The re-sale of 301 Main Street #9E has fallen out of contract, its list price has been cut to $749,000 (asking just under $900,000 when the Infinity sales office first opened), and its listing now notes “Infinity’s BEST 2BR VALUE.”
According to a plugged-in tipster, however, at least one mid-rise Infinity two-bedroom, two-bath has been sold by the sales office for under $600,000. Unfortunately we can’t officially confirm with details, and we’ll have to consider that nugget a “random rumor” for now, as apparently a confidentially agreement was attached to the sale.
That being said, we have no reason to doubt our tipster and based on what we’ve been hearing from other sources we have no reason to doubt that price.
UPDATE: Another plugged-in reader adds, “Not sure if this is the same unit, but I know someone who just closed on a 2 bedroom viewless unit for 605k with 2 years of Hoa dues included.”
∙ Listing: 301 Main #9E (2/2) – $749,000 [MLS]
Just Under $900,000 Originally, Asking Just Under $800,000 Today [SocketSite]

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Comments from “Plugged-In” Readers

  1. Posted by tipster

    Hi this is the head of infinity sales. The unit that was sold at $579K was sold to a disabled grandmother of the developer. Cough, cough. That price is not available to the general public. Hey, is it getting hot in here?

  2. Posted by NJ

    How long before the alleged under $600K sale will be in the public record, if it exists?

  3. Posted by tony

    Wow, killer views in this unit. And the interior character!! I believe it’s considered “Modern Box”, right? Blech.

  4. Posted by vox

    “Hi this is the head of infinity sales. The unit that was sold at $579K was sold to a disabled grandmother of the developer.”
    And since she helped lick the stamps on the company’s Season’s Greetings cards we gave her an employee discount, too.

  5. Posted by Jason

    Cookie cutter pseudo high-end condos will be the first thing to feel the real burn. When there’s so little to distinguish one unit from another, why would people keep paying the bloated sales office prices when resales start coming on the market? Is there that much of an allure to getting Infinity Tower 2 when you could pick up one of the tower one or ORH units coming back on? Or any of the more unique units around the city?
    Hard to justify that your unit is special in relation to the comps when they are, in fact, identical apart from views/floor level.

  6. Posted by Thumbs down

    Let the debate continue as to whether buying here or at the Palms was a worse investment. While the Infinity may be a superior building, their initial lofty pricing was the most bubblicious of the lot. I guess after the owner of 9E spent some time in a building with the worst floorplans of any newer building in SOMA and he/she may have realized that a condo with no living space isn’t much fun.
    Given the hardwood floor, Berber carpet and track lighting upgrades the cost basis for 9E is probably closer to $925k. The owner is now seeking bids at $725k, a 19% reduction. If the rumor is even close to true about similar units going for $600k (which wouldn’t be a huge surprise) that represents a 35% fall. At these levels perhaps the Palms wasn’t such a bad idea, relatively speaking of course.
    Prediction – this sells for $650k, a 30% reduction. Despite the location, most of the units at the Palms have far more practical floorplans. Moreover, with this unit looking into the other tower across the ‘courtyard’, this is teed up to be a sobering sale.

  7. Posted by ys

    Just saw this on craigslist. Looks too good to be legit, but I thought it was a nice coincidence.
    http://sfbay.craigslist.org/sfc/apa/1227553945.html
    (hope the posting stays live long enough)

  8. Posted by anon

    Looking at completed sales lately, the infinity II has been selling extremely briskly given market conditions. Quite a few seven-figure units too.

  9. Posted by LMRiM

    Tax records for 9E imply that the buyer paid $867,029, so it’s not quite as bad as a 35% fall. Yet :)
    I can’t tell whether that price includes updgrades or not.
    BTW, it looks like the purchase prices of T1 are now online through the tax collector’s site:
    http://www.sfgov.org/site/treasurer_index.asp?id=4615 You need to search under “Supplemental Tax” bills and follow the apartment naming convention used when searching (not hard to figure out), as they haven’t yet made it into the normal “Secured Property Tax” cycle.
    Whether down 30%, 25%, or 20% is really immaterial imo. Any of these falls is a large enough number to ensure that the large majority of “owners” have been transformed into renters utterly dependent on a market over which they have no control.

  10. Posted by anonn

    Any of these falls is a large enough number to ensure that the large majority of “owners” have been transformed into renters utterly dependent on a market over which they have no control.
    Or, somewhat disappointed people who are nonetheless generally happy with great units they plan to keep for a long time.
    Did somebody spike your Cheerios with a hyperbole serum this morning?

  11. Posted by jd

    At $600K for 2/2, I am buying. Infinity Sales Office, feel free to contact me. I can be VERY discreet. :)

  12. Posted by tipster

    We’re seeing places fall out of contract and then immediately get listed lower. I wonder if the appraisal came back in the 600s on this unit, the buyer tried to renegotiate down to that, and the seller turned the buyer down and relisted at 750K hoping for a cash buyer or a better appraisal.
    I said 6 months ago that anyone who bought then was a complete idiot, and I still believe it. But anyone buying without a financing contingency really is brainless. It can save you many tens of thousands of dollars.

  13. Posted by anon

    Is there really a building so close outside? No wonder they avoid the windows in all the pictures.

  14. Posted by condoshopper

    does this mean 1/1’s can be had in the 400’s? a year ago i wouldn’t dream that i could afford this building but now it seems like a possible reality. the HOA’s are another matter though…

  15. Posted by MIkey

    As has been pointed out, this unit is seriously view challenged. That and the fact that, frankly, anyone trying to do a resale at the Infinity right now must be desperate, so the asking price reflects that.
    About the 2 bedroom in the midrise. I know for a fact that 2 2 bedroom units in one of the midrise buildings were quickly sold in the last month or so (after sitting unsold for over a year). If these are the units, they have serious floor plan issues. The living area is probably 8 feet wide. There’s a reason they had to be discounted so heavily

  16. Posted by San FronziScheme

    Let’s see…
    704 HOA
    800 Property taxes
    That’s 1500/month right off the bat.
    And you haven’t even started paying for your loan or the place itself.
    Next.

  17. Posted by diemos

    Look. $1000/sqft is the new price point. That’s just what it is. If you wanna be a playa you’ll man up and pay it otherwise you can go back to being a wannabe renter with your nose pressed up against the glass. Women will scorn you. Dogs will pee on you. And every morning for the rest of your life you’ll get up, look in the mirror, and wish that you had had the balls to “swing for the fences” and had paid $1000/sqft for a soma condo while you still could.
    – realtor conventional wisdom circa. 2005-2008

  18. Posted by Willow

    “Or, somewhat disappointed people who are nonetheless generally happy with great units they plan to keep for a long time.”
    I dunno, I wouldn’t characterize being underwater around 200K as “disappointing” even if my time horizon was long term. Honestly, it’s an absolute disaster! I suspect those who put down less than 10% would have to consider walking away. It’s not difficult to see where this is headed. Short sales => Foreclosures => Declining Prices. Not good news at all for those who purchased condos in the Bay Area over the last few years considering Infinity is considered one of the “premier” buildings.

  19. Posted by Bay Area Native

    The cut down to 749k was necessary given that #8E in Tower 2 is on the MLS asking (from the seller) for 780k.

  20. Posted by Paul Hwang

    If there were ever an argument to hire a good real estate broker, it’s Socketsite.

  21. Posted by San FronziScheme

    In concrete terms, a 200K loss in 2 years can be materialized like this:
    Every morning before you go to work stop by the ATM.
    Type in your PIN.
    Chose withdrawal – Other amounts
    Enter $400.00
    Pick your cash and receipt.
    Get your card back.
    Take a lighter.
    Burn the money.
    Go to work.

  22. Posted by anonn

    Many of these “losses” may never see the light of day.

