October 22, 2010

Investors/Contractors Delight with Many Possibilities!

What is your favorite kind of problem property?  Do you like 100+ year old termite havens?  How about severe price reductions chasing the market down?  Or does an eye-popping you-have-got-to-be-insane wishing price make your day?

Here’s what burbed reader nomadic, who sent in today’s featured listing, had to say about this trifecta:

$2.5M for a tear-down on .47 acres in LG?  That backs up to townhouses?  How much is it worth to be a short walk to the middle school?  Whatever it is, it’s probably off-set by the headache of all of the traffic that will
accompany it.

You know what the agent would say: the value is in the land!

16922 Mitchell Ave, Los Gatos, CA 95032
$2,499,000

image

Beds: 2
Baths: 1
Sq. Ft.: 1,200
$/Sq. Ft.: $2,082
Lot Size: 0.47 Acres
Property Type: Detached Single Family
Stories: 1
View: Neighborhood
Year Built: 1900
Community: Los Gatos/Monte Sereno
County: Santa Clara
MLS#: 80823053
Source: MLSListings
Status: Active
On Redfin: 821 days

Investors/Contractors Delight with many possibilities! 3 Lot subdivision capability to build 3 new homes. Remodel existing home and build two new homes at site. Replace/remodel existing home on large lot. Property walkable to Los Gatos shopping and schools. Huge price reduction for this in-demand LG location.

Yes you read that right, 110 years old, 1200 square feet, with each one of them priced over two thousand dollars, and it’s been on the market for 821 days.  It’s like every single metric of horrible all rolled up in one.  All we need is a wrecked foundation and a clouded title.  (Um, wait… why is there an earthquake disclosure?)

So let’s see what nomadic meant about the neighborhood.

image

“Backs up to townhomes” wasn’t a figure of speech!  But speaking of Many Possibilities, how about checking out the other MLS listing for the same location?  Same price, same address, but they’re marketing the property as Residential Land and ignore the house.

Guess the Investing Contractors are in, demanding another Huge Price Reduction before delighting.

Comments (18) -- Posted by: madhaus @ 5:07 am

18 Responses to “Investors/Contractors Delight with Many Possibilities!”

  1. sonarrat Says:

    That’s South Bay Honda’s service center across the corner. Sounds like a $2.5 million neighborhood to me!

  2. nomadic Says:

    I’d say the land would be good for another car dealership, but those are closing in LG left and right.

  3. madhaus Says:

    Great! Less competition when you buy this place and open up your Tesla dealership!

  4. SEA Says:

    First listing (not the other):

    http://www.redfin.com/CA/Los-Gatos/16922-Mitchell-Ave-95032/home/912815

  5. Gallileo Says:

    Subdivide by three and you’ve got to get 860k per lot just to break even on the land costs. To make it worth your while to build, you’ve got to be able to sell each for around 1.3M. I’m thinking that is only difficult if this place isn’t in the RBA. If it is in the RBA, then we are just waiting for an RBA contractor to RBA it.

  6. CB Says:

    For Sale (MLS-listed) $2,499,000

    Tax (2009) $1,544

    California!

  7. cardinal2007 Says:

    It doesn’t seem like the land would be worth $5M/acre in that area, perhaps it is a bit overpriced. How much does it cost to build in that area of Los Gatos, and is that area really in demand, usually I find proximity to call dealerships a bad thing.

  8. madhaus Says:

    I am really sorry about the links to Redfin disappearing. I put them in when I wrote this article, I swear. I think this is a bug in WordPress, if I update the article onsite the link in a heading gets clobbered.

    So many bugs, not enough crapboxes.

  9. nomadic Says:

    If you subdivided it, got plans approved and put a foundation on each lot, they’d be worth maybe $700k each, IMO. Not sure how much it would cost to get to that point either.

  10. ymous Says:

    How much was the “Huge” price reduction?

    Also, to #6: Property tax after you buy it for $2.5M – let’s say 1.2% = $30,000 a year! Just for the privilege of developing it! Even with a marginal tax break of 35% (assuming you could somehow deduct it ALL, you big income earner who avoids AMT), $30,000 * 0.65 = $19,500.

    Divide by 12, and you’ve got a monthly rent payment for that house! Who said it was overpriced…

  11. madhaus Says:

    #10, the HUGE PRICE REDUCTION is on the Redfin listing. It was reduced $450K from $2,937,000. Simply click on the link to the listing (the address of the property, up top), then scroll past the aerial map and that’s where Redfin puts a listing history if it has one.

    But I’ll save you the trouble, since you appear to be in the lead for the caption contest.

    Property History for 16922 MITCHELL Ave
    Date Event Price Appreciation Source
    Jun 11, 2010 Price Changed $2,499,000 – MLSListings #80823711
    Jun 10, 2010 Price Changed $2,499,000 – MLSListings #80823053
    Jul 24, 2008 Listed $2,937,000 – MLSListings #80823711
    Jul 21, 2008 Listed $2,937,000 – MLSListings #80823053

  12. SEA Says:

    “(assuming you could somehow deduct it ALL, you big income earner who avoids AMT)”

    Corporations don’t have AMT problems…

  13. SEA Says:

    Regarding the “huge price reduction.”

    “It was reduced $450K from $2,937,000.”

    We all know that any “huge price reduction” should bring immediate so-called over-bidding. It is simply not possible to over-price real estate, especially RBA quality. Yes, yes, I realize this place is most likely not in the RBA, but at $2.5M, this is RBA priced–just add buyer. Now all the seller needs are the bids to bring it right up to where it needs to be: $3M.

  14. madhaus Says:

    #13, this is a win-win. If the seller needs it to sell for $3M, then the buyer must subdivide the lots into 3 $1M parcels. The homes built there must sell for at least $1.5M, preferably $1.75M. Plus an extra $100,000 for the landscaping. The overbidding should take it up to $1.888M.

  15. SEA Says:

    And in no more than 10 years each one is worth at least $3.888M. This property is actually worth $12M in just 10 short years.

  16. A Thousand Dollars per Square Foot? That’s *All*? | Burbed.com Says:

    [...] we ever had a house listed for this much a foot?  This one cleared $2000 a foot, but isn’t anywhere as awesome because its high price is due to being on [...]

  17. Thomas Says:

    I paid $240K for my home in LG back in early 90s. Much bigger than the one above. Since then prices skyrockted well past $1M. I see lots of New Yorkers and other from the NorthEast who overpaid like they were movie stars. Thats the mentality of east coast people.

  18. nomadic Says:

    You know what I hate? When they show some movie star’s house on TV and it’s nicer than mine, but it cost the same or less than mine.

    See, that’s the beauty of the RBA! (Or RBA-adjacent.)
    ;-)


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