Recently, two different clients of mine contacted me about a recent sale of a property near his home. Each client had bought a unit in 2011, a year that the real estate market was just starting to come back from the 2008 downturn. Properties were staying on the market a bit longer then and motivated sellers were negotiating. Just five years later, each could likely now sell his property for $500,000 more than he paid!
One client bought a two bedroom, two bath condo with a large private deck and parking in SOMA for $720,000. The original list price was $795,000. The other client bought a two bedroom, one bath TIC without parking in Noe Valley for $725,000. The original list price was also $795,000. This TIC was in a three-unit building with two residential condos and one commercial condo. The significance of this is that it could be easily condo-converted by bypassing the condo lottery. After my client bought the unit, the joint owners implemented a condo conversion so that the units are now condos and more valuable.
For the SOMA client, a recent sale occurred in his building on the same floor. The unit for sale was a two bedroom, two bath but smaller unit with no private deck and it sold for $1,225,000. (Another smaller unit sold earlier this year for $1,260,000 on a lower floor). If my SOMA client were to sell now, he would likely sell his unit for a price that is $500,000 more than what he paid.
Similarly, for my Noe client, the upstairs condo in his building just sold for $1,300,000. The units are almost identical but there is one more smaller room in the upstairs unit so it was called a 3 bedroom unit when it was put on the market. Again, this client would likely sell his unit for a price that could be $500,000 more than what he paid.
Obviously, timing (and location) is everything and these two clients bought at a good time and if they were going to sell, they would be selling at a good time. For now, they are holding on to their properties. And while this type of appreciation may be exceptional, it demonstrates that even if you bought and held on to property in SF in one the most dramatic downturns we will ever likely see, you are rewarded with a substantial return over time.
If you would like to fulfill your dream of home ownership in SF and grow your wealth at the same time, please don’t hesitate to contact me!