  23. Posted by MIkey

    @ San FronziScheme
    Thinking like that would drive you crazy. You could say the same thing about anything, a new car, a stock portfolio, gold, etc.
    The last place I owned dropped in value by about 120K, then, eventually, we back up over 200K. So did I lose 120K or make 200K?
    Do I think there will be a similar rebound this time around? Probably not. But like any purchase, you make your decision based on (what you perceive to be) the facts at the time. Sometimes you win, sometimes you lose.
    I know SS posts these kind of stories as bear bait, but the jubilation on this board would be funny, if it wasn’t so uncreative and tedious.
    [Editor’s Note: We publish these kinds of pieces to keep our readers plugged-in to what’s actually happening in the market versus the sales office or industry spin. As far as we're concerned that's the only way to make an informed decision about buying, selling or renting. But if it’s easier to simply rationalize as "bear bait," feel free.]

  24. Posted by Hopper

    Not sure if this is the same unit, but I know someone who just closed on a 2 bedroom viewless unit for 605k with 2 years of Hoa dues included.

  25. Posted by jd

    605K + w 2 years HOA sounds great to me. I don’t really care about view. It seems that one is setting one’s self up when you buy based on view. In a few years, something taller may be built right in front of you. Location is the most important thing to me.

  26. Posted by jd

    And I guess that should be oneself :)

  27. Posted by rpiing

    Paul,
    If seller would have bought the socketsite conventional wisdom two years ago when buying this unit, then they would not have bought this unit. Are you saying they would have had the same outcome if they listened to you two years ago?
    You claim that you are one of the biggest SOMA condo realtors in the city. If that’s true, then you are more than likely one of the top realtors in the city with clients that worse off now than before they worked with you, right?
    What exactly are you trying to say? That if people worked with a Realtor 2 years they wouldn’t have lost money? Or if they work with you now, they won’t lose money?
    Not trying to be a jerk. I am really curious about how you perceive the value of realtors in this situation?

  28. Posted by San FronziScheme

    Many of these “losses” may never see the light of day.
    True, but many will and in fact some already did.
    MIkey,
    I know your story. I had a place that “lost” 40% in 3 years from 1994 to 1997. I sold it in late 2005 at 140% over the 1994 price. But it was then and this is now: the popping of the biggest asset bubble in history and all… Reinflating it will take a lot of time. Will it come back? Sure. The question is when (5/10/15 years? More?) and how long can you hold the place at 2.5 times fair rental value when even rents are falling but your mortgage doesn’t.

  29. Posted by EBGuy

    Can someone help me out here? I never was that good at game theory. Is this a Mexican standoff or prisoner’s dilemma?

  30. Posted by systemr

    i believe the unit in question is 4D in the main st mid-rise. price was in the 57X range.

  31. Posted by LMRiM

    About “waiting this out”, my estimate fwiw is that we won’t see “peak” pricing again in SF until 2015-2020. Obviously it’s impossible to predict the future with certainty – I’m just throwing our a central forecast of plausible outcomes based on how I expect the economy and nominal price and wage inflation to progress. I actually think that if that’s off, it’s more likely because it will be early.

  32. Posted by anonn

    my estimate fwiw is that we won’t see “peak” pricing again in SF until 2015-2020.
    Based upon what, precisely? Except for a handful of nicer western neighborhoods, you learned nearly everything you know about SF r.e. on this website. Give it a rest.

  33. Posted by Legacy Dude

    Instead of your knee-jerk criticisms, anonn, why don’t you actually contribute something tangible for a change? So you disagree with LMRiM. But how much farther do YOU think prices will fall? Is this a good time to buy? When will we hit bottom? How long will bubble buyers have to hold to break even in YOUR opinion?

  34. Posted by MIkey

    i believe the unit in question is 4D in the main st mid-rise. price was in the 57X range.
    No. 4D is a 1 bed and was sold a long time ago.
    @ LMRiM: 2015 – 2020? That actually sounds optimistic for you (I’m serious). I thought I read once you NEVER expected to reach peak pricing again. And I assume that’s nominal, NOT inflation-adjusted.

  35. Posted by hangemhi

    “peak” pricing again in SF until 2015-2020 – wow, that is WAY more bullish than i would have expected from you. are you saying that 9E will once again sell for $900k in 6 to 11 years????
    wouldn’t that mean that rents will have to quadruple? i mean isn’t it all about the rent vs. buy ratio to you?
    Paul – why would you come on here and say that? rpiing in right. you can’t be a top SOMA agent unless you were both drinking and spewing the coolaide for the last few years with many clients way under water. i’ve avoided SOMA like the plague my entire career because prices were always ridiculous. only now are they getting near reasonable, but now i expect an over correction. today 9E is worth $600k since it has no balcony and no view. next year it will likely be worth $500k. the downward spiral that is caused by reo’s and short sales leading to more reo’s and short sales is a tough one to stop. the Palms and Beacon are in those throws now, and have a ways to go before they bottom. and as they go lower, no matter how much more you like the infinity, you won’t like a unit there that is double what it costs at the Palms.

  36. Posted by Paul Hwang

    rpiing,
    What I am saying is that instead of basing multimillion dollar decisions (or $500k ones) on speculation, it may be prudent to base them on fact instead.
    Not all Brokers are created equal and darwinism exists.
    Paul

  37. Posted by LMRiM

    Absolutely, my forecast is in nominal terms. And, in case it wasn’t clear (I guess it wasn’t – my fault), I mean peak pricing on average, meaning that if you randomnly select housing units in SF and compare the “peak” price for that unit against its nominal price sometime in 2015-2020, they’d be the same in nominal terms.
    For SOMA condos, they’ll do much worse is my guess. I could see them going down another 25-40% nominally and not recovering an even longer period.
    Conversely, there will be some fairly good areas where supply is limited that should recover more quickly (and which won’t go down as far).
    Hard to say exactly of course, and as I said, if I’m off it will because I am early :)
    In real, inflation-adjusted terms, observe these prices today closely. I very strongly suspect that none of us is going to live long enough to see real valuations this high again in our lifetimes.

  38. Posted by anonn

    Instead of your knee-jerk criticisms, anonn, why
    I contribute on a daily basis. Yesterday it was the SFR performance of area 5-B over the past five years. Today I contributed easily digested, and quite likely counterpoint scenarios. How about you hold some of these people accountable once in a while for the uninformed and overblown things that they say?
    If you want my opinion, I have been saying for some time — over two years at any rate — that SOMA is overbuilt. It’s a supply and demand issue. A cursory glance at the difference between the condo and SFR markets in SF shows a stark divide. I do feel as if the higher big view condos will retain value better. I feel as if the condo market has been sliding for some time already. A few things need to happen. All development needs to cease. The Aterra and others of its kind need to slash/rent. The nicer developments will fare better. “A return to peak” — I find that disingenuous to begin with because “peak” for some of these were before they were even finished.

  39. Posted by buyer/renter

    Hey socketsite contributors,
    Bear bait or not, thanks socketsite for providing these types of posts. This is the reason why I read the blog daily. Personally, I know of at least 2 purchasers who were getting around 25% off of asking with upgrades.
    I am currently torn between trying to swoop on a deal with an Infinity unit, or waiting a year by leasing to own at Millenium. I feel the market is going down still, but how much difference will a year make? Will Infinity be completely out of inventory? I feel confident about the price drops with Infinity, but do not know much about the discounts offered by Millenium.

