Compare and contrast, a tale of two homes.
920 Donald is a brand new spec home, never lived in just completed by a contractor this summer on newly created lot at the corner of the Donald and Ridge Road. It is a small lot, and the home lacks curb appeal but the home really packs a nice punch inside, with new granite counters, open floor plan, and nice finishing touches that make very good use of the 1480 square foot three bedroom ranch styling. A new privacy fence helps mitigate the busy corner lot. Now, this home has been on the market for 60 days, and the original list price was $319,000. Now priced under $300,000 it is a far better value than just about everything else seen this year under $300,000. I think the reason it has not sold has to do with the busy corner lot. There is quite a bit of street noise coming from Ridge Road. We will just have to see how much this sells for.
But here is the ultimate market test of value. Just one vacant lot away, here is a 1966 fixer that has a lots of differed maintenance, a shabby appearance, and a garage that was converted into a an extra room with very poor workmanship. Siding, roof, and all the fixtures and appliances need attention. It is rental, and so it is not uninhabitable, but it needs paint, carpet, floor coverings, doors, windows… in sort, it needs a total rehabilitation. The good aspect of this house is the lot size is quite large, just under 1/2 acre, and it sits back off the main street so there is little or no impact from traffic. It is questionable whether this home would qualify for conventional financing.
So here is the question: if you can’t sell a brand new, never lived in, nicely appointed home for $300,000, how much money would have to put into this home if you paid the asking price of $239,000 to get it up to the same condition as the home next door, and what would it be worth when the remodeling was done? Clearly, an investor could not expect the home to sell for more than $300,000, and it surely looks like it would at least $60,000 to get the home back into near new condition. Does the price of $239,000 make sense here? That is exactly what buyers will determine over the next 60 to 90 days. Before Christmas I will give you a report on this head to head battle for the hearts and pocketbooks of buyers.