The Infinity, a luxury high-rise condominium development in San Francisco’s South Beach, fascinates me because it reflects so many realities of the real estate market as a whole.  Some reflections:

Prices have declined as much as 25 percent between 2008 and 2009.

• For example:  In April 2008, some one bedroom units on the 6^th floor at The Infinity sold for over $730,000. In August 2009, another unit on the same floor and about the same size sold for $500,000.

Investors have been able to pick up deals and actually make some profit.

• Case in point: Unit 10C, a smaller one bedroom unit was purchased in September 2009 for $522,000. The seller successfully sold for a small profit in May 2010: $599,000 and only 27 days on market.
• Better yet is Unit 5F, which sold in May 2009 for $478,500. This was a larger one bedroom (approx. 899 sq. ft.) and is now in contract. Originally listed at $699,000, the seller received and accepted an offer within 17 days after a price drop to $649,000. My guess is that this will sell nicely over $478K. 
• A sale price of over $600,000 will signal a healthy stabilization, but we will need Q2 and Q3 results to see if the expired homebuyer credit pushed prices higher artificially.

The price spread at the Infinity is so large – $730,000 versus $478,000 – that I believe the Infinity also illustrates that when real estate is not sold on the MLS or the open market (which is common with new construction) there is a lack of transparency on what is market value. 

In 2008, I remember overhearing salespeople tell buyers that view units were over $800,000. So $750,000 may have sounded like a deal.  In reality, could some buyers have paid higher than market prices because they did not have comparables or information to use as leverage?  

In 2009, if Unit 5G was listed in the open market at, say $525,000, could it have sold for more than $478,000?

The last of The Infinity’s new units are now on the open market: 3300+ sq. ft. penthouses with drop-dead views. Priced over $5M, catering to a small pool of buyers, and with no real comparables, it will be interesting to see what the market will bear.

Exterior and penthouse interior of the Inifinity courtesy of listing at 338 Spear #D-42B