Friday, June 20, 2008

833 Locust Avenue - $549,900.00

MLS #454312

5 Bedrooms, 2 Bathrooms
Sq. Ft.: 2,200
Acre: .49
Year Built: 1928

This nice brick Colonial on a double lot in a good neighborhood went on the market June 15. The listing says there's a "newly finished terrace level, new gas furnace, cac, electrical and plumbing."

Real C'ville
ran right out to look. We wanted to see what a HALF MILLION DOLLARS for 833 Locust Avenue looks like, as compared to the Half Mil Askings over at 702 Belmont and 1316 Oxford Place.

When we did our homework, however, we got dizzy. These sales numbers for 833 Locust Avenue are recorded online:

1997: $123,000

2000: $187,500
= a difference from yr. 1997 of $64,000
increase of 52%

2005: $420,000
= a difference from yr. 2000 of $232,500
increase of 124%

Between 1997 and 2005--eight years--833 Locust Avenue gained 241% in "value."

That the OFHEO had already declared Charlottesville overvalued by 25% in 2004 is entirely irrelevant here.

The Asking Price is 30% over previous sale. Even with the "new" this and that in the listing, our eyebrows are raised. So Real C'ville is wondering: Were robot maids installed? Or was our other fave home improvement added, 18K bathroom fixtures?

Hello? Has anybody connected with 833 Locust Avenue picked up a newspaper, surfed the 'net, flicked on the cable in the past year? It's 2008. We're particularly intrigued, given the identity of the Current Owners.

Though maybe the asking is savvy: this is the kind of house the "foreign money" goes for--the New Yorkers--when they're not slummin' over in Belmont.

Tell Real C'ville what we're missing here.


Montpellier said...

This property has been on and off the market intermittently over the past 8 years. At one point the pricing was over $500k, so I think the $420k was a concession to reality.

The thing about this house is: that's a big lot, inside the city; access to 250 is very good. The house is OK on size - not as large as people are accustomed to out in sprawl-land - but the kicker is the single bath - that hurts. Moreover, the advantages of a smaller house - energy efficiency - are probably offset by the baseboard hot water (truly wonderful heat) and the windows.

I suspect that while they'll not get asking, they won't revert to the 2000 price. At a minimum, they'll have to pull it down below FHA conforming, which is $417k for our MSA, iirc, as the expense of Jumbos goes up. But, that is around 2004 pricing. Much as I find most REALTOR spewings to be so much sales-babbling, location does make a difference, and in this case, it will make price stickier. Compare with the gas you'll spend driving in from Zion's Crossroads, and that energy efficiency isn't as troubling. Build quality is likely significantly better, but I'd still want a real engineer (not that other bubble-parasite - the "home inspector") do check things structurally.

Anyway - that's my guess and take on this house. I don't think it's nearly as bubblicious as some of the other examples you've cited.

Sebastian said...

montpellier sez,

"I don't think it's nearly as bubblicious as some of the other examples you've cited."

I agree it's a nicer house/lot/loc than some of the other bubblers on the blog...but the numbers, and the # of buyers, are a PERFECT EXAMPLE of the bubble that has gripped C'ville AND the US in recent years. INSANE.

Anonymous said...

Overpriced by a little, but Montpellier confuses me a tad.
"Moreover, the advantages of a smaller house - energy efficiency - are probably offset by the baseboard hot water"
Hot water radiator heat is some of the most efficient heating there is. That house has a new Buderus boiler that acts as an indirect fired hot water heater as well. You can't find a more efficient system, or one that will last longer. Most hydronics guys will tell you that thing will go 50 years without stopping. Price tag on the boiler alone is $13,000.

As for the huge jump in price.. the house was renovated, and yes, prices tend to go up when you spend a hundred grand making something better... That is the idea on making improvements.

That said, the price is higher than they will get, but it is not an obscene overpricing like some of the other homes you have picked on. It's actually a very cool house (one upstairs bath pretty much sucks though.) Ceiling height in the basement is low. But the big offsets are off street parking, location in relation to the downtown mall, and the absolutely huge lot. You need to stop by to actually see the lot. Few downtowners have it this good.

Montpellier said...

anonymous - I have hot water hydronic in the city - and I'm very familiar with it's operating efficiencies!

I do see, looking up Buderus' ratings, that one of their models does provide 95%AFUE rating - which is up there with the best forced-hot-air furnaces. However, the majority of their models offer 81-84%AFUE. Generally speaking, most hydronic boilers don't exceed 85%AFUE.

None of that addresses the apparent lack of thermal (or storm) windows - I don't know if the walls were re-insulated. If I were buying this house, I'd want to get a look at a year's-worth of utility bills - I suspect they are higher than for a comparable house heated with forced air and built post-war-II.

All that said: I think hydronic is awesome, and this is a feature which does make the house desirable. The systems do last forever.

Historically, just fixing the existing home does not increase the value. Several studies have been done showing that beyond fresh paint and kitchen appliances, most renovations do not add as much to the sale price as they cost. Renovations are typically money losers. During the bubble, that was a bit different.

Matt said...

all the talk of radiators is interesting...but off the point just a tad.

this house never should have soared this much in value.

sure, it's within one mile of the downtown mall and it has a large lot, which will be an asset in the coming months (years) when food prices continue to rise and the new owners need to grow their own fruit veggies...

but the bubble issue remains: it's a $220K house that's now being listed for $550k.

this is the reality, but it's still idiotic.

it's a completely fake valuation, and the new buyer will probably have a similarly fake transaction: 5% down and a creative mortgage (yes you can still do that with jumbos) and the bubble continues floating....