What's Up with 864 12th Ct.?

By Dave Fratello | March 23rd, 2007
MBC notes a new listing today that is a frequent flier on the MLS.

Charming house, quiet Tree Section location, and already bought & sold three times in less than five years.

The sellers are hoping you'll pay $1.549m for this 3br/2ba, 1,500 sq. ft. cottage. They sort of need that price or close to it, since they paid $1.469m in August 2005 – at the peak of the boom.

Before that, the house sold in August 2004 for $1.150m, and for $850k in August 2002.

This house is like a metaphor for the flipping madness of 2001-05.

Did the house really become $620,000 more valuable in those three years (Aug. '02-Aug. '05)?!? The record says yes – that's what the market would bear.

Two sellers each gained $300,000 as the reward for holding the property 1-2 years. (And who knows what profits went to the folks who sold it for $850k in 2002... they were probably thinking the madness was due to end soon.)

Now, is the house worth $700,000 more today than it was in August 2002? That's a big question.

The listing touts extensive remodeling:
The home has been totally remodeled with new windows with plantation shutters, recessed lighting, crown molding, wainscoating, hardwood floors and new carpeting. The kitchen is remodeled with stainless appliances and breakfast bar.
But who do you suppose did that work? The current sellers have had the house for 18 months. If they paid for all that, then a sale near $1.5m could leave them at a deficit. They have to pay Realtor commissions and capital gains tax, because they didn't hang around for 2 full years.

MBC would bet that the expensive work was done before Aug. 2005, when these folks moved in. Those were some smart flippers back before. If the work was done by the '02-'04 owners, they even got their $300k tax-free because they held the property 4 days longer than 2 years. Congrats!

But these sellers now really need their price, and will probably hold out a while insisting on their price if they don't get a quick sale. Anything could happen... we'll watch.

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