A fire-damaged home in Walnut Creek, California, sold for precisely $1 million on Thursday.
The accepted offer came significantly over listing price. The two-story, four-bedroom initially listed for $850,000 and immediately incurred a bidding war as well as the attention of perplexed onlookers. The deal closed Thursday.
The realtor who sold it, Melinda Byrne with the firm Key Realty, tells CNBC that while California may be an anomaly compared to the rest of the country’s real estate, this particular home sale was nothing out of the ordinary.
“I was really surprised at all the hoopla this has caused because to me, it’s a great listing,” Byrne said, referring to local reports circulating the listing. “We sell homes that are fixer-uppers, regularly.”
Byrne said nearly 100 interested parties contacted her in a three-day period. She received eight offers within those three days and by the time they landed on a buyer, five more made offers in case the selected ones didn’t work out.
The sale comes amid a broader countrywide housing cool-off. Home sales in June dropped to their lowest level since April 2020, as construction costs have forced homebuilders to focus on the high end of the market, leaving much of the demand for cheaper homes unsatisfied.
Byrne said though the house is damaged, with the garage, laundry and family room are all gone, the bones are still there. Experienced flippers can skip the tear-down and re-build within six months, she said.
“You see the wiring, you see what’s behind the walls,” she said. “You see everything you get with this one.”
Byrne said the buyer is an experienced investor who will re-do the house and put it back on the market — likely, for an even higher price.
Most home flippers have their own team of contractors, architects and designers, meaning they don’t have to wait as long for the construction lags as the rest of regular home buyers, she said. For these types of buyers, they can get a renovation done in four to six months.
Suburban flight
Single-family homes in the suburbs around San Francisco Bay Area and surrounding cities are selling for hundreds of thousands of dollars over list price, often triggering bidding wars with all-cash offers.
Walnut Creek is one of the San Francisco Bay Area suburban neighborhoods where demand skyrocketed amid the Covid-19 pandemic as residents looked to move out of dense urban areas and into homes with more space. The average price for a home sold has risen more than 20% from last year, according to data by Byrne’s real estate firm.
Walnut Creek is less than an hour’s commute from San Francisco, and is also known for some of the area’s best schools and walking distance to both trails and shopping and dining and equestrian activities.
“You get a sense you’re away from the hustle and bustle but urban enough to feel like you’re not out in the boondocks,” Byrne said.