Close the Books on 440 6th

By Dave Fratello | July 26th, 2010
After a year of highs and lows, the saga of the new Cape Cod at 440 6th has come to a close.

Whether the saga ended on a high or a low note depends on which side you were on.

The sale closed late last week at $3.275m, -$1.220m/-27% off its start at $4.495m in July 2009. (The sale closed rather suddenly; the listing, curiously, was never posted as being in escrow.)

About $3m for a big (6br/6ba, 4200 sq. ft.) new home on a South End flat walkstreet – that is starting to look like a deal-of-the-year candidate. It's probably not welcome news, though, around the neighborhood.

With virtually no flat walkstreet new home sales as comps, that start price near $4.5m for 440 6th was loosely tied back to the $4.9m sale in May 2009 of a new Cape Cod at 224 7th (5br/5ba, 4200 sq. ft.). (Redfin doesn't show the listing details, but see MBC's "High/Low Prices of 2010, Sand," where 7th shared top honors.)

But 7th turned out not to be much of a comp. The location differences between a 200-block, ocean-view walkstreet home and a flat walkstreet home like 6th are readily apparent, and then you need to consider the build.

Still, a new home on a flat walkstreet – that sort of thing is rare. And 440 6th seemed to have some nice advantages in that corner location along Ingleside: lots of windows, no neighbors on one side, easy parking. Unless walkstreet buyers turned out to prefer midblock locations.

There was an early – though failed – deal that must have bucked up the notion that 6th was a $4m-plus property. (See "Newly Gone, South" from last August.)

But no.

MBC last mentioned 6th when it quit the market, however briefly. That turned out to be an interlude before a change of listing agents. (See "They Want the One They Can't Have.")

The point of our post then was that the mere act of taking the home off the market had prompted renewed interest in the property. Suddenly people were scrambling. And it worked out as we projected – the eventual buyers had considered the property under the first agent, and were biding their time. They were among those who called when it quit, assuring themselves a place in line – and getting the keys in the end.

So there's a note to sellers – why not try dropping out to see if you can get a deal done?

Those buyers also took a decent discount off the last list price (before that MBC post) of $3.598m, an extra $323k (-9%).

Whether this was a spec project or a custom home on which the owners switched gears – as MBC has reported – this project now looks to have wound up in the red.

The lot at 440 6th was purchased for $2.050m in Oct. 2007 in an overbid situation. (See "MB Market Update for 9/15/07.") By our back-of-the-envelope calculations, the project winds up flat only at a build cost of roughly $225/sq. ft. Anything much higher and the losses really pile up.

Meantime, the not-quite-new (2003), somewhat smaller Cape Cod at 325 9th (5br/5ba, 3700 sq. ft.) is lingering near 6 months, though it's got a new price ($3.349m) and was recently re-listed to restart the clock. (Achem.)

They're not going to like the comp at 6th, either – on a purely PPSF basis, that brings 9th closer to $2.9m. It was purchased at the peak in March 2007 for $3.659m, nearly 21% higher.

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