Buy The Dip: Another Modern Condo Tries To Break Even

If you’ve been following our stories here, then you know that 2021 was a painful year for condo sellers — especially those in newer buildings and/or who purchased in the past 4-5 years. When economic downturns strike San Francisco, it’s historically the dime-a-dozen vanilla modern units and homes in “non-traditional” neighborhoods (e.g. South of Market, Mission Bay, etc.) that have the most trouble finding a buyer. Buy the dip!

Many, many such condos last year failed to get an offer that matched what the owner had paid just a few years earlier:

› This upper-floor 1-bedroom unit at Rowan finally sold in June 2021 for $765,000, more than $30K under its 2017 purchase price.

 

› Two of these three condos at Stage 1075 sold for less than their 2018/19 inaugural sale prices, and the third didn’t sell at all.

 

› The owner of this SoMa townhome lost $50,000 on their investment between 2018 and February 2022 when it sold for $1,500,000, after spending nearly six months on and off the market.

Even some sellers of relatively downturn-resistent Victorian homes got caught in the pandemic crossfire:

› This house-like bi-level condo loaded with original details located across from Panhandle Park took a $50,000 hit off its 2016 purchase price.

450 Hayes Street #3C is marketed and exclusively listed by cooperating broker Compass. Listing photo below courtesy of SFAR MLS.

On the market for its first resale since purchased new, 450 Hayes Street #3C is now on its second listing in six months and has been reduced by over $100K. If it can manage to find a buyer at its current $895,000 list price, that’ll be only marginally more than what the seller paid in 2016. And by the time broker compensation and other transactional expenses are factored in, the seller will be in the red by tens of thousands of dollars. As the property approaches 30+ days on market, the odds of it actually hitting that price are increasingly slim… BUT a growing post-pandemic demand for housing in San Francisco could change that.

450 Hayes Street #3C is marketed and exclusively listed by cooperating broker Compass. Listing photos below courtesy of SFAR MLS.

For what it’s worth, we’re bullish on Hayes Valley returning to business as usual quicker than other certain neighborhoods. Its geographically central positioning, trendy commercial strip with popular restaurants that still draw lines, active outdoor spaces, and stimulating mix of old and new all around make it one of San Francisco’s forever best neighborhoods in our book.

450 Hayes is one of a half dozen modern new condominium developments that all began selling in Hayes Valley within a three year period commencing mid 2015. Along with 388 Fulton, 400 Grove, Fulton 555, Laguna Hayes and One Franklin, 450 Hayes was an easy sell to well-heeled buyers during the 2010s tech boom. And being located catercorner to Patricia’s Green — right at the center of all the action — it was (and still is) prime real estate. Location, location, location.

San Francisco’s real estate market cycles since 1980 show a pattern of 5-7 years of run-up followed by a shorter period of pullback. The city’s median home price rose year after year from 2012 thru 2019. By 2020, the market was overdue for a correction — and that it did. Today, however, the latest data reported by SFAR MLS shows the market is on the mend (the median sales price of condos in Hayes Valley is up 9.9% year-over-year as of February 2022).

450 Hayes Street #3C is an opportunity to get in while the getting is good!

Pro Tip: If you can commit to holding onto your home for 5 years minimum, you should be in a good position to break even (at the very least) when it comes time to sell.