Fighting the Future

Posted by Dave Fratello on Thursday, November 13th, 2008 at 6:43am.

What to do with location-challenged new construction in the Tree Section?

Do you try for the $2m+ that newbies have gotten in recent years, or start closer to current market?

At 3413 Pacific, the start price is over $2m – $2.095m, to be exact – presumably to establish some wiggle room for a future sale below that.

In recent months we have seen a few new homes drop below $2m to make a deal, including two in better locations on Pacific:
  • 3104 Pacific (5br/5ba, 3200 sq. ft.), which hung around 6 months before selling for $1.950m in Feb. 2008;
  • 2709 Oak (5br/5ba, 3600 sq. ft.), which lasted 500+ days before grabbing $1.950m in March;
  • 2309 Pacific (5br/4ba, 3200 sq. ft.), which logged more than 300 DOM before going for $1.890m in April;
  • 2611 Palm (5br/4ba, 3200 sq. ft.), which shot for the record at 600+ DOM and sold for $1.850m in mid-October.
Those were fairly recent developments, but look no further than a couple of doors down from newbie 3413 Pacific for a cautionary tale.

In March 2006, a new home at 3405 Pacific (4br/4ba, 3200 sq.ft.) went up at $2.149m. The home was nice in some respects, but flawed in others. That location became a punishment. The home's view windows to the north actually featured the refinery. (What!?!)

Over time – a year, actually – the problems settled themselves and the home sold for $1.775m in March 2007. That may be the key comp, because 3413 Pacific is also also oriented toward the refinery. And the 35th/Pacific corner location exaggerates the impact of rush-hour traffic due to the 4-way stop.

This home was offered for rent (at $9,500/mo.) when it was first completed, and we referenced it in a mid-September story about listings offered for sale and for rent at the same time. (See "Why Sell When You Can Rent?")

Now they're offering it for sale, but they're not yet really trying to sell it yet. If they meant to unload this one, it'd be on a par with the neighbor, or lower. Perhaps some day it will be.
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