Burned-out, uninhabitable structures have sold for over $1 million in Silicon Valley and San Francisco, but Berkeley buyers seem to have different standards. For one million dollars, they expect interior walls, hopefully a kitchen, possibly a bathroom, and even upgrades such as functioning plumbing and electricity.
So when a dilapidated duplex at 1418 Northside Ave. (at Hopkins) showed up on the market with a gutted interior and plywood-covered windows — and an asking price of $1,099,000 — there was no collective rush to the bank. Buyers did not line up with suitcases full of cash, as they have in Fremont, San Jose and San Francisco. The house, in the coveted Westbrae neighborhood, continues to sit vacant after almost 150 days on the market. The price, mysteriously, has not been dropped.
“Calling all investors and contractors,” the listing reads. “Berkeley Duplex with plenty of potential. Bring your imagination and make it something truly amazing. Pull your permits and start construction. Easy SF commute! Convenient location, North Berkeley BART, Google shuttle, etc. A fabulous opportunity!”
At one time, the 1,910-square-foot building had two units, each with two bedrooms and two full baths. At present, the structure is “not habitable” and “not stable,” according to the agent’s notes in the MLS listing.
Ning Sha, the property’s Green Valley Realty agent, based in Cupertino, did not return Berkeleyside’s calls or texts. Her ad suggests she also has little experience “pulling” permits from the city of Berkeley — many will testify to the fact that the process is not quite as instantaneous as the ad suggests.
According to Redfin, the property changed hands twice last year. It was first sold for $550,000 on Feb. 14, 2017, and then re-sold for $885,000 on Dec. 13, 2017. Hot as the Berkeley real estate market is, few if any Berkeley properties have doubled in price over the past 19 months. The median price for houses in the 94702 zip code is $896,500, according to Redfin. The vast majority of those houses are suitable for human habitation.
An attractive single-family house on the same block as the duplex — 1407 Northside Ave. — is asking $950,000. The house has four bedrooms, all electrified; two baths and comes in at 1,864 square feet.
“We’ve been seeing some unrealistic expectations in the market, just because people think it’s such a sellers’ market,” said agent Jodi Nishimura of Pacific Union International, who is marketing a duplex in South Berkeley. “Some sellers have an inflated idea of value, but the market is proving this Northside Avenue property is priced too high. And the rebuilding process is much more daunting than they are making it out to be.”
Nishimura is the listing agent for a renovated 2,721-square-foot duplex at 1534 Julia St., with an asking price $1,150,000. This duplex has an existing tenant with a rent-controlled lease. It features three bedrooms and one bath upstairs, and two bedrooms with one bath downstairs. It also has original wood floors, a fireplace, built-ins, a renovated kitchen and bath, and plumbing that actually works.
Nishimura said she would have priced the gutted Northside house at $799,000, as it could cost about $500,000-$600,000 to renovate the property. “If it’s re-buildable — if you don’t have to do a total tear-down — you could get the permitting and plans done in six months to a year,” she said. “If I had an investor client wanting a great location, I would take them there and try to get the price down.”
In other parts of the Bay Area, people are competing to pay over $1 million in cash for uninhabitable structures. In March, a condemned Fremont house with holes in the roof and mildew made news by selling for $1.23 million. The ad read: “Build your Dream Home, Beyond FIXER, Home is CONDEMNED, Enter at your own RISK.” That house ended up selling for about a quarter million dollars over the asking price, according to the Mercury News.
The house, which had sat vacant for years, was “totally unlivable,” according to listing agent Larry Gallegos of Better Home and Gardens, Reliance Partners. Water came in through holes in the roof, and mildew covered the ceilings. But that made no difference to prospective buyers, who planned to tear down the house and build on the roughly 9,400-square-foot lot. “They didn’t buy the house,” Gallegos told the Mercury News. “They bought the dirt.”
Apparently, Berkeley dirt contains somewhat less gold — and perhaps less silicon — than Fremont dirt.
If you despair of Bay Area housing prices, you can read about other condemned properties that sold for over $1 million. Then you can weep, or possibly consider a move to Detroit, Pittsburgh, or Portland.