May 23, 2011
On This Farm He Had A Short Sale (And Foreclosure In The Works)
One of ten Donald MacDonald designed petit townhomes that comprise the Clinton Mews urban infill development off Guerrero, 170 Guerrero Street #F was purchased for $507,000 in November 2003.
Refinanced in June of 2007 with a first for $517,500 and a second for $130,000, as of this past November the first mortgage was $43,976 past due and the home is currently scheduled to hit the courthouse steps in a month.
In the meantime, 170 Guerrero #F has been listed for $568,000 as a short sale.
∙ Listing: 170 Guerrero #F (2/1) 800 sqft – “$568,000” (short sale) [MLS]
First Published: May 23, 2011 2:30 PM
Comments from "Plugged In" Readers
I like the concept of smaller mews-style homes in San Francisco, as opposed to the basic "shoebox in the sky". Design and execution on this project leave a lot to be desired.
Posted by: SausalitoRes at May 23, 2011 3:14 PM
I'm not a big fan of MacDonald's work, but I'm a fan of mews-style projects as well. There's a nice sense of shared space, particularly with the greenspace out back. That common courtyard could be a lot nice, but it does double duty as a car park.
High point in this development seems to be 2008, with a 670K sale.
Posted by: curmudgeon at May 23, 2011 3:17 PM
Does "mews" mean it's built for cats? I think a cat would like the design. Cat-sized loft with cat-sized stairs going up to it. Cat-sized balcony. Cat-sized space above the cabinets. Maybe some cat-sized furniture for staging too.
(Yes, I know what mews means)
I could see why some people would find this charming, but it's not my bag.
Posted by: sfrenegade at May 23, 2011 3:57 PM
What was poor people housing is asking 3 times the median US home (which is typically twice bigger, with 10 times more land). Only in SF.
The footprint of these places look like 20 by 20 or 20 by 25 tops. As always I would advise buyers to carefully check square footage because it looks like it's a very rough estimate...
Posted by: lol at May 23, 2011 4:58 PM
See, that's the thing. Mews-style homes were housing for working class people and then it went upscale, except not only in S.F. or recently, but back in the 60's. The subtitle from a story on independent.co.uk, From humble beginnings in the shadow of great houses they became the height of style. Now you can have the ideal home for your E-Type for a £2.15m price tag:
Humble in origins but now a byword for exclusivity, mews houses are quirky urban cottages with cachet. Sebastian Deckker, author of Mews Style says "mews living is a way of life", which in the 1960s meant bachelor pads, playboys and the jet-set…Celebrities love their privacy combined with a central location and the mews have long been a magnet for the creative, artistic and unconventional. Serge Gainsbourg, singer, film-maker, and all-round provocateur, lived in his converted former stables in fashionable St Germain in Paris, proving mews appeal is not merely a British phenomenon.
Buyers wanting a mews house in London will have to dig deep. Richard Moore is selling his three-bedroom mews house near Eaton Square for £2.15m…
That price was from 2003, so there's some skew due to exchange rates, and obviously the 3 bd. in that article is larger than the one featured above, but £2.15m is about 3.5M U.S. dollars today.
If this place goes to the courthouse steps and the bank actually sells it rather than taking it back due to bids being too low, I'm sure the buyer'll flip it and we'll see it again on socketsite within six months.
Posted by: Brahma (incensed renter) at May 23, 2011 5:57 PM
Donald McDnoald made tiny places. I wish they had tiny prices.
Posted by: kathleen at May 23, 2011 6:31 PM
I always have to laugh when people complain about our high housing costs. They don't really seem to understand why.
1. We are a VERY desirable place to live. And desirable for a lot of high income people.
2. People are willing to pay a LOT to live here.
3. When have you ever seen someone wanting to sell their house or condo for LESS that what they paid, and not wanting to make a profit? True, they may be forced, in some cases, to sell if they are "under water". The exception, not so much the rule here.
When this city becomes "undesirable" then we are all in trouble. People want to live here because it's a GREAT place to live. Period.
Demand drives up prices.
Posted by: noearch at May 23, 2011 6:59 PM
Yes, but the law of supply and demand functions the same in SF as everywhere else. There is a supply curve and a demand curve, and the market price is where they intersect. The demand curve in SF has shifted far to the left - i.e. there is much less of it than before. Hence, prices have been, and are, falling.
It is simplistic, and not accurate, to simply state "demand drives up prices." For the last 3 years, and continuing, the supply/demand equation in SF has led to falling prices, and I don't see any evidence that SF is any less desirable now than it was 3 years ago.
