Purchased for $1,116,000 in November 2008, the sale of the William Stout designed 160 Manchester atop the north slope of Bernal Heights closed escrow on 5/14/10 with a reported contract price of $1,035,000 (6 percent under asking and 11 percent under 2008).
∙ 160 Manchester: Will This (North Slope) Bernal Stout Stand Up? [SocketSite]
anonn and his clients single handedly held the line in FHA-land, but this is the first sign of cracks in the high end ($1 million+) of the North Slope. Will be interesting to see if this is an aberration or the beginning of a trend. That said 3219 Folsom (see this thread) is the only pent up supply that I currently am seeing.
One of the most interesting properties (for me, given my needs) I’ve seen on the market in some time. Would have liked it more for a bit less, but not bad at $481/sqft! Give me hope the market will continue its downward trend toward more reasonable pricing…
I should also note, the previously documented 1587 Treat and 130 Ripley are still in the foreclosure pipeline.
Some stats:
DJIA: Nov 2008: 8046; Today: 10,625 +32%
GOOG: Nov 2008: 0262; Today: 00,507 +93%
This house: Down 11% over the same period.
I can think of many better ways to spend $10,000 per month for a year and a half than living in some dreary looking Bernal home, but that’s just me.
DJIA at the time they took their money out for the down payment, at least 10,850. Nice cherry picking on the November ’08 date.
DJIA is down 10% from its January 2000 peak of 11723, whereas Bernal homes have appreciated considerably since January 2000.
The listing says it is 1643 finished SF. So the price is $630/SF, not $481/SF, if the Redfin numbers are accurate.
I suppose somebody might still argue that “prices fell even further between 11/08 and the ‘bottom’ in 5/09 and they’ve bounced back up a bit since then.” But that would be weak. This is a pretty solid indicator (I know, but just one data point) that prices did not bottom in ’09 and they are still declining, albeit a bit more slowly than a year ago. All the trillions pumped into the system has just slowed and stretched out the fall, which, I think, was the whole point. Still have a few years to go before the real bottom.
I’m betting the new buyers lose more over the next 18 months than the ’08 buyers did. The latter actually did a pretty good job of cutting their losses.
Median 94110 interest for the median Bernal house for a 30 year fixed mortgage in 2000: $500,000@8.5% = $3541/mo
Median 94110 interest for the median Bernal house with a 30 year fixed mortgage on 2010: $700,000@5% = 2916/mo
Bernal homes have only “appreciated” because interest rates have dropped. If interest rates rise as expected after the election, I think you’ll see your “appreciation” evaporate.
Interest rates will continue to drop until the election.
Interest rates have not varied that much. I refinanced my Bernal house in 1998 at 5.75%.
Dan, you must have had a lot of points or had an ARM, or a 15-yr loan. We bought our place in 1998 with a conforming 30-yr loan, and going rates were about 7% (we got a 6.875% with 1/2 point). So a jumbo rate (for this place) would have been about 7.75%.
By 2000 rates were about 1% higher.
Interest rates have not varied that much.
Yes they have.
I refinanced my Bernal house in 1998 at 5.75%.
Perhaps, but you were clearly an anomaly. Most people were getting rates around 6.5-7.5% at that time period at least for traditional loan products. (if you got a nontraditional loan product then you were being misleading with your post)
Here’s several charts of historical mortgage rates
http://mortgage-x.com/trends.htm
You can clearly see how mortgage rates rose incrementally over the late 1990s, then plummeted from 2000 to 2003, then slowly rose a little until 2007, then fell again.
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Interest rates will continue to drop until the election
although I am quite confident that interest rates will skyrocket at some point in the future, the timing of this is completely unknown to me. too many moving parts.
we will likely continue pseudo-Quantitative Easing in the mortgage market (in the past Fed purchases of Treasuries and MBS… currently covert QE through Fannie and Freddie). This is more of a “political” decision and of course will remain like this until at least after the midterm elections (or until the bond vigilantes start squawking as they are doing in Europe right now).
so I agree, that low mortgage rates will likely last at least through Nov/Dec of this year.
However, right now our interest rates are being held very low mostly due to the so called “flight to safety” trade with the Eurozone sovereign debt market collapsing and the volatility in the US equity markets..
soon, that trade will be over, but when??? I have no idea. could be months or years.
^ Will Uncle Hu never tire of throwing good money after bad?
Nice charts by the way.
This house on Manchester is sort of a fixer, for 1 mm+. I wouldn’t be surprised if that market is worse than the fall of 2008 market. Did anybody see the place? Those mirrors are ghastly. But according to my realtor there’s another apple over on Winfield that just went for way over 1mm, and also more than its fall 2006 price.
I’m with ex SF-er in that the only place for interest rates to go is up. A good description of the influence of interest rates on house pricing is here — check out the comparison to bond pricing:
http://makingsenseofmyworld.blogspot.com/2008/02/six-degrees-of-leverage.html
This is one of the reasons we had such a spike in value since the early-to-mid-80s and why those boomers have felt so much appreciation. We would all be much better off with 8-9% loans and more sane pricing.
What’s interesting is that in Denmark, home loans are more directly tied to the secondary market than here, so home loans actually are more like bond pricing in that refis don’t have to be at par:
http://finance.yahoo.com/family-home/article/109430/the-housing-finance-system-needs-a-redesign;
I financed at 7.75% for a jumbo loan in 1995, but refinanced at 5.75% for a traditional loan (though with a point or 2) in 1998, and could have gotten 5.625% if my mortgage broker acted quickly when I asked him to. There was an Asian financial crisis that year and rates did go that low.