350 Eureka
As we wrote in September:

We typically won’t feature a property as an “apple” once it’s in contract or has already closed escrow as it promotes a selection bias, but we do like year-over-year data. And two weeks ago a tipster did suggest we keep an eye on this one.

Purchased for $1,403,500 in August 2010, a permit to convert the attic at 350 Eureka into a master suite, renovate the kitchen, add a new garage out front and expand out back has since been filed and plans have been drawn up, but the property returned to the market two weeks ago prior to any of the proposed work.

Listed for $1,495,000 on September 8, the Eureka Valley home went into contract on September 23 but contingencies have yet to be waived. We’ll keep you plugged in.

Reduced a few times after having fallen out of contract (“the potential buyers could not afford the renovations and secure financing”), the sale of 350 Eureka closed escrow yesterday with a reported contract price of $1,350,000, down 3.8 percent on a year-over-year and apples-to-apples basis for the single-family home.
A Year Later, 350 Eureka Returns With Plans For Much More [SocketSite]

37 thoughts on “Plans For More Actually Return Less Year-Over-Year On Eureka”
  1. So they paid an above market rent, and about a $125,000 “move out fee” after a little more than a year.
    If any landlord had asked for that, he would have been laughed off the planet. Although it was “only” 4%, that is what you get right now. Wow.

  2. Good apple. I guess the question here is what does the current buyer intend to do with the property? Will they develop it / live in in, live in it as-is, or flip it? Can anyone speculate what this home would trade at in this area with the proposed renovations?

  3. Yes @ Eddy, a little under 2M or so. The permits, such as they are, do not go far enough. There’s probably a ~3M house to be had there. But they’ll need to extend the second floor bedrooms outward above the main floor rooms that are to be built out. That way they’ll have a full 3/2 or 4/2 on one level, and a nice main floor too.

  4. Also, it should be pointed out that it was disclosed to any current buyers that they likely would not be able to build the same 2 car garage that their exact-replica structure next door neighbors have. That’s due to a shift in DBI policy. That’s a minor factor for an end user with one car. But certainly, is a factor for those who considered this property for development purposes. (It was for us.) I put this result down to getting involved in a bidding war in August 2010 and holding for one year. If they would have paid asking, it would have traded flatly.

  5. Minor correction, but any changes in the Planning Code that revises front yard garage additions came from the SF Planning Dept. not the DBI. (Department of Building Inspection).
    Planning deals with WHAT you can build in terms of setbacks, bulk, massing, height limitations and architectural character.
    Building Dept. or DBI deals with HOW to construct the garage, such as structural requirements, materials, fire resistive ratings, exiting, etc.

  6. Ok. I’m glad. It’s important I think for people to understand the differences between those two departments.

  7. For what it’s worth, street parking is easy that high up the hill. But i understand anon.ed’s point that a two car garage is still more desirable at that price point.
    Also, btw, anon.ed…you really think this could go 3 mill with a bigger buildout? According to redfin there were only 5 sales north of that number in 94114 last year. And all of them were pretty special and seem to be 4000 square feet plus. (prime Dolores Heights, Clarendon Heights, the first station redo). This location…not so special to me.

  8. ” 5 sales north of that number in 94114 last year. And all of them were pretty special and seem to be 4000 square feet plus.”
    Yes. I said ~3M, so maybe 2.8M. But yes. With views from the main floor and views from the bedrooms? In this current market, and I wouldn’t just limit it to 94114. One 3000 foot house went for 3M in 94131, for example.

  9. This neighborhood cannot support a $3M price, maybe $2M is possible, with the planned expansion.
    Also, the views are marginal at best. You have to crane your neck to see downtown.

  10. We can all debate how many millions a hypothetical remodel would fetch, and that is an interesting discussion. What we know, however, is that this quite nice 1,720 sf 4/2 SFR in a great neighborhood with a view went for $1,350,000, about 4% less than a little over a year ago, and that’s with building permits that were not included a year ago.
    Buying, extensively remodeling, and selling may (or may not be) the way to go. But buying, living in the place, and then selling appears to be a financially unsound move right now.

