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Tough times at The Palms, 555 4th St, San Francisco

by sfishome on February 19, 2010

Tough times at The Palms, 555 4th St, San Francisco

The Palms really doesn’t need any more problems. $800,000 and over 2BR condos from 2006 are now selling for $600,000 and under, and Short sales and REO’s rule the day. But per the Q&A at Trulia today there are or were several loan issues:

1. they apparently had a pooled insurance policy – now supposedly corrected. I happen to be showing a Palms unit today to a client, so if she’s interested I’ll get more details on this.

2. delinquent HOA dues had been 15% – now supposedly corrected, this is also a lender guideline where 15% is the threshold.

3. owner occupancy “quite low” per one comment. My understanding is that FHA requires 50% owner occupancy and conventional loans require 51%. If The Palms is lower than 51% that would be pretty shocking news.

My concern here is #2 and #3. It may be a struggle to contain both as short sales and foreclosures continue. Then again, hopefully the new buyers in the building snapping up the $600,000 2BR’s are owner-occupiers like my client will be if she likes the building and unit after our visit today.

{ 2 comments… read them below or add one }

kevin May 4, 2011 at 9:00 pm

Hi,

Were you ever able to get a confirmation of the owner occupancy rate for the Palms?

Thanks,

sfishome May 4, 2011 at 10:01 pm

I didn’t, but they provide that via disclosures when you are purchasing there. It changes, and the above post was written over a year ago, so you would want recent information any way. It is entirely possible all of the above are better today – in other words, if there were a lot of reo and short sales leading to many new owners in better financial position, the building could be doing fine. But I would strongly urge a thorough investigation if you are interested in purchasing in the building.g

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