A ‘fixer upper’ is a charitable term for what this is.
In a story that exposes just how obscenely overvalued San Francisco’s housing market has become, Business Insider reports that one motivated real estate agent in San Francisco is seeking a buyer for a home in the tony Bernal Heights neighborhood that was completely gutted in a fire last year, and needs to be demolished and completely rebuilt – a project that would likely run into the millions of dollars.
The asking price? A not-unreasonable $800,000. And that’s a bargain, according to real estate agent Jim Laufenberger, who is seeking a buyer for the home at 121 Grant Street, because in all likelihood, the paucity of new housing stock in the city means it will likely sell for more – not less – than the ask.
121 Grant Street, a one-bedroom, one-bathroom house in the desirable Bernal Heights neighborhood, hit the market in late October. The home was "completely gutted" in a fire in 2016, and the new owners will need to demolish what's left, according to realtor Jim Laufenberg.
"I suspect it will sell for more than what I'm asking," Laufenberg told Business Insider, adding that the seller listed the property below market value to incite interest in the first few weeks.
The price tag attached to the 1,700-square-foot lot shows the extent of the housing bubble in San Francisco, where tech workers create demand faster than the city can build new housing.
While rebuilding the home would be a massive hassle, Laufenberger suggested that 121 Grant Street's location just north of Cortland Street — a main drag populated by small markets, cafes, restaurants, and nail salons — would make it worth the effort.
Bernal Heights, like the rest of San Francisco, has seen housing prices soar to unprecedented heights driven by demand from well-compensated tech employees.
As we’ve reported previously, the lack of affordable housing is affecting the local economy in profound ways. Data from California’s Employment Development Department show the Bay Area lost nearly 5,000 jobs in September – its worst month for employment since 2010, and the second straight month that jobs disappeared from a region that was formerly an engine of labor market growth.
"It's the location, it's the land, it's the opportunity to build," Laufenberg said.
As Axios noted, jobs are disappearing not for want of work, but because employers are finding it hard to fill positions due to limited housing and sky-high prices. Housing prices in the city are so out of whack, that a couple earning nearly $140,000 a year (more than double the median income for American families) qualifies for affordable housing.
“The economy in the Bay Area has pushed up against the physical limits of a lack of housing and a lack of places for workers to live,” Jeffrey Michael, director of the Stockton-based Center for Business and Policy Research at University of the Pacific, told the San Jose Mercury News.
Workers who can't find or afford housing close to their offices are pushed out of the area, and many of them don't want to bother with long commutes. "Housing is the chain on the dog that is chasing a squirrel," economist Christopher Thornberg told the Merc. "Once that chain runs out, it yanks the dog back."
Elon Musk, who recently laid off some 700 employees at Tesla’s Fremont factory in hopes of replacing them with cheaper contract labor, won’t be happy to hear this.