2543 Vallejo (www.SocketSite.com)
2543 Vallejo has been on our readers’ radar for just about a year. Purchased in January 2000 with a $1,395,000 variable rate loan, the Pacific Heights property was refinanced in February 2003 with a $1,680,000 variable rate loan, and then again in April 2007 with a $2,900,000 variable rate loan.
A month later a $500,000 line of credit was extended on the house as well.
In April of 2009 a notice of trustee sale (NOTS) was filed with $3,149,895 owned on the mortgage, and this past March the property was taken back by the bank with $3,224,168 due on the mortgage at the time.
Listed on the open market for $2,652,000 this past April, the single-family home has been on the market asking $2,395,000 since the beginning of June.
UPDATE: After we posted this morning, the list price for 2543 Vallejo was reduced from $2,395,000 to $2,349,900 after two months without a change.
∙ Listing: 2543 Vallejo (3/3.5) 2,788 sqft – $2,395,000 [MLS]
An Appreciation (Just Not “Appreciation” Per Se) For 2668 Vallejo [SocketSite]

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Comments from “Plugged-In” Readers

  1. Posted by diemos

    Your tax dollars at work.

  2. Posted by eddy

    Maybe EB can come up with some dirt on this one. But this place is a disaster with the sort of renovations that anyone with $2+ would want to immediately undo; but for someone that financed their way into this home would think was ‘luxurious’. It’s like someone with a shopping spree at home depot went crazy. That said, if it has the view in the listing photos, $2.1, no view, $1.9. I wouldn’t take it for $1.8 personally.

  3. Posted by The Milkshake of Despair

    Stories like this demonstrate that it wasn’t just tech windfall, Bank of Mom and Dad, foreign buyers, or old money wealth that fueled the RE boom. Here we have almost $2M in money debt created out of thin air in the course of just seven years.
    That spigot has been turned off. Tech is still limping along. Our foreign counterparts are hurting as bad as us now. That leaves just old money and BoM&D to prop up the prestige market.
    I guess if you’ve got a pile of dirty cash and a way to launder it then this is your market.

  4. Posted by sigh

    looks like a circa 2003 flip…..all pig and lipstick…this is a 2 the studs reno..
    [Editor’s Note: The home was remodeled in 1999.]

  5. Posted by Oh brother

    Ageed…where did all that money go?? diemos ..your right …Home Depot…

  6. Posted by Arch94123

    “Stories like this demonstrate that it wasn’t just tech windfall, Bank of Mom and Dad, foreign buyers, or old money wealth that fueled the RE boom. Here we have almost $2M in money debt created out of thin air in the course of just seven years.”
    ^^^THANK YOU!^^^
    As someone who has designed homes in various “special” areas in the last 10 years, I was astonished at how every single one of these neighborhoods were considered “immune” from any downturn. Whether Newport Beach, Palm Desert, Wailea, Hulalai, Winnetka, Wilmette or Lincoln Park, I heard many realtors-contractors-buyers tell me that their location was “special” and therefore the massive run up in prices was “justified”. This was nothing more than a credit bubble no different than the tulip bubble. San Francisco buyers are no different than clients I have had in many other parts of the country.

  7. Posted by marina girl

    if the listing agent had the tiniest sense of humor, those five top-floor windows would have cherry – cherry – cherry – cherry – lemon in them.

  8. Posted by suspicious

    Hold on, Lincoln Park (as in Chicago?)? I know it’s off topic, but by what % is that area down in Chicago, as opposed to downtown?
    Thanks

  9. Posted by tipster

    That spigot has been turned off.
    The spigot has not been turned off. It’s just been turned off above a $729K loan amount.
    Buyers under $950K, beware: this is your future a few years from now.

