If I had the time, patience, and a hint more obsession, I’d probably write about real estate all the time. I find it fascinating to observe, especially here in San Francisco. Carol Lloyd has written some good pieces recently for the Chron on the softening/correcting/plateauing/whatever market. National stories are interesting, but not quite instructive given the utter weirdness of the Bay Area market.

For example, there is a house currently for sale in Glen Park on Bosworth, near the BART station. I walk all or part of the way to Glen Park BART about once a week and I passed by this house every time. After it seemed like it had been on sale forever, I finally got curious enough to look it up on the MLS a couple months ago. I often look up houses in my immediate neighborhood that I see for sale because of the natural curiosity of what my neighbors think their houses are worth, but I usually don’t care so much for houses I see elsewhere, principally because it tends to be an overwhelming exercise given the still astronomical home prices for the most modest dwellings.

Anyway, I was visiting my mom when I looked up the Bosworth house and when I informed her that it was $1,050,000, she said “A million dollars?! For a house on Bosworth?!” To be fair, it was a four bedroom, three bath house, with the two downstairs bedrooms and downstairs bath (adding 400 sq ft) added recently with permits (”downstairs” and “unwarranted” are part and parcel of real estate listings in SF so a legit addition is a big deal), which certainly ups the house’s value. But Bosworth is on its best day a terrible street in a great location. It’s a stone’s throw from the BART station so it’s great for commuting, not only because of BART, but also because of all the buses (23, 26, 44, 52) and the J Church Muni Metro streetcar that are hubbed at the BART station. There are lots of cute shops and restaurants and a library, though no grocery store (yet) in the neighborhood. It borders Glen Park Recreation Center (with baseball fields and tennis courts) and Glen Canyon Park (a nice open greenspace with lots of hiking). It’s close to I-280. It’s a relatively safe neighborhood.

But Bosworth is a busy, busy street. It’s a main thoroughfare. People come flying down O’Shaughnessy and barely pause at the stop signs. There’s lots of traffic with the attendant noise and pollution. It’s close to I-280. The houses have small setbacks and the sidewalks aren’t super-wide.

As far as the house itself goes, four bedrooms and three baths is on paper phenomenal. From the description and pictures - formal dining room, living room, modern stainless appliances and granite countertops and island in the kitchen, 2000+ square feet - all good selling points. Unfortunately, there are things I personally would balk at. The backyard of the house is not deep and most likely abuts a hill, which makes it private, but limits options. Of course, with the rec center across the street, no yard might not be a deal breaker. And who knows how well it shows or whether it has an unfortunate layout? Bottom line, in the neighborhood and in the home, there are pluses and there are minuses.

I was curious and decided to follow the fate of this house, checking in periodically. Interestingly, despite the for sale sign staying up, the MLS listing disappeared for a few weeks. Until I checked back earlier this week and discovered that the house was listed again - except this time the price had been reduced to $949,000. That’s a hair over a hundred thousand dollars lower - a big drop by any standards. The new MLS listing did not trumpet the reduction as I have seen noted for a number of other houses, but it’s still true.

At first I felt a tinge of pity for the owners - despite the fact that it’s much less of a seller’s market and all the talk of a correction, it’s got to be hard to revise down an expectation that far. Amusingly, Zillow, one of my favorite time-wasting sites, pegs the value of the house at $913,000 - and that’s without the data about the added two bedrooms and bath. That’s right, Zillow, which yes I know is at best an wild estimate because it calculates values based on extremely limited public information (for example, it doesn’t know if your countertops are laminate or granite, whether you’ve got a front lawn or paved it over, whether you’ve added or taken out a room without permits, etc.), thinks that with two beds and two baths the house is worth only forty thousand less than its current asking price. Four bedrooms and three baths ought to get you at least another $100,000. But, alas, the market apparently doesn’t think so and that’s all that matters.

(According to Trulia, which I would like more if it wasn’t slightly impossible to use, through August, for 2 bedrooms in SF the average sales price was $923,144, and four beds average sales price was $1,330,490. This is, of course, across all neighborhoods (a 4 bedroom in Bayview is not comparable price-wise to a 4 BR in Pac Heights); includes condos (luxury and otherwise) as well as TICs in addition to single family homes; and isn’t weighted to account for the difference in inventory between those types of places. [NB: Trulia has revamped their site to include more data - it’s not much easier to use, but it really has a lot more data now.])

As recently as last year, this price reduction could have been pegged as a coy attempt to garner offers above the original asking - lower the price to invite a frenzy of bidding that gets you where you want to be rather than starting high and scaring off potential buyers. But now, the sellers are probably still looking for a premium, but not expecting to get even their original asking. Or are they? Who knows?

I don’t feel too sorry for the owners. According to Zillow and Trulia (you can also check out how much properties sold for through the city Assessor’s website, it’s just slightly more work and the information is presented in a less malleable form), the place was last purchased in December 2004 for $681,000. At list, which the sellers will at least get, they earn $268,000 on the investment in less than 2 years. Even factoring in the cost of adding the lower rooms, that’s a fair return.

Obviously, this one house is not a case study for the entire city. It’s one experience and a hundred factors that may have kept it sitting may be unique to it. But it’s less that the house is worth less, it’s more that it was probably overpriced and now that’s being realized. This is consistent with Lloyd’s recent articles about how buyers are taking their time and noticing which flaws can be fixed and which can’t and also how sellers have been reluctant to awaken to the new reality. 

Bottom line, it will be interesting to see the price when it finally sells - stay tuned.