  40. Posted by Mud

    Re: when the rebound might come…
    Great article re: scope / depth of this crisis globally… would seem to imply that meaninguful recovery 5+ years out is bullish.
    http://voxeu.com/index.php?q=node/3421

  41. Posted by systemr

    believe the unit in question is 4D in the main st mid-rise. price was in the 57X range.
    No. 4D is a 1 bed and was sold a long time ago.
    @ LMRiM: 2015 – 2020? That actually sounds optimistic for you (I’m serious). I thought I read once you NEVER expected to reach peak pricing again. And I assume that’s nominal, NOT inflation-adjusted.
    @Mikey: sorry i meant its unit 2d on the 4th floor:
    http://www.the-infinity.com/images/floorplans/PDF/333-2D.pdf

  42. Posted by PDT

    Paul,
    Too funny. If I were a well known, rather overexposed-through paying for ad space, SOMA real estate “expert” the last thing I would do is comment on this site. The simple fact is that you sold to anyone interested: speculators, long and short term buyers – it’s your “job”. I wonder how many of the “non-prudent” buyers that you try to defend yourself with in your last post either bought in the buildings that are being nailed or took your “expert” advice and bought because in your “expert” opinion the SF market would never fail. It also amuses me that you mention multi-million dollar sales in your portfolio, maybe 1.35 during the good times.

  43. Posted by jduncan37

    @ buyer/renter – read the fine print before leasing at the millennium. none of your guests will be allowed to use any of the amenities. speaking of amenities, watching a movie in their theater will cost you $250, each time. (non-refundable cleaning charge!) oh, and you absolutely can’t move in on weekends!

  44. Posted by gowiththeflow

    You could get the sales prices months ago directly at the assessor recorder office – one screen vs. having to pull up all the supplemental stuff. You can look it up online as well per LMRiM’s notes. If you do, check out the unit next door and what it went for – now that person bought bubble price!

  45. Posted by supreme

    hangemhi, why are you always bashing Paul? weird to see a realtor bash another.
    I guess its the new thing.
    I read on another blog that Infinity was 75 percent sold. True?

  46. Posted by Paul Hwang

    PDT,
    I just closed a Penthouse unit for a buyer at the Infinity yesterday.
    Thank you for providing an excellent example of my earlier point on baseless and incorrect speculation and why it would be prudent to base your decisions on facts instead of posts like yours.
    Paul

  47. Posted by K&L

    @ anonn – “All development needs to cease. The Aterra and others of its kind need to slash/rent.”
    I know someone that lives at Arterra. They have said the developer has reduced prices and they are now selling at a very healthy clip. I am not sure if that applies to all new developments but Arterra seems to have found a successful price point to move inventory. What percentage of adiscount, I don’t know.

  48. Posted by PDT

    LOL Paul – good sale! Since it was just yesterday, I guess I wasn’t prudent enough to investigate your latest win. I guess what I said was simply baseless and you are the premier figure in the SOMA market. Cheers!

  49. Posted by Paul Hwang

    That’s what the ad says. :)

  50. Posted by renter/buyer

    @jduncan
    I have read the lease. I can have up to 6 guests that can use any of the facilities if I am with them (including the screening room). The $250 cleaning deposit applies for “special events” which are categorized as parties of 6 or more.

  51. Posted by Legacy Dude

    Thanks for the direct answer, anonn. So I guess LMRiM’s assertions are not outside the realm of possibility after all, especially in regards to Soma condos.
    IMO, Soma isn’t overbuilt, it’s just overpriced. There are tons of people (me among them) who are ready to buy down here once it makes sense financially. We’re not there yet, but making good progress.
    I estimate a going rent for 9E of $3,200/month. With today’s financing environment, my guess at a breakeven equivalent price to renting is $525-550K for this place. That’s assuming rents don’t keep falling and mortgage rates don’t increase.

  52. Posted by anon

    I am surprised Mark Choey hasn’t responded in this thread. He’s the agent who represented the seller and usually posts on these Infinity topics. I would love to hear his insights.

  53. Posted by Paul Hwang

    Y, where is Mark? That would be the key to the discussion.

  54. Posted by Willow

    That 2D Floor plan doesn’t look too bad to me. No worse than the “signature curve” units. On a very low floor no doubt and may be a little on the dark side. I’d be interested if there are any not so recent Infinity bubble buyers who would like to share their thoughts on 08 pricing versus what’s currently being offered.
    Renter/Buyer: On location alone I’d skip Millennium and go with the more value oriented units @ the Infinity. That area of Mission is really gritty. (i.e. dirty, filled with traffic and across from the cesspool that is the Trans Bay Terminal.) That’s not going to change for quite some time.

  55. Posted by anonn

    Thanks for the direct answer, anonn. So I guess LMRiM’s assertions are not outside the realm of possibility after all, especially in regards to Soma condos.
    Sure. If you want to take that guy’s grasp of development timeframes, pre-development sales, occupancy, tacit knowledge of the relative value of the various developments, micro neighborhoods, amenities, and other determining factors at face value, then feel free. Not to mention the clear divide between the condo market and the SFR market — only the latter of which has he ever weighed in on with any degree of believability.
    It’s lonesome being the only cop on here. Really. Some of you lurkers could help if you wanted to.

  56. Posted by OneEyedMan

    Arterra / Infinity / ORH are poster children for bad market timing. Does anyone know what the Arterra discounts are? I hear the developer is taking an 8 figure hit on the project.

  57. Posted by Futurhomebuyer

    Someone mentioned lease to own for millenium does one rincon or infinity do that ? How does it work ? Anybody got an opinion on the $599K unit at the Metropolitan seems a great price for a 2/2 !! love to read replies thanks

  58. Posted by anonn

    Arterra / Infinity / ORH
    You have to stop right there. They’re not all three the same even with perfect market timing.

  59. Posted by K&L

    “I hear the developer is taking an 8 figure hit on the project.”
    Sounds like a typical SS “rumor” with not much evidence to back it up. I’d be curious to know the source and what that even equates to? $10 million across 250 units doesn’t seem that significant

  60. Posted by tony

    “If there were ever an argument to hire a good real estate broker, it’s Socketsite.”
    Paul, thanks for the chuckle. Considering you sold your clients up and down the river during the bubble for self-gain, is there someone competent you’d recommend? Here’s a hint: The agent in question would have advised their clients against buying the majority of the time over the past 4 years, regardless of the personal implications. Are you implying you’re that agent?
    Annon, respectfully sir, it’s clear (to me) that you have a better understanding of the nuances of SF real estate than LMRiM; it’s also clear he has a much better grasp of economics than you do. While I enjoy (and learn from) each of you individually, it’s the combination of your perspectives that truly creates value. I encourage you (both) to give each other a respectful nod now and then. And please don’t stop your “policing”. Thx. ;)

  61. Posted by anon

    Soma is NOT overbuilt. I wish they would build more. Trying to find quality in SOMA is hard. You have a few patches of good neighborhoods but the rest is hardly enjoyable.
    Berry Street – Overcrowded, Windy, Smell and No Street Parking
    1st Street- Right onto the freeway, needs the rest of the vacant land to be built.
    King Street- Beacon is not the crown jewel for any city.
    Mission Street – SOMA Grand is so far off the beaten path.
    The Brannan is the nicest of them all and in a good neighborhood but prices start at $1 Million for their units. It really isn’t that easy to find a nice condo in SOMA.

  62. Posted by Mark D.

    Re Tony to Paul Hwang at 2:06 – “Considering you sold your clients up and down the river during the bubble for self-gain, is there someone competent you’d recommend? Here’s a hint: The agent in question would have advised their clients against buying the majority of the time over the past 4 years, regardless of the personal implications.”
    This is a little much, isn’t it? Paul Hwang is a real estate broker, not a fortune teller. He may offer his good faith forecasts of future price trends to his clients, but like the weather predictions on the nightly news, a forecast is a forecast and not a guarantee.
    Are you suggesting that Paul, anonn and the other industry folks who post on this board have been offering forecasts in bad faith? I may not agree with Paul or anonn’s forecasts or analysis, but I respect their participation on this board and I do not see them as acting in bad faith.
    And if anyone thought that the market forecasts offered by the industry professionals were in fact some kind of price guarantee, well, what’s that saying about a fool and his money?

