July 7, 2011
Apples To Apples With "Easy Freeway Access" On Oak
It's definitely on a busy street (or "easy freeway access" as would have been sold as a pro rather than a con), but it’s no busier and arguably more gentrified (hello alpha) than in August 2007 when purchased for $1,150,000.
Taken back by the bank this past September, the Haight Ashbury home at 1419 Oak with wood detailing (and granite) inside is back on the market and asking $919,900.
A sale at asking would represent a 20 percent ($230,100) drop below the 2007 value of the home, a bigger swing if you account for any appreciation in between.
The sale of 1419 Oak Street has since closed escrow with a reported contract price of $825,000, twenty-eight (28) percent ($325,000) below its year 2007 sale price.
∙ Busy Street (But Even Slower Market) [SocketSite]
First Published: July 7, 2011 12:00 PM
Comments from "Plugged In" Readers
From the other thread:
Sold: $825,000. $491/psf (1680 sq ft pre redfin)
Actually seems like a lot of house for the money. How on earth the 2007 buyer justified $1.15 (+21% over asking 949k) is beyond me. Looks like the bank repurchased the property for $1,002,840 on 9/22/2010. Interesting that public records show this closed on 6/23/2011 but MLS was only recently updated. But hey, it's up from its 1988 sale of $255k! That's +225% over a 23 year hold! ;)
Posted by: eddy at July 7, 2011 12:26 PM
Lot is 41.5' wide by 30' deep. Many would avoid the property just based on this. I would.
Posted by: formerly%whatever at July 7, 2011 9:55 PM
Oak Street is "more gentrified" now than in 2007? seriously? nice excuse to attempt to say that this apple is representative of the entire haight. problem property on problem street = double the fall in value than the average in the hood.
Posted by: hangemhi at July 7, 2011 11:41 PM
The quote was "arguably" and I'd have to agree that the area as a whole is much improved since 2007. But Oak and Fell are the haight equivalent to gouge and franklin of pacific heights and we all know how those homes fared. About the same here albeit at higher price points. I have no problem with seeing sub prime homes in marginal locations that commanded prime/prime pricing near peak dropping ~30%. There are more than a few of these out there to deny this reality. But there was the other Apple in the Haight/Cole that I brought up recently that showed a much better fate than this home and I'm sure it had much to do with gentrification. But if you are going to use gentrification to make a bad situation worse and use it to discount good outcomes as well, I'm not sure that is fair. It just comps to me at the end of the day.
Posted by: Eddy at July 8, 2011 7:13 AM
This house is around the corner from me; it is hard to argue against getting that much sq ft in a SFH in the upper Haight for just north of $800k (even on Oak) when other unrenovated SFH start at $1.1-1.2. The other tipster is right - I don't think this house has ANY backyard but sells the roofdeck-greenhouse. Though suppose one would argue there is a nice one across the (busy) street. Those 2 garage spots could rent for the rehab though too. Welcome to the neighborhood - good luck w/ the remodel.
Posted by: wcesf at July 8, 2011 8:29 AM
@eddy, even at 225% return over 23 years is pretty bad. You'd have done better with a simple savings account (on average) during that time. You should be doubling your money every 7-8 years if you're investing.
Posted by: scurvy at July 8, 2011 9:12 AM
scurvy, you're exactly right that the 225% return is not great IF this home were bought purely as an investment and left unoccupied during that time. But assuming the owner either lived in it or rented it, also factoring in other ownership costs (mortgage, taxes, maintenance), that is probably quite a good return.
Will that return be replicated for anyone buying since the mid-90s? Not a chance - not even close, and a real loss is much more likely for anyone buying since 2000.
Posted by: A.T. at July 8, 2011 9:29 AM
So now we're predicting how the markets will fare in 2018-2034. Ok, let's check back and see. Personally, I agree with wcesf who lives in the area. This is a lot of square footage and a great condo-alternative given the lack of outdoor space. But the roof + panhandle park are pretty nice overall. Lot's of people used to write off the Lower East Side in Manhattan; same with Soho. Even the West Side Highway has become a hot residential area and it is on a highway. So I'm not counting anything out in the long run. Just too impossible to predict. If that global warming reports turns out to be accurate and the average weather in SF notches up a few degrees over the next quarter century I think this would have a material effect on values. But stuff like this is impossible to project.