  11. Interesting discussion. Can’t decide whether talk of an even bigger expansion at a house that’s already taken least 1 seller for a brutal loss is still-bubble sign or sign of the city’s strength in certain demos

  12. I can assure you that the seller overpaid for the property when he bought it. It went for well over asking, which was $1.25M.

  13. “But buying, living in the place, and then selling appears to be a financially unsound move right now”
    You mean to say overbidding on the buy, living for one year, and selling?
    Agreed. Bad move(s) in this market.
    And, @ Steve, “maybe $2M is possible, with the planned expansion.”
    Agreed, but you didn’t really read what I had to say about the subject I take it. I’m not even sure that the property would fetch 2M with the current permits. As for 3M, I beg to differ, and the views are actually pretty good as is without a neck crain.

  14. I love when homes are sold with “plans”. 95% of the time the plans aren’t implemented because they aren’t financially feasible at the price point.
    “The potential buyers could not afford the renovations and secure financing.” is just proof of the above.
    And who would undertake a lengthy renovation on a property right now? You’d lose so much money from the market decline while you were working on it.
    This 3/3 condo in one of the best locations in Pac heights just got reduced under its “frothy” year 2000 price, so it appears one bubble unwind is nearing completion and now we are moving on to unwind the other one. An 11 year hold and they are still going to lose money. Over $100,000. Wow.
    http://www.redfin.com/CA/San-Francisco/2900-Pacific-Ave-94115/unit-201/home/2035989

  15. The reason I question the $3M is because this would make the house far and away the most expensive place in the neighborhood. While it’s a nice neighborhood, it’s not leafy-gorgeous in walking distance to cool restaurants, etc.

  16. “And who would undertake a lengthy renovation on a property right now? You’d lose so much money from the market decline while you were working on it”
    You mean an apple would hypothetically take a market decline, in your estimation? You’re not talking about apples there. You can’t have it both ways, Tipster. Yelling at people that apples are the end-all, be-all, and then opining about things you don’t know about. Don’t even rate for that matter.

  17. OK. Well it wouldn’t get ~3M anyway without a 2 car garage, so it’s a moot point. But the area has seen 3M before, and it will again …

  18. “As for 3M, I beg to differ, and the views are actually pretty good as is without a neck crain.”
    “Well it wouldn’t get ~3M anyway without a 2 car garage, so it’s a moot point.”
    “You can’t have it both ways” “Yelling at people” … “and then opining about things you don’t know about”

  19. a parsing we will go … a troll takes a parse .. a troll takes a parse … hi ho the dairy-o … You know what? It’s not out of the realm of possibility that one COULD get a variance for a 2 car garage. But I was talking about the neighborhood itself, there.
    YOu? You were talking about something else: “who would undertake a lengthy renovation on a property right now? You’d lose so much money from the market decline while you were working on it.
    Really only inserting very unqualified opinion on top of bias.

  20. “And who would undertake a lengthy renovation on a property right now? You’d lose so much money from the market decline while you were working on it.”
    I can’t say I understand the above comment.
    If a large market decline were truly forthcoming, why would that have a particular effect on the calculus of whether one should undertake a lengthy renovation? It seems to me that a market decline bears on whether one should own the property in the first place, but is agnostic as to whether a renovation should be completed during said ownership. Indeed, to the extent that a renovation adds equity, one might be more inclined to renovate to offset market losses.

  21. Pretty good result for the seller imo. Only lost about $125k + whatever the plans/permits cost, maybe another $10k? 15k? Regardless, I can’t imagine that losing even $150k on the high side would matter to anyone buying a place in Ess Eff. Take your schadenfreude elsewhere, bears, the sellers are laughing over this minor trifle.

  22. I agree that the former buyer overpaid. I actually think the current buyer did too. I like the offer price of $1.25 mil from last year. That makes more sense to me, given that the assumption is that someone is going to throw a couple/three hundred thousand at this sucker. And the owner has to live with the pain of doing the remodel (even if the permits are already in hand). In my book that’s alot of pain and suffering to go through.
    Having suffered through that before myself (thank god I bought in 1995…saved by the market!), and knowing that renovation takes longer and is more costly than most back of the envelope guestimates….I would want plenty of room between the purchase price and the presumed final value of $1.8 – $2.0 mill. While I personally don’t think there’s a lot more downside in the market, I don’t think you should figure that appreciation will save you either.

