Done Deal in Outer Parkside (2342 42nd)

What feels like ages ago on April 11th, I wrote about 2342 42nd Avenue:

…in August of 2006 this property was listed at $1,095,000, then in March of 2007 listed at $899,000, now it is listed at $1,295,000. If it sells at $1,295,000, I’m packing up and moving to Mexico, because that would be just plain wrong. It should sell around $775,000 or less. That is a fair price. It has no ocean views, is hardly high-end, literally shares a fence with a school, and could definitely use some “modernizing”. Other than that, it is a great house…

That was then. I’m packing my bags, but not boarding the plane. It just sold for $990,000!!!! This is truly amazing. I can’t even believe it. Not at all. Comps and price per square foot support it (I guess), but it is NOT a “$10,000 shy of $1M” house. WOW! That’s all I can say…wow.

234242ndsold.jpg

-2342 42nd [MLS]

17 thoughts on “Done Deal in Outer Parkside (2342 42nd)”

  1. Doesn’t seem expensive for a 4/3.5 for $999k? Am i missing something? yes, it’s far away… but, this is SF.

    [Editor’s note: $990k, but who’s counting. If you had gone inside, you’d probably agree with me. Not a $990 house…IMHO.]

  2. I NEED the seller’s agent name! He/She will be selling my house next!!!

    [Editor’s note: One of us could do the same thing…and sell it faster. I helped a friend get a house right across the street. This was listed forever at $1,295,000. As I said, it is on target for comps and ppsf, but it is just amazing as it was anything but a WOW house, and it is significant in that it is Outer Parkside getting close to $1M.]

  3. I think $775,000 would be right if the house had 2 bedrooms, 1.5 baths, and about 1200sqft (you know, the standard parkside stuff). But this one is much bigger. But still, for $990K you can get something similar around Inner Sunset (closer to downtown and warmer and less fog).

    I think this is an anomaly. I bet listing agents will use this anomaly to convince buyers that it is the norm for the area, and I believe buyers will dispute that with their wallet…

    [Editor’s note: You said it right, and from memory I recall walking through thinking, “did they do this legally?” It’s one of those jobs.]

  4. I guess this property must really be a dump?

    Elsewhere, 1080 Chestnut #12A sold for 6% below it’s asking of $2.15 mil. I got alot of bubbleheads to believe that this is the sign of a weak market. This is inspite of the fact that the place was purchased exactly two years ago for $1.65 million, and the $450,000 gain (24%) is tax free :)

    This is a scenario where both parties win. The renters and bubbleheads think prices are coming down, and the seller makes bank and allows the buyer to feel good about only paying $2,050,000.

    Thank goodness i’m not ‘investing the difference’ in this stock market. Ouch!

  5. You might want to recheck your figures blazing since even the Dow Jones Industrial Average is up more in the past two years than this house. If you had invested in the market in any sort of leveraged way, you could have easily beat the profits on this house.

  6. So many renters don’t realize that when you put 10% down, and the house appreciated by 5%, that’s a 50% return per year. It’s pretty comical actually.

    Homeowners can also invest in the stock market too ya know? But, it’s days like Friday, where a homeowner is pumped they own a house in SF, as prices are up over 10% YTD now.

  7. First of all, I was responding to this part of your post: “Thank goodness i’m not ‘investing the difference’ in this stock market. Ouch!” which implies that this stock market is somehow “bad”.

    Second of all, you can leverage yourself into almost any investment, not just housing. You could have easily beaten the returns of this house by buying options on the Dow Jones (of all things!) instead of purchasing this house.

    Thirdly, not everyone who responds to you is a “renter”. I’m a property owner, but even I understand the bust we are entering.

  8. As a sitting buyer with impeccable credit all I can say is that my attitude towards the current market is best represented by the non-pinky digit adjacent to my ring finger.

