Sand Dirt in the 8's

By Dave Fratello | October 23rd, 2009
Within days of each other, 3 Sand Section homes with primary value in the land have all sold for prices between $800k-$900k. They provide an interesting window on dirt values, albeit in different parts of town.

First up is 616 Ocean, an 800 sq. ft. lot with a small (1br/2ba, 625 sq. ft.), but cheerily spruced-up old bungalow on it.

What it lacks in size or prestige, the 1/3rd-size lot can, at least, boast in location. That's the sand and Strand to the left (west) in our pic, snipped from the Redfin page on the property

Sale price a couple weeks ago: $885k, or about $1,105/PSF if we consider only the beach-close dirt.

Also worth a note: This property may have looked like a nice investment in July 2006, when someone grabbed it for $1.020m.

In fact, the new sale price is down $165k (-16%) from 2006, consistent with the value drops on 7 other properties purchased in 2006 and listed on our 2003-06 acquisitions spreadsheet that was mentioned in MBC's story last week, "How Resales of 2003-06 Purchases Are Faring." (We've now put that spreadsheet under the "MB Market Updates" pull-down menu for easier, future reference.)

452 36th Place is a much bigger lot (full size, 2700 sq. ft.) in a much worse location, near the end of a plateau block that is plagued by its Rosecrans proximity.

On the plus side, zoning appears to allow for a couple of townhomes here.

Market watchers will recall that this listing has been offered on and off for well over a year – its debut came May 14, 2008, at $1.365m. At some point this year, a buyer emerged but failed to perform, returning the property to market in late September. (As an "Incredible Opportunity," per the listing.)

A sale came quickly this time. Closed price last week: $855k, a reality check of more than $500k off the start price last year.

Was the land 1/3rd the value of the little Ocean Blvd. home? At $316/PSF for the plateau dirt, maybe so.

Back to the plateau, we'll look at 444 33rd Place, a puzzling property if there is one up there.

The ostensibly full-size lot (~2700 sq. ft.) is oriented wide along the alley that is 33rd Place. Though the listing touted it as "perfect as a future building site," there would be some utility-pole challenges to using the lot as one might wish.

More likely, this one was valued as a cheap way into town, with a spiffy little 1930s house (2br/1ba, 900 sq. ft.) on the land, opening to a reasonable yard. No real (21st century) garage, but half the lot's good for parking.

Sale price last week: $800k. Were someone looking at the land for development, you'd see a PPSF for the dirt of $297/PSF.

Note: The MLS shows a sale price of $835k, but tax records show $800k.

We've also got another late-bubble investment gone bad here.

In May 2005, someone bought this property for $1.160m and held on for just 5 months. (Intriguingly, they bought it from a local realtor whose name is synonymous with REOs, who had held it since 2000.)

The most recent owner picked up 444 33rd Place for $1.260m – a cool $100k markup over the space of a few months, financing 90%.

A very long time ago, in April 2008, the property was offered for what seemed a rescue price of $1.299m, but that was not to be. NODs began early in 2009, and the property was slated for auction by Summer.

Though the listing was not (visibly) listed as a short sale or REO, a bank took the brunt of this loss. As to the neighboring land values, that remains to be seen.


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