Tough times at The Palms, 555 4th St, San Francisco
The Palms really doesn't need any more problems. $800,000 and over 2BR condos from 2006 are now selling for $600,000 and under, and Short sales and REO's rule the day. But per the Q&A at Trulia today there are or were several loan issues:
1. they apparently had a pooled insurance policy - now supposedly corrected. I happen to be showing a Palms unit today to a client, so if she's interested I'll get more details on this.
2. delinquent HOA dues had been 15% - now supposedly corrected, this is also a lender guideline where 15% is the threshold.
3. owner occupancy "quite low" per one comment. My understanding is that FHA requires 50% owner occupancy and conventional loans require 51%. If The Palms is lower than 51% that would be pretty shocking news.
My concern here is #2 and #3. It may be a struggle to contain both as short sales and foreclosures continue. Then again, hopefully the new buyers in the building snapping up the $600,000 2BR's are owner-occupiers like my client will be if she likes the building and unit after our visit today.