    I mean seriously, if it takes a million dollars to buy a dump in the cold depressing reaches of the outer Sunset then the ship has sailed as far as I am concerned and unless we start seeing some kind of rationalthought returning to property values I am giving up on home ownership in SF. I will either continue to rent ($1800 for a 3 bedroom with private laundry, dishwasher, and 2 parking space in a decent neighborhood, take that bitchess) or I will buying in one of the outlying areas (hey there Soquel, Novato, Napa!) where reality seems to be returning, and a decent life with a decent property can be had without selling out future unborn children, and indenturing myself as a 70 hour a week slave to the bank with what I estimate is a better then even chance I will wind up upside down sometime in the next five years. I’m just not willing to embrace that kind of stress. Sorry. /rant off

  9. BTW Blazing what you don’t seem to realize (and many renters such as myself do) is that your formula has an even larger impact in reverse. You put your life savings down and pray to god you didn’t buy at the top and your family doesn’t have any life issues such as illness, injury, divorce, death, unemployment, or downswing in business, which results in you losing 60% or more of your down payment after even a 2% depreciation due to closing costs, commissions, taxes and penalties. A modest 6% depreciation could result in you losing everything.

    Its an easy decision to make when an upmarket is just beginning and salaries are rising, but when all indicators are trending down it is difficult to escape the feeling that you are playing a game of craps at the highest stakes table in las vegas.

  10. All indicators are trending down? Here in SF? Really? You might be right. But you “understand” it?

    Believe it or not, some people still think that the real story was that SF was incredibly undervalued previously, and that we still have not even levelled off. When I say levelled off, I only mean for a period of time, because real estate always goes up if one takes a long view. This credit situation is a separate phenomenon that in many ways has affected real estate. But you can’t tell me all that many people were buying million dollar houses in Glen Park with sub prime loans two years ago.

    I mean, look at New York. Everything costs 800 a foot, and those are shoeboxes. We’re the second densest city in America, and you can still find good stuff, houses, for 650 a foot. I don’t know. The jury is out. We’ll see what happens.

  11. All I know is that rents are up over 10%, and properties in the city I’m looking to buy are up over 10%, which makes the real winner the landlord in the area I want to buy.

    Ah Boom – The good thing I can see about the likes of you and others capitulating is that the city of SF will become less crowded, as more people relocate to outer areas. There is indeed a correction taking place in Novato, Vallejo, Antioch, Sacramento etc. I would definitely look to purchase something out there if you are willing to relocate.

    When you have examples like 1330 Chestnut St. selling for $1.55 million after a $1,055 mil purchase last yr, and this place above sell for $1,000,000, I think it’s safe to say that prices are going to continue going up.

    If prices go up 10% in one of the most doom & gloom year’s, can’t wait to see what prices do next year after people get paid record amounts for 2007, and the fed has cut rates.

    I don’t know many people who leverage their stock portfolio more than 50% margin and ride it out for the long term. Frankly, many who leveaged into the July 24th correction is getting killed.

    This house was purchased for $3.1 million (asking was $2.9) in Feb, 2005. It underwent landscaping, and now is back on the market for $1.85 million MORE. Angela Lam from Pac Union sold it then. Prices are ridiculous, and the rich are getting RICHER.

    http://sfarmls.rapmls.com/scripts/mgrqispi.dll?APPNAME=Sanfrancisco&PRGNAME=MLSPropertyDetail&ARGUMENTS=-N710361870,-N211774,-N,-A,-N10249688

  12. From what I’ve seen, the middle tier loft condo is trending down. A client of mine is lucky enough to be in that market right now. Things that might have cost 800K two years ago can be had for 699K. Nothing else is dropping in price.

  13. “If prices go up 10% in one of the most doom & gloom year’s, can’t wait to see what prices do next year after people get paid record amounts for 2007, and the fed has cut rates.”

    I would be curious to see where you are getting the data for your claim that prices are up 10% this year.

