2831-33 Webster St #4 is a TIC in a 6 unit building on a prime Pac Heights/Cow Hollow block. This 3 bedroom 1 bath sold for $820,000 in 2007 - arguably the San Francisco market peak. Prior to that the entire building sold in 2004 for $2,370,000. That buyer did great because they sold 4 of the 6 units for $2,449,000.
Unfortunately unit #4's more recent 2007 buyer didn't do so well. Starting a year ago they tried selling at $895,000, and withdrawn and listed 2 more times with the last failed attempt to sell at $799,000. Now on Craigslist asking $4,000 and from what I know of the rental market, that may be $500 over priced.
Then again, it's got Golden Gate Bridge views and a deck... and just a 1/2 block from Union Street it just might attract a $4,000 renter. On the other hand the NYTimes Rent vs Buy calculator says it's better to buy at $800,000 vs. $4,000 in rent. So the problem here is it's a TIC, and TIC's are definitely not selling well vs. Condos in San Francisco right now.
Andy Sirkin, the well known San Francisco TIC attorney spoke at our Pacific Union office meeting this morning. One thing I've been curious about is his estimate on how long it would take for new TIC buildings of 3 to 6 units to win the lottery and complete conversion if you started today. "20 years" was his guess. In other words, if you're buying into a newly formed TIC - plan on selling it as a TIC.
Among the MANY other tidbits of info I gleamed from a very informative hour are: - Sterling Bank is pretty much the only fractional lender left - other than when Builders have gotten previous commitments from other fractional lenders. - the 2010 condo conversion lottery will happen in the next couple of weeks. Those who have been in for 7 years are in "Pool A" and he thinks they have a 90% chance of winning the right to convert. Those in "Pool B" may have a 1% to 2% chance of winning because there are so many tickets in that pool. - almost all of the news for TIC's was bad - except for 2-unit buildings who qualify for lottery bypass - if you can bypass the lottery (and there are 2-unit buildings that can't due to eviction history or only one owner-occupier) the good news is that processing times are much faster - technically a 2-unit might be able to complete a conversion in as little as 15 months due to processing of as little as 3 months.
Over promising and under delivering is a bad recipe in any facet of life, and one I wish we could ban in real estate here in San Francisco.
This TIC on Laguna Street in the Marina is currently listed with a photo of the Living room with windows facing Moscone Rec Park. I had seen all 4 TIC units in this building when it first came on the market so I knew the only two I liked at all were the front units with views of the Park.
In the view I state that I thought they all sold for around $700,000. Well, the other three sold in the mid to high $700's. Meanwhile, I guess that the one on the market is the front one BECAUSE of the MLS photo showing the front unit, and guess that today's value is around $550,000, or at least lower than it's new $599k asking price.
Then I show up on Tuesday's "Broker's Tour" and you can hear the annoyance in my voice that in fact the photo was misleading and #1 is the rear unit with views of the small yard and the neighboring building.
So my value guess now? Closer to $525k. A long drop from $699k.
As I mentioned in the post below, while checking on the $293,888 1BR TIC at 3731 Fillmore that is to be auctioned on February 24th, I noticed 4 of the 5 other doors were open and vacant. #6 was sold last October. It's a top floor rear/west facing apartment. The other top floor unit is #5 facing Fillmore Street or East. I also noticed stairs to the roof and found an amazing roof deck.
Here's the roof deck walk through followed by a tour of Apartment #5
Listing price in the MLS was $298,888. 5 and 1/2 hours later is was dropped by $3,000 to $295,888. This morning, only 1 day later, it was dropped another $2,000.
Why such tiny drops you ask?
If you like, start the video walk through and read more below:
So why the price drops? Because price drops are re-emailed to Buyers who have been set up on email alerts for new and changed listings that meet their search criteria. Check out www.Automated-HomeFinder.com if you'd like to set up your own search, or speak to your Realtor who will do it for you. Other sites like CleanOffer and SF-MLS-Search.com also re-email new listings or price changes. So the strategy is to get it noticed by everyone with an active search in the area.
Any why so many drops so fast? Because they are planning to have an auction outside the property on Tuesday at 1pm which is a mere 6 days after entering it into the MLS.
I'll post yet another video because while there I notice that 4 of the 5 other apartment doors were open. So my guess is that after the auction they will bring on the other 4 apartments. Apparently back in Sept/Oct 2008 unit #6 (correction, it was unit #1, a 1st floor western facing unit) in the building sold for $710,000. They are marketing parking separately, so that might have included parking (update, they definitely did include parking per the above) whereas the $294k price on #2 does not include parking.
To speculate even more, I'll guess that the auction is designed to determine the true market value of these TIC units. #2 is probably the least desirable in the building, although not a bad apartment at all. #6 (#1 I meant) almost definitely set the high price because it went into contract before the financial crisis became national news. The auction of #2 without parking is likely to set the bottom price. Then all other units may then be brought to market with prices in between.
I haven't spoken to the listing agent, so the above is guesswork. I saw Brown & Co open house signs in the building, so who knows, maybe the Auction agent and Brown & Co are working together in some fashion.
Auction date and time: Tuesday February 24th at 1pm outside the building. See you there. And if you're interested in making an offer and are unrepresented by another Realtor, drop me a line at info AT sfishome DOT com
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