Prices skyrocketed in Stockton during the bubble more than they did in SF. Are we to conclude that people suddenly found Stockton to be more desirable than SF and thus there was more demand there, which drove prices up more rapidly than in SF?
Posted by: A.T. at May 24, 2011 7:19 AM
SF has become more desirable in the past 20 years, I agree, and this makes for some of the seemingly ridiculous pricing like these showboxes.
Also to take into account is cheap money. Because a guy bidding 650K for this would think twice if the interest rates were at 10%. Cheap money accounted for more than 1/2 of the bubble uptick.
I can see why someone would pay 500K for this. With 150K down, you can live in a decent area, have a car, and rent the thing out for mortgage + property taxes. Not such a bad deal.
But 650K or more? That doesn't make much sense.
Posted by: lol at May 24, 2011 7:52 AM
I think there would be a market for "clustered cottages" in walkable neighborhoods with retail and services, albeit higher quality and slightly larger than these. For example, some of the 1920s-era homes on the narrow alleys in Cow Hollow (i.e. Pixley Street).
I hate to see a good idea get trashed because this developer and his architect went too small and too cheap in order to hit a specific price-point. These units won't age well.
Posted by: SausalitoRes at May 24, 2011 8:28 AM
Stockton is not more desirable. It's just cheaper. And people with lower incomes than many in SF choose to live in Stockton...because they can "afford" it.
The price for this little cottage is not "ridiculous" if you can afford it and want it. Simple.
Are prices "ridiculous" in Manhattan? Not really. People who want to live there and can afford it will do so. Same thing here.
It's not rocket science.
Posted by: noearch at May 24, 2011 8:57 AM
"Stockton is not more desirable."
I think his point was that Stockton, and indeed much of the country, exhibited a similar run up and decline over the last decade pointing to macro factors such as easy credit rather then local desirability.
Given that the subject house of this thread ended up with $648k in loans on a $507k purchase it is perhaps more indicative of loose credit then people's ability to afford high house prices. Especially since the home is headed for a distressed sale.
Being able to borrow 130% the price of a purchase also drives up demand regardless of desirability.
Posted by: tc_sf at May 24, 2011 9:19 AM
It may not be rocket science, but there is some science involved. Supply and demand are interesting concepts, but highly variable and open to interpretation. Property was more desirable when ownership was perceived to be a fast track to riches, and markets really heated up when overrated dot com paper could be used for purchases. When the economy heats up people buy, build, and retrofit mansions, and when things cool down those big houses get torn down or converted to apartments or some other use. There are important social and economic reasons why the "no chrome" generation was referred to as such and lived in smaller places--even the very rich.
There are numerous studies of property prices over the long term, most famously The Herengracht Index examining prices from 1628 to 1973. House prices tend to be stable and strongly related to incomes. Bay area incomes and rents have been rising at around 5.5% a year for a while now in good times and bad. All properties and transactions are unique, but there is a kind of physics that keeps prices in general from getting much farther ahead of rents. People pay what they can and have alternatives.
Posted by: Mole Man at May 24, 2011 9:19 AM
"The price for this little cottage is not 'ridiculous' if you can afford it and want it. Simple."
It is not that simple at all. You also need to include the available alternatives (i.e. the "supply") into the equation. If one can afford this little place and wants it, but there is a bigger or better place one also can afford and wants, one will buy that other place.
People "wanted" and "could afford" all sorts of ridiculously priced places a few years ago. They were still ridiculously priced, and are priced much lower now.
Posted by: A.T. at May 24, 2011 9:21 AM
All those statistics and metrics are fine, I suppose. I don't care about them.
I (personally) think that buying property here is largely emotional, largely if you can afford it, and largely what your peers are doing.
A nice, but fixer, pair of flats near me in Noe V recently had tons of people at the open house. It had multiple over bids and sold for $260k over asking.
Lots of people wanted it. One person wanted it more than any others. They got it.
Posted by: noearch at May 24, 2011 9:26 AM
"Bay area incomes and rents have been rising at around 5.5% a year for a while now in good times and bad."
Not sure this is the case.
"After falling precipitously from their peak two years ago, the city's rents - which historically have been among the highest in the nation - are showing signs of soon climbing back to 2008 levels.
Data from real estate research firm RealFacts show that San Francisco County's average asking rent for buildings of 50 or more units was $2,282 in the third quarter of 2010, only about $120 lower than the same quarter in 2008."
"All properties and transactions are unique, but there is a kind of physics that keeps prices in general from getting much farther ahead of rents."
When buyers can state whatever income they wish to have and borrow 130% of the property value I think that the above physics breaks down quite a bit.
