patrick.net

Thanks for the info, that is interesting. How long did the planning, design, and construction take? How many hours/week did it cost you?

For the land - The Greenridge Terrace places seem to be undeveloped hilly land. So there's surely a lot of additional expense to make it usable. Otherwise people would jump on $318k for one acre. 1/4 acre scrapers in LG will go for $1m or more, so there's a reason for Greenridge not selling. Otherwise, someone would buy it, subdivide ... profit!!

Harwood is a flag lot on a semi-busy street. No house. So comparing Alan to Harwood is a little unfair. A lot of people would prefer a suboptimal house to raw land that needs a house built; it's a lot of work and time as you know. And, believe it or not, $700k for a 1600 ft in Cambrian is not out of line.

SiO2 says

How long did the planning, design, and construction take? How many hours/week did it cost you?

A long time! It was a family project which took several of us a lot of time to do. The vast majority of that however was due to the learning curve. For someone with vision, experience and contacts the labor involved in managing the project would have been much more reasonable.

Suboptimal does not describe the Alan house - it was a teardown which is why I chose it. The Alan house also backs up to Camden which is far busier than Harwood. Much more noise and traffic. The Harwood lot has a considerable setback is bigger and much more privacy. Having looked at both lots I personally prefer the Harwood lot.

As for leveling the Greenridge Terrace lots I don't believe that to be necessary. People are perfectly willing to spend outrageous amounts of money on hilly lots as buyers do in SF. Here is a $3M foreclosure on Greenridge Terrace estimated to sell for $514 sqft:

http://www.zillow.com/homedetails/16050-Greenridge-Ter-Los-Gatos-CA-95032/19747231_zpid/

So construction costs for a brand new comparable house might run $1.4M (assuming $220/sqft) and an undeveloped similar lot would be worth $413 (318*1.3). That leaves over $1M just to get it to the price of a foreclosure.

I believe land cost in San Jose is about $50-$80 per sqft.

hanera says

I believe land cost in San Jose is about $50-$80 per sqft.

At 43560 sqft/acre, $50/sqft would make an acre of undeveloped San Jose land worth at least $2.2M. We're not quite there yet!

I have to think San Jose is pricier than even the expensive places in Denver...

This house was a scrape and the selling price puts land at about $2.4 million in this area:

http://www.redfin.com/CO/Denver/558-Fillmore-St-80206/home/34097714

The one next door sold for $420, same size lot, valuing the land at about $3.36 million per acre...

http://www.zillow.com/homedetails/550-Fillmore-St-Denver-CO-80206/13328264_zpid/

It not undeveloped land, though.

This one is just a few blocks down. It hasn't sold,but they are asking $5.8m for 0.72 acres, about $8m/acre

http://www.zillow.com/homedetails/346-Milwaukee-St-Denver-CO-80206/13349098_zpid/

I bet there are a lot of places in San Jose that would fetch $2.2m/acre

New Renter says

How much is land worth anyway? Well it depends. Based on this recent sale in nearby Los Gatos of a 36 acre parcel for 2.4M such a lot could be worth as little as $20k!

http://www.redfin.com/CA/Los-Gatos/16100-Greenridge-Ter-95032/home/17494446

Yes its an outlier but here is a 1 acre parcel right next door for $317k. I’d guess with improvements a buildable ¼ acre here could cost less than $100k.

http://www.redfin.com/CA/Los-Gatos/16084-Greenridge-Ter-95032/home/23469930

its better to use pre-bubble numbers and you would find even in LG. land/home prices not so high decades prior. ... yes I think you got it right ...
it mus be at less than $100K..

swebb says

I bet there are a lot of places in San Jose that would fetch $2.2m/acre

Of course there are! Like this one I mentioned above:

New Renter says

Here is a $3M foreclosure on Greenridge Terrace estimated to sell for $514 sqft:

http://www.zillow.com/homedetails/16050-Greenridge-Ter-Los-Gatos-CA-95032/19747231_zpid/

As a regular sale it might fetch even more.

