June 28, 2012

Before And (Four Months) After At 936 Clayton (And $1.25M More)

936 Clayton Before

Listed for $1,649,000 as pictured above with a renovated kitchen, arched doorways and an unwarranted third floor room with panoramic views, the sale of 936 Clayton closed escrow this past February with a recorded contract price of $1,594,000.

It’s now four months later and 936 Clayton has returned to the market "fully remodeled" and listed for $2,850,000 as pictured below and looking a bit more Square.

936 Clayton After

The renovated kitchen before and fully remodeled after:

936 Clayton Kitchen

∙ Listing: 936 Clayton (4/3.5) - $2,850,000 [936claytonstreet.com]

First Published: June 28, 2012 8:45 AM

Comments from "Plugged In" Readers

2.85mm seems like a lot for a remodel by the numbers. Recent comps in the area (1027 Cole St and 475 Belvedere) offered much more at that price

Posted by: Cole Valley at June 28, 2012 9:16 AM

Looked better before both inside and outside. The flipper should kiss their 'improvement' money goodbye.

Posted by: jovalito at June 28, 2012 9:54 AM

Nothing says cheap like slate stairs, at least to me.

Posted by: BobN at June 28, 2012 10:01 AM

You're not the only one BobN. In addition to "cheap" it also says "temporary" when slate is placed atop wood treads. That configuration accelerates wood rot though not the issue here because it looks like the original steps are concrete.

Posted by: The Milkshake of Despair at June 28, 2012 10:11 AM

I'm all for gutting a house, flipping it and adding all the modern decor/amenities, but I think the house looked much better before. Before, the house had a lot character (e.g., crown moldings, curved ceilings, etc.). Now, the house looks like a bachelor pad in a somewhat conservative neighborhood.

I can't quite get a pulse on it, but (for me) the remodeling just doesn't look good at all.

Posted by: Palms at June 28, 2012 10:12 AM

The listing says it has Cat5 and Cat6 wiring.
What, all those glass railings and no Cat7 wiring?

You should see this listing at 936 Clayton.
Is that over near Cole Valley?
Yes, but every time I step inside, it feels like the best of Guangzhou.

There's no accounting for taste, right?
Right. Except when someone to make a big spread on a flip and they make questionable aesthetic choices. Then you get an apples to orange accounting for taste.

Thanks, I'm here all week. Please tip your waitress.

Posted by: soccermom at June 28, 2012 10:23 AM

The Lumber Liquidator trend continues...

Posted by: Joshua at June 28, 2012 10:30 AM

What an unfortunate paint job.

Posted by: Brad at June 28, 2012 12:26 PM

Better hope it closes this year.

In 2013, there will be an added 3.8% tax on real estate gains over $250K to pay for health care.

Posted by: tipster at June 28, 2012 12:36 PM

Tipster, have more info on this new tax? what if its rolled into a 1031? Is the 3.8% based on the gain over 250k? or on the total gain once it exceeds 250k?

Posted by: mikey woodz at June 28, 2012 12:51 PM

Tipster has oversimplified the tax, or he doesn't understand how it works.


Posted by: R at June 28, 2012 1:01 PM

tipster is right, but only because this was not the owner's residence. The 250/500k exemption still applies to gains on sales of your residence. the 3.8% tax only kicks in for gains in excess of that, and only on the excess.

And remodeling costs are included in the tax basis.

Posted by: anon at June 28, 2012 1:02 PM

That's what happens when Faux News becomes your "trusted" news source.

Posted by: lol at June 28, 2012 1:07 PM

And if you have AGI under $200k or joint under $250k you don't pay this tax at all..

Posted by: R at June 28, 2012 1:12 PM

^^^I would hope anyone who spent $1.5M on a house (and then more on work) makes well in excess of $250k AGI.

Posted by: shza at June 28, 2012 1:49 PM

Maybe, maybe not. Developer is going to his best to hide AGI.

And besides, Tipster's post said "In 2013, there will be an added 3.8% tax on real estate gains over $250K to pay for health care." Which is not true, and not solely about this house.

Posted by: R at June 28, 2012 2:15 PM

If you have real estate gains over $200/250K, you typically have AGI of at least that much because your AGI would include the gain.

And it *is* relevant to this house because it looks like the gain is over that amount, and it could sit for awhile, which is why I brought it up in the context of this place. Three months from now, the owner might be a bit more motivated.

It looks to me like if you have ordinary income (like from a job) of $250K or above, you'll pay the 3.8% on every dollar of gain from the sale of any residence. So other sellers could start to get motivated before the year is out. And I wouldn't count on the rate to remain that low for long.

Sorry if I didn't originally make it clear why this discussion applies to this house, but it does.

