2023 Real Estate Observations (Hingham: address, plans, ownership)

[gf2020]

Originally Posted by Moh1988

https://www.redfin.com/MA/Woburn/23-.../home/11821799

This is a case study of real estate in this town. A teardown place in Woburn was sold for $600k,,, was listed for $499k. Location played a major role in this unbelievable price (west side close to Lex),,, you are basically in Lex, however your kids don't have access to the school system.

A year later,,, was built and now prices at $1.7m. How much does it cost to build a house like this in 2023? $600k?

Pretty typical situation. Is there a specific concern or question?

Purchase of old property: $605,000

Demolish and remediate the old house: $20,000

Construct new 4100 sq ft house: $700,000 (it's a pretty basic house)

Driveway, landscaping, hardscape: $25,000

Closing costs, real estate commission, legal, etc.: $100,000

Total investment: $1,450,000

Potential profit: $250,000, that's less than a 18% return. Now, if the developer is also one of the building trades or can reduce their construction costs, their margin can increase. When I was building houses in northern Essex County over 20 years ago, we were making over 30% margin. I would not have done this deal.

[newenglandgal123]

Originally Posted by gf2020

Pretty typical situation. Is there a specific concern or question?

Purchase of old property: $605,000

Demolish and remediate the old house: $20,000

Construct new 4100 sq ft house: $700,000 (it's a pretty basic house)

Driveway, landscaping, hardscape: $25,000

Closing costs, real estate commission, legal, etc.: $100,000

Total investment: $1,450,000

Potential profit: $250,000, that's less than a 18% return. Now, if the developer is also one of the building trades or can reduce their construction costs, their margin can increase. When I was building houses in northern Essex County over 20 years ago, we were making over 30% margin. I would not have done this deal.

I'd consider it better than basic.....this builder actually did tile in the bathroom showers/surrounds. A lot of them just plop in those cheapo fiberglass inserts. Also, looks like there's a gas fireplace insert....most builders consider that an 'upgrade'

[Moh1988]

Originally Posted by gf2020

Pretty typical situation. Is there a specific concern or question?

Purchase of old property: $605,000

Demolish and remediate the old house: $20,000

Construct new 4100 sq ft house: $700,000 (it's a pretty basic house)

Driveway, landscaping, hardscape: $25,000

Closing costs, real estate commission, legal, etc.: $100,000

Total investment: $1,450,000

Potential profit: $250,000, that's less than a 18% return. Now, if the developer is also one of the building trades or can reduce their construction costs, their margin can increase. When I was building houses in northern Essex County over 20 years ago, we were making over 30% margin. I would not have done this deal.

Thanks for the breakdown,,, I personally don't know anything about building costs.
$250k profit is good in my book,,, I work 9-5 for a whole year, and I cant come up with this kind of money.

I posted this because I thought the teardown price is out of this world, and pretty much explains how it's becoming more and more difficult for 1st-time owners to purchase in this state (those who are working in Cambridge/Boston)

[newenglandgal123]

https://www.zillow.com/homedetails/1...6641307_zpid/?
Purchased in 2021 for $425K. Sounds like someone bought it w/the intention of flipping then stopped midstream for some reason and is now trying to sell it at $75K more for a gutted house.

[yesmaybe]

Originally Posted by newenglandgal123

https://www.zillow.com/homedetails/1...6641307_zpid/?
Purchased in 2021 for $425K. Sounds like someone bought it w/the intention of flipping then stopped midstream for some reason and is now trying to sell it at $75K more for a gutted house.

There's some LLC shenanigans when looking at the public records. Buyer bought the place, then "sold" it to an LLC they controlled for $1, then "sold" it to another LLC they controlled for 425k in 2022.

The Redfin listing mentions that they didn't get the proper permits to demo. I'm guessing the LLC shenanigans are related.

[matrix5k]

Originally Posted by Moh1988

Thanks for the breakdown,,, I personally don't know anything about building costs.
$250k profit is good in my book,,, I work 9-5 for a whole year, and I cant come up with this kind of money.

I posted this because I thought the teardown price is out of this world, and pretty much explains how it's becoming more and more difficult for 1st-time owners to purchase in this state (those who are working in Cambridge/Boston)

Isn't the 250k split up among multiple people though? Still seems risky to do this.

[robr2]

Originally Posted by Moh1988

https://www.redfin.com/MA/Woburn/23-.../home/11821799

This is a case study of real estate in this town. A teardown place in Woburn was sold for $600k,,, was listed for $499k. Location played a major role in this unbelievable price (west side close to Lex),,, you are basically in Lex, however your kids don't have access to the school system.

A year later,,, was built and now prices at $1.7m. How much does it cost to build a house like this in 2023? $600k?

Figure that house at about $350/sq. ft. Including the land. Money was spent the 5 burner stove and quartz countertops. Hardware is pretty cheap - stainless pulls and