SAN JOSE — What can $800,000 get you in the Bay Area’s red-hot housing market?
In San Jose’s desirable Willow Glen neighborhood, that sum will land you a tiny, burned-out shell of a home. Unless, of course, the property follows the current trend by selling for over the listing price.
The owner of the 1,066 square-foot home on Bird Avenue, which was all but destroyed in a fire two years ago, listed the property for sale at midnight Thursday for $799,000. For some, the price tag has come to symbolize the runaway property values that are making it increasingly difficult for Silicon Valley renters and new arrivals to afford a home here. But local real estate agents say in this market, there’s nothing extraordinary about the price.
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“It’s a great location,” said Holly Barr of the Sereno Group, the realtor who is selling the property. “It’s an easy commute. There’s a great downtown, walkability, people with kids and their dogs and tree-lined streets. It’s where people want to be.”
Several houses on that street have sold for $1.6 million, and Zillow estimates the home’s worth as more than $1 million. The home is about a mile from the area where Google plans to build a new campus.
“As crazy as it sounds, I’m not surprised by it,” realtor John Espinosa of Morgan Hill-based Heritage Realty Group said of the price tag. “It’s probably what I would do as well if I was listing that property.”
Barr posted a photo of the burned house and its price on the Willow Glen Charm Facebook page Monday night, sparking a quick response from shocked observers. The post has been shared nearly 1,000 times, and Barr says about 20 people have contacted her so far to express interest in the property. She called the response “overwhelming.”
The value is in the 5,850-square-foot lot, Barr said, where the buyer could tear down the damaged building and build his or her dream house.
A look back in time using Google Street View, which shows the home before it caught fire, reveals its potential. The image shows a small cottage shaded by trees and bordered by a white picket fence.
Despite the ruined condition of the house, the property presents a great opportunity, Espinosa said. A developer likely can save money by taking advantage of existing sewer, water and power hookups to the burned house, he said.
Rick Smith, former president of the Santa Clara County Association of Realtors, agrees.
“It’s not an issue of if it will sell,” he said, “it’s a matter of how much over the asking price.”
A developer might spend $500,000 building a new house on that lot, plus an extra $15,000 or $20,000 demolishing the old house and hauling away the pieces, Smith said. If the rebuilt house sells for $1.6 million, that’s about a $300,000 profit.
Smith recently listed a similar uninhabitable property in San Francisco for $399,000 — the plumbing didn’t work, and visitors risked plunging through the floor if they stepped on a certain spot in the bathroom. That home received 23 all-cash offers, and ultimately sold for $565,000, Smith said.
The Bird Avenue home likely will see cash offers as well, he said, because many lenders won’t put money up for such severely damaged homes.
But just because paying $800,000 or more for the remains of a home has become the new normal in Silicon Valley, doesn’t mean it’s not a jaw-dropping sum elsewhere, Espinosa said.
“Anybody who is coming from another state and sees what we here in the Bay Area are paying for homes,” he said, “it’s just insane.”
Published at Thu, 12 Apr 2018 13:20:59 +0000