Posted by: tc_sf at May 24, 2011 9:26 AM
noearch, there are countless examples of the flipside of your anecdote, where a home is priced below the last sale and the prices drop further and further until it finally sells. And other homes sit unsold because they won't drop the price. Lots of people wanted to sell. The successful seller "wanted it more than any others. They got it."
Supply and demand -- two parts to the equation.
Posted by: A.T. at May 24, 2011 10:07 AM
When buyers can state whatever income they wish to have and borrow 130% of the property value I think that the above physics breaks down quite a bit.
In 2007, the buyer borrowed 130% of the 2003 purchase price, which was probably in line with the property's value at the time.
Posted by: joh at May 24, 2011 10:14 AM
If you search redfin for 170 Guerrero, you'll find that some of the other units in this complex have been renovated and look quite a lot nicer inside than this one. Yes, they are still very small little boxes, but if one can deal with that, there are relatively cosmetic things that can be done to significantly improve both the aesthetics and (somewhat) the function.
Posted by: curmudgeon at May 24, 2011 10:20 AM
@joh -- You're right. I got it right the first time but then incorrectly switched purchase price to "value"
Posted by: tc_sf at May 24, 2011 10:24 AM
"A nice, but fixer, pair of flats near me in Noe V recently had tons of people at the open house. It had multiple over bids and sold for $260k over asking."
What's the address?
Posted by: R at May 24, 2011 10:46 AM
I think that the point of this post was to illustrate the high loan that the owner was able to take out.
Regarding MacDonalds work, he built a lot around town in the 80's and early 90's. Some cottages like these, others were town houses and condo apartments. Despite a look and feel that is very much of the time, I still like his work. They are small, but generally make a good use of space. The prices on his cottages seem to have held up better than most of his others (although location matters too).
I don't see what people are complaining about in terms of these. The comparison is obviously to a condo apartment of a similar size (don't compare to a house; that's much more expensive). For a similar price, I'd rather one of these (or a townhouse). If you would prefer a condo apartment, that's fine. But, it doesn't make these bad.
The unit in this complex that sold a few years ago was the former home of an interior designer and was enhanced a bit on the inside.
Posted by: John at May 24, 2011 11:44 AM
By the way, I've been watching his resales for a past few years. Hoping that SF prices come back to what I would be willing to spend.
Noticed that one of his other units (near by) went into contract. What do folks think of 1035 South Van Ness Ave Unit D?
It's a bit newer. Area a bit less desirable, I assume.
Posted by: John at May 24, 2011 11:53 AM
I looked at a MacDonald townhouse in the late 80's and talked to the architect and drove around town with him. At that time he was building in somewhat marginal neighborhoods and his mission was inexpensive but smart and stylish. He made them small so they could be cheap. I think the price was around 125K for a townhouse. (I heard they are hard to live in because of little storage and thin walls.)
I think it's telling how far in the past this mission seems now. Sad.
Posted by: lark at May 24, 2011 12:27 PM
I don't think his original mission was sad at all. If anything he was a pioneer in the early stages of living small and living lightly on the planet.
Perhaps the design is somewhat dated and yes, some of the construction was "cheap" but the concept of small units in urban, marginal neighborhoods made sense and still does.
Trouble is this: we Americans still love to live "large" in our homes and sometimes our cars. We don't really embrace the European or Japanese approach to living in smaller spaces, but well design spaces. As a side note, I cannot believe all the large Suv's I see in my neighborhood alone. We still see these houses being built (or remodeled) with 4 baths, huge kitchens and on and on.
What makes sense today for many new and young or older buyers is very well designed, efficient, high quality but small living spaces; higher density, green design, etc., shared outdoor gardens, and increased height limit.
There are great examples of small urban homes for families with yards, using space well, especially in Amsterdam and Copenhagen, and some in Tokyo. We still have a lot to learn here about well designed, urban housing.
Posted by: noearch at May 24, 2011 1:02 PM
@noearch: just because something sold above asking, doesn't mean the asking price was set correctly -- or, it was intentionally set low to create a bidding war. Asking prices are set all over the place for all kinds of reasons -- unique to each seller and their situation. So, the whole idea that list prices or asking prices mean much on their own is a little crazy. Selling prices mean something, but emotion definitely plays a big part in many SF purchases. Real estate has never been a perfect market for exchange, and never will be.
Posted by: 4noearch at May 24, 2011 1:06 PM
Lark didn't say the vision was sad, he/she said that how far we are now from that vision is sad. We are perhaps coming back around to it though.
Posted by: curmudgeon at May 24, 2011 1:11 PM
of course not. I never said that.
Posted by: noearch at May 24, 2011 1:13 PM
A few more key factors:
alternative offerings (including rent),
expectations of appreciation/depreciation.
