Dilapidated four-bedroom home in San Francisco sells for astonishing price
The power of San Francisco's white hot property market knows no bounds.
Despite a dismal listing that made no secret of the 'deteriorative state' of a 4 bedroom home in the city's Outer Sunset area, the owner's felt comfortable asking $799,000.
Two weeks after listing, the home sold for $1.21 million.
So what did the buyers get for $411,000 over the asking price? In short: ocean views, great location for techies and a big mess.
White hot market: Despite a dismal listing that made no secret of the 'deteriorative state' of a 4 bedroom home in the city's Outer Sunset area, the owner's felt comfortable asking $799,000.
The ripped-apart 1,832 square foot property features torn carpets up the stairs, appliances ripped from the kitchen, a boarded up door and other not-so-amenable features.
'Contractors' Special! Seriously. Property is in a deteriorative state; needs everything, not for the novice,' read the listing on Zillow.
'Decedent Trust sale. House sits on a deep and wide lot (120 x30) with ocean view from upper level and attic. Very hip area -- great upside potential for builder/contractor.'
The ocean view helped spur the generous offer, which Redfin reports was all cash, no doubt.
But the real driving force behind this and similar unbelievable real estate transactions happening across San Francisco is the city's massively competitive property market.
The technology's industry's rapid growth coupled with 49-square-mile San Francisco's constrained supply of housing is a big part of the story behind the city's ascension to a rarified real estate bracket already occupied by New York City, but Silicon Valley wealth also is stoking the market in the greater San Francisco Bay Area, according to Andrew LePage, an analyst with CoreLogic DataQuick, a real estate research firm in Irvine, California.
Big mess: Two weeks after listing, the home sold for $1.21 million.So what did the buyers get for $411,000 over the asking price? In short: ocean views, great location for techies and a big mess
Disrepair: The carpet up the stair is ripped and floors throughout the house are in disprepair
Linoleum: Appliances were unceremoniously ripped from walls and the home still features outdated flooring
And then there's the view: The home, in addition to being in the hot city of San Francisco, sits at the edge of the Pacific Ocean
Coveted: While not the sort of beaches where you'd want to swim, the home's nearby shoreline is coveted by home buyers
Between April and June, the Bay Area saw a record number of homes and condos going for $1 million and above, and they accounted for one-quarter of all sales in the region, CoreLogic DataQuick said in a report released on Thursday.
During the same three-month period, six of the Bay Area's nine counties set records for the number of homes and condos selling for over $2 million, as did California as a whole, the report said.
‘The robust tech economy and the overall economy mean the Bay Area has been doing better than most for years now,’ LePage said.
‘It already was expensive, and a lot of these high-end markets weren't hammered as hard during the downturn because they weren't exposed to subprime mortgages, so they had less ground to recover in the first place.’
George Limperis, an agent with Paragon Real Estate Group in San Francisco, agrees that freshly minted technology millionaires who can afford to bid up a property until they win it with an all-cash offer are helping to drive up demand.
But unlike during the city's first tech boom in the late 1990s, the buyers prepared to lay down more than $1 million on a fixer-upper in a neighborhood within walking distance of shops and restaurants also include Asian investors and retirees from other major cities who already are accustomed to skyscraper prices for shoebox dwellings, Limperis said.
All cash: San Francisco is experiencing an unprecedented tech boom and newly minted millionaires are able to snatch up the properties of their choosing with increasingly exorbitant cash bids
The home was in far better shape when it last sold in 2008 for $935,000 but it's unclear what happened between then and this past February when it hit the market once again
‘It feels like a very different city than it certainly did even 15 years ago. There is money coming from so many places now,’ he said.
‘So many of these buyers today, they have lived in London, they have lived in Hong Kong, they have lived in New York, and to them these prices are parallel. We can't compare San Francisco with median housing prices even elsewhere in California because this is an international level we are dealing with.’
Being prepared to go well over a home's asking price and willing to sacrifice style or a second bathroom are some of the pointers that Kelly Kang, a colleague of Limperis' at Paragon, gives to buyers.
Kang just represented a young couple with a child who were interested in a 756-square-foot, two-bedroom, one-bath row house built in 1950 in a newly hot neighborhood near a park and public transit that was listed at a little more than $1 million after having sold for $710,000 five years ago.
The couple offered $1.2 million and wrote a ‘love letter’ about the house explaining why it was just right for their family. They got the house.
‘People that want to stay in San Francisco really love the city, so what they are buying is the city more than the property,’ Kang said.
The ocean view helped spur the generous cash offer, no doubt. But the real driving force behind this and similar unbelievable real estate transactions happening across San Francisco is the city's massively competitive property market
The backyard is now overgrown and will require a lot of effort to get into the same form as those of many of the neighborhood's homes