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Why this Mid-Century Fix won't Flip
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Sounds like any Modernist's dream come true, right? So why has it been sitting on the market for 6 months?
THE HISTORY
This home sold in February of 2004 for $310,000. It was acquired by an agent/investor who went in and replaced all the wiring, plumbing and HVAC, along with the kitchens and bathrooms. Basically it was gutted.
It came back onto the market in October of 2005 and I was anxious to see how they had brought this gem into the 21st century.
THE REVEAL
From the outside, things looked promising. The trees had been shaped, the bushes pruned so more of the exterior could be seen. I braced myself as I stepped up to the courtyard gate, believing there was a good chance I would fall in love with the home and only be able to covet it from afar...
As I stepped into the courtyard, I was immediately taken with the glass....nothing but walls of glass on 3 sides. I could see into the main living/dining areas and the master bedroom (making me think my housekeeping skills would be put to the test in a home like this)
Yes, everything has been updated (with the exception of maybe the original fireplace.)
THE PROBLEM
Clearly the investor had gone with the "traditional fix & flip wisdom" which says keep things neutral and generic to appeal to the most buyers. The walls are beige and the ceiling white (sloppily painted I might add.) The humdrum oak floors don't compliment the woodwork or fireplace.
And the kitchen...when I walked into it, my first thought was "I could be standing in any 2005 mcmansion, bleh!"
THE RESULT
Clearly this is not a "traditional home" designed to cater to a mass audience and the "traditional wisdom" does not apply. Beige walls and Home Depot cabinets are not what a potential buyer expects to see in this type of home.
When this home came back on the market in October of 2005 it was priced at @ $745K. A price that was beyond ambitious in the current market. After two weeks the price dropped to $649K. Now it has just dropped to $565K.
Once a home has been on the market for more than 3 months, most agents will overlook it, assuming either a) there must be something wrong with it, or b) the seller has unrealistic expectations.
THE LESSON
As one of my purist clients put it... "It's a shame that this redo will have to be redone!"
Unfortunately, I see this quite often in architecturally unique homes. Investors are wearing dollar sign blinders and don't take the time to understand their market.
More information on this property.Other Modern Homes for Sale
I have shown this property to clients several times and they all generally concurr with Shannon's assessment: Its a shame that they lost some of the MCM character that makes this home special.
However, it has been completely upgraded with all new double paned windows (lots), plumbing, electrical, heating and air conditioning, and insulation (most AA homes have none). These improvements alone probably cost the seller over $150K. So, clearly the starting price of $745K was just a pipe dream - the neighborhood does not justify such a price even if someone was willing to pay it. The current asking price of $565,000 is more realistic and within the recent trend of homes selling in the neighborhood for $250-$300 per square foot.
It still is a wonderful modern home and worth seeing.
Craig Mayer
Mile Hi Modern
Distinctive Properties Ltd.
303-316-2161
craig@milehimodern.com
The kitchen could probably be revived with a cabinet door job. The bathroom is sort of mcmansiony too, but they could have ruined much worse than they did.
It flipped, but I don't think the investor would call it a resounding success.
After being on the market for 8 months, selling for $210K less than the asking price, paying at least $16,000 in commissions and carrying costs from February of 2004, I don't think they turned a profit.
Yes, this house's architectural features make it very difficult to ruin, but I hope there is a lesson here for would be investors to take a different approach with unique homes and learn a little more about their market.
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