  63. Posted by The Milkshake of Despair

    Regarding whether a “good agent” would advise a client to wait a long time for the market to move in their favor, I think that sort of advice lies outside of the realm of an agent.
    This question has come up in the past and the standard agent stance is that a client has already made the decision to transact before they sign the agent’s contract. No coaching is required in whether or not to transact since the decision has been made. There is plenty of room however to coach on marketing strategy, writing offers, counteroffers, etc.
    Given that agents assume that their clients have already chosen the market timing on their own, agents are absolved from leading the client down the garden path of making a poorly timed transaction. Even if the agent’s crystal ball is crystal clear and indicating that the client should wait years to get the optimal deal, they can go ahead help their clients transact in a poor market.
    At least that’s how it seems to work given the agent comments here as well as my personal experience.
    If agents did truly aid their clients in making the best possible transaction (including market timing), they would all have been telling their buyer clients to hold off for a year or so, cutting off a large sector source of income as well. The only buyers left would be the “absolutely must buy now” clients, if there is such a client.

  64. Posted by dch

    Mark D, it’s just odd to have Paul come on here and bash supposed uninformed speculation you see from the yahoos on socketsite and tout the benefits of using a realtor (him), when:
    1) He clearly represented a lot of a lot buyers in recent years, each of whom made a disastrous financial decision to buy a SOMA condo;
    2) His purportedly expert opinion — the reason to hire a realtor — didn’t predict those declines (or he did, but didn’t tell the buyers);
    while 3) The uninformed yahoos on this board rightly predicted significant price declines.
    Seems like if buyers want good advice, they should listen to “us people” rather than the expert professionals.
    Paul, I don’t mean to be harsh on you, but how do you square your self-promotion with your failure to warn your clients away from purchasing soma condos in recent years?

  65. Posted by Mark Choey

    what would you like me to respond to in this thread? answering anything in these message boards is akin to walking in the DMZ between North/South or East/West {enter your favorite country split by past wars here} but I would be happy to see if I can answer any question someone is dying to know the answer for.

  66. Posted by Fishtarian

    “Someone mentioned lease to own for millenium does one rincon or infinity do that ?”
    FutureHomeBuyer, just go rent there for a while. There are enough units available for rent that you should be able to pick the plan that you want and it’ll be cheaper too. Lease-to-own would be useful for one of a kind property. These condos are cookie cutters, you don’t need to live in the exact same unit to get the feel.

  67. Posted by anonn

    each of whom made a disastrous financial decision to buy a SOMA condo
    Not a legitimate thing to say. “Disastrous” for “each” ? Come on now.

  68. Posted by anon

    Mark Choey,
    What are your thoughts on unit 9E? Was it worth $900k when you sold it and is it worth $750k now?

  69. Posted by Mikey

    The uninformed yahoos on this board rightly predicted significant price declines.
    Anyone taking financial advice from any of the Yahoos on this board have bigger problems than buying an overpriced condo.

  70. Posted by dch

    Anonn, are you arguing that it was shrewd to by in ORH at the peak or just splitting hairs and quibbling about wording?
    Buying a soma condo at the height of the bubble was a terrible financial decision. Those units were obviously overpriced and have seen significant value declines.
    Maybe for a very tiny sliver of uber-rich buyers, it wasn’t a full-on financial disaster. But I stand by my use of that word. People lost hundreds of thousands of dollars. Is there any way to spin that positively?
    And Mikey, the yahoos on this board have been right — or at least “righter” than a lot of self-proclaimed expert professionals.

  71. Posted by anonn

    Anonn, are you arguing that it was shrewd to by in ORH at the peak or just splitting hairs and quibbling about wording?
    I’m saying that you clearly said each and every person Paul sold a condo to made a disastrous decision, and that’s a ridiculous thing to say. You have no idea what their backstories are.

  72. Posted by tony

    @ Mark D. at June 18, 2009 2:42 PM
    “Are you suggesting that Paul, anonn and the other industry folks who post on this board have been offering forecasts in bad faith?”
    Let me tease this out a bit:
    1. Yes, I do believe that there were (and are) real estate agents who operated in bad faith during the real estate bubble (and would say the same of mortgage brokers); do you -not- believe this to be true?
    2. There is (as you clearly know) a material difference between bad faith and negligence. Given the definition of negligence (unlawfully borrowed from a convenient online source) “In law, the reasonable person is not an average person or a typical person but a composite of the community’s judgment as to how the typical community member should behave in situations that might pose a threat of harm to the public.” If one were to look at the “community” of posters on SocketSite during this period, one would find that a composite community member would be hardpressed to believe that purchasing a home (as an investment) would be a sound financial decision. As an “expert”, don’t (or rather, shouldn’t?) agents have a fudiciary responsibility to advise their clients on the composite perspective? Had they done so, wouldn’t there have been (significantly) fewer transactions? And if so, and no such advice was given, weren’t they at least negligent in their duties? Sure seems that way from here.
    3. Remember, my post was in response to Paul’s post wherein he basically called the composite community to task and advised that prospective buyers would be far better off hiring a good agent, implying that he was said. I (and others) are simply calling him out on that.
    So Paul, please do share with us exactly how much, exclusing your buying and selling commissions, you think the clients you’ve represented over the past few years have made or lost on their real estate transactions with you. And hey, if you managed to get them units at Infinity and Rincon for $400/sqft such that they’re all in-the-money, let’s talk!

  73. Posted by Mark Choey

    “anon” – asking what something is “worth” is basically asking what is the market value of something, correct? So market value means what estimated amount a buyer or seller will agree to assuming several things:
    1) it’s an arms-length transaction, i.e., not family related (mom selling to son), or special circumstance (one friend selling to another and giving a discounted price for example)
    2) available to the public for sale with “proper” marketing for some “reasonable” length of time and
    3) both parties acted knowledgeably and “rationally”
    Let’s not even get into whether “market price” is the same thing as “market value”. Let’s just assume “market value” is the price that two willing and able parties agree to assuming full marketing and efficient markets.
    So a couple of things before I step into this loaded question: I did not represent the seller when he bought this property. But, at the time, units several floors above him were selling for over 1.0M. So, the question whether it was “worth” $900k when he bought it, I would have to answer yes because there were other transactions between other buyers and the seller at prices that would suggest this unit (9E) was worth $900k at the time.
    The second part of your question, is it worth $750k now? Well, we are asking $750k now so it depends on the buyer and what they are willing to pay plus what the seller is willing to sell it for and if we can come to an agreement on the “market value” for this unit. Time will tell and we will see.

  74. Posted by tony

    @The Milkshake of Despair at June 18, 2009 3:01 PM
    “If agents did truly aid their clients in making the best possible transaction (including market timing), they would all have been telling their buyer clients to hold off for a year or so, cutting off a large sector source of income as well. The only buyers left would be the “absolutely must buy now” clients, if there is such a client.”
    Exactly. And so, if one were on SocketSite purporting to be a “good” agent, wouldn’t that in fact be a reasonable distinction? Isn’t a good agent, like a good broker or good doctor, one who prduces AN ABOVE AVERAGE OUTCOME for their client?
    An average broker would have lost you 40% last year. A good one might have had you in cash and thus you broke even. A great one might have made you some money. Why is the standard any lower with real estate agents?
    Please (in all seriousness) help me understand why the bar is so low for what is, for most people, their largest investment?!

