Sereno Group
In another sign of a surging real estate market, a house that’s a complete teardown in San Jose, Calif., is poised to sell for nearly $1 million.
A fire-gutted home in San Jose’s desirable Willow Glen neighborhood, was listed for $800,000, local news outlet KTVU reported earlier this week. Since then, the property has already received one offer for more than the asking price, and the deadline for offers is Monday, said Holly Barr, the Realtor marketing the listing.
The 1,066-square-foot house, which was built in 1976, is a detached studio with only one bathroom, according to the listing. It was badly burned two years ago, and interested buyers are not allowed to tour the inside of the property. In reality, buyers would not be purchasing the property, so much as the land it sits on.
The unusual-sounding “fire sale” is not necessarily out of line in the pricey San Jose market, said Realtor.com’s chief economist Danielle Hale. “We talk about the value of a home being in its location. There are some things you can change, you can tear it down or rehab it,” Hale said. “But there are things you can’t change: being close to a thriving local economy and a strong job markets.”
San Jose, the largest city in Silicon Valley, boasts a 3% unemployment rate, notably lower than the national average of 4.1%. The 5,800-square-foot property is close to amenities including the downtown shopping district, freeways and light rail transit. It’s also near Google’s planned village, a massive office, research, and retail development that could accommodate between 15,000 and 20,000 employees. “It’s a great neighborhood,” Barr said.
San Jose is one of the most competitive housing markets in the country — the median home price increased 33% over the past year, the highest increase of any metro area with more than 250,000 people nationwide, according to real-estate analytics firm Attom Data Solutions.
But situations like these may become more common across the country. This spring is shaping up to be the most competitive home-buying season since before the Great Recession. Two in five buyers searching for homes today have been on the hunt for more than seven months, according to a recent Realtor.com survey of 1,000 active buyers.
Consequently, buyers are willing to go the extra mile in search of a deal. For instance, 42% said they checked real-estate listing websites on a daily basis, while 26% were prepared to submit an offer above asking price, according to the Realtor.com survey. (Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.).
For a home like this one in San Jose, even if a buyer were to make an offer that was $100,000 above asking, they could be getting a discount. The median list price in San Jose is $1.24 million. Indeed, Barr said that houses in the area surrounding this listing have sold for as much as $1.4 million and then torn down.