While a couple weeks behind in updating their listings on the MLS, it would appear the sales office at One Rincon Hill has had a relatively busy January.
In terms of two-bedrooms, sales have included 425 1st Street #4306 for $985,000 ($796 per square), it had been listed for $1,383,000 nine months ago; 425 1st Street #5101 for $965,000 ($926 per square); and 425 1st Street #5104 for $948,000 ($752 per square).
In terms of three-bedrooms, an upgraded #5302 closed escrow six days ago with a reported contract price of $2,065,500 ($1,047 per square foot). As a potential point of reference, the sales office sold the three-bedroom #5204 for $2,916,000 ($1,498 per square) in August of 2008.
According to one source, the One Rincon Hill sales team has around 40 more units to sell.
From Failed To Foreclosure Flip (And Five Others) At One Rincon Hill [SocketSite]
One Rincon Hill ’08′s Appear To Have Slipped More (Not Less) In 2010 [SocketSite]
“The Last” Of The Last One Rincon Hill 02’s [SocketSite]

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Comments from “Plugged-In” Readers

  1. Posted by notsexy

    wait 2 more years and take 20% off the top as the downward pressure on prices continue combined with a gradual uptick in interest rates. Buying ORH now is like driving a new Cadillac off the lot…automatic 20% depreciation.

  2. Posted by Spencer

    sort of off topic, but are there still plans to build the 2nd tower? I think the skyline would look so much better with the planned 2nd tower built.
    [Editor’s Note: There are, it’s simply a matter of economics and fundraising which results in a bit of a catch-22 with respect to the developer’s unsold inventory.]

  3. Posted by ex SF-er

    I think this is wonderful news.
    allowing housing to fall in value attracts buyers and allows for clearing of inventory. IMO this is much better than artificially propping up the market leaving units empty indefinitely.
    there are so many empty units at ORH, I like the idea of some of them selling. Hopefully they will sell to end-users!
    it’s very hard for the people living there who bought in 2008 since several of them may have negative equity in the hundreds of thousands of dollars range, but it is a necessary process.
    ORH is a great building in many ways, with significant challenges. But an attractive price will help to negate some of its negative aspects.

  4. Posted by Outsider

    May be there should be a fundamental change in the way people view property ownership. Perhaps it needs to be looked at the same way as owning an automobile – all homes depreciate over time although some holds on to their value more than others. A house wears with time just as a car, both the interior as well as the exterior ( may be with the exception of the land it stands on. ) Owning or renting a home is the equivalent of financing or leasing a vehicle. The notion would validate those that argue a home’s value ( hence financing cost ) should not exceed the rental value of said property. For those that bought a car with a 20% down payment is immediately under water ( as pointed out by notsexy in the first post.) Residual value finally catches up with balance 3-4 years into a 5 year loan after which you actually accumulate equity. Making a profit – not a chance. Owning a home may be the same now…

  5. Posted by Willow

    “…all homes depreciate over time although some holds on to their value more than others.”
    Really? I think that statement is simply not accurate. The car analogy is interesting but not applicable in a significant number of buy versus rent transactions.
    On these sales…that’s great news for ORH. Those prices despite being reduced are still amazingly strong. I guess buyers really put a major premium on view.

  6. Posted by tc_sf

    “…all homes depreciate over time although some holds on to their value more than others.”
    Shiller’s study of national home prices show them on average beating inflation by 0.7%. Note though that there is an annual maintenance outlay which may exceed this amount.
    Note that there is some link between absolute home prices and their expected relative change. Try running numbers in the NYT buy/rent calculator with ~1% house price appreciation:
    http://www.nytimes.com/interactive/business/buy-rent-calculator.html
    You’ll see that it’s hard to make buying work out if you are paying significantly more in mortgage payments then rent.
    High expected rent increases can change this, but if you are comparing to a rent controlled alternative this is not an issue.

  7. Posted by anonee

    “High expected rent increases can change this, but if you are comparing to a rent controlled alternative this is not an issue.”
    remember that condos and sfrs are not rent controlled.

  8. Posted by ex SF-er

    this is of course splitting hairs,
    however in general houses and condos DO depreciate over time… hence the need for maintenance.
    the thing that appreciates over time is LAND value.
    housing is a depreciating asset.
    land has traditionally been an appreciating asset.
    one problem is that there has been SO MUCH international land appreciation over the last 15 years or so that it is hard to argue for land to start appreciating any time soon.
    there are also significant American demographic factors that will cause changes in land values… including but not limited to Boomer downsizing and future oil/energy constraints.
    some of these demographic changes will be positive for SF (like energy constraints), others I believe will be negative (boomers downsizing).
    there will be relative winners (SF) vs relative losers (Ohio).
    however, the relative winners still may turn out to be losers in abosolute terms.
    the problem of course is that SF RE is so expensive that even small changes can cause significant harm.
    losing 10% on a $1.5M home hurts more than losing 10% of a $150k home, even after taking income into play IMO… since those in $1.5M SF homes in general do NOT make 10x what those in $150k midwest homes.

  9. Posted by tc_sf

    In addition to downsizing, a group of people moving into a smaller house, another factor to watch is the number of people per housing unit. During flush times, people seek out their own space and the number of persons per housing unit goes down. When times are tighter, children, aging parents and even unrelated people often move in together.
    I believe that during the boom the US hit a low point in #people per housing unit.

  10. Posted by Outsider

    Just to point out I own the entire 1/2 acre land my house sits on but I only own 1/600th of the land my condo building occupies…

  11. Posted by sfrenegade

    I bumped into this 2006 One Rincon Hill thread by linking through on the 168 Yerba Buena thread to a V is for Valet (and Ventless) thread. It’s truly a classic. There was one particularly aggressive “Anonymous” ORH defender:
    PLEASE. Are you saying that all the developers and buyers in the Rincon Hill area are wrong with their investments? Hundreds of units have sold for their asking price. The developers have even raised the prices on the last units and they still sell. The market has spoken.
    Posted by: Anonymous at October 10, 2006 3:31 PM
    Of course, this Anonymous had it right:
    And I especially liked the earlier comment, the “market has spoken.” That is something that cannot be debated. But the market probably won’t truly speak until years down the road when the original buyers are entering the resale market.
    Posted by: Anonymous at October 10, 2006 3:37 PM

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