[Editor’s Note: And now back to the property and remodel in question...]

Posted by: tipster at June 28, 2012 2:54 PM

Before, the house had a lot character

Yes, but now the ceiling feels lower!!

Posted by: BobN at June 28, 2012 3:28 PM

As the editor seems to be implying, there appears to be an inexhaustible supply of people who will pay ~3M for a freshly resurfaced house with views, up-to-date styling, and an upper-middle-class location.

At least, that is probably what the developer told the bank.

Hard to see how 4 months of work can add 1.25M in value, but maybe thats just me. The market is 'hot hot hot'. Still, there are several of places nearby in this near-3M class piling up on the market. Maybe the strategy was to list it for 2.85 so that the buyer who gets it for 2.4 gets to feel like they got a 'bargain'...

Posted by: around1905 at June 28, 2012 3:52 PM

gah! so blue. its like some kind of bizarro-world instagram filter was applied.

Posted by: Chris at June 28, 2012 3:54 PM

You people have too much time on your hands! Why don't you stop criticizing other people's hard work and shut the heck up. If you think it's so easy, go do it and find out how easy it isn't...and oh ya, try and find the money to do it. Ha!

Posted by: TLE at June 28, 2012 9:02 PM

Looks like place hasn't generated any interest at that price point, and the owner decided to have a few drinks tonight.

Posted by: tipster at June 28, 2012 11:12 PM

I like the old place better, especially the deck. I am really having a tough time figuring out who the target market here is.

Social Media money? They prefer to live South of Market, in a walkable neighborhood.

UCSF Doctors? They want to live in a more traditional place.

Finance? Closer to the Financial District.

I think this place is the wrong architecture for the neighborhood and will not sell at this price point. It might not sell at all.

Posted by: NoeValleyJim at June 29, 2012 1:02 AM

A more serious issue with this place is that the speculator/developer took a pleasant, more-or-less middle-class home and repackaged it as something for the wealthy. This is a tough town for the middle class and moves like that make it even tougher.

My father was a contractor -- the kind who built greenfield subdivisions -- and he made it a point of pride to build modest, thoughtfully designed houses that 'regular' people could afford. You could say that the best of our present economy (i.e. Apple, etc...) does this with their products on a global scale.

We are laughing at this developer because, having decided to make it his business to grind middle class houses into luxury sausages, he has created a rather tasteless sausage.

Posted by: around1905 at June 29, 2012 7:21 AM

I live in this neighborhood and I'm very surprised at the price. A 5 bedroom recently sold on the next block north on Clayton for under 2.5M, and it had much more character than this one, and is a much better family house. The location is terrific since it's so close to Carl & Cole but Clayton itself is kind of a busy street. I'm very curious to see how this does and I'm really surprised that this is what they're asking.

Posted by: ilivehere at June 29, 2012 8:52 AM

UCSF doctors are not affording a $2M plus home, NVJ. Not even close.

Posted by: shza at June 29, 2012 9:37 AM

This really should go for less than it was purchased previously. The consensus (with which I agree) seems to be that the remodel destroyed value. Am I right that it was all (negatively) cosmetic -- i.e., no foundation or electrical work that we can't see but that is actually worth something? The kitchen ceiling change is particularly sinful -- well, that and the facade.

Posted by: shza at June 29, 2012 9:41 AM


I don't think the style of the house will keep and doctors or families away. This style is what sells these days. Lots of places get high 2's or 3M in Cole Valley, I don't know what the people do for work but the commute isn't a factor I guess.

I agree. I hate purchase of a this kind of house to make it a luxury house. There are plenty of really run down places/crazy illegal work houses that could be remodeled. Or, I am fine with taking a little 1 bedroom in a neighborhood of big houses and redoing that into a 3 or 4 bedroom, but this was a 3 bedroom already. That sucks.

Posted by: sparky-b at June 29, 2012 9:43 AM

We shorted Zynga and a few others based on the information on these forums so now we can afford $2M+ homes and more. Thank you.

Posted by: UCSF Docs at June 29, 2012 9:51 AM

They cut down the tree at the entry to make room for the real estate sign? ....environmentalists need not apply...

Posted by: monkey bizz at June 29, 2012 10:42 AM

Mr. Blandings builds his dream home.

Posted by: Tim at June 29, 2012 11:19 AM

I went to the (pre-renovated) open house, but haven't seen the post-renovated in person.