Posted by: A.T. at May 24, 2011 1:28 PM
Nope. Don't agree with you A.T.
Mine are truly "key" factors, imo.
Yours are additional factors, perhaps, but not key. There's no way I would take seriously the rent vs. buy factor. that's already covered under "desire". If you desire to buy, you're gonna buy.
Now, keep in mind before others get all worked up. I love distilling things down to very precise components. I love the power of simplicity and clarity.
Posted by: noearch at May 24, 2011 1:52 PM
"I love the power of simplicity and clarity."
Simplicity is wonderful as long as its also correct.
While people may not be completely rational and may have used wildly off base financial assumptions and logic I have yet to meet a homeowner or renter where the financial implications did not take a very prominent position in their discussions of the matter.
Both during the boom and now far more people knew their home's Zestimate off hand then the name of their home's architect!
Not to say that emotions played no part, nor that it would be undeniably better to ride out a bust in a well designed house in a great city then in a mass produced home in Stockton.
Posted by: tc_sf at May 24, 2011 2:10 PM
Yes, but I love the power of accuracy!
I don't think all the Stockton buyers who drove prices up 300% were driven by emotion, location, desire, or available funds. They were, however, driven by considerations of available financing, alternative offerings, and expectations of appreciation/depreciation. Same goes for SF buyers.
The fuzzy factors (available funds is a concrete factor) you note do go into the issue of who buys where, of course, but they are less important than the other factors. We can see this at work today, with sales in SF down about 40% from a few years ago (despite lower prices), while the emotion, location, and desire has not changed.
Posted by: A.T. at May 24, 2011 2:12 PM
Oh wait...should we add "greed" to one of the key factors?
I'm thinking it might make sense.
Posted by: noearch at May 24, 2011 2:16 PM
It's in there - expectations of appreciation/depreciation ;)
Posted by: A.T. at May 24, 2011 2:19 PM
That's not on my list..but greed could be.
Posted by: noearch at May 24, 2011 2:58 PM
I believe another reason McDonald designed these infill projects as clusters, as opposed to a single multi-unit building, is it greatly simplified building code requirements and therefore reduced construction costs. Items such as fire sprinklers, dry standpipes, exit stairs, elevators, rated construction and sound proofing which would be required in a multi-unit building, could be done away with. This contributed to their "affordability" at the time.
Posted by: inmycountry at May 24, 2011 6:17 PM
"All those statistics and metrics are fine, I suppose. I don't care about them."
i've come to realize the people that are still bulls are quite bad with statistics.
Posted by: * at May 24, 2011 7:15 PM
LOL..Bad meaning bad boy? bad judgement call? bad predictions? bad at believing metrics and statistics? bad at being bullish with our SF real estate?
Oh..maybe that's what you mean.
Posted by: noearch at May 24, 2011 7:37 PM
Donald MacDonald? This fucker built 2 duplexes at Ocean Beach and blocked my view. I hate him!
Posted by: richmond at May 25, 2011 3:01 PM
Dear richmond... if it was "your" view then it wouldn't have been blocked, now would it? Views are not protected. Welcome to the city.
Posted by: Jimmy (No Longer Bitter) at May 25, 2011 3:07 PM
The list price for 170 Guerrero Street #F has just been reduced from $568,000 to $548,000.
Posted by: SocketSite at June 1, 2011 10:34 AM
that was fast....
Posted by: curmudgeon at June 1, 2011 3:41 PM
The list price for 170 Guerrero Street #F has just been reduced from $548,000 to $538,000.
Posted by: SocketSite at June 10, 2011 8:24 AM
I live at 170 Guerrero and know this unit (and my own, of course) quite well. I like the use of space, 2 floors and a loft, good light, address on a noisy street but can't really hear the noisy street, little patios and balconies, a strip of sunny grass, a parking spot off the street, friendly neighbors who generally pitch in and help each other. The loft is a great place to sleep and then there are 2 full bedrooms for other use.
Posted by: T at June 16, 2011 1:59 PM
It is now in contract. The homes are great use of space. This home is off Guerrero behind the front units. Very quite with great out looks. After cosmetic work, this place can shine.
Posted by: E at June 16, 2011 5:20 PM
I love to go back and comments where know it all's try to claim that the value of different homes will drop. Not out of rational basis but probably in hopes they can some how talk down housing prices so they can afford to buy one these.
They were built in 1985 if you were lucky enough to buy one, you sure are a lot happier then some who bought a stucco clad generic loft that has bankrupt HOA from fighting the developer in construction defect litigation.
I would love to own one of these.
Posted by: craig at November 8, 2012 12:48 AM