December 20, 2010

2041 Sacramento Cuts Again But Gains Three Exclamation Points!!!

2041 Sacramento Facade

While the foreclosure of 2041 Sacramento was inexplicably reported as a "sale at $1,950,000" on the San Francisco Association of Realtors MLS in October, as plugged-in people know it wasn’t.

And while the property returned to the market a few days later asking $1,695,000, in November its list price was reduced to $1,577,700. And as a plugged-in reader notes, on Friday it was reduced to $1,499,000 ("DRASTIC REDUCTION for quick sale!!!…Won't last!").

Purchased for $2,286,500 in June 2007, a sale at asking would represent a 34 percent ($787,500) drop in value over the past three and one-half years for the "beautiful house-like top floor 2-level 3BR/3BA condo in prime location across from Lafayette Park."

∙ Listing: 2041 Sacramento (3/3) 2,503 sqft - $1,499,000 [MLS]
At Least The MLS Is Accurate In Terms Of The Reduction... [SocketSite]
While The MLS Reports A "Sale," Public Records Report A Foreclosure [SocketSite]
A Year Later An Apple Falls In Pacific Heights (2041 Sacaramento) [SocketSite]
An Apples To Apples (And Rather Prime) Update For 2041 Sacramento [SocketSite]
North To South (And Apples To Apples) From Atop 2041 Sacramento [SocketSite]

First Published: December 20, 2010 9:30 AM

Comments from "Plugged In" Readers

Of course, "inexplicably" in this case means "fraudulently and unethically." CAR and SFAR may not police their members, but hopefully DRE does an adequate job.

Posted by: sfrenegade at December 20, 2010 9:41 AM

it's funny how defensive realtors get on here about comments like that. They have to realize that even if one individual is very ethical, all of us have had numerous instances of being blatantly lied to by realtors- in small and large ways. But the NAR is a powerful body in washington and practices that are so clearly unethical and illegal will continue until there is some political sway to do something about it. even on this site, there have been manipulations cited that in any other industry would get you thrown in jail. But not in real estate . . ..

Posted by: &%^$theNAR at December 20, 2010 9:50 AM

So the non-existent buyer that "bought" it for $1,950,000 overpaid. It happens.

So much for the validity of the median and average $/sf data that skirunman and others have been touting lately over actual apples-to-apples sales.

Posted by: A.T. at December 20, 2010 10:00 AM

Yikes . . . . the real estate market is so quiet that we're relying on punctuation to help out.....

Posted by: MH for Movoto at December 20, 2010 10:11 AM

The lie that makes my blood boil the most is square footage.

There is nothing easier to measure than square footage, darnit!

But because this is an unregulated domain, there are 3 of 4 different ways to measure depending on the profession (Realtor/Developer/Assessor/Buyer) which means sellers and their Realtors can easily claim anything and everything without being actually liable (provided they have a disclaimer).

That's how I saw a 750sf TIC claimed as... gasp... 1000sf. This was so obvious I brought my measuring tape and put the number into the Realtor's face. Now this listing is appointment only, asking 10% less and with no square footage advertised. The place I bought was {only} 10% off but that could be explained by the walls. After all I could reclaim the wall surface If I could find a way to get my roof to levitate.

Posted by: lol at December 20, 2010 11:19 AM

@A.T.: Based on your comments IMO you really don't understand statistics and markets. In any case, distressed properties sell for less than non-distressed, this is a fact. Averaged over the last year the median sales price for bank owned properties in SF was about $300k less than non-bank owned. Apples don't tell you anything more than what happened at that specific property, quite valuable if you are planning to buy that property, less so about the general market. There is no perfect way to estimate market pricing or even future pricing on a single property. However, and as I have said before, the statistical tools are the best way we have to try to understand what is really happening in the market. Apples can help to provide some additional color, but really nothing more, especially if they are not selected randomly and in enough quantity to be statistically relevant.

