Is the market really going south?

#519 in a series of true experiences in real estate
August 2006, Hills Newspapers

Not long ago Anet and I went to see a new Berkeley listing, a large house priced at just under $1.5 million. We didn’t have a buyer for the house but we like the area streets, the architecture of houses there, most of them built around 1920. We wanted to see what this one looked like.

The house sits on an upslope with a single garage at street level. From there steps rise, maybe 40 of them, to a concrete path and then to a side entrance. Behind the house is a gently sloping, unexpectedly deep garden.

Even today one-and-a-half-million is a fair amount of money for a house. We were expecting, hoping for a treat, which we did get. A lovely old stuccoed house with original woodwork, hardware and most lighting intact, appearing to be in excellent condition and refurbished from top to bottom.

In fact, according to the handout, it even had a new foundation. The exterior painting was new, too, and as we went from floor to floor, room to room, it was obvious that all of the interior painting had just been done anew. Clean, good colors; good job, not sloppy or skimpy.

We walked down to the lower level and saw a new, large ceramic tile bathroom with oversized glass-walled shower and that is when we began to wonder just how much money had very recently been spent on this house.

How much had it cost to make the house ready to sell? What had it looked like before? Would the owner make the money back?

No one was living in the house when we saw it but the staging was extensive. Three full floors, many bedrooms, all with beds and other furniture in them. Living, family, dining, dens and several full and partial baths. Patio and porch, too, all furnished and accessorized.

The staging alone had to have been expensive it consisted of so many different pieces each of which had been carried up the front steps. Probably other work had been made more costly by the site. Exterior painting certainly, and the foundation, maybe roofing and tree trimming too.

We don’t know any of the story of this house, don’t know who has come home there or for how many years, or what was done at what time. Maybe the owner remodeled the kitchen and replaced the foundation, as well as electricity and plumbing, in past years while living there. But certainly everything looked pristine.

Most sellers do some prep before selling, sometimes extensive, but often not. There are so many variables to be considered: time available to have work done and what the work will cost. Will the value of the house go up enough to make doing the work worthwhile? Who will do the design and colors, select materials to be used?

Some sellers are proud and protective of what they have and cannot contemplate any changes. Others voice despair that their houses are outmoded but are sure that the new owners will want their own style.

For most sellers though spending a moderate amount of time and money to solve smallish problems and to make their houses fresh and appealing makes excellent sense. And most of the time, the money comes back in a higher sale price.

There is too a good feeling that goes with passing along a house honorably. The owner has loved and cared for the house and he takes pleasure in offering it to the next caretaker clean and well dressed. Perhaps this was the case for the owner of the house we saw that day.

We mentally added up the cost for the current looks of the house. We thought at least $100,000, depending on which and how many systems were included. Interesting, we said to one another, that the owner felt it was worthwhile to spend so much.

Well, you know what? The sale recently closed on that house. It sold for a little over $1.8M. An overbid of about $350,000. You know how the newspapers keep telling us that the market has gone south?

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