  75. Posted by tony

    @ dch at June 18, 2009 3:08 PM
    “Mark D, it’s just odd to have Paul come on here and bash supposed uninformed speculation you see from the yahoos on socketsite and tout the benefits of using a realtor (him), when…”
    Very well said.
    Adam, it would be great to have a Realtor (TM) Scoreboard here at SocketSite where you list the Buyer’s Agent along with each Apple so we can tally who helped who make or lose money on these transactions.
    Perhaps being the “#1 Relator in XYZ” should be about client profits instead of dollar sales volume?!
    We ran screaming from the last dingbat who wanted to represent us after we found out that three of her homes were being foreclosed. Imagine the “expert” advice she was providing…

  76. Posted by tony

    @ anonn at June 18, 2009 3:45 PM
    “Anonn, are you arguing that it was shrewd to by in ORH at the peak or just splitting hairs and quibbling about wording?
    I’m saying that you clearly said each and every person Paul sold a condo to made a disastrous decision, and that’s a ridiculous thing to say. You have no idea what their backstories are.”
    Anonn, would it be fair to say that it’s more probable than not that the majority of clients that Paul has represented as a Buyer’s agent over the past 4 years would likely lose a material amount of capital if they chose to sell now?
    Would it further be reasonable to say that based on current sales trends and local and macro-economic conditions, that said clients of Paul’s would more likely than not lose a material amount of capital if they chose to sell in the next few years?
    And lastly, knowing that short holding periods in real estate can lead to significant capital loss, what percentage of your peers advised clients between 1995-1998 that they shouldn’t purchase unless they intended to hold for at least 10 years? How many are advising clients of such today?

  77. Posted by Mikey

    Please (in all seriousness) help me understand why the bar is so low for what is, for most people, their largest investment?!
    Because the real estate market (more so than almost any other market) is very inefficient. It’s also why real estate agents can still ask for 5 or 6% commissions. In a more efficient market, commissions would have down like they have gone down for stocks.
    I’m not necessarily defending real estate agents (I’ve dealt with some very bad ones) but blaming them for an individual’s poor choice is misplaced. The entire world suffered from a mania for real estate.

  78. Posted by anonn

    Anonn, would it be fair to say that it’s more probable than not that the majority of clients that Paul has represented as a Buyer’s agent over the past 4 years would likely lose a material amount of capital if they chose to sell now?
    Yes, it would be fair to say that.
    Would it further be reasonable to say that based on current sales trends and local and macro-economic conditions, that said clients of Paul’s would more likely than not lose a material amount of capital if they chose to sell in the next few years?
    Reasonable to say, sure. It’s also reasonable to say that some of the higher floor penthouses could command decent premiums moving forward, as hardly any will be built for the foreseeable future.
    And lastly, knowing that short holding periods in real estate can lead to significant capital loss, what percentage of your peers advised clients between 1995-1998 that they shouldn’t purchase unless they intended to hold for at least 10 years? How many are advising clients of such today?
    You meant 205-2008, right? What percentage said that? I have no idea. But to be fair, how many actually were asked, “What can I expect my appreciation to be, year in and year out?” — probably not as many as the hindsight mystics on here would have people believe. That sort of talk is occurring more frequently these days, without a doubt.
    I don’t know what anybody else says to their clients, really. Well, I know what one guy says, and he’s a turkey who talked a big “safe yoy appreciation bet” game. But best believe he’ll remain nameless …

  79. Posted by anonn

    Also, Tony, “disastrous” and “reasonable to say” — not to parse words, but that aint parsing words!!!
    What might be “disastrous” to someone who is forced to sell, might merely be the unpleasant notion of a paper loss to someone who does not have to sell, might be a loss on paper that’s actually generating revenue to someone who did a 1031 exchange. It will vary wildly. Saying all of Paul’s clients were shepherded into “disastrous” decisions is a deeply unfair thing to say.

  80. Posted by tony

    @ Mikey at June 18, 2009 4:29 PM
    “I’m not necessarily defending real estate agents (I’ve dealt with some very bad ones) but blaming them for an individual’s poor choice is misplaced. The entire world suffered from a mania for real estate.”
    Definitely not my intent to assign blame to a specific individual or even a class/category of folks; it’s been my experience that such an approach is only productive in limited situations (and I make plenty of my own mistakes to judge others too harshly). BUT, when someone posts that they have the answer and that others would be advised to seek them out (as Paul did or certainly implied), then they are asking for (and should receive) such scrutiny, IMHO.
    Moreover, there are a lot of neophytes lurking here (and on the continuum between newbie and satchel/fluj, I’m sadly further to the left) who don’t necessarily appreciate exactly what they’re getting with the ‘average’ agent; the least the rest of us can do is to try to shine a bit of light on that so that they’re condo (et al) isn’t the next Apple to be featured here. Otherwise, why bother, right? :)

  81. Posted by LMRiM

    I don’t want to disrupt the useful discussion about real estate agents and their role/responsibilities, but I do want to interject a revision to my forecast of a possible timetable for a return to peak nominal prices for SF.
    I’ve been thinking about it all afternoon, and 2015-2020 is really too short for a base case forecast. I’ll shift the window to 2018-23, with a less than 10% chance in my estimation that prices may regain their nominal peak as early as 2013-15 (that quick would basically require a currency crisis in the very near future and then a few years to recover and get credit flowing again at the new lower equilibrium dollar nominal value). I’d also assign a “fat tail” to the estimation of possible future price trajectories, meaning that there’s a much greater than 10% chance (maybe as high as 20 or 30%? – these are all just guesstimates of course) that prices will not regain nominal peaks until after 2023.
    The bubble really was too large to expect a 2015-20 window as a base case forecast. Sorry, guys!
    (BTW, ot but I’ve been very public on SS with my treasury bond purchases and sales in 2008 and early 2009, and fwiw I just started buying the long bond again today, scaling in slowly as I usually do with structural bets.)

  82. Posted by tony

    @ anonn
    “Well, I know what one guy says, and he’s a turkey who talked a big “safe yoy appreciation bet” game. But best believe he’ll remain nameless…”
    You tease! ;-)
    “Also, Tony, “disastrous” and “reasonable to say” — not to parse words, but that aint parsing words!!!”
    Totally agreed. I think people tend to be sloppy and/or hyperbolic in their posts (sometimes intentional, sometimes not — myself included) and don’t fault you at all for calling them to task. (The lack of an edit option — a shared pet peeve — certainly doesn’t help.) The more exacting we can be, the better.
    “Saying all of Paul’s clients were shepherded into “disastrous” decisions is a deeply unfair thing to say.”
    Agreed and that’s why I rephrased (and thanks for overlooking my 95-98 vs 05-08 typo and replying to my intent) for the sake of the discussion.
    “That sort of talk is occurring more frequently these days, without a doubt.”
    I’m heartened to hear this, though I suspect you hang in a more enlightened crowd than most. ;)

  83. Posted by briank

    Shouldn’t it be possible to judge realtors based on their property’s performance in comparison to some baseline reference?
    Blaming a realtor (in this case, Paul Hwang ^TM) for the paper losses in absolute terms 2008-2009 of homebuyers who purchased in 2006 in SOMA is, to rehash an overused simile, like blaming a stock broker for the paper losses in absolute terms of an investor losing money in the S&P in 2008-2009.
    As someone else said above, the person had already chosen to buy a house; the investor had already decided to place money in stock.
    What should be important is whether the stock broker secured LOWER LOSSES than the S&P as a whole, or whatever indicator is the industry standard. To determine if Paul Hwang ^TM ^R is a better agent than someone else in purely ROI terms, it should be possible to compare the percentage losses of his properties against some established industry guideline. Case-shiller? Who knows.
    But again, as Mikey said, the stock market is vastly more efficient than the RE market, so the realtors association probably doesn’t want a commonly-understood indicator. I’m sure the top-tier 2% of realtors would like one, since then they could have factual numbers behind their claims, but the other 98% would probably keep such a thing from happening.

  84. Posted by ktdw

    I’m just amazed that people actually want buy/sell advice from a realtor, period. Their goal is to close the deal, not to provide sound finincial advice. If I wanted advice on when to buy into this market, I’d give more weight to the opinion of those on this site who don’t have 3% riding on a deal.