Posted by: Skirunman at December 20, 2010 11:22 AM

Skirunman, just so happens I understand statistics very well. E.E. major undergrad but I took a number of stats classes (very simple subject matter compared to everything else I studied). And much of what I do now involves analyzing markets for litigation damages support. What I really understand extremely well is realtor spin.

Maybe you did not get the reference in my post. There was no sale at all yet the MLS recorded a $1,950,000 "sale" and that was reflected in all these "statistics." Garbage in, garbage out.

Posted by: A.T. at December 20, 2010 11:31 AM

Looks like pac heights is down 34%+!!!!

I wonder how the buyer of 2039 downstairs feels about now. 2039 went contingent @1.6 while the realtors were fradulently claiming 2041 sold for 1.95.

Posted by: anon at December 20, 2010 11:34 AM

A.T.: I apologize for any personal attack, normally not my style. I'm going to stay away from any comments on the real estate agent "profession" as well. However, a single bad data point like incorrectly reported sale would typically not effect the statistical outcomes over the referenced data set, i.e. it is in the noise.

Posted by: Skirunman at December 20, 2010 11:41 AM

@Skirunman/A.T. -- I very much agree with the Garbage in/Garbage out comment. The real question is then, how much garbage is in? i.e. is it noise or an endemic problem.

Don't have much real data, but sqft measurment seems to be endemically bad. Whereas MLS price seems to be mostly good. (Probably since it has to somewhat square with tax payments)

Posted by: tc_sf at December 20, 2010 11:55 AM

"Whereas MLS price seems to be mostly good. (Probably since it has to somewhat square with tax payments)"

Except for the fact that MLS price doesn't always match public records. It frequently does match, but not always.

Posted by: sfrenegade at December 20, 2010 11:59 AM

If you are tracking trends and don't care so much about the absolute price (sq. ft. or median) then as long as you can assume the errors are random it does not really effect the outcomes. Even if the errors are not random, like maybe in over-inflated sq. ft. listings, as long as the error bias does not fluctuate then the trend data is still valid.

Posted by: Skirunman at December 20, 2010 1:01 PM

You can make the argument that garbage inputs don't matter that much for medians because over time the garbage will be roughly the same so the trend is roughly the same. But that does not work for $/sf. Too many homes simply don't list it at all in the MLS, so any statistical analysis of it is worthless. To illustrate, I see 175 SFRs that sold in SF in November, but 25 had no sf data, 14.3%. I agree that with good data $/sf numbers will be more revealing than medians, but SF's data on this is way too full of holes to be reliable.

Posted by: A.T. at December 20, 2010 1:20 PM


Plus, if you give the seller the choice of whether to list the sqft or not, then this is really not a random error.

You'd obviously list the sqft if it made your $psf look good, else provide no data.

Posted by: tc_sf at December 20, 2010 1:28 PM

@A.T.: It does not matter that 15% of the sold properties did not list sf. Those that did are their own VALID and statistically relevant data set. Also, as long as you can assume that those that didn't provide sf are random then you can correlate between the two results. Even if the missing data is not random as postulated by tc_sf, as long as the bias is constant, the trend data will still be valid.

@tc_sf: Also, my experience with SF RE is that the square footage is recorded at listing time, if known. It is not recorded at time of sale. Anyone have a different experience? Therefore, I don't see a bias for listing it to somehow make that particular sale's $/sf look good. Also, why would that seller or even RE agent really care, the sale has already taken place. Now if you believe in a conspiracy between all SF RE agents to increase $/sf for some reason then maybe there is really a bias. However, I doubt it. I think the reason sf is not listed is is hard to calculate for larger homes that do not have accurate architectural floor plans without actually doing a site survey. If listed and inaccurate it creates a liability for the seller and seller's RE agent. Also, as mentioned earlier by someone, there is really no industry accepted standard for measuring square footage to my knowledge.