  10. Posted by Denis

    Buyers in this range simply don’t want homes that are in financial distress. This is really the only home in proper Pacific Heights for sale on the MLS for under 3 million, but the home is obviously among the least attractive homes in the entire neighborhood and needs a huge investment to make it livable. There’s no wonder it hasn’t sold. I don’t think it’s worth any more than its 2000 purchase price. Can this go up for auction? It should…

  11. Posted by tipster

    “Buyers in this range simply don’t want homes that are in financial distress. ”
    Oh brother. How exactly is this home in financial distress. It was foreclosed and is free and clear of all liens.
    The only “financial distress” is that the bank that owns it is probably insolvent, but they all are.
    Could it be that the market is falling again? Nah. Financial distress. I’d run with that.

  12. Posted by John

    Looks nice from the outside, but the inside is very plain/generic. Perhaps the owner didn’t have the money or desire to create something nicer.
    But, I don’t see how it is not “livable”. Looks like it would keep you warm and dry, etc. Maybe I’m missing something.
    I also don’t know that it’s a fact that someone with less money would think more of the interior than someone with money. Does money buy taste? The second post sound quite elitist.
    Lastly, what does this phrase mean in the listing, “generously proportional living spaces”? Is this a term of art? Does it imply that the living space is big compared to the other (non-living) spaces?

  13. Posted by mikey woodz

    ^^ owner didnt have money to create something nicer….he/she pulled almost 2 mil in equity….could have made for pretty much any type of remodel they wanted. These people simply soaked this dry and lived/(bought ferrari’s perhaps??) of this place

  14. Posted by curmudgeon

    ^John: typical bad realtor command of the english language…I think they meant “proportioned”, not “proportional”. And all it means is “nice sized rooms”

  15. Posted by Gigi

    The tile, granite, and cabinet choices are fugly and look cheap. Whoever buys this is going to have to put a ton of work into updating it. Right now the interior looks like it belongs to a house in San Mateo…not good.

  16. Posted by Denis

    Oh Tipster, I never said the market wasn’t in decline, besides, I also just said this home is still over-priced by almost a million dollars. Similar sized homes in inferior D7 locations (Laguna, Gough, Franklin) oddly enough sold comparatively quickly and all were in this price range. I think 3346 Clay also falls into the same category as this home. Homes with severe aesthetic issues are lingering, but couple that with financial problems and buyers are going to keep walking. This would be a ok project for a developer, but even developers seem to stay clear of these messy situations. I’m actually surprised that D7 has managed to clear out a significant amount of inventory over the last month. The inexplicable, and likely short lived, stock market boost along with lower prices (2.1 for Union!) really helped move some homes I didn’t think would sell.

  17. Posted by jason

    But, I don’t see how it is not “livable”. Looks like it would keep you warm and dry, etc. Maybe I’m missing something.
    For $2.4M I expect a little more than warm and dry. A tarp and a trash can fire will keep you warm and dry…

  18. Posted by sfrenegade

    “I don’t think it’s worth any more than its 2000[sic] purchase price.”
    The 1998 purchase price was $1.32M, which is around $1.77M in today’s money. Maybe the adjusted 1998 price is what it would take, although I would redirect everyone to eddy’s quote:
    “I wouldn’t take it for $1.8 personally.”
    Simply amazing that this house was cashed out to the tune of $1.5M. Wonder what they bought with that money.

  19. Posted by justme

    A tarp and a trash can fire will keep you warm and dry…

    and in D7 will only run you 1.3.
    As to the house in question, is there actually an award for “beige-est?”

  20. Posted by meep

    no way all of that refi money went into this house.could they have just lived off that refi money and than forclose?

  21. Posted by Jimmy (No Longer Bitter)

    What an unbelievably ugly house. The bank can keep it!

  22. Posted by pobeb

    Holy cow people! How is this house fugly or not move-in ready?! Quit making me feel bad about the houses I’m shopping for!! I think this house will sell for around $1.8M because it’s in a great location with good sq footage, and if I have the cash that’s what I’d offer.

