Lackluster Start For Luxury Resales At Union House

DM Development’s swanky new condo project in Cow Hollow barely reached 50 percent sell-out before 1515 Union Street #3H — the first unit in the building offered for resale (and the only one, so far) — landed on the market. Now, 6+ weeks later, that home is still unsold and just chopped $100K off its list price. It’s not cheap at $1,995,000! It is, however, likely the least expensive 2-bedroom residence we’ll be seeing there in the near future.

1515 Union Street #3H is marketed and listed exclusively by cooperating broker Side, Inc. Listing photos above courtesy of SFAR MLS.

 

As of 15 May 2022, approximately one dozen of the 24 total 2-bedroom residences at 1515 Union are available for purchase from the developer. These remaining units include one townhome, two penthouses, a variety of lower-floor flats with private terraces and upper-floor flats with upwards of 1,600+ square feet. The only one of these active on the MLS is a 4th floor flat seeking $2,649,000.

The inaugural sale of 1515 Union Street #3H closed escrow in July 2020 for a reported $1,790,000. Considering its relatively small 1,124sqft footprint (smallest 2-bed layout in the building), frontage on high-traffic Van Ness Avenue, and absence of views and outdoor space, the home has its challenges. And for those reasons, it holds the title of cheapest 2-bed in the building (by more than $100K).

Source: unionhousesf.com

 

A resale at the $1,995,000 list price would represent 11.5 percent appreciation over the past two years. Is it merited? Perhaps not. The pandemic-era shift in home buyer preferences and hit to wealth in San Francisco certainly didn’t do the condo market any favors. For what it’s worth, the median sales price of condos in Cow Hollow is up a measly 1.3 percent year-over-year according to April 2022 data reported by SFAR MLS.

Assuming the seller will pay a customary 5 percent commission to brokers involved in a sale, they’d need a buyer to pony up nearly $1.9 million just to break even. Even that seems unlikely. In a race against rapidly rising mortgage interest rates (i.e. plummeting purchasing power), the 1515 Union Street #3H‘s hopeful seller may be best served to accept any reasonable offer and cut their losses.

On the flip side, opportunity knocks for a buyer who can stay put for a few years and ride out any short-term market shocks. A historically normal rate of appreciation would see the property’s value increase approximately 5-7 percent annually. And median prices stand to be pushed higher by new condominium developments in the works nearby at 2525 Van Ness (under construction) and 2601 Van Ness (approved).

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We’re always scoping out great buyer opportunities in San Francisco, both on and off market. Whether you’re just beginning your home search or on the hunt for something specific, please get in touch > 415.715.9205 / homes@vulcca.com