    I don’t claim to be an expert, but according to at least one site, SFR’s are down 6.1% and inventory is up 30% over last year:

    http://housing-watch.com/regionview.aspx?city=San-Francisco&pct=50&g=m&t=1

    And condo’s are essentially flat:

    http://housing-watch.com/regionview.aspx?city=San-Francisco&pct=50&g=m&t=2

    Also, boomtime, what do you do for a living? Just curious…

  14. Come on man. housing-watch.com ??? You just quoted “San Francisco and surrounding regions.” Those surrounding regions include: Brisbane, Broadmoor Village, Colma, Daly City, Millbrae, San Bruno. First, I bet Brisbane is doing great. Second, what does Daly City have to do with North Beach? Third, no Burlingame, San Mateo or Belmont? That’s some questionable source material right there. We’re talking SF on here. There are bulls and there are bears. Folks sure like to quote th e hell out of bears these days.

    ‘Cause SF SFR’s are up and that holds true for more desirable San Mateo and Marin as well. Yes, volume is down. However, median is up, per data from a week ago. And yes, I do real estate for a living. Don’t get me wrong. I’m not an unabashed bull, by any stretch. The truth is that the jury is out, and it’s a crock to say otherwise. I refer again to NYC as the only comparable region to what’s happening here. Manhattan and northwestern Brooklyn neighborhoods are going gangbusters. Surrounding areas are getting hosed.

  15. First of all I have already stated I’m not an expert so you can turn your castigation down a notch.

    Second of all I’m having a little trouble following your logic. You seem to take issue with the Housing Watch site because it includes regions just outside of SF county limits (Colma, Daly City), but then say they should include regions that are even farther out (Belmont???). Taking your comments at face value it appears the only analysis you would accept as valid is one that only includes neighborhoods on the upswing. If that is the case then surely you agree that is kind of like predicting the weather by only measuring the temperature where it’s sunny: it’s no surprise that you predict we are in for some sunny weather.

    Third of all, I’ve asked for data supporting Boomtime’s statement that SFH’s in SF are up 10%. Maybe they are, maybe they aren’t I don’t really have any way to know – which is why I asked for his source in the first place. I think I’ve been clear that I’m of the opinion that we are due for a correction, but I’m not going to fudge the facts to make my case. All I have found so far is what I drummed up from Housing Watch, which is just one dataset. Case Schiller would be another source, perhaps more credible, that doesn’t seem to support this “SFH up 10%” statement. If you are aware of some other source for information that might be more credible then either of these then by all means share it. But using anecdotal evidence that x house or y house sold for z over asking doesn’t really tell us much of anything about the SF market in general. And while the market might be doing fabulous for homes $1 million and over, what’s happening in the $500-$1 million range? Am I allowed to ponder that question?

    Finally, I thought that it was generally acknowledged that the median price going up is more a reflection of lower priced properties not selling rather then prices going up per se across the board in the city.

    PS I took a walk through a cute Excelsior home today. It’s been on the market for a while, and has seen it’s asking price drop over $100k in six months. The realtor told me that he thought the owner overpriced it originally (which I agree with), but that if it had been priced properly they could have sold it for $30k more six months ago then what they are *asking* for now. That’s interesting, because at those numbers it suggests at least a 4-5% drop in six months in the Excelsior. Surely you would agree that *that* is San Francisco, no? And I think it’s worth pointing out that if you paid a 10% down payment six months ago then your life savings are just about gone should you need to sell now, as this owner apparently does.

  16. Ah Boom – Sorry, but wher eis Excelsior?

    I’ve seen about 20 examples this year, that support my argument that prices are up up about 10% YTD this year.

    1330 Chestnut is a great example, showing actually a 20%+ appreciation.

    3221 Octavia St.

    745 Marina Blvd

    etc. I don’t remember it all, but I can dig them up. Maybe prices are up more like 10-15%. The good locations are getting bid up big, and the poorer locations are not.

    Ah Boom, I would really look at the outskirts of SF, for those deals.

  17. Didn’t mean to castigate. What I meant to do was question. I wonder why San Mateo county would be lumped in with SF SFRs.

    Some areas are up, way up. Some are down. Areas 10 are down. Areas 7 are way up. Areas 4 are up. Merced Manor has become insanely expensive in the last six months or so. I just don’t know, and neither does anybody else. If I had to guess, I would probably guess that prices will decrease a little bit across the board before too long. Then again, if the federal funds rate is cut, prices could even rise. Can’t call it.

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