And looking at the permits they did:
Expanded garage from 1 to 2-car, new retaining wall & slab.
Full rewire.
New furnace, ducting, water heater, fireplace.
Took out kitchen/DR wall.
Remodeled kitchen and two bathrooms.
Added bathroom on the 3rd floor.
Looks like new wood floors throughout, or are they refinished?
New staircase to the 3rd floor - it was a single, unusually steep incline before, now with a turnaround it's less steep.
Refinished/refined the 3rd floor, which seemed pretty flimsy in person.
New windows on the 3rd floor and added roof deck.
Backyard re-done.

I guess what's most surprising to me isn't the style itself, but just that so much was done, apparently with permits, in 3-1/2 months since the purchase!

But over $1000/sf? Not. This looked like it was worth $1000/sf: http://www.redfin.com/CA/San-Francisco/350-Hill-St-94114/home/1015023

My guess is about $2.3m.

Posted by: mike at June 29, 2012 12:33 PM

^^^Thanks for posting the permit info. And agreed that this place is not remotely in the same class as the Hill home.

Posted by: shza at June 29, 2012 1:35 PM

Some of them can shza. Go here:


Plug in 2010 and UCSF and look what the top Docs make there.

Name  Job Title  Department  Total Pay▼
Anthony Azakie ASSOCIATE PROF IN RES-HCOMP UC San Francisco $1,549,461.26
Philip E Leboit PROFESSOR OF CLINICAL -HCOMP UC San Francisco $1,477,050.58
Timothy H Mccalmont PROFESSOR OF CLINICAL -HCOMP UC San Francisco $1,464,798.93

Here is a list from 2008:


Posted by: NoeValleyJim at June 29, 2012 5:52 PM

we looked at this place the first time it was on the market. haven't been inside (at this price, not worth my time), but those floors seem like a bad choice. definitely visually disruptive in the photos.

the place next door (930 clayton) sold for 2.25 at the end of last year. now THAT was a gorgeous remodel.

but why are so many commenters throwing around "middle class" and $2-$3M in the same comment? geez...really?

Posted by: hopeful at June 29, 2012 8:13 PM

"but why are so many commenters throwing around "middle class" and $2-$3M in the same comment? geez...really?"

So many? I think there was one. Who early in the same post had 'regular' in quotes. The middle class was a follow up on that.

You missed the point. It was $1.6M is one price and taking it to $2.85M is totally another. It take a lot of people out of the buying pool, people like you it would seem.

Posted by: sparky-b at June 29, 2012 8:31 PM


2 ways to look at it:

yes, it takes a lot of people out of the buying pool for this property. It's a bet that the buyer pool in the new price range is ok with buying the older price + renovation costs + profit for the seller. How much of that potential future profit do you think is due to overall market forces and how much of it is smart market opportunism?

We saw that many redos in 2009-2010 were merely breaking even or worse because added values of improvements were eaten up by a bearish trend. It feels that today we have a very different situation. Times sure have changed fast.

Posted by: lol at July 2, 2012 8:56 AM


I think the developer will do fine and there are enough buyers at this price point who will be happy buying the "finished" house at this price. I wasn't talking about the developer making a bad money move, just that I prefer developers purchase projects that most homeowner feel is to big a project for them.

Buying in 2007 and selling in 2009 was a recipe for disaster. Very bubbly fixer prices in 2007, and we are seeing that again. NoeValley Jim mentioned a few on another thread that got really high prices. But, there are not nearly as many fixers coming to market as there were in '07, so it is hard to tell how that is going to translate at sale time. Is the price high for supply/demand reasons that will stay that way until the sale so in a few years when there won't be many totally done house coming out either or will we see a repeat of 2009?
This also dovetails into what happened here. I imagine developer kept getting priced out of the few fixers that came out and didn't have to pay that much more for this (with a much faster turn around) so went for it. I can see the appeal of that, I just don't like it for housing diversity.
If I had a fixer or a permitted project right now I would put it on the market.

Posted by: sparky-b at July 2, 2012 9:40 AM

Yes, what is interesting is that roughly 2 years ago, you were saying you were not finding that many good projects at a decent price.

If I could go back in time... I would have bought 3 times what I purchased 2 years ago when there were a few sellers giving up. I thought this market would stay down long enough to make this a bit easier to digest.

A friend gave up last year, taking a small loss for a place in Cole Valley after a 1Y+ wait. If he had waited just 6 months...

Posted by: lol at July 2, 2012 10:43 AM


Was I saying that? about fixers, I know I said it about units. I must have found something afterward becuase I bought a place in summer '10.

I also found some good deals last winter/spring. Glad I did becuase prices have really jumped since then.

Posted by: sparky-b at July 2, 2012 11:31 AM

in contract. wow...

Posted by: sunsetlover at July 27, 2012 10:05 AM

Sold: $2,840,000 "Under Asking" by .001% :) And in 40 days. Look out below!

Posted by: eddy at August 3, 2012 11:18 AM

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