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March 1, 2013

1BR Prices Soar in SoMa

It’s not news that the South of Market, South Beach and Mission Bay markets have improved dramatically over the past year. The fury with which buyers are snapping up 1BR condos is whipping through these neighborhoods. This is somewhat atypical, in that 1BR units tend to have a narrower buyer pool. But for first-time home buyers looking for proximity to downtown and hip neighborhoods, 1BR condos are a great bet.

Even buildings hard hit by foreclosure and short sale activity in recent years are on the upswing. Take The Palms, for example, at 555 4th Street. You couldn’t give away a unit there at one time, and prices for units plummeted. But welcome to 2013: You’ll be competing with 15 other buyers for that 1BR listed in the high $500,000s. And you can expect to see a few cash buyers in the mix, too.

One buyer recently made a nice play for a brick and timber warehouse conversion unit at 310 Townsend (above). Technically located in SoMa, the building is on the border of Mission Bay and South Beach. So it’s central, has great style, and unit #202 was a 945-square foot 1BR/1BA listed for $799,000. The buyer came in with all cash and paid the transfer tax (approx $5562), and the unit was sold this week for $818,000.

No, this wasn’t way over the asking price. But $800,000+ in cash for a SoMa condo (with transfer tax thrown in) is getting up there where values are concerned. The average price for a 1BR unit in these neighborhoods in 2013 thus far is about $674,022; five 1BRs in buildings such as Madrone, 340 Ritch, 75 Folsom, and 650 Delancey sold in the $839,000-$998,000 range.

The bottom line? If you’re looking for a 1BR condo in a premium building in these neighborhoods, expect to pay in this range—whether you have cash or not.

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