Beautiful Loser

Posted by Dave Fratello on Monday, September 21st, 2009 at 10:15pm.

Some day quite soon we'll be writing the final chapter on 502 24th, a certified "green" contemporary that's going to cost the builder almost as much as it costs the new buyers.

What's that?

Yes, the big (4br/4ba, 3875 sq. ft.), unique, fun modern is a hit as architecture, but a flop as a business venture.

The listing touts such pros as the news that the home "will be featured on this fall's American Institute of Architects (AIA) Home tour," and cons like: "Priced over $1,000,000 under what it cost to build."

That was when the price was at $2.995m. We're hearing that buyers stepped in last week and took a big chunk off that asking price. Which means a loss of more than $1m, maybe a lot more.

(Click the Redfin link above for the still-active listing, or see the property-specific website with more cool photos.)

Comps would put the home well below $2.5m, or less than half the initial asking price of $4.995m. For instance:
  • 425 26th (5br/5ba, 4200 sq. ft.), a different sort of contemporary with views of treetops, ocean and PV over Grandview. Start price: $3.75m, sold short at: $2.3m (-$1.45m/-39% from start). (See "A Selection of Sand Closings" and "Short in the Sand.") Closed in late July.
  • 510 23rd (4br/4ba, 3200 sq. ft.), a smaller new Spanish that went for $2.006m in late April.
  • 517 21st (4br/4ba, 3400 sq. ft.), a certified "green" Cape Cod, also smaller than 24th, and which also closed in late April at $2.270m.
Those homes had a range of PPSFs from $525-$670/PSF. None had the location liability of 502 24th, right across from the parking lot at Grandview school, on a street that's busy and cramped twice a day, 5 days a week, for 9 months out of the year. Watch for 24th to fall in the middle of that PPSF range.

The same builder group produced 2 other "green" moderns in MB that sold in 2007:
  • 505 Valley (3br/4ba, 2150 sq. ft.), touted then as the first certified "green" home in MB (sold for $2.175m in Aug. 2007), and
  • 217 9th (3br/4ba, 1725 sq. ft.), near downtown ($3m, all cash, in Oct. 2007).
Those projects worked out pretty well, despite less-than-perfect locations. PPSFs were at $1,000 and $1,730/PSF.

At Grandview, everything turned out differently in 2009.
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