :)

  68. Posted by sparky-b

    ex-sfer,
    Read that first line of the listing. “The third bedroom could be converted to a dining room”. That means it is the dining room and this is a 2 bedroom.
    Also, there are houses with 3+ beds to rent all over the city. In my hood (west portal) there are 16 on craigslist right now. But, they are all over $4000.

  69. Posted by LMRiM

    Or is that what you mean by less involvement? Set the Fed rate to 8% and walk away? :)
    Just get rid of the Fed entirely. I mean, there’s no central planner setting the price of bread (or forcing people to eat bread, for instance, when they’d rather eat pita chips), and there doesn’t seem to be a problem with getting enough bread to people in the US, so why do we need a central planner/group of eggheads for money?
    (Not that I’m complaining, really, as far as my personal circumstances go. If it weren’t for distortions like the Fed and the crazy, bloated financial system that has evolved with the backstop of the Fed/USG partnership that has allowed gambling with other people’s resouces on an incomprehensible scale, people like me would have had to get a real job instead of just playing with digits on a screen ;))

  70. Posted by anon

    Bread and money are a tad different. In a world with no national borders, I like your idea, LMRiM. We’ve got to wait a few more years before that happens though (and San Francisco is the HQ of the Federation).

  71. Posted by ex SF-er

    sparky: good catch. however, there are tons of other 3BR listings for under $3k/mo. I just chose the first one.
    again, I’m not saying that places don’t rent for >$3k… I’m saying that most don’t. And even fewer can fetch $6k/mo.

    mediated:
    LMRiM is correct to say that regulation was partial cause of this crisis. Or more correctly stated, POOR regulation (or poor enforcement of regulation) was part of the cause of this.
    Fannie and Freddie are regulated, and they share much of the blame with the unregulated space. the reason: they were regulated POORLY. by the end especially, when much of the unregulated crap got pushed onto their books by our benevolent leaders.
    Also, the Fed theoretically regulated the banks. but they weren’t regulating well. if they were, they could have stopped this long ago by disallowing the leverage that we saw across the regulated banking space.
    LMRiM typically pounces on this (and is correct to do so). but he typically ignores the frank abuses of the nonregulated space, which IMO caused more harm than the regulated space> (specifically I’m talking about CDS contracts, completely unregulated).
    it is tough to say which is worse:
    no regulation
    or
    bad enforcement of regulation.
    at least with no regulation you know that it’s wild west yahoo-ism. that doesn’t seem to have stopped any of the financial entities from shooting themselves though. and life did not go well for those living in the 1880s when there was largely no regulation. also, massive global trade is clearly not possible with no regulation. thus no regulation really isn’t possible.
    clearly, the answer is properly well enforced sensible regulation. some would argue that this is a myth. i disagree. (for instance, Glass Steagall was easy to enforce and worked very well… so did many of the post Great Depression regulations… until they were dismantled by the free-marketeers).
    unfortunately, the Obama administration is furthering the Bush administration mantra… and thus we will likely not see well-enforced sensible regulation… especially if the Fed wins its bid to be the “super cop”. They suck at regulation and enforcement obviously.

  72. Posted by LMRiM

    Yeah, borders (which is a subset of the problems presented by different ideologies/systems in different countries) presents speacial problems for libertarians. Free trade and capital movement and national defense can be seen as subsets of that same group of related issues.
    I’m pretty libertarian, but I do break ranks a bit when it comes to relations between the US and the external world, inclining towards the view that some moral and legal systems (and therefore cultures) are “superior” to others, in the sense that free people should prefer them. Difficult theoretical issues to be sure (and I don’t have all the answers) but I think a market system for money would do a better job intermediating these than the current system.
    As I wrote, though, contemplating a Fed-less and small government modern economy is ahistorical and not going to happen over any reasonable trading/investment horizon. It’s just helpful for me in my trading to structure my thinking this way b/c then the tradable anomalies seem to present themselves. If I am going to be forced to measure a good portion of my productivity and prospects for well being for my family in funny FRN notes, I want to get more of them.

  73. Posted by SocketSite

    The list price for 465 Hoffman has been reduced $405,000 (10%). Now asking $3,495,000.

  74. Posted by SocketSite

    The list price for 465 Hoffman has been reduced another $296,000 (8%). Now asking $3,199,000 or 18% under original ask.

  75. Posted by sparky-b

    Wow, and 4218 25th street flies off the shelf at $3M. Victorians are still worth more than modern?

  76. Posted by SocketSite

    The listing for 465 Hoffman has been withdrawn from the market.

  77. Posted by eddy

    Back at $3M.

  78. Posted by anonn

    Now it is likely to move, IMO.

  79. Posted by SocketSite

    As a plugged-in reader notes, the sale of 465 Hoffman closed escrow today with a reported contract price of $2,970,000. And while that’s 23 percent under its original list price of $3,900,000, industry stats will reflect a sale at 1 percent under its last list price of $3,000,000.

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