Learning, and Not

Posted by Dave Fratello on Friday, May 29th, 2009 at 5:50am.

This week there's another big, early-90s build in the Tree Section that's priced in the lower 400s per square foot – evidence that sellers are learning from recent experience.

It's 2400 N. Poinsettia, several doors south of Marine. The home is big (4br/5ba, 3650 sq. ft.) and, though its early-90s vintage is apparent in some of the construction, the updates make it one of the crispest among similar offerings we've seen recently.

The start price of $1.599m looks realistic, with, perhaps, a little extra built in. The PPSF to begin is $438/PSF.

This one's open Sunday, 1-4pm, and we'll go ahead and project that a crowd will attend.

There was a time when the $1.5m range got you 2,000-2,500 sq. ft., but here we are looking at 3,650 sq. ft. in that price range. Not bad, and definitely an indicator of the state of our market.

At least 3 recent sales factor into this price:
  • 1608 Poinsettia (1990 build, 5br/4ba, 3625 sq. ft.) closed in late in April for $1.530m, or $422/PSF;
  • 2600 Poinsettia (in escrow, a 2000 build, 4br/4ba, 3200 sq. ft.), which has a directly comparable location, just a few doors north of Marine. Inside, the home is lovely and the little patio out back is finely customized for outdoor living. Began at $1.899m in late Sept. 2008, last at $1.569m ($489/PSF), and it won't close that high.
We will note here that all 3 of the sold listings above tried starting considerably above the 400s in PPSF and wound up coming to earth. 2400 Poinsettia seems to be starting on earth, learning from the neighbors and comps. Time will tell.

Not so fully trying to learn the lesson: 513 N. Dianthus (3br/3ba, 2475 sq. ft.) in the Hills.

Oddly enough, this is the third contiguous home to go on market in the past year or so, the others being:
  • 511 Dianthus (3br/2ba, 1900 sq. ft.), which began last Spring at $1.429m, a tad above market, and adjusted all the way down to $1.125m (that's $592/PSF) while freshening up the 60s-vintage, boxy home along the way. But the price was always a bit behind the market and the listing went rental instead.
  • 509 Dianthus (3br/3ba, 2250 sq. ft.) sold in a little more than a month this year. There was also some real adjusting. The start price of $1.350m gave way to a final sale price of $1.150m, or $511/PSF. The home was superior to 511 Dianthus in light of wide-ranging remodeling work that gave the home some of the flavor of newer construction.
Now, of the 3 contiguous homes, 513 Dianthus is clearly the senior partner. It's gorgeous, as the pics clearly tell.

It's open this weekend (Sun. 2-4pm) and will certainly get a mention in our "Weekend Opens" feature.

But even with a very recent, smashing remodel – as is the case here – what you've got is still a smallish home on a skinny lot on Dianthus.

No matter how much better tricked-out than the neighbors, it's hard to make the argument that this home is worth literally 50% more per square foot than the neighbor at 509 Dianthus that just closed. (Current price is $769/PSF, versus $511/PSF at 509 Dianthus.)

No doubt, part of what is driving the price here is the acquisition price in Oct. 2007. (Uh-oh.) Someone paid $1.650m not quite 2 years ago, then went to work updating the property. (The listing says the home was "completely upgraded in 2008.")

We get the sense that the sellers are trying not to learn from the selling experience of their neighbors. Their property is just too different, too special. And that attitude is fine, provided they don't fully intend to sell.
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