  23. Posted by waterball

    I laughed so hard I choked!
    if the listing agent had the tiniest sense of humor, those five top-floor windows would have cherry – cherry – cherry – cherry – lemon in them.

  24. Posted by justme

    cherry – cherry – cherry – cherry – lemon

    If ever there has been a worthy place for Photoshopped windows in a real estate listing…

  25. Posted by tipster

    When you see what went on here, you can see just how screwed we all are. This person was handed over $1.5 million dollars to spend as she pleased for no reason at all. That drove prices up and people who retired and sold their homes got essentially the same thing. Repeat this, on a smaller scale, but millions of times across the country and that was our economy 2005-2008.
    The rug has been pulled out and where is that money going to come from. How is the woman who owned this house going to maintain that lifestyle. Sure she probably saved some of it, and has been spending it recently, but at some point, the savings are depleted and then what happens?

  26. Posted by EBGuy

    All Americans face fear and instability at some level, and will continue until we get the machine working properly.
    Excerpted from the foreclosed (previous) owner’s blog.

  27. Posted by eddy

    I would agree that this home and the home on Clay are clearly a demonstration of the availability of, and execution of abuse in the system. I don’t think the issue is that widespread, but time will tell. Then again, this property never traded on the open market and only the banks are to blame for extending this home this far. This block and a few others have a few lousy homes whose value have always been more Cow Hallow than PH. I agree with Denis that this home is destined for auction. 3nd for the photoshop request.

  28. Posted by A.T.

    It’s not done how I would do it, but it is a perfectly nice, good-sized place in Pac Heights. Yet at $859/sf (and not going anywhere quickly) it is now priced where low-end new SOMA condo crap was priced just three years ago. Certainly reflects a big move in the right direction — market-wide.
    We have seen the near future. “Subprime” has moved upscale. More higher-end distressed sales coming to a theater near you.

  29. Posted by tipster

    @eddy:
    “I agree with Denis that this home is destined for auction. ”
    From the original post:
    “In April of 2009 a notice of trustee sale (NOTS) was filed with $3,149,895 owned on the mortgage, and this past March the property was taken back by the bank with $3,224,168 due on the mortgage at the time.”
    Come again eddy?

  30. Posted by EBGuy

    It used to be that ‘Cash is King’ but investors know it is wiser not to use your own money.
    Former owner getting philosophical after the foreclosure.

  31. Posted by eddy

    All I’m saying is that this home would be more likely to find a buyer and its market value via auction rather than via MLS given the state of the home and its finishes. The back yard looks like a jungle and the interior is sort of a disaster that most buyers in this price range will not find appealing.

  32. Posted by Mole Man

    The “Your tax dollars at work.” angle is nothing but emotional and obnoxious. All this craziness blew an approximately $6 trillion dollar hole in the economy into which the government threw around $1-2 trillion, depending on exactly how you measure spending. At this rate we will need 3-6 more bank rescues and stimulus packages to make up the shortfall even if viewed only in strict dollar accounting terms. Actual recovery is likely to require more than mere liquidity. It is precisely because the situation is so ugly that casual remarks about the value chain bound to taxes are unacceptable. Before you can claim to have paid for something, you have to actually pay for it. NINJA deals only work for getting into trouble, not for getting out of it.

  33. Posted by anonymous

    The price $2,349,900 if you click the MLS link or my eyes are bad. It does need updating, but I find most homes that look dated to be unappealing before the updating. Does anyone know if a rooftop deck can be added?
    @ eddy, why an auction over the MLS? Isn’t the exposure the same?
    [Editor’s Note: No need for glasses, the price was reduced from $2,395,000 to $2,349,900 between the time we posted this morning and you read this afternoon.]

  34. Posted by Charlotte

    I just walked past and it looks like the green house to the left is for lease. Both look depressing.

  35. Posted by tony

    1.8mm? Hmm, call me when it hits $500 sqft; nothing special here.

