December 30, 2010

An Offer Inciting Potrero Hill Price At 40 Percent Under 2004

146 Connecticut

Built in 2001, the two-bedroom #3 atop 146 Connecticut appears to have first sold for $729,000 that April and then $880,000 just three years later in 2004. Taken back by the bank three weeks ago, the 1,056 square foot Potrero Hill condo is now back on the market and listed for an offer inciting price of $525,000 ("No offers until 1/4/11").

The listing touts "Modern kitchen with granite counter tops" although you’ll have to take their word for it (it’s not pictured in any of the current listing pics), there do appear to be some nice views (although keep in mind that pictured roof deck is shared), and we’ll touch on that "owner occupied versus investor" bit in a bit (unless you beat us to it).

We’ll also note that the 1,502 square foot lower floor unit #1 at 146 Connecticut which originally sold for $699,000 in May of 2001 resold in October of 2005 for $980,000.

But remember short term holds never show appreciation. Well, unless the market is actually going up rather than down.

∙ Listing: 146 Connecticut Street IT-3 (2/2) 1,056 sqft - "$525,000" [MLS]

First Published: December 30, 2010 8:30 AM

Comments from "Plugged In" Readers

All the best lies are true.

The old saw about short-term holds is very true. The transaction costs involved with real estate have to be overcome by subsequent appreciation before you can make a profit. So, short-term holds were very unlikely to be profitable ... even when things were appreciating normally.

However, the local bull patrol would harp endlessly on "short-term holds" in order to imply that the losses people were experiencing were a function of hold time instead of the market going down.

[Editor’s Note: Cheers. Since re-worded to more accurately reflect the wit. And of course things weren't appreciating normally a few years back, but that's the whole point.]

Posted by: diemos at December 30, 2010 9:25 AM

Provocative, although "short-term holds never show appreciation" isn't as nuanced as "betting on appreciation is a sucker's bet" and "unsurprising they didn't fare well after such a short term hold."

Posted by: [anon.ed] at December 30, 2010 10:36 AM

this listing is going to hurt the property values for the places nearby. at this price this condo is looking pretty affordable, especially for the neighborhood.

Posted by: oscar at December 30, 2010 10:47 AM

Is this a condo or a TIC? My access to the MLS only lists it as a Condo/Co-op/TIC/Loft and not a Condo specifically. The only reason I can see them preferring a owner-occupier is because of the restrictions on fractional TIC loans.

Well, unless they are doing seller financing.

Posted by: rr at December 30, 2010 11:09 AM

rr, I think this is an FHA loan foreclosure. When they sell, they give first opportunity to owner occupiers as part of their charter. I don't think it has anything to do with condo vs tic.

http://homeguides.sfgate.com/requirements-buy-hud-home-7975.html

SF homes are still selling at a price above what most investors will pay, so an owner occupier is likely to put forth the best offer anyway, so the additional waiting time for an investor to show up if they can't get an owner occupier to give them a sufficient bid isn't likely to produce a higher offer, and so they'll sell to an owner occupier anyway. But it's obviously not the case in Phoenix or Las Vegas and so these rules would make a difference there.

Posted by: tipster at December 30, 2010 11:37 AM

This place will sell for under its 2001 price. Which is great news for everyone. Except of course for the poor sap who paid almost one million dollars for the apartment downstairs.

Posted by: El Bombero at December 30, 2010 11:47 AM

I believe this is a TIC, i'm not a big fan of the location. The Brew factory is close by when the smoke is constantly blowing to the area, it's very bad for your healthy especially if you have children. Also, the bar is right around the corner from the house.

No picture of the kitchen when the property is a bank owned seems very scratchy to me.

Posted by: julieBSF at December 30, 2010 2:32 PM

The unit is priced "okay" but the agent holding the listing took pictures only of the floors. Whats a great guy!

We also posted this listing on our blog when it first hit the MLS. We talked about how some REO agents just don't seem to even try when it comes to listing bank owned homes.

Posted by: XYZFEED at December 31, 2010 2:21 PM

This property is priced very well for today's market and seems like a great buy. Relative to most buildings in SF, it is built in the 2000, so it is probably more retrofited for earthquakes. It will definitely hurt housing prices in the neighborhood - especially other REO's, as banks price properties to move quickly. They rely mostly at the comps and not the intrinsic values of neighborhoods.

Posted by: Miles at January 1, 2011 11:12 AM

Curious to see what it does. Potrero Hill saw some freakishly high prices in and around Texas and 19th last fall. Granted, that's prime 'Hill, and this is not. But "offer enticing" is right.

Posted by: [anon.ed] at January 1, 2011 11:15 AM

Hard to tell with those photos, but $500 psft has lots and lots of potential comps in that area.

Posted by: tipster at January 1, 2011 12:02 PM

I rented this property out in 2003 for the then owner, in 2003. I [have] a few old photos if anyone wants to see them It was a nice, not too big place with views and outside space and parking.

I will post the not so great pix (my photos are better now) [on my rental site] if anyone wants to see what the place looked like in January 2003.

Posted by: kathleen at January 3, 2011 7:26 PM

I heard the bank received 11 offers and that it went for more than $100K over asking.

Posted by: PUAgent at January 7, 2011 11:28 AM

So it almost sold for $100K UNDER what it sold for nearly ten years ago?

Not exactly a smoking hot market.

Posted by: tipster at January 7, 2011 11:51 AM

I put out some feelers on this property and was told the final sales price is going to be in the high 600k range, so it should sell close to it's 2001 price. views from this place were absolutely top notch. At this price it was too high for me to get interested, but hopefully the "lucky" new homeowner (or investor?) will enjoy it. I agree with tipster, however, even at this price doesn't bode well for a "smoking hot market."

Posted by: oscar at January 7, 2011 2:27 PM

Amazing place, saw it yesterday, was going to make an offer on the spot, but then we got the spreading word that it was sitting at 12 offers and $625K.

Great unit. And it's a condo, not a TIC.

Posted by: Buy High Sell Low at January 10, 2011 5:26 AM

Sold. 9% off. It's 2001 price that is!!

And I don't think its on a busy street.

Posted by: tipster at January 26, 2011 10:24 PM

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