More Than a Half at 14th

Posted by Dave Fratello on Monday, January 24th, 2011 at 9:05pm.

The Sand Section is rife with half lots. That's what happens by the beach anyplace – we chop up the land into the smallest conceivable rectangles to make them livable and to maximize value. 

A half lot in the Tree Section? Except for the skinny lots along Valley, a half lot is as rare there as a little cottage is in the Hill Section. Maybe rarer.

But a half lot (2240 sq. ft.) is what they offered along with the home at 910 14th (3br/3ba, 1575 sq. ft.), which hit the market last November. This created a puzzle for valuing the home. There are no true comps if you can't find land of the same size in other recent sales.

Land is normally the biggest component of a valuation in MB, but what would you say about the land at 14th? If Tree Section dirt is worth roughly $800k, plus or minus, was the dirt here worth $400k? 

If so, that would mean the structure, remodeled in the mid-90s, was – improbably – worth more than $500k at the start price of $959k. Pull out your slide rule, and you'll see that would be $355/PSF for the structure alone – the kind of price you'd pay for premium new construction.

(Fun side note: This story on Move.com, from the late 90s, details the home's transformation some years ago from "unfriendly and imposing" and "just plain ugly" (see the pics in the story) to "elegant" and "the pride of the neighborhood.") 

A sale has now closed at 910 14th, and it wasn't far off that start price, selling for $934k.

This suggests that the land – in a pretty good location – was "worth" somewhat more than half a lot, or the structure was valued at a highly unusual level for what it is, or maybe something else was at work. In this case, maybe the value wasn't tied mainly to some kind of scientifically discernable metric – it was more simply what a willing buyer was willing to pay a willing seller.


Points of comparison: Two recently remodeled homes, both smaller but on full-size lots on Oak, just fetched about $900k each – 3005 Oak ($890k) and 2301 Oak ($899k).

A home closer in size and location to 910 14th, on a full lot over at 1504 Pine, sold for $949k, though it needed updating. (See "Big Bear Closes at Full Price.")

Finally, among the roughly comparable Tree Section sales between about $1.2m-$1.4m (all on full-size lots) you'll find 2308 Elm, similarly sized but completely, freshly remodeled and updated, closing at $1.307m last September.

Closing note: In a prior "Weekend Opens" post, we limited MBC's comments on 14th due to "a few entanglements." We can now say specifically that we're friendly with the sellers and were representing buyers interested in the property. Initially we figured that simply not mentioning the property would help sidestep any conflicts, but even that decision had a consequence (i.e., potentially limiting the buyer pool or the information buyers might bring to the table). So we went forward with a brief mention with disclosure. Potential conflicts like this are pretty rare, but we try to find the right balance.
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