Dirt Gets Pricey, Too

By Dave Fratello | May 22nd, 2013

The recent sale of 1804 Agnes serves as a reminder that finding a lot for a custom build is getting costlier by the day.

You can definitely say this flat lot at Agnes on a sleepy street boasts a prime location.

However, the 4780 sq. ft. lot size is average, and the backyard exposure will be to the east – less sunny in the afternoon – so we're not looking at pluses on every front.

So the sale price, after multiple bids, at $1.700M, is a wake-up call.

Wasn't it just last year that 1805 John shocked onlookers (and the 19 losing bidders) with a sale at $1.352M?

But that lot was a tad bigger (5065 sq. ft.) and with western exposure on the back. About the only major liability of the lot was (is) the giant eucalyptus in the front yard, which apparently the city forced the new owners to keep. (What is this, Australia?)

Even if the lots were equivalent, you'd see a $350K difference in only a bit more than a year. That's 26%. And if you call John the better lot, then you have to say lot prices are up more than 26% in 14 months... based on a sample of two.

That's two in the Tree Section's prime Martyrs area.

Let's test that hypothesis in the South End of the Sand Section.

Dave's clients purchased 521 2nd in May last year.

That 2700 sq. ft. lot (standard for the Sand) had a cute little 60s house on it that seemed to lend itself to an ambitious remodel. Instead, the buyers opted to scrape it and build new.

So the lot-sale-that-wasn't-intended-as-such was for $1.370M.

By October 2012, we'd seen the market moving for a bit.

That's when 512 4th listed for the same price as 521 2nd, only to come to prove that the market had moved.

Asking $1.369M, 512 4th instead got $1.625M. That was a jump of 19% over 521 2nd, and for a lot on the (barely) less desirable south side of this non-walkstreet segment of 4th.

Last month, another house on the same block sold for more.

That was 521 4th St., another 2700 sq. ft. lot.

In fact, there was no mistaking this as anything but a dirt trade. It's a long-running vacant plot of land that people have been eyeing for years.

Sale price in early April 2013: $1.645M. (Does it matter that the list price was $1.5M?)

That was a jump of 20% over 521 2nd from 11 months prior.

And maybe the one that stands out most in the South End is 424 2nd, which didn't have to be a lot sale at all.

Yes, those 3 examples above were all 500-block homes, good comps against one another, and 424 is a bit closer to the water. But it's not a walkstreet and it's not far from the others.

424 2nd had a functional, 3br/3ba, 2500+ sq. ft. house on it. It worked. But it's now gone.

424 2nd turned out to be a lot sale at $1.700M. (Sale posted in October 2012.) We had heard it would be scraped, but didn't quite believe it till the 'dozers arrived recently.

Maybe Agnes and 2nd are anomalies, but we hear tell of new lot sales in the Tree Section at $1.5M+, we just saw 1728 Pine close at $1.350M and can't really see what is to be done with that house, and, whew, we haven't even started talking about the Hill Section yet, or East MB.

Looking for dirt? It's worth more than dirt. More than last year, even.

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