  85. Posted by tony

    @LMRiM at June 18, 2009 5:11 PM
    Well, since I’m already over-contributing but enjoying and learning…
    “(BTW, ot but I’ve been very public on SS with my treasury bond purchases and sales in 2008 and early 2009, and fwiw I just started buying the long bond again today, scaling in slowly as I usually do with structural bets.)”
    So my grasp of the topic is still to feeble to interpret why you’re playing this way. I could assume…
    – You expect significantly more deleveraging and hence expect the Fed to buy long bonds more aggressively, pushing yields lower and so you want to lock in the current (soon to be “above average”) rate…
    or
    – You expect next week’s $104B in auctions to be the inflection point at which the long bond yield begins to spike and you intend to buy into it periodically as it climbs…
    More context, please? :)
    (Adam, sorry for the spew of semi-OT posts, but as you know, this is a major draw and I have no way of reaching out to these guys. You have my email if I need a spankin!)

  86. Posted by LMRiM

    tony –
    OT – I could give you a lot of techno-babble, and justifications/technical/fundamental factors, but basically I think the most recent “inflation scare” has mostly run its course. There has been no fundamental delevering of personal balance sheets, and of course more indebtedness in the public sector; some pushback and concern about what the Fed has been doing re: quantitative easing, and the stock and asset markets are overbought and looking toppy (ditto for the anti-dollar bets). CPI will print negative yoy for a while yet, and it won’t be until well after the summer that we even start getting some tougher yoy comparisons (owing to the crash of commodities post-July 2008). All in all, risks favor the upside on the long end of the curve (lower yields), and at 4.6%+ yield there is some cushion now.
    My experience trading Japan throughout the 1990s heavily inflences my thinking, so take it fwiw. Here’s a fun Bloomberg article that’s light reading: http://www.bloomberg.com/apps/news?pid=20602007&sid=aYq_CZTAtgvQ
    I hope that helps! (PS – the Fed has a lot less power than people believe; their quantitative easing isn’t going to make too much of a difference ultimately. How’d they do stopping the decline in stocks that they so transparently tried to prevent starting in Sept 07?, lol)

  87. Posted by dch

    Ok anonn, you win:
    “most” of Paul’s buyers made a “bad” financial decision to purchase a SOMA condo.
    Again, I find myself at a loss for the point of your nitpicking.Does it make him right and the uninformed yahoos wrong? Does the revised statement constitute a ringing endorsement of his services?
    “Come to Skybox! You might be so rich that you won’t mind the six-figure losses!”
    Yeah, that one doesn’t work for me either.

  88. Posted by anonn

    “most” “bad” “six figure losses” “nitpicking”
    ahem
    whatever. No, no, no. YOU WIN! believe what you want. Apparently, you have chosen to believe that you know and understand the finances and motivations of a large group whom you’ve never spoken to, or laid eyes upon. What’s more, you understand what the future holds for them: They bought high. Therefore, they’ve “lost” lots of money. More power to ya. You aren’t alone in that line of reasoning, obviously. Ever see “Valkyrie” ? LOL

  89. Posted by Mud

    @ LMRiM
    Feel like we keep coming to same conclusion from different angles. I get a good look at consumer balance sheets and retailer receipts – and consumers aren’t deleveraging…yet.
    I would genuinely love to see how this is gonna be even a medium term improvement – but the uptick doesn’t start until the deleveraging stops. And it hasn’t even started on the consumer side.

  90. Posted by FormerAptBroker

    anonn seems to think that not a even a single underwater condo buyer is upset that they are underwater (and paying twice as much every month to live in the same building as renters) and he can’t understand that by writing:
    > Apparently, you have chosen to believe that you know and
    > understand the finances and motivations of a large group
    > whom you’ve never spoken to, or laid eyes upon.
    He is saying that “HE” (the all knowing anonn) DOES know and understand the finances and motivations of a large group of buyers that he has never spoken to, or laid eyes upon.

  91. Posted by San FronziScheme

    Let’s not pick on Real estate salesmen, they’re just there to move product, not to make financial predictions.
    Everyone’s responsible for his own acts. Get used to it. Upside down home-owers used to step on each-others’ toes when rushing to buy 2-3 years ago and no-one forced them. Next time they’ll think before they act, or open a book or something. Everything was out there telling them prices were too high but yet they still bought.

  92. Posted by anon

    “I’ve been thinking about it all afternoon, and 2015-2020 is really too short for a base case forecast. I’ll shift the window to 2018-23,…”
    No worries. By then the big one will surely have taken care of your “investment”.

  93. Posted by Raymond

    I’m not a realtor, I’m actually a client of Paul, he help me to sold my condo in SOMA last year.
    I read the socketsite a lot but never write up anything here, but it’s funny that when it’s the real estate bull market, a lot of people turning to the real estate agent for data, but when market is down, people turn all the blame to the real estate agents……..
    We should all understand the role of real estate agent, to determine they are good or not, just their ability to buy/sell your house in good price, good condition, and smooth transaction. Not the fortune teller of how the future market goes. Because they are not ‘good’ enough to tell you that, in fact, very very few people good enough to tell you that. You have to read a lot and observe a lot to come your own judgement.
    I’m not here to promote Paul be the good agent or not. But I think he do a fine job for the socketsite, I didn’t see him do too much promotion here, just simply give whatever information he know in the market. It’s not right to put blame to the real estate agents for the house value decline. Real estate agents are also salesmen, they do the sales pitch to the seller to sell their condo and do the sales pitch to the buyer to buy the condo, what’s wrong with that? I sold my house in Pleasanton in 2005, when I work with that agent to sell my house, he told me the market is so hot right now, it’s the time to sell the house. 2 months after I sold my house, he called me up saying that probably it’s the time to buy a house and a lot of selection there and ask if I need help on that. It sounds quite funny, but can I blame him doing that? It’s part of his job. I still talked to him from time to time, it’s part of my information collection channels, but should you buy/sell your house base on the sales pitch, it’s all up to you. Just don’t blame the salesman in Sears that the fridge you bought 2 months ago and now it’s on sales for 20% off……..

  94. Posted by FormerAptBroker

    Raymond wrote:
    > We should all understand the role of real estate agent,
    > to determine they are good or not, just their ability to
    > buy/sell your house in good price, good condition, and
    > smooth transaction.
    I’ve been licensed since ’81 (a Broker since ’85) and I have never (technically) acted as my own agent (meaning I have never received a brokerage fee on a property I bought or sold) so I realize that it makes sense to use an agent (and pay them a fee) when buying and selling real estate. I know many great real estate agents and I don’t want to slam the entire profession (but do want to point out that for every top agent with lots of experience there are many agents with little market knowledge and experience).
    I just have problems with some (not all) agents, including the HUGE number of people in real estate that came out and told me that I am an idiot for renting in SF and that I will be “priced out of the market forever “ if I don’t “buy now!”. I also have a problem with agents who speak for all buyers and tell us that people who overpaid and continue to pay a ton of money to live in an a property that continue to decline in value are happy as clams since they “bought for the long term”…

  95. Posted by Bernie MadeOff

    On real estate agents:
    The agent we used to sell our house at the peak of the market enabled us to generate the impression of a bidding war and squeeze an additional 5% from the ultimate buyer. She was great! If I were on the other side of that transaction, and looking back at my purchase two years ago, I’d be ready to punch someone (first myself for bad judgement).
    As far as using an agent for timing a purchase, very bad idea. They always think it’s a good time to buy.

  96. Posted by anonn

    anonn seems to think that not a even a single underwater condo buyer is upset that they are underwater (and paying twice as much every month to live in the same building as renters) and he can’t understand that by writing
    Really? Is that what I meant when I said,
    “What might be “disastrous” to someone who is forced to sell, might merely be the unpleasant notion of a paper loss to someone who does not have to sell, might be a loss on paper that’s actually generating revenue to someone who did a 1031 exchange.”
    He is saying that “HE” (the all knowing anonn) DOES know and understand the finances and motivations of a large group of buyers that he has never spoken to, or laid eyes upon.
    No I didn’t. I said that they were likely quite varied. Several times I said that.
    It would be nice if you read what I say once in a while, FAB.