Posted by: Skirunman at December 20, 2010 2:09 PM

It's amazing to think that just three years ago, there were potential buyers walking around who were willing to pay almost 2.3 for this condo. The suckers - oh i mean informed and savvy buyers - fell all over themselves. 2041 sacramento went pending within two weeks or so of coming on the market back then. What a difference a few years make!

Posted by: anon at December 20, 2010 2:37 PM

Skirunman, my comment was about advertised square footage. How has it become an issue of post-mortem data?

Plus I don't see the point that we should rely on garbage for comps because it could be statistically be a similar garbage. Times change and behaviors adjust with time.

With low volume comes desperation. Someone will do whatever it takes to feed his family. This means for some pushing the lie a little further to make a sale. Plus there's no regulation/punishment therefore all carrot, no stick. Nobody will blame you.


Posted by: lol at December 20, 2010 3:28 PM

Square footage numbers need to be taken with a large dose of salt.

Some are accurate, some are exagerated, some include space that it should not (such as a converted basement that is only accessible by going outside), and some is completely falsified. Measurements are done differently by different people. Staircases are included in square footage numbers.

Anybody that is buying should do their due diligence and measure the space for themselves.

It's certainly useful to have square footage, but like much of the data reported in RE it should never be taken at face value.

Posted by: lyqwyd at December 20, 2010 3:30 PM

I echo lol's frustration with square footage shenanigans. My small home has been appraised during my tenure at least 4 times -- original sale and through 3 refi's -- and the square footage measure has varied widely each time: from 1200 something all the way up to 1550 sf. What gives? That's a 20% swing. It can't be that hard to get a relatively precise measurement.

Posted by: sanfrantim at December 20, 2010 7:08 PM

I though for SFH, the sqft is measured by outside walls. How can that introduce so much error? Just curious.

Posted by: John at December 21, 2010 8:09 AM

@lol: My comments were not directed at you and I agree that any single square footage listed should be taken with a grain of salt. If you are buying a property it may be worth buying a laser measuring tool and measuring the interior space yourself. As noted though, there is no standard how square footage is measured in RE. If the property is quite expensive I would personally hire a surveyor to measure both the lot and property for the $2k-$3k this typically costs after I was in contract and I would have an out in the contract if the quoted sf was off more than some %. I have done this for investment properties in the past.

However, from a statistical point of view the square footage trend data is still valid for all the reasons I have said before. I use it as a second order measurement of market pricing to help substantiate other trend data. IMO sf data is over relied on when used to purchase or value a single property though.

Posted by: Skirunman at December 21, 2010 2:38 PM

Sold! $1,418,000. Even under the "DRASTIC REDUCTION for quick sale!!!" price and 38% under the 2007 sale price in Pac Heights.

And the MLS will reflect a half million-plus dollar loss from that October 2010 "sale." Quite a drop!

Posted by: A.T. at January 27, 2011 8:22 AM

Pac heights is down at least 38% since 2007! I'd love to see the HUD statement on this one -- these deals ALWAYS include broker kickbacks to buyers and seller concessions not captured in the sales price...

Posted by: REAnal_yst at January 27, 2011 7:03 PM

Watch out for your step, REAnal_yst. This is one property.

Things are pretty complex in this market.

Among many parameters:

- There are still quite a few cash rich buyers looking for their "trophy" home and ready to pay top $$$
- Anything that isn't a perfect 10 or 9.5 is subject to gravitational forces: how much bangs for the bucks? What's available in the same segment? The one right above? The one right below?

Right now the market belongs to buyers with good cash and good credit. They own it and sellers have to adapt.

2008 it is not, and by far.

I love this market.

Posted by: lol at January 28, 2011 8:49 AM

Post a comment


(required - will be published)


(required - will not be published, sold, or shared)


(optional - your "Posted by" name will link to this URL)

Remember Me?

(you may use HTML tags for style)


Continue Perusing SocketSite:

« San Francisco County Unemployment Ticks Up To 9.6% In November | HOME | New Designs For Dwellings And Retail At Market And Sanchez »