Scaffolding is Down, So's the Price

Posted by Dave Fratello on Friday, September 21st, 2007 at 6:05pm.

The builders have made impressive progress at 4419 Highland (45th/Highland). With the stucco team finished, we just need to wait for the interior to be built out and this one will be ready for walkthroughs.

MBC has to admit, this home looks a bit better than expected, and of course it's a giant improvement over the wrecked shack that used to occupy this lot.

We do find it a very strange use of stapled-on stone for one corner to feature stacked rock. What structural purpose would be served by having a single corner built from stone, if it were real? This is just a perplexing accent.

To celebrate the end of exterior construction work, as the scaffolding came down, so did the price. The listing began at $1.695m – let's be honest, that was ridiculous – back on June 3rd, and now we're at $1.580m.

Will you love this house? The listing gives you many reasons. (MBC is retyping the language, which appears entirely in upper case, and therefore screams a bit too much.)
Stunning brand new construction!... Meticulous attention to detail and craftsmanship at it's finest. Extra large 4 bedrooms 3 baths with approximately 1,973 square feet! First thing that will win you over is the high ceilings, second, large open living room with stylish fireplace exquisite ocean and Malibu mountain views! Three levels of bliss! From marble in the bathroom to high-end stainless steel Viking stove and appliances this is truly a custom gourmet kitchen!
"Three levels of bliss!" We just love the alternative reality of promotional copy.

Problem: as we've all discussed before (here, here and here), this is possibly the worst lot in all of MB, certainly west of Sepulveda. (There's a home on a corner lot at Aviation and Marine that probably takes the cake for the utter worst.) Therefore, this one calls for the mother of all location discounts. But it's not priced that way, yet.

Ah, but there is this in the "addendum" to the listing:
Bring any and all offers!
Now that's more like it. So, what can the builder take without losing money?

Let's go back to our first post on this house, before construction began and the builder tried to unload the project on Craigslist:
Price for Land, Survey, Plan check fees, Permits, Approved Design,
Demolition, Grading, Utility hook-up, Retaining walls and foudation is
$1,089,520

The balance of the construction contract is $309,980.

$1,399,500 to complete. Comps are in the $1.6 million to $1.7 million range.
Assuming no construction cost overruns (ha!), and assuming just 5% cost of sale ($70k or so), the bottom line would appear to be around $1.47m. The builder might be OK with going lower if some profit were built into that advertised figure of $1.089m for land along with the permits and initial work. (They paid $730k for the lot.)

But MBC, and a lot of our readers here, are going to be shocked if 4419 Highland gets $1.4m or more. Yes, shocked.
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