A 2-Yr. Flip on Duncan

Posted by Dave Fratello on Friday, October 12th, 2007 at 5:38am.

You've got to spend money to make money.

In the case of 939 Duncan, a new Hill Section listing (click address for details), the current owners have spent.

Not fully two years ago, in December 2005, they paid $2.53m for this home. Recently, it's been work, work, work, and spend, spend, spend. Per the listing:
This home has been almost completely redone in 2007. Absolutely like new. No expense spared. The best of all worlds from a wonderful pool and spa to a very serviceable elevator.
So now they'd like $3.895m for their trouble. That's +$1.545m and +54%. And remember: the first $500k is tax-free, assuming this was the owners' primary residence. Nice.

We don't know if this was a wreck in 2005, or if the big-time updating was all a bonus. (How bad could it have been at $2.5m two years ago?) Sadly, the listing pics don't tell much about the interior remodel, just the curb and views. Also, we wish we knew more about the "very serviceable" elevator – was "no expense spared" to bring it to that condition?

The lot for 939 Duncan is surprisingly skinny, not what you think of when you think "Hill Section." But there are those views. Well, if you're at the window.

Nearby 911 Duncan (click address for details) reacted to the entry of 939 by dropping its price for the first time. After 4 months at $3.770m, 911 is now at $3.650m. No 3% drop is worth a big fuss, but you wonder if 911 was edging away from the new one as if to say, "Get out of my space," and to say to buyers: "Here's the deal, over here." The move did create a real gap that undermines the price on the newer listing.

By profile, the homes are comparable, with an edge to 911 Duncan:
  • 911 Duncan – 5br/6ba, 3700 sq. ft., 5000 sq. ft. lot
  • 939 Duncan – 4br/5ba, 3950 sq. ft., 4500 sq. ft. lot
And of course, 911 Duncan is architecturally interesting, and all the interior spaces are hugely charming. (It's open this weekend [Sun. 2-4], so check it out if you're inclined.)

Both of these Duncan listings need to contend with the recent experience of 938 Duncan – yes, the across-the-street neighbor of the newer listing. This was a 5br/5ba, 4650 sq. ft. house on a lot sized right between the size of the lots of the current listings on the block (4700 sq. ft.).

This substantially larger home, with some views of its own, sat for more than 300 DOM before closing May 15 for $3.230m, down a whopping $565k (-15%) from the initial price of $3.795m.

If a bigger remodel got $3.23m this Spring, the question is why somewhat smaller homes are worth $400k-$665k more. We can adjust for all kinds of factors, but this neighboring comp is a problem.

That said, we do not know why 911 Duncan hasn't yet tickled someone's fancy. 939 may be the freshest, but 911 is the cutie.
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