The value of the land will depend on the zoning, proximity to commerce, transport, etc.

My greater point was that buying an undeveloped lot, developing it and having even a fancy custom house built on that lot can be FAR cheaper than buying a nearby existing tear down of similar dimensions. Even still many people still pay outrageous sums of money to do just that. It takes maybe 18 months to build a house and even with a GC to do the job one might be able to save half a million to a million dollars rather than buying an existing comparable house in dubious condition.

And that's not even factoring in the property tax savings.

SiO2 says

Otherwise people would jump on $318k for one acre. 1/4 acre scrapers in LG will go for $1m or more, so there's a reason for Greenridge not selling. Otherwise, someone would buy it, subdivide ... profit!!

what was it pre-bubble ?

thomaswong.1986 says

SiO2 says

Otherwise people would jump on $318k for one acre. 1/4 acre scrapers in LG will go for $1m or more, so there's a reason for Greenridge not selling. Otherwise, someone would buy it, subdivide ... profit!!

what was it pre-bubble ?

Unfortunately, I don't have a time machine to go back and buy in 1970. That would be pretty cool though. I could outbid for Manhattan; here's $48 worth of beads and cloth, double the going rate.

New Renter says

My greater point was that buying an undeveloped lot, developing it and having even a fancy custom house built on that lot can be FAR cheaper than buying a nearby existing tear down of similar dimensions. Even still many people still pay outrageous sums of money to do just that. It takes maybe 18 months to build a house and even with a GC to do the job one might be able to save half a million to a million dollars rather than buying an existing comparable house in dubious condition.

There must be something else going on though. All over the sfba there's people buying scrapers, rebuilding, selling. So if it were that easy to make $1m then someone would do it.

New Renter says

At 43560 sqft/acre, $50/sqft would make an acre of undeveloped San Jose land worth at least $2.2M. We're not quite there yet!

In Saratoga/LG/Cupertino/MV, a 1/4 acre lot with a scraper is about $1m plus or minus. So this would be $4m per dividable acre. A non-dividable acre is less though.

In Cambrian, the land value for a 6k lot is around $400k. ($800k for an updated 1600ft house, subtract $250/ft as the OP cites). So this would put a dividable acre at 43/6 *400 = $2.8m. Not quite that high as there needs to be space for the street, but $2.2m is not out of the ballpark. Now in other parts of sj it would be less. But in west sj with cupertino schools it would be more.

And yes, denver overall is cheaper than sj. You can get a nice 6k HOUSE (not lot) with 1/3 acre in a very good nhood for around 1.5m. Maybe those who live in LG and predict lower house prices will immediately sell to some sucker and move to Denver. I'll pay $100k for a lot in LG all day long, any sellers at that price?

Denver's actually very nice and a good place to live. I know some SJers who moved there and really like it.

SiO2 says

In Cambrian, the land value for a 6k lot is around $400k.

Nope, its much less. The Harwood lot is double that size for only $525k. Sure its undeveloped but seriously, how much do you really think it would cost to develop that lot?

SiO2 says

I'll pay $100k for a lot in LG all day long, any sellers at that price?

Yes if you are willing to buy in bulk. As I pointed out 36 ACRES of nice undeveloped LG land just sold for a measly $2.4M

That's just $66k/acre or $9.2k for a 6000 sqft lot of undeveloped land.

Contact the buyer, I'm sure he'd be more than happy to sell you a 6000 sfqt chunk of that lot for $100k

Those are good figures to know. I suppose that is a high grade rebuild as opposed to mid or low grade. Wouldn't there be a lot of extra costs to build on bare land?

New Renter says

SiO2 says

In Cambrian, the land value for a 6k lot is around $400k.

Nope, its much less. The Harwood lot is double that size for only $525k. Sure its undeveloped but seriously, how much do you really think it would cost to develop that lot?

The thing is, a double-sized lot doesn't cost twice as much, unless it is subdividable. It's certainly more, but not 2x.

