Tuesday, October 30, 2007

1980s specs

The big push up in "lot value" prices north of Montana in the latter 1980s was from spec builders. Paul Zahler was especially well known for these. Their new houses sold for $1.5-1.7M, for 2 stories, ~4,000 SF, but not the opulence of new houses of the last decade. Ballpark price of these houses from the 1980s now would be over $3M, as opposed to $4-5M for current new houses.

A good example, and one of the last of that cycle, is 330 10th. It's tear-down sold in 8/88 for $785K. The new house (photo), is 4,558 SF, 4 bed / 5 bath, sold 8/90 for $1,572K as the market had already turned down.

It all came to a halt in the 1990s. Jeff Mandel, developer of 330 10th, was too leveraged at the wrong time and reportedly went broke. With no new-construction demand, prices of tear-downs fell 25%, and didn't recover for a decade.

No comments: