Late-Bubble Beauty Slammed Upon Resale

By Dave Fratello | November 22nd, 2010
The bubble years of the early 2000s gave MB a bunch of spec construction, mostly in a Caliterranean or Cape Cod style.

But not everything was done in a cookie-cutter fashion. There were some creative, one-off, standouts like 2523 N. Valley (4br/5ba, 2800 sq. ft.), completed in 2005 and sold in Feb. 2006 for a kindly $2.050m. That was, not incidentally, just months before the bubble era began to end locally.

They called this one a "Monterey Colonial," and while it may not nail the style – we found examples of "Monterey Colonial" design that, frankly, look nothing like 2523 Valley which, for example, lacks a hip roof – we have called the home "darling" and "meticulously crafted" here at MBC in prior posts. (Such as this May 2010 "Weekend Opens.")

We wanted to give credit for the home's style and unique choices made in its overall design, with extra points for the attention to interior design, including a classically inspired bath. Everything's new but feels older, in a good way.

All the home's charms helped it find top dollar just before the bubble burst.

That $2.050m sale price in Feb. 2006 was something of a reduction off the start at $2.199m, which, upon launch, was labeled, "Best priced new construction in the trees." 

It was rare indeed for new homes to sell for so close to $2m back then, but 2523 Valley had a few liabilities. The lot (4280 sq. ft.), is on, well, Valley, a fairly busy road. (We sometimes call it a "speedway.") The home itself was also smaller – by 300 to 500 square feet – than most new homes, another knock. And it needed buyers that loved the style.

Now, when we fast-forward 4 years to the current day, we see the triple-whammy impact of the bursting of the bubble, greater concern over location, and the home's loss of the cachet of "new."

In a listing beginning during our hot, hot Spring – 6 months ago – the sellers bet they could get out for just a 13% discount off of acquisition, asking $1.789m.

But the final deal has come in almost 10% lower than that, at $1.629m, a chop of -$421k/-20% off the Feb. 2006 price.

The home's still beautiful, it hasn't moved, it's not that much older, but this particular slice of MB real estate sure didn't work out as much of an investment.

If it's any consolation, though, the home likely would have traded in the mid-to-lower 1.5s if it had sold in the doldrums of 2009, putting it down a quick $500k in 3 years. The recent firming of local prices – and the related, consistent lowering of rates – brought back a little of that money.

Meantime, the new buyers could be forgiven if they were saying now: "Good thing we waited."

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