  36. Posted by eddy

    @anonymous, your listing a property that has been poorly upgraded with finishes that are undesirable and those upgrades are priced in to the current ask as if the ‘upgrades’ have value. Aside from the fridge and range, all other surfaces in the baths and kitchens may as well be from 1970. The rest of the home from just the pics doesn’t look well cared for compared to other homes on the market at $850/psf. I think this is a 650-700/psf property based on sight-unseen, but I know the street and the nabe and I doubt the listing agent / bank can get approval to go this low. The auction comment is really just my thinking this through. I’d price this tomorrow at $1.9 and pray for an overbid.

  37. Posted by diemos

    You perplex me mole man.
    We’ve had this discussion before but I’m still unclear what, exactly, your objection is.
    “emotional and obnoxious” huh?
    “It is precisely because the situation is so ugly that casual remarks about the value chain bound to taxes are unacceptable.” Honestly, I haven’t the faintest idea what this sentence means. Can you expand?
    P.S. I’ve always been curious if mole man is a Simpson’s reference.

  38. Posted by anonymous

    eddy I agree with you about the outdated condition. I asked about the auction because from what I know about auctions they price properties really low to create bidding, but if the bid isn’t high enough the seller will not accept the offer. I always thought they were a waste of time.
    What about deals on the courthouse steps? Are the banks willing to sell at a discounted price? I have never tried it, but that seems to be where investors and developers are buying.

  39. Posted by pacific

    I can see this going for $2 million. It’s a great neighborhood. I could see sinking $300-400k into it to fix it up with more classy finishes, roof deck, and landscaping. I agree the current finishes need to go and the outside of the house could be greatly improved. It’ll be interesting if they get close to asking.

  40. Posted by eddy

    This site is funny lately. Lot’s of interesting commentary.

  41. Posted by NoeValleyJim

    It wasn’t the government that re-fied this house to such an extreme level, it was the owner and the banks. The taxpayer came to rescue to keep the economy from falling into a ditch afterward, this much is true.
    Do you blame the fire department for fires too diemos?

  42. Posted by A.T.

    “The taxpayer came to rescue to keep the economy from falling into a ditch afterward, this much is true.”
    NVJ is exactly right, and the stimulus has been too small, not too big.
    But the problem is with how the rescue component of the package was carried out — few, if any, of the responsible individuals suffered any consequences whatsoever for their destructive and probably illegal financial conduct. Indeed, the bankers were rewarded for it during the bubble years then rewarded for it again later with the outsized 2009 taxpayer-funded “rescue” bonuses.
    The proper analogy would be if individual firefighters had been going around setting fires, then putting them out. And they were not only left unpunished but were then given more money so they could buy additional incendiary devices to keep the fire count up.

  43. Posted by tipster

    The fire department usually enforces the fire code, and so they are blameless.
    If they drove around all day spraying gasoline on buildings, I think we’d have a right to complain.

  44. Posted by R

    “This person was handed over $1.5 million dollars to spend as she pleased for no reason at all. That drove prices up”
    What? I think you got the cart before the horse. Cash out refis didn’t drive prices up. Cheap credit allowed prices to be driven up, which resulted in cash out refis.

  45. Posted by lark

    Gosh I love real estate agent snark. Hilarious.
    “In the know” is right – even with blog posts of the foreclosed upon former owner!
    Wouldn’t want to work with you guys, though.

  46. Posted by lol

    Cash out refis didn’t drive prices up.
    Indirectly it did:
    1 – Some cash out refis were used as downpayment for a second home. Using cash from the bubble to perpetuate the bubble thanks to easy cash and easy leverage. Fiat money creating more fiat money.
    2 – Debt levels too high slowed down the correction in some areas. A debt higher than what you originally contracted changes your attitude when you have to sell. Buy your house for 200K in 1985 and sell it for 1M in 2010? Sure. But if you cashed out 1.5M in 2007 you’ll try to “ride it out” if you can afford it. That puts a level of resistance that us SFers know all too well.