Posted by: eddy at July 8, 2011 9:38 AM
anyone buying since the mid-90s? Not a chance - not even close, and a real loss is much more likely for anyone buying since 2000.
Since after the mid '90s now, is it?
You continue to say this sort of nonsense, interchanging the years willy nilly, all the time: "2000. No, 2002. No 2004. No, 2003." Now th late '90s are in there too? ha. What pleasure are you deriving from acting like this on here? It's all pretty weird.
Posted by: [anon.ed] at July 8, 2011 9:39 AM
Agreed Oak and fell haven't been gentrified. But there have been many improved residential properties over the last decade on Page, Waller, Clayton, Ashbury, etc., and the commercial side is generally keepig up with the changes. The business changes point to gentrification in a way - Nice improvements at Haight Ashbury Market, improved Magnolia, Ruca, Askew, Booksmith, Alembic , and Whole Foods. The recent sit-lie law is definitely limiting the roving groups on the streets and in front of homes. Overall gentrification.
The 225% over 23 years implies about 5.5% annual appreciation before tax breaks and costs. The 10% annual returns implied by doubling my money every 7-8 years has been tough to come by lately for the average joe like me. Let me know can I get those these days (other than private equity / web 2.0/ china property!)
Posted by: Been there at July 8, 2011 9:57 AM
fluj, I'll spell it out so you can follow along. I was agreeing with eddy that those who bought 23 years ago did great.
If you bought in the mid-90s or earlier in SF, there's a good chance you were paying below comparable rent from the start and prices have certainly appreciated since then. So you're likely doing fine or even very well.
If you bought from 2000 on, you likely are paying more than comparable rent and thus losing every month, and for those who bought a few years after that, it is likely that the home itself has gone down in value compounding the losses. Those who bought in the 2004-2008 bubble peak generally got the most creamed all around.
For those who bought in the late 90s (mid-dot com bubble but before credit bubble), the picture is mixed and you likely did not do great but also not terrible.
Not so difficult or weird, really.
Posted by: A.T. at July 8, 2011 10:50 AM
Well the S&P500 has had a return of 422% (not including dividends) since January of 1988. Of course all of that gain was really during the second half of the 90's. And if you bought in 2000 or early 2007 you will have lost money.
Posted by: Rillion at July 8, 2011 11:35 AM
"If you bought from 2000 on, you likely are paying more than comparable rent and thus losing every month, and for those who bought a few years after that, it is likely that the home itself has gone down in value compounding the losses. Those who bought in the 2004-2008 bubble peak generally got the most creamed all around.
For those who bought in the late 90s (mid-dot com bubble but before credit bubble), the picture is mixed and you likely did not do great but also not terrible"
What a bunch of overreaching nonsense. Most late '90s buyers are tickled pink. Most pre 4th quarter 2004 buyers have seen significant appreciation as well. If you actually cared, and you don't, you just like to troll on here, you'd understand that you are always in a position where you're arguing with people who know much more about the various markets you casually lump together. You argue with folks who have owned, developed, and bought and sold real estate all over town during all of these markets you mention. And they weren't all the same. We know how much our property sold for in a strong 1999. We know how much it's worth now. We know how much our old house sold for during a relatively weak spring 2002. And we know how much it's worth now. We know what dozens of clients' properties are worth now versus then. You don't. You don't know any of that stuff. Hell, Case Shiller finds your blanket statements ridiculous.
Posted by: [anon.ed] at July 8, 2011 12:52 PM
Down 28% or so from a "peak" or "near peak" sales price falls right in the middle of typical declines in value for SF proper. No reason to get too into questions of gentrification or overpayment, etc. This is a pretty common fall in value.
Posted by: El Bombero at July 8, 2011 3:34 PM
Right in the middle? As in 0 to 56% declines? Huh?
Posted by: eddy at July 8, 2011 4:09 PM