Monday, September 04, 2006

4 Bedrooms, No Parking

This six-unit TIC near Duboce Park lives up to the hyperbole of the realtor's statement: spacious, elegant, soaring ceilings, period details, remodelled kitchens and baths, terrific tree-lined street.

So why, after 88 days, are all six units still on the market?

My answer would be no parking, high price and the unattractive mortgage rates that go with fractional TIC financing.

When asked about leased parking nearby, the realtor could only offer the vaguest of reassurances about finding a garage somewhere in the area.

My guess is that in the $699,000 price range, city buyers would rather give up the extra square footage and go for a two bedroom condo with parking. Let's face it. Most of the higher paying private sector jobs are in the South Bay, and people have to commute. Nothing like circling the block for half an hour after a full day's work and an hour plus drive.

And while you are checking out that condo, you will find loan rates are a full point lower than what TIC fractionals have to offer.

Also, when a building has this many units, all more or less equally attractive, mirroring each other in terms of layouts and features, no buyer in this market wants to be the first to offer list price. Everyone knows that when it is down to the last unit or two the buyer is going to be eager to sell, and perhaps highly motivated to offer discounts or incentives.

I believe TICs are best targeted toward entry level buyers, or those who are looking to downsize. When prices start overlapping those in the condo zone, TICs will make less sense to a buyer. I could be wrong.

It will be interesting to see what happens at 188 Noe.


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