  23. ^ If sparky-b’s comment is meant for me, I’ll take that. I should have said that I think a pro could flip this, and in my calculus I was assuming that a homeowner bought it.
    But I’ll be the first to acknowledge that I’m speaking only as a homeowner who has done remodeling, not as a pro.
    I do think that there is a lot of market opportunity for flippers with capital right now.

  24. Not meant for you curmudgean. I was responding to El Bomberos, I’m not schadenfreudin’ comment above yours.

  25. Plans included with a new sale are usually not completed for one simple reason:
    They were designed specifically for the original home owners, with very focused floor plans and materials.
    Most of these plans would not fit a NEW homeowner. They would need to start over and design the addition to fit their needs.

  26. neo-noe futurist – By that logic then no-one would ever move into a house as-is. Spec homes wouldn’t sell because they weren’t bespoke.
    Quite a few people are able to enjoy their new home without requiring that it be reconfigured to meet their specific needs. Humans can quite easily adapt to their environment.

  27. This sort of discussion always annoys me.
    The same people who condemn someone for taking advantage of being able to get tons of money from a corrupt system see a home and a neighborhood only as a financial investment – to hell with the consequences to the area. Speculators buy a property because it’s distinctive and in a desirable neighborhood with great shops and nice people, then proceed to ruin the interior with “upscale remodeling,” alienate the neighbors with “unique” expansions, and never patronize any of the stores.
    Seeing every piece of property for development potential without regard to its place in the cityscape destroys the very investment you’re trying to sell. In the end all we get are homes for the very rich or people who are house poor. It’s an unsustainable economic system of shi**ing where you eat.

  28. MM2, you are full of it.
    “Speculators buy a property because it’s distinctive”. Wrong, most are bought becuase they are rundown and crappy. Then they fix em up and sell them to homeowners who will live there.
    “ruin the interior with “upscale remodeling””. Again most places are total fixers. Is a place ruined when asbestos and lead are abated, when brick foundations are replaced, when forced air heat is added, when a working bathroom is added. No, those are all benefits and whether you like the finishes in the end or not is personal choice.
    “alienate the neighbors with “unique” expansions”. That doesn’t happen either. A unique expansion, one that doesn’t match what the neighbors alreay have, is going to need variances. Those are most often by current homeowner not developers. Developers don’t want that extra year and cost.
    “never patronize any of the stores”. Who doesn’t patronize the stores? The new buyers, of course they do, part of the reason they are moving into the neigborhood is because they like the neighborhood and it’s stores. So who else might not patronize the stores? The crew who is working on it eat lunch there every day, I know I shop for presents near jobs sites all the time. I will grocercy shop as well before coming home. So, wrong again.
    “In the end all we get are homes for the very rich or people who are house poor.” Development is done in every neighborhood so the “very rich” is relative. House poor? How do you know. I know what the down payments were on all the places I have sold. I didn’t see much house poor going on.
    On top off all that, this house wasn’t permitted by a developer, it will not be sold to a developer and doesn’t really have anything to do with your gripe. Basically this is a home that will be bought and possibly expanded by someone who wants to live in the neighborhood. If they make it a big house all on their own with out a horrible developer then what will you think of them. Heaven forbid they ever patronize a neighborhood shop after they have alienated the neighbors.

  29. Agreed – I don’t see how one can reasonably rant against upgrading and remodeling SF’s old housing stock Mr. Peskin, er, I mean, MM2.

  30. Maybe, just maybe, the sellers bought a bigger and better new place that doesn’t need renovation, which they didn’t have time or energy for anyways. Someplace with sweeping views where its hard not say “wow” when you walk in. Just maybe.

  31. cilia, who i suspect is probably more than just speculating, hits the nail on the head in terms of rationale. It’s possible that the sellers here looked at everything on paper and realized that it would be better to cut bait and buy a newer / redone place. Given it seems that most people are in their homes for what seems like 5-10 years, few people have the 18-24 months to start / finish this sort of project and still have time to enjoy the benefits.

  32. That would be a smart move for those (like me) who don’t want to live in a construction zone for years.
    And it gave us all a nice YOY market indicator!

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