For example: 5160 Elrose Ave, by Harwood. 4/2 1991 ft, sold in 9/2011 for $810k. Value is probably higher now, but I wanted to check a house with recent reassessment. Assessment: Land $578k Improvements $247k.

Maybe that's a little high, but, back-calculate. This house is surely not as nice as yours, so let's say building would be $200/ft. 1991 ft * 200 = 398k. 810-398 = $412k. In the ballpark.

If the 36 acre lot were subdividable into 36x4 = 144 1/4 acre lots (maybe a little less due to streets) it would be worth much more than $3.6m. But, it's not, so it's not.

SiO2 says

If the 36 acre lot were subdividable into 36x4 = 144 1/4 acre lots (maybe a little less due to streets) it would be worth much more than $3.6m. But, it's not, so it's not.

Land Information
Present Use: Vacant
Development Status: Possible Lot Split, Possible Subdivision
Geological Survey Required
Private Road Access

MsBennet says

Those are good figures to know. I suppose that is a high grade rebuild as opposed to mid or low grade. Wouldn't there be a lot of extra costs to build on bare land?

Yes, it was a custom construction job, not tract. Granted its not a super fancy place but any fancier would have simply been cosmetic, not structural.

As to the extra costs to build on bare land yes of course, there will be some, however this job did require a fair amount of additional foundation to be laid. It also required a new reenforced garage slab and driveway which are included in the $/sqft.

Essentially the only thing we did NOT do in this build vs a virgin lot was to clear, level and pack down the lot. Perhaps someone with more experience in this area can give ballpark costs to do this.

Edit, Here is a calculator which gives an estimate of clearing a lot:

http://www.homewyse.com/services/cost_to_clear_land.html

New Renter says

A long time! It was a family project which took several of us a lot of time to do. The vast majority of that however was due to the learning curve. For someone with vision, experience and contacts the labor involved in managing the project would have been much more reasonable.

Thanks for posting the info.

Did you act as an owner-builder, or hire a GC? Did your family do most of the actual labor?

leo707 says

New Renter says

A long time! It was a family project which took several of us a lot of time to do. The vast majority of that however was due to the learning curve. For someone with vision, experience and contacts the labor involved in managing the project would have been much more reasonable.

Thanks for posting the info.

Did you act as an owner-builder, or hire a GC? Did your family do most of the actual labor?

No this was done with a GC. Our involvement was mostly coming up with the basic design (modified from the original floorplan), negotiating with the insurance company+builder, shopping for components and inspecting the work. I caught several mistakes early on which would have been very expensive to fix later. Some others I didn't but they were very minor. The negotiating was a LOT of work and was handled by far more capable family members than I

I did do some of the minor hands on work myself - wiring AV, pretreatment for termites, etc.

Here's another lot ripe for building:

http://www.redfin.com/CA/Fremont/0-E-Warren-Ave-94538/home/28461966

I'm assuming its the large vacant area right next to 680 in the warm springs area of Fremont. The proximity to the freeway does not seem to have prevented other very nice large homes from being built there. Good schools too.

I just ran across this listing. The ad claims new construction. It looks to have been a teardown of a 1920 vintage 1073 sqft shack. There are pictures on the old Zillow ad:

http://www.zillow.com/homes/-1550-MARTIN-Ave-San-Jose,-CA-95126-_rb/

The property was bought for $400k in 12/19/2012 and is now offered at $550k as a $1665 sqft house with new construction.

http://www.redfin.com/CA/San-Jose/1550-Martin-Ave-95126/home/718290

The actual selling price is to be determined BUT if the sale price is the asking price this makes for an interesting question regarding new construction

The old house in teardown shape sold for $373 sqft in late 2012. The new house is offered for LESS at $330/sqft with new construction. That's after the spike in RE prices here over 2013

What gives? Is this a tactic?

Edit - price has changed from $550k to $850k. Not a tactic, just a posting error.