The listed property at 16 De Long Street in San Francisco that sold for $1.2 million. Courtesy of Vanguard Properties

“Distinguished home in need of work” as listed with Vanguard Properties “Contractor Special.” However, is this property a contractor’s dream or worst nightmare?

With rotting wooden shingles, peeling paint and boarded-up windows, this 1906 single-story home needs a lot of work. But the price is what had people talking. The asking price was $350,000, for 2 bedrooms, one bath and a mere 765 square feet, about the size of a hotel suite.

The Golden Gate City’s out-of-control Housing Market

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Located at 16 De Long Street in the more affordable Outer Mission district, the house price reflects the out-of-control real estate market in San Francisco. Since 2012, the city has seen a 103% increase in housing prices. The average apartment in the city rents for $3,500 a month, and the median housing price reached an all-time high of $1.2 million and it’s expected to climb another 5.2% in the year ahead, according to Zillow. Manhattan rents in August, by comparison, topped $3,460, according to StreetEasy, a New York real-estate research firm that’s part of the Zillow Group Z, -2.95% .

The San Francisco Real-estate Market Is Probably the Hottest Market in the U.S Right Now

Not surprisingly, given state of the actual building, the home’s value isn’t in the structure but in the land that it sits on.

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With the influx of tech workers driving up the housing market, along with a strain on the supply of houses to meet demand, it is understandable to brokers in San Francisco why prices seem so unrealistic.

$1.2 Million Is What It Costs to Buy a Shack in San Francisco, Literally

The home is an earthquake shack. These tiny homes were built after the 1906 earthquake to house people who lost their residences. Many still remain around the city and have been restored, updated and refurbished.

Earthquake Natural Disaster San Francisco 1906
Earthquake Natural Disaster San Francisco 1906
Earthquake Natural Disaster San Francisco 1906
Earthquake Natural Disaster San Francisco 1906

According to a report from Curbed San Francisco, the house had rats, black widows, mould, and hundreds of bottles of urine inside it when it went up for sale and was subsequently sold for $1.52 million.

The tiny home backs on to the eight-lane 280 freeway and a Bay Area Rapid Transit, or rail line that begins running at 5 a.m. and doesn’t stop until nearly 2.a.m.

On the flip side biking it to the local station only takes eight minutes and getting on to the freeway isn’t difficult either, if you want to get out of town or into the city by car. Three golf clubs are also nearby. And, for those late-night snacks, a convenience store stands just a few steps away at the corner of De Long and San Jose Avenue.

So maybe it wasn’t such a bad deal, after all? or is it a sign of how crazy the San Francisco real estate market has become?