Pricing Poll: 1026 Duncan

Posted by Dave Fratello on Thursday, December 4th, 2008 at 5:13am.

MBC pricing polls have often focused on properties that were drastically overpriced and in need of major corrections.

But those weren't the only kinds of homes featured. In fact, the only 2 homes subject to a poll to have closed escrow this year actually sold at or near the asking prices from the time of the poll (e.g., no big correction necessary). The rest have fallen dramatically or quit the market.

We'll do a year-end wrap-up on the pricing polls soon, but let's first add one to the mix. As you'll see, this one's a little bit different.

This time around, we're focusing on 1026 Duncan, a new Hill Section listing. (Click highlighted address for more pics & details via Redfin.) It's intriguing for several reasons.

The newer, 5br/6ba, 4000 sq. ft. home is squeezed onto a lot that is surprisingly small for the Hills (4600 sq. ft.). It's pretty, but it's also just a few doors away from Sepulveda. And no views.

1026 Duncan was new in 2005, when it was purchased for $2.5m.

It's up now at $3.350m, a markup of $850k (+34%) over about 3 and a half years.

But median prices for SFRs in MB have not risen 34% over this period of time.

In fact, MBC's presentation of median price data for this period (see "How're Median Prices Doing?") shows a rise from $1.5m in March 2005, the same month 1026 Duncan was purchased, to $1.707m in Sept. 2008, a total rise of 14%. (Click to expand graphic.)

Duncan was obviously well above the median then, but it's reasonable to assume its appreciation rate was close to the area as a whole. Take it up the same 14% from March 2005, and the price would now be $2.85m, or $500k below the start price here.

You also need to consider recent sales and current options.

There are 3 recent sales in the Hills that might figure in:
  • 916 9th (5br/5ba, 4550 sq. ft., on a lot that's 7250 sq. ft. – sold for $2.825m in June
  • 953 9th (5br/4ba, 4100 sq. ft., on a 6000 sq. ft. lot) – got $2.3m in August
  • 914 2nd (4br/4ba, 4300 sq. ft., on a large 8600 sq. ft. lot) – just closed for $2.92m in mid-September
All of those were larger and better located. Only 2nd St. was relatively new (2000 construction).

In escrow now, last at $2.999m, is 755 11th, "The Georgian," a 5br/5ba, 5300 sq. ft. home with views on a large 9300 sq. ft. lot. It needs updating, but the location is quite good, and it's 30% larger than 1026 Duncan.

There are also 3 other active listings between $2.75m and $3.4m that are bigger and either comparably, or better, located:
  • 918 10th (5br/5ba, 4475 sq. ft.) – $2.750m (began at $3.2m)
  • 1042 1st (5br/5ba, 4800 sq. ft.) – $3.395m
So the big question here is how the quality and newness of Duncan can compensate for its smaller size and not-so-hot location.

At the same time it's offered for sale, Duncan is offered for rent at $15k/mo. So it could go either way.

Oh, and, buying or renting, you can have the furniture if you please.

So, in a premium area like the Hills, do fairly new, higher-end homes appreciate at a rate well above the city as a whole?

Please vote in the poll and give the reasons for your vote in the comments. We'll hold this vote open until Sunday night at 8pm. The home is not posted as open in the Beach Reporter, but we'll direct you to it this weekend if it will be open.

---------------------------------------------------

IMPORTANT UPDATE:

The original story, showing a clip from the listing, stated that 1026 Duncan is bank owned. However, the listing agent contacted MBC to apologize for an error made in entering the listing. It is not bank-owned, it is owned by the seller, who is not in default. We are assured that the listing information will be revised later today.

Our story has been revised to drop references to the property being Real Estate Owned. Some of the first comments (and votes) will refer to that information in the original story.
comments powered by Disqus