  47. Posted by Mole Man

    Diemos, I don’t get it. I see about $1 trillion shoved at a $6 trillion dollar hole. This mess got around $500k shoved at it, with those numbers. Your calculations are interesting, but don’t cover the $6 trillion hole at all. That isn’t going away any time soon. We have zombie banks because of the huge amount of lending on assets that have collapsed in value. That conjured money has to go away somehow, but right now it is just sitting there like a vast loadstone on the economy.
    The Mole Man tag is many things including a Simpson’s reference and a Marvel antihero

  48. Posted by NoeValleyJim

    Everyone keeps talking about zombie banks, but I am not really buying it. I am not finding it hard to borrow money. I know big companies are borrowing, are small companies finding it hard to find credit? If the banks were really zombified they wouldn’t be lending. They have tightened credit standards from the go-go aughts, but this is a good thing, not a bad thing.
    Fannie Mae and Freddie Mac are definitely zombies, but that is sort of on purpose. Cleaning up that mess is going to be a big one, but probably not too much worse than the cleanup after the S&L deregulation disaster.

  49. Posted by diemos

    The change in asset values isn’t the right number to look at to understand the impact on the real economy. Much of that $6T is unrealized gains turning into unrealized losses. For the real economy the relevant number is MEW.
    All you had to do was look at that chart in 2006 to see the coming Second Great Depression. $800B a year of free money was being created out of nowhere and handed out for people to spend. When credit creation turned to credit contraction and that flow reversed it was guaranteed to devastate the real economy. So over the past few years +800B/year has turned into -400B/year, a $1.2T shift. That’s the relevant number.
    So what to do, what to do.
    Back in 2008 when Paulson got down on his knees and begged Pelosi for authority to prop up the system, that wasn’t theater. We actually were staring into the abyss. A self-reinforcing liquidation that would have wiped all the fictitious values off of real estate, the stock market, the bond market. And it took a stealth defacto 100% takeover of the financial system just to keep us from falling into that abyss. Not that anything is fixed, we’re still standing on the edge of that cliff.
    The traditional and favored way of solving this problem of overvaluation of assets is to create an inflation that will slowly realign incomes and asset values. But that requires income increases and globalization has painted us into a corner on that score.
    So, what to do, what to do.
    We want to create jobs. Move the economy from the unsustainable activities that were funded by MEW and onto new industries and activities that can be self sustaining.
    What creates jobs? Demand.
    What creates demand? People with money to spend.
    What gives people money to spend? Jobs.
    What creates jobs? Oopsie … We’ve gone in a circle.
    This is why these situations don’t resolve themselves either quickly or easily on their own.
    For the moment Barry O and the Capitol Hill Gang have gone on a borrow and spend binge that’s done a lot to mitigate the loss of MEW. However, that money is getting spent primarily on empire; wars of choice, new toys from the MIC, the security state apparatus none of which creates a healthy self-sustaining economy. Furthermore the borrowing props up foreign exporters and hastens the transfer of the actual productive industries out of the country.
    So, what to do, what to do.
    I say, print.
    Not borrow, print.
    About $1T a year printed up, divided equally among the legal adult citizens, and handed out would be a good start. That’s only $5K/person.
    The citizens would spend the money creating demand for industries that actually serve their needs. (Power to the people!) Industries would realign. The chindians would either give us stuff for free or allow their currencies to realign to bring exports back in line with imports.
    But it would be the elites, those with large amounts of dollar denominated assets that would bear the price for that realignment. Since the elites are the ones who make the decisions you can rest assured that this will never happen. We will continue to muddle through and the pain of this correction will be set on the shoulders of the low skilled workers least able to bear it.
    At least, until the day comes when our foreign creditors finally pull the plug on us and say, “bu zai”

  50. Posted by A.T.

    diemos, it’s posts like that one which keep me coming back here.

  51. Posted by tipster

    Sold for 2.2. $807 psft.

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