A Boost Over '07?

By Dave Fratello | September 27th, 2010
This year's been a recovery year of sorts, but that doesn't mean sellers are getting 2007 prices, does it?

One new listing is going to try for a little markup. We'll see how it plays out.

The home's a beaut in the quiet South End, so that's a good start.

It's 417 2nd (5br/5ba, 4325 sq. ft.), a newer (2004) Cape Cod on a corner lot at Crest, which the listing describes simply as "the finest" Cape Cod in the Sand.

Big claim. Oh, the agent built it.

There was a pretty big jump in this home's market value between 2004-2007.

A listing logged 30 DOM in 2004, but looks like a pre-completion sale. (The listing noted "new construction" and was listed for sale by the builder.) Regardless, the sale price was $2.1m in March '04.

The owners solicited buyers at $3.599m in Sept. 2006, and though that listing officially canceled, a sale was made for $3.507m in March 2007.

That's a shockingly healthy $1.407m markup, +67% over 3 years.

Did the median price for MB rise 67% over those 3 years?

Now 2nd is back with a fairly modest request for a markup to $3.579m (+$72k/+2%). But that's not the sort of thing that's working for most 2007 resales this year.

Maybe 417 2nd will continue to defy gravity, but first let's check in on a few other listings and sales to see if it makes sense to seek a markup over 2007 prices these days.

We can look first at a couple of South End bretheren, homes that aren't at all like 417 2nd, but nearby anyway (see "Goin' South"):
  • 88 Manhattan Ave. (3br/4ba, 2150 sq. ft., TH) traded for $2.2m in Nov. 2007, and is currently offered back at $1.799m, a $400k drop in value (-18%).  

  • 420 1st (2br/2ba, 1000 sq. ft.), an odd little 2-building cottage next to a school parking lot, acquired for $1.075m in June 2007 and, quite recently, offered for the first time below acquisition at $999k (-7%).
Also quite different, but still sporting a 2007 acquisition date:

  • 3212 Maple (5br/4ba, 3450 sq. ft.), a pretty great newer Mediterranean – as these things go – was purchased for $2.5m in June 2007, and has been listed most of 2010 at $2.199m (-$301k/-12%), with no takers yet.
We might also look at some recent closed sales of 2007 purchases. Here, too, we fail to see any markups.

As mentioned in the most recent South Bay Confidential column, 
  • 1018 2nd (3br/3ba, 1900 sq. ft.) in the Hills nabbed $1.950 in May 2007, but sold 3 years later for $1.545m (-$405k/-21%).
  • 1516 Highland (3br/4ba, 2225 sq. ft.) went for $1.795m in March 2007 before a remodel, netting just $1.6m (-$195k/-12%) this past June.
  • 2305 Pine (3br/2ba, 2000 sq. ft.) sold for $1.577m in Aug. 2007, but was worth $1.400m (-$177k/-11%) here in July 2010.
And one more Sand Section TH just hit our radar, a shortie at 3612 Alma (4br/4ba, 2600 sq. ft., a TH), which was purchased May 2007 for $1.905m and sold short last week for $1.176m (-$729k/-38%).

Now, you'll notice the dearth of true comps there to 417 2nd, just plenty of other 2007 acquisitions, many with some challenges.

The series of list/sale prices compared to the 2007 acquisitions: -7%, -11%, -12%, -12%, -18%, -21%, -38%.

We're still looking in MB for a sale that's sporting a markup over 2007, but we haven't seen it yet.

But we'll keep watching 2nd, or anywhere else, to see if someone can make it happen.

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