7-bedroom house in San Jose sells for $700K
A 7-bedroom property at 2161 Elliott Street in San Jose sold for $700,000. Photo credit: Robert Gosalvez and Rouzbeh Mokhtari of Compass via Zillow.
SAN JOSE, Calif. - Land is California's new gold, and the rush for a piece of it online might raise eyebrows when browsing the real estate listings.
This month, a seven-bed, two-bathroom home on a 4,000 square-foot lot is on the market for nearly $700,000 in San Jose's Burbank Neighborhood. It may sound like a bargain, but that's because the home has been condemned by Santa Clara County -- unsafe to live in by government standards. And while its multiple kitchens, exterior staircase and neon teal paint job amused locals online, realtors say it's not nearly the most expensive condemned home one can find in Silicon Valley. Rather, it's just an example of how hot the market has become for investors looking for land value in one of California's most expensive and housing-strapped locales.
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"You're basically thinking of land value at this point," Robert Gosalvez, the real estate listing agent, told San Jose Spotlight. "What's the cost of rebuilding? How big can I rebuild? How many units?"
The price doesn't surprise Tammie Peters, a Los Gatos real estate agent.
"Honestly, that's not high for a condemned home," Peters told San Jose Spotlight. "It's just in the numbers. Many years ago homes were selling for $700,000 -- in decent shape."
The home at 2161 Elliott St. appears to have a buyer.
"We can't disclose the final price yet, but did get three offers above the asking price. We're due to close on the sale next week," Gosalvez said. "It was kind of a mixed conversation of buyers hoping they could remodel or rent out, but in the end, it looks like it's going to need the help from a general contractor."
Condemned home purchases can't be financed with loans.
"There were a number of violations that needed to be addressed to make it habitable," Gosalvez said.
Gosalvez said one could easily find condemned homes going for up to $2 million if surrounded by $3 million or $4 million homes in more expensive neighborhoods a couple of miles away.
"It just shows the demand of the Bay Area," he told San Jose Spotlight. "It's just the number of people that want to buy into Silicon Valley versus the people that want to leave. It shows what people really want at the end of the day -- nice weather, good schools, parks, colleges nearby."
The U.S. News and World Report ranking for the 25 best places to live puts San Jose in the No. 4 spot. The ranking is based on a wide range of factors according to the report's methodology, including resident well-being and the job market.
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San Jose has been mulling over ways to add to the city's housing stock and has keyed into streamlining the approval process for property owners to build accessory dwelling units, also known as granny flats.
The city has 23 pre-approved construction contractors to help residents fast track approvals within an estimated three months after submission. The projects must start construction within 12 months of approval, or the permit will expire. City officials say less than 1% of permits expire.
San Jose's program has seen roughly 1,400 backyard homes built in the last five years -- representing about 23% of San Jose's new housing stock over that time frame, Mayor Matt Mahan said in a letter to county supervisors.
"With the new ADU options, someone could very well put two of them on the property," Peters told San Jose Spotlight. "Land is the new gold rush. We're not making any more of it."