Close the Books on the 6th St. Moderns

Posted by Dave Fratello on Friday, May 1st, 2009 at 3:45am.

A blog on local real estate can provide a little collective memory that we might not otherwise share.

Consider this update on 2 home sales that took 15 months to wrap up.

Back in November 2007, MBC took note of the dearth (then) of South End walkstreet listings, and called attention to 3 that had all gone on public offer near the same time. They were all on 6th St. (See "6th Street Is Turning Over" – a title that now looks a bit optimistic, in retrospect.)

Two of those listings, which we'll discuss here, were neighboring moderns built at the same time (2005) on designs by the same architect.

532 6th (4br/4ba, 2700 sq. ft.) was the smaller of the 2, situated on a trapezoidal lot on the corner with Valley and the 6th St. walkstreet.

Over the months that followed, MBC noted many times that the design was surprisingly warm for a contemporary and made pretty good use of the limited footprint to make a good family home. (Smallish kid bedrooms aside.) Views smartly steered away from Valley and toward the greenbelt and even treetops to the west.

The issue that kept 532 6th from selling, as is often the case, was price. The home had been purchased for $1.818m in March 2005, and tried starting at $2.7m, a 49% markup. After a 6-month break, it returned at $2.35m in June 2008, but ambitions shrank and the listing sliced repeatedly before making a deal.

532 6th closed last October, almost a year after first being offered, at a final price of $1.820m, exactly flat against that March 2005 price.

528 6th was the larger of the 2 moderns on 6th, with 4br/4ba and 3890 sq. ft. It was also clearly the showpiece.

The home is in the news here at MBC this week because a sale just closed, but, as it happens, the architect, Hermosa's Dean Nota, is all over town right now on the cover of the Easy Reader's glossy Beach magazine, distributed Thursday.

528 6th is ultra-contemporary, so you have to like the style, but it makes nice use of light, offers a snazzy roofdeck (how'd they sneak that in?) and had the kitchen redone entirely by the most recent owners.

The home's style clearly limited the buyer pool over the past year-plus but, again, so did the price.

Out of the gates in 2007, the sellers were seeking $3.449m. That was a markup of $454k (+15%) over the Feb. 2006 acquisition price of $2.995m. That price did not change while the listing lingered for months before finally quitting.

In Feb. 2009, the sellers acknowledged they'd be losing money on a sale, starting it at $2.799m. They found a buyer. This week, 528 6th closed for $2.6m, nearly a $400k (-13%) drop over 3+ years, and an even bigger hit after the costs of the kitchen remodel and costs of sale are factored in.

The reversal of fortune at 528 6th was particularly stark: the sellers apparently began by thinking, "let's get out of this house and make some money while we're at it," and wound up spending a great deal to get out.

Since we are looking at these 2 homes together, we'll back up a ways for some history of the properties that came to mind when reading the Beach magazine piece on the architect. The article includes this observation:
Almost every home Nota has designed is still inhabited by the people who commissioned the homes – these are not real estate "flips," but carefully conceived places for people to truly reside.
528 6th was one of the exceptions that proved the rule. It was built for a client who wound up holding it only a short time before selling to those owners above who paid $2.995m in Feb. 2006.

The original owner actually bought two lots that each stretched west-to-east and ended at Valley, then reconfigured the land to create one new north-south walkstreet home (528 6th) and two smaller lots fronting Valley (532 6th and 513 Valley). The plan was to develop all 3 together with new moderns, but instead the new lot at 513 Valley was sold off and became someone else's Cape Cod.

The result of all that buying, selling, building and maneuvering was 3 new homes where there once were 2, including a new street-to-alley walkstreet home that wasn't part of MB's original layout. That's a net plus to the neighborhood, even if the peak buyers of 528 6th might be excused for focusing on the negative at this time.
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