August 13, 2009
A Banked Owned White Picket Fence And Dream (126 Chester Ave)
Purchased for $750,000 in December 2004 with what appears to have been $25,000 down, 126 Chester Avenue was bought back by the bank in November of 2008, white picket fence and all. Back on the market and asking $447,000 in 2009.
With a sale for $360,000 in March of 1999, a sale at asking would represent average annual appreciation (CAGR) of 2.1% over the past ten years, but a 40% drop in value over the past five.
∙ Listing: 126 Chester (4/2) - $447,000 [MLS]
First Published: August 13, 2009 11:00 AM
Comments from "Plugged In" Readers
$447K is a sign of incredible strength in the Ess Eff market. $750K back in 2004 you say? "Overpaid" - was only worth $500K so market is flat. Now, can we move on to the next property
Posted by: LMRiM at August 13, 2009 11:23 AM
It's interesting that the CAGR analysis from the late 90's seems to always average around 2%. We might be on to something here....
Posted by: ed at August 13, 2009 11:31 AM
Was over priced in 2004, still over priced now. Bring it down to $350k and I bet it'll sell.
Posted by: lolcat_94123 at August 13, 2009 11:33 AM
re: 2% CAGR - real estate costs will over the looooooong term match the inflation rate, with the exceptions of demographic shifts/changes to the locale relative to other locales. There is a "normal" %age of income to be spent on housing, and even the swings have natural limits - you can't spend 101% of your income on your mortgage.
Note that the mortgage cost is a part of the real estate cost.
Where you see positive (and negative) changes are where a 'hood goes upscale or goes into a tailspin.
That stated, having your $s actually keep up with inflation is an accomplishment.
Posted by: Jeff at August 13, 2009 11:40 AM
@Jeff, that is correct. What I'm seeing anecdotaly is that from the late 90's to many of today's recent foreclosed properties, which many perceive to be the best market indicator, we're seeing around a ~2% CAGR. Over a 10 year period we're less likely to see reversion to an inflation rate but rather a real sense of appreciation. This is all just speculation but could serve as a decent proxy for where many properties are fairly valued on the open market, for now. That is, take a late 90's comp, apply a CAGR of 2-2.2% and derive what your likely foreclosed value might represent.
Posted by: eddy at August 13, 2009 11:50 AM
Correct me if I'm wrong, but you guys are implying that property values, in real terms, have basically gone nowhere in a decade. Or, to be more specific, values will appear flat over a decade once the current bubble deflation has run its course.
Posted by: Legacy Dude at August 13, 2009 11:59 AM
Does anyone know anything about this neighborhood? I guess I must have driven by it on the 280 or on the way to the zoo but have definitely never been into it. I'm guessing it's consistently foggy and feels like Daly City. At these prices, is it unsafe as well?
Posted by: Shza at August 13, 2009 12:04 PM
Posted by: Mud at August 13, 2009 12:09 PM
So Pretty !!! I love the picket fence :)
The location seems a little out though, almost like it's in Daly City. Is this still in San Francisco ?
Posted by: Chad at August 13, 2009 12:19 PM
It is in San Francisco.
But you're right, it IS a little too far out there for me.
It's a cute little house on the outside, needs some love on the inside. I hope it gets it.
Posted by: kthnxybe at August 13, 2009 12:43 PM
Chad / Shza:
Definitely not a Daly City feel to this neighborhood. Houses tend to be distinct and somewhat interesting, while still having typical small-frontage SF lots. Most need work, as you would expect in a more working-class neighborhood. Drug dealers were pushed out of nearby Brooks Park a few years back; crime isn't really an issue until you get several blocks East -- crossing over Orizaba towards OceanView Playground can get "interesting".
The knock on this area, as with most of more affordable parts of the City, is that it doesn't have the walkability we appreciate as residents. While well-served by transit (unlike much of Daly City), you simply don't have a refreshing morning walk to the local coffee house/what-have-you.
When I see this listing, I'm very surprised by the $/sq ft, especially given that there is additional "unwarranted" space beyond the (relatively sizable) 1600+ listed. I would definitely be looking for a critical failing in the property. From the pics/description, I don't see it. Because, although $350K is a nice thought, this is still a SFR in SF (and not D-10), and is not going to go for Daly City prices.
Posted by: Average Joe at August 13, 2009 12:45 PM
Thanks Average Joe. I am going to check out the Open House this weekend...
Yeah, that "unwarranted rooms" statement on MLS is bothering me. What exactly is an "unwarranted room" ? Will I have trouble with structural stability etc ? That is scary !
Posted by: Chad at August 13, 2009 1:03 PM
Unwarranted means that it's a room and it's potentially habitable, but doesn't conform to the City's definition (i.e. "code") of a habitable room.
You can have a room with a ceiling height that's one inch shorter than code, for example, and it will be unwarranted... Or it doesn't have proper egress (window/door access). Or any number of things.
Basically, somebody "installed" a room, perhaps many many years ago, and did not get a permit... It typically has very little to do with structural stability. If the house is structurally stable, then so are the unwarranted rooms inside.
Posted by: "Dave" at August 13, 2009 2:01 PM
Thanks Dave ! Feel a little better now :)
Posted by: Chad at August 13, 2009 2:26 PM
A quick headcount in Ingleside Heights shows 42 foreclosures (NODs, NOTS, bank owned) to 18 homes currently for sale. Plenty of pent up supply still in the pipeline.
Posted by: EBGuy at August 13, 2009 2:30 PM
The downside might be the noisy roadway in back. Cars hit that stretch as they come off of 280 at high speed, and also launch onto 280 from there.
Posted by: Mole Man at August 13, 2009 2:41 PM
With SF State nearby??? That unwarranted in-law is worth more than you think it is!
Posted by: nowonderitcostssomuchhere at August 13, 2009 2:47 PM
In regards to this area, I am not sure about the street this house is on in particular and once you cross Brotherhood it gets Daly City like and very ugly. My sense is this home is transitioning
But my uncle has a place a 8 blocks away off Holloway and it is a fantasic place, fully detached, 1920's, detached garage, nice details, two stories, small front lawn
Posted by: Zig at August 13, 2009 3:03 PM
Don't have a buyer, so I don't really care specifically about this house and what it sells for or who gets it. But I do see what is going on in the under $600K price range. If it is reasonable inside and does not have significant structural problems...I predict it will sell north of $500,000 and probably closer to $550,000. Inlaw units - especially vacant ones add significantly to the value proposition with multi-generational family buyers.
Posted by: joerealtor at August 13, 2009 4:06 PM