New Shockers on 26th

By Dave Fratello | March 19th, 2014

You have to be careful not to be continuously shocked, or your systems may burn out. You may become numb to news that really is big.

We're conscious of all that, and kinda hate to ring the "shocker" bell too often in this rising market. But we have occasion again today with the sale at 768 26th in the Tree Section at $1.900M.

The most ridiculous way to analyze this one would be by price per square foot. Because on this 3br/2ba, 1443 sq. ft. cottage, the PPSF wound up at $1,317/PSF.

Check that. You'll typically see those kinds skewed figures only when looking at a land sale – a small house contributes almost nothing to the value that someone places on the plot, so the math gets screwy. Recent examples in the Trees are 750 30th ($1.515M, $1,308/PSF), 636 12th ($1.585M, $1,531/PSF) and 1400 Ardmore ($1.596M, $1,315/PSF) – all set to be building sites.

As with those cases, the primary value at 26th is in the land – a terrific, nearly 6100 sq. ft. lot that is nearly one-third bigger than the typical Tree Section lot. The backyard is flat and south-facing, meaning sunny. And this location is quiet, off the beaten path yet close to town and a safe, 10-minute walk to school.

Builders were willing to go into the 1.7s (at least) for the land, envisioning a mega house with basement and buried garage that could command $4M when complete.

But no. It's not a land sale here. Our information is that the buyers just wanted to be in the neighborhood and plan to keep the house more or less as is. To pull that off, they had to pay today's land price, inflated by the packs of hungry, aggressive builder bidders, and add something for the 50s cottage on top.

We scanned the past year's sales in the Tree Section for a comparable case where buyers paid so much for so little. Sifting out a series of lot sales, wouldn't you know it, we alerted on another of MBC's "shockers" from last year: 725 12th (3br/2ba, 1320 sq. ft.).

But that one came in at "only" $1.620M last May, and it was doll-perfect, ready to move in, gorgeous. (See "Shocker on 12th.")

At 768 26th, the home certainly has its charms, but isn't at the stage of puffed-up, perfect beach cottagery that 725 12th was at last year.

Side note: In a triumph of minimalist marketing, the listing for 768 26th sold $200K over asking, despite a description saying little more than: "Just too cute to mention all the particulars." Punt.

But if you want the real shocker in this story, you have to look next door.

At 2517 Laurel, a builder just paid a half million dollars less for a bigger lot – off-market.

The corner lot at 26th/Laurel is officially 6867 sq. ft., or 13% bigger than 768 26th. It's inclined considerably and will take some creative engineering to build on properly to max everything out.

But the developers start out ahead of the game.

They paid $1.400M for the bigger lot. Do you think some of the folks chasing 768 26th might have thrown in on this one if they had a shot?

That off-market deal, selling privately to a builder for a big number.... that must have sounded great at the time it was offered.

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