November 15, 2011

Theory of Relativity in Real Estate

Today we’re taking a trip to the upscale community of Saratoga, thanks to Burbed reader REshrink.  The initial write-up was originally shared on patrick.net, but REshrink thought they’d be perfect for Burbed.  Add in a visit at the Open House and we hope you agree that these pricey Eichlers make for a great Guest Post.

Neither of these Saratoga listings had sold when this column was sent in, now both are pending!  Be sure to place your bets on their selling prices.  And now, please give REshrink a big, warm Real Bay Area welcome to today’s front page.


19201 SHUBERT Dr, Saratoga, CA 95070
$1,399,000

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BEDS: 4
BATHS:4.5
SQ. FT.: 2,840
$/SQ. FT.: $493
LOT SIZE: 0.32 Acres
PROPERTY TYPE: Detached Single Family
STYLE: Contemporary
STORIES: 1
VIEW: Neighborhood
YEAR BUILT: 1964
COMMUNITY: Saratoga
COUNTY: Santa Clara
MLS#: 81141806
SOURCE: MLSListings
STATUS: Pending Without Release
ON REDFIN: 41 days

Gorgeous Atrium Model Eichler Home on Corner Lot! * 4bds/4.5bths, Plus Office & Workshop * Spacious Living & Dining Area w. Vaulted Natural Beam Ceilings, Tile Flrs * Gourmet Kitchen w. Large Island, Gas Stove & Lots of Counter & Cabinet Space * Open Family Room w. Fireplace * Master Suite w. Private Courtyard * Indoor Pool w. Solar * Foam Roof * Remodeled Baths * Indoor Laundry * Great Location & Saratoga Schools!

imageJust when you are trying to think if this house has been priced accurately at $1,399,000 (last sold in 2004 for 1.1 M) , a similar listing shows up with a price tag of $1,649,000 (19168 De Havilland Drive, pictured at left, last sold in 2003 for $1,488,000).

Is it a coincidence that these two homes are “perpendicularly” next to each other and have similar architectural styles?

Hmmm…why would an agent advise the owners of De Havilland to bring their home in market at a time when a similar property next door is priced approximately $250K lower. I acknowledge that the backyard of Schubert abuts a busy street, but $250K more, really. I will never pay $5.99/lb for tomatoes in Whole Foods if I know they are selling for $3.99/lb in Trader’s Joe next door. I know, I know…it is a bad analogy. After all, you don’t need a jumbo loan to buy tomatoes.

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Moreover, the Schubert property came to the market only 18 days ago. Therefore, it is not like it has been sitting for 6 months and the owners at De Havilland got tired and decided to list their home a month before the holiday season, A.K.A. slow-real-estate season.

imageWhat kind of business decision goes in putting a home in the market for a price tag that is significantly higher than the neighboring home? If you read carefully at the listings for both homes, you will find the answer. Both these homes have something more in common; they have the same listing agent. It seems the property on Schubert, which now looks like a bargain at $1,399,000, is being marketed at the expense of De Havilland. So, buyers don’t delay or you will miss the deal at Schubert; that is if you can get past the bidding war in an attempt to get it for at least $1.5M, which is still $150K lower than the competition.

Any guesses what will happen to the pricing of De Havilland after Schubert is sold? Just go back to the owner of De Havilland and tell them that they should lower the price to whatever-Schubert-sold-for.

Am I the only one who wants to sympathize with the owners of De Havilland property?


imageAddendum: I ended up going to the open house for the Schubert property. The agent proudly explained the updates the current owner made in the kitchen. The cabinets are indeed new but they are Ikea Adel. Please don’t get me wrong as I am a big fan of Ikea, but an increase of $300K since the last sale ($1.1M in 2004) is hard to explain by Ikea cabinets. As for the appliances, the refrigerator does not make ice, and the garbage disposal has been disconnected as it keeps getting clogged. Besides, the only fireplace in the house is now non-functional.

imageAlso worth mentioning, the whole house smelled of Chlorine (from the indoor swimming pool). This stands in contrast to the real estate agent’s false claim about the house having a salt water pool.  The agent tried to mask the cheap-motel-chlorine-swimming-pool-smell by baking garlic-chicken in the oven during the open house. May be, the agent should have followed the traditional route of baking cookies. While the smell of Chlorine was enough to trigger my migraine, I found a few people leaving right away as the smell of garlic was nauseating.

imageSo, here is a wonderful Ikealer, I mean an Eichler for you to buy for $1,399,000 only. As most people might know, the attraction of any Eichler is their architectural philosophy of bringing outside indoors, Well, this purpose has been well achieved in this particular Eichler. The outside noise from Cox Ave can be heard inside the home in its full glory.

 

Comments (8) -- Posted by: madhaus @ 5:02 am