  97. Posted by juice

    LMRIM,
    What are your feelings on TIPS, either individual securities or their mutual fund (VIPSX) or ETF brethren (TIP)? Think its a good time to stock up as a longer term investment?

  98. Posted by LMRiM

    juice,
    I’m really not the guy to opine on TIPs because I don’t trade them and don’t follow them very closely (they’re not tax efficient for me because of their current income/imputed income characteristics). Another poster, polip, is really the expert here, and maybe he (or she) could chime in!
    In general, though, I’m not enormously worried about inflation near- and (perhaps) even mid-term, so I wouldn’t want to have too many correlated bets on price inflation. Long-term, though, sure, I think price inflation will become a big deal. I get the feeling that we’ll get better levels to initiate or increase inflation bets at some point in the future (that would include TIPs and commodity bets). Once the real estate adjustment gets a little long in the tooth (it’s going to take a bit longer in SF than most places), holding income real estate against fixed rate debt will be a good bet – probably the best bet of all the price inflation bets. Many more investors need to get washed out first, though, and I have 0 doubt that most will :)

  99. Posted by Mud

    @ editor
    Sorta makes me laugh that my comment asking that people discuss the factual pros / cons of real estate agents (since it always seems to be the elephant in the room on most discussions) got pulled….
    but look where we’ve gotten.
    [Editor's Note: What can we say (other than it's probably a bit more "on topic" here than on a post about trends in rents...).]

  100. Posted by Victor Harrington

    YES!!! Another listing where 75% of the photo’s are of the building and surrounding area…not the condo….I LOVE IT!!!

  101. Posted by Legacy Dude

    Sorry to digress and bring the conversation back on topic, but does anyone know the square footage of this unit?

  102. Posted by Thumbs down

    LD – Square footage is 1163. Floorplan is as per link below, and like all of the units in the building [with the exception of some of the no view treetops] made the living and dining room space a complete afterthought. Perhaps Paul and/or Mark Chooey can let us know which floorplans make this building so “hot, hot, hot”?
    http://www.the-infinity.com/images/floorplans/PDF/301-2B.pdf

  103. Posted by Rillion

    “not a even a single underwater condo buyer is upset that they are underwater (and paying twice as much every month to live in the same building as renters)”
    Well I guess fortunately for me I don’t have to worry about living in same building with renters paying half as much as me, since our HOA prohibits renting out our condos. It is really nice to live somewhere entirely occupied by other suckers and fools without any of those brilliant renters rubbing our noses in their financial savvy.

  104. Posted by Mark Choey

    LD – answering your question regarding “which floor plans” make this building so “hot, hot, hot”? I’m assuming by your comment about this floor plan’s small living/dining room area, you are not understanding why the Infinity is one of the hottest projects in the country (it has been confirmed that it is currently the fastest selling project in the West actually if not the country right now).
    It’s not the floor plan per se that makes the building so “hot”, it is the price relative to what you are getting. If you are just looking at floor plans, this floor plan is not as attractive as other 2BR floor plans in the tower especially the “signature” curved floor plan,
    http://the-infinity.com/images/floorplans/PDF/Infinity_D2A.pdf (called the “2A” floor plan)
    and I agree the living/dining area is smaller than most would like, however most of the smaller 2BR floor plans stack face the water to the south or the city to the north if you get high enough to clear the mid-rise buildings of course (around the 12th floor and above). And combining the view with the lower prices for the smaller 2BR relative to the signature curve plan (approx 12-15% smaller in fact and therefore cheaper), you have high demand for the “E” and the “A”‘s.
    Actually, this smaller 2BR floor plan is currently the most popular one in Tower 2! All of the other “stacks” have much more availability for various reasons. Other popular stacks and floors are the low floor “B” stack, the low “D” stack (below 10) and then the very high “B” stack from 27-30th floors. Anything under 1.0M sold very well and still is.
    Hope this helps

  105. Posted by Legacy Dude

    Thanks Mark, but I wasn’t the one who asked why it was “hot hot hot.” Although not surprising that units are moving given the average price per square foot in these buildings is down about 30% over the last 2 years.

  106. Posted by Mark Choey

    sorry LD i meant “Thumbs down”

  107. Posted by anon

    Marc, has anyone thought for a moment that maybe they are one of the hottest selling developments on the west coast because they slashed prices and maybe they slashed prices because TS wants to get out badly, and maybe they want to get out badly because they feel as if some details about the development may get uncovered any moment now?

  108. Posted by gowiththeflow

    anon not sure what you are talking about but if it is anything developer related they are not off the hook solely based on selling all the units “and getting out”. It sounds like you know something, would you like to share?

  109. Posted by Paul Hwang

    It’s incredible the amount of made up facts on Socketsite about me and real estate in general.
    I’m not going to discuss prices on Socketsite, because I said I wouldn’t. That’s me; I do what I say I am going to do. I’ve been very lucky in my life and I like the way things are, I’m not going to change for anyone.
    For the people doing all the finger pointing, I am reminded of an ancient chinese proverb from my childhood, “Whoever smelt it, dealt it.”

  110. Posted by LMRiM

    LOL, Paul. I love fart jokes!
    The proper retort to “whoever smelt it, dealt it” is, of course: “Whoever denied it, supplied it”.

  111. Posted by tipster

    Mark, that was a very welcome post. It was frank, provided useful information, and seemed thoroughly honest and not the least bit manipulative or cheerleading. And I didn’t get the feeling that the poster was playing “hide the ball”.
    I wish you’d post more!

  112. Posted by Mikey

    Marc, has anyone thought for a moment that maybe they are one of the hottest selling developments on the west coast because they slashed prices and maybe they slashed prices because TS wants to get out badly, and maybe they want to get out badly because they feel as if some details about the development may get uncovered any moment now?
    Puh leeze. Has anyone ever thought for a moment that TS is a business that has a lot of product (condos) to sell and thus has to cut prices (supply) in order to reach buyers (demand)?
    Besides, if you knew anything about how this kind of thing works, you’d know that there’s a 10 year limited warranty on buildings in CA. TS isn’t off the hook for defects after they sell the last unit.
    But your conspiracy theory is more interesting. I guess.

  113. Posted by terry

    Mark, I second what tipster said. From the posts on this socketsite thread alone, it’s clear that one’s choices in SOMA for realtors range from Mark (thoughtful, knowledgeable, tactful and polite) to Paul ([Removed by Editor]). I know which office I’ll be calling when prices finally reach rent parity in SOMA.

  114. Posted by tipster

    I like Paul, but I think he might be just a bit too self-promotional on here, and maybe he doesn’t realize how much that turns people off.
    For example, instead of stating that X units went into contract, and this was breaking news, it might have been more balanced to state that Infinity prices have come way down, and so units are moving again, which is what the editor finally posted.
    I think what the socketsite crowd expects from a realtor who uses his real name is a certain level of balance.
    Ester is quite different: ever the cheerleading realtor, she isn’t using her full real name, so we cut her some slack. She also at least attempts to post on behalf of her landlord persona, in spite of the fact that she’s really promoting buying real estate because she’s a realtor.
    What Mark did above was to provide balance, coupled with real, not cherrypicked information (the $7000 rent, or the $1200 psft for a marina rebuild, more commonly known as a teardown, tho you can’t really tear hoiuses down).
    Every time someone tries to cherrypick info, it makes me make a mental note not to use that realtor, for fear that I will have to check every statement for cherrypicking and I don’t want to use someone I can’t trust.
    Mark came across as someone providing honest, valuyable information, exactly the kind of person you want on your team. A. Lot of us took note of that.
    Maybe a.more promotional, cherrypicking style works for other people, but it turns me completely off, and this crowd sees through it anyways, so it just backfires.

  115. Posted by SocketSite

    We’re moving discussion on the “hot” topic to: Perspective(s) On How Infinity Floor Plans Currently Stack Up.

