My first open home on Sunday was a 2 bedroom 2.5 bath condo in a 3 unit building in Russian Hill. 1178 Greenwich Street is a two-story home with a private roof deck and is listed at $1,895,000. I was eager to check this one out because the floor plan is unusual and it’s also a small home relative to the price. The listing doesn’t state square footage, but my estimate is that it’s around 1,200 square feet.
About the floor plan – the thing that struck me from the listing photos is that the living room is narrow and separated from the dining area and kitchen by a wall and several steps. The space doesn’t exactly scream luxury housing. Which all made me curious – how much suboptimality would you deal with for that roof deck and view, at whatever price this house commands?
As it turns out, seeing the home in person changed my opinion on the floor plan. While the house is definitely small and the segregated/galley living floor isn’t my personal preference, it’s actually a lovely home with high ceilings and a certain efficiency to the ground floor layout.
Which lets us isolate the roof deck effect! When we analyzed 88 Garden Street, we used the model: Estimated sale price = ($ / square foot) * square footage * usable square footage score. With 1178 Greenwich, we get to add a new term, view premium, for that roof deck and view. We’ll also add a term to adjust for the Russian Hill neighborhood premium.
Our updated equation is:
Estimated sale price = ($ / square foot) * neighborhood score * square footage * usable square footage score + view premium
From the previous post, we’re setting the average neighborhood $ / square foot cost in San Francisco as $1,000 / square foot and now we’ll be adjusting it (up or down) by a neighborhood score. Based on my feel for the relative desirability of the neighborhoods, I’m going to placeholder a 15% premium for this part of Russian Hill. Finally, I alluded to this above but I saw no deficiencies in the layout and give it a usable square footage score of 1.0, leading to:
Estimated sale price = ($1000 / square foot) * 1.15 * 1200 square feet * 1.0 + view premium Estimated sale price = $1,380,000 + view premium
One of the interesting things about a view premium is that some (many?) buyers are not going to want to spend their budget here and will prefer more space, a different layout, etc if they are looking in the 2m range. Put another way, they actually want the average 2m house – not a 1.4m house with a great roof deck.
I’ll be curious to see where this one goes. I think my neighborhood premium and square footage estimate are both on the generous side. And I could see the view premium coming in around $400k -> $1,780,000 which is $115,000 under the list price.
Side note: I wanted to include more photos but my phone DIED (not due to battery) while I was in the house. The timing was so unfortunate it was almost funny – I had a full afternoon of tours lined up but getting from place to place (and taking photos) relied pretty heavily on my single point of failure iPhone.
So I walked over to Swenson’s and got a scoop of Rocky Road ice cream, and then I walked home to make a new plan 🙂