  116. Posted by polip

    well I’m assuming this thread is dead now, so I won’t feel badly about posting OT at this point.
    First, thanks LMRIM, but I’m quite far from an expert on TIPS, though I do know a fair amount about them (both because I invest in them and because I find them rather interesting). More importantly, unlike LMRIM, I’m not a trader. I know that the trading game is rigged against retail investors, and even when not rigged, it takes incredible savvy and timing to generate true alpha.
    Second, I’m not a conspiracy theorist (LMRIM sometimes comes across that way, and maybe he is, but I suspect its just his way to ‘see’ the world and it helps him generate an analytic framework). With that said, however, TIPS suffer from the fact that the CPI-U (which creates the inflation adjustment of the bond) is biased towards a low standard deviation. This is primarily because a huge component of CPI-U, owner’s equivalent rent (OER), moves in fairly narrow bands, thus smoothing out the CPI-U data. OER was too low during the credit expansion of 2003-mid 2008, and is currently way too high. As a result, CPI-U was lower than true inflation from 2003-mid 2008, and is currently much higher than true inflation (which is actually deflation). Presumably this evens out in the long run, but this is not a small concern.
    So with that pretext, here are my thoughts on TIPS, the TIP etf, and VIPSX.
    #1.) They must be held in tax deferred accounts. Holding them in taxable accounts is a terrible idea – LMRIM explained why already.
    #2.) They are a decent, but imperfect, hedge against inflation. The imprefection stems not just from the problems with CPI-U, but also the liquidity characteristics of TIPS. During the meltdown of late 2008, the relatively illiquid TIPS market (compared to nominals which are basically the most liquid market in the world short of forex) underwent a massive liquidity related dislocation. The result was that TIPS values fell to very low levels, with real yields on the longest maturity bonds reaching 3.5%! Without the adverse selection created by the liquidity crisis, TIPS may have fallen slightly relative to Treasuries, but breakeven inflation (actually deflation) forecasts comparing TIPS to nominals were far different than the spreads in the inflation swap exchange markets. Now, for those plannign on holding their bonds to maturity, this may not seem to matter, but, just as falling housing prices cannot be ignored by a homeowner who is actually thinking rationally (and understands the concept of opportunity cost!), fallings bond prices cannot be ignored in the context of a properly constructed portfolio. To put it another way, TIPS are wonderful in theory because they should hedge inflation related risks to the other portions of a portfolio (for instance, falling equity prices in the face of a sudden inflationary shock). The result of this hedge is that it should smooth portfolio returns, and it should improve overall cumulative annual growth rates (CAGR). Unfortunately, if TIPS are subject to liquidity related issues, when and if a sudden inflationary shock presents itself, TIPS may fail simply because their relatively illiquid (compared to nominal UST instruments) characterisitcs result in their liquidation by those who hold these instruments in large quantities. To put it another way, it turns out that TIPS may well be positively correlated with systemic riks. Thus, if the inflationary shock is due to a systemic risk to the financial system, then the possibility exisits that TIPS will failt to function when they are needed most. In the meltdown of late 2008, which was, to be fair, a deflationary demand destruction event, TIPS still performed much much worse than would have been assumed given the deflation predictions that were present – so much so that the Cleveland Fed cited this fact when they stopped publishing breakeven inflation data derived from TIPS-nominals spreads. This poor performance has rightly been attributed to the large scale liquidiation of these instruments that ocurred by institutions that needed immediate access to liquidity. It is not as likely, but surely it is possible, that a sudden hyperinflationary supply shock could create a similar performance lag in TIPS (namely, we would expect TIPS to show massive price increases during such a shock, but the price increases might be muted simply because the systemic risks posed by the hyperinflationary event might lead to liquidity related selling of the TIPS, with a resulting drag on their theoretical price performance). For these reasons, TIPS are generally useful as a long term hedge against inflation, but may not work as well as theorized in times of crisis (as a hedge aginst a portfolio falling in value). If held to maturity, one can gnerally expect the real interest rate to be realized, but the opporunity cost during a serious financial event may serve to limit their utility when needed most.
    3.) TIP, VIPSX, and TIPS etfs and funds are vastly inferior to holding the actuals TIPS. This is generally true for any fund which holds UST instruments. Since UST instruments are deemed to have no credit risk, holding a ‘diversified basket’ does nothing other than incur costs of management, decrease ability to match future cash flows to liabilities, and create undesirable and unhelpful volatility. Most importantly, TIP and VIPSX are weighted towards the middle and shorter end of the curve. The result is that they are much less useful in hedging long term inflation risk. Their NAV fluctuation is more related to earlier maturity issues, and as such, the ‘guarantee’ of future real yield (if held to maturity) is less useful. If an invesotr knows that 2.0% yeild above CPI-U over 22 years will supply his or her needs, then this can only be provided by purchasing an acutal TIPS instrument. Likewise, a TIPS ladder can be constructed which will produce desired inflation indexed cash flows. No such possiblity exists with TIPS funds due in large part to the shorter weighting and turnover of the maturing issues and purchasing of new longer dated issues.
    4.) As LMRIM, among others, have mentioned previously, the best hedge against inflation is provided by holding real assets, ideally with underlying fixed rate debt. Holding commodities also functions well in this regard. In a hyperinflationary systemic shock event, I would strongly suspect that TIPS will underperform commodities and real assets (such as rental property – though rental property suffers from the constraints of lease renewal, rent control, etc). Thus, for a true hedge against a severe hyperinflationary event (of equivalent magnitude to what we experienced on the deflationary side of the coin in late 2008), I would state that TIPS will do OK, but commodities and cash flow real estate will perform as desired and function in the desired capacity.
    As for whether TIPS are a good buy at present – that is a bit hard. Last I checked the real yeild on the 20+ year maturities was 2.4% real ytm or so. UST nominals of similar length are about 4.5%. If we are to believe that there is a slight liquidity premium in UST nominals , maybe worth about 40 bps, then the breakeven inflation rate is around 1.7%. At these levels, I’m basically indifferent. I do believe that for the next 3-7 years, CPI-U inflation will be muted, and thus I wholeheartedly agree with LMRIM that the long end of the UST nominal curve will be a good place to be (as inflation expectations drop). Since I don’t trade, I don’t make these kind of bets with my actual portfolio. I suspect the long end for TIPS will hover around 1.8-2.5% real ytm for quite some time here, and really, buying them versus purchasing long dated nominals will likely be equivalent, except that TIPS will show less price volatility (as they are sensitive only to liquidity issues – which I believe are now resolved, and the movement in real interest rates – which is gnerally in a narrow range between 1-3%, especially at the long end). I think LMRIM mentioned that if the 10 year goes to nominal 4.5% it would be a screaming buy. I could not agree more, but likewise if a 10yr TIPS goes to 2.8% real ytm it will also be a screaming buy (if inflation expecations remain constant at around 1.5% for 10 years out these criteria will be satisfied). I believe that LMRIM’s point is that if the 10yr goes to 4.5% it is because for some bizarre reason, inflation expectations will have moved to 2.5 or even 3.0%, in which case the real ytm on TIPS will be 1.5% and the truth is that 1.) the 10yr won’t be getting to 4.5% anytime soon, and 2.) if it does it is because of a misguided belief that somehow the vast deflationary forces washing over the US economy can somehow be circumvented.
    Full disclosure. I bought the long end of the TIPS curve at 3+ % real ytm last fall, and I have bought the 10yr nominal as it got between 3.8 and 4.0 % in the last week or so. If the 10yr goes over 4% I will buy plenty more, and if the 18+ year TIPS see a real ytm over 3% I will be a buyer in large amounts again. Your portfolio is likely different. So is LMRIMs (he has a large hedge in the form of gold, forex) – so look at your own portfolio to decide if any of these are helpful ideas.
    Sorry for the long post – hope it is a bit helpful. Too long for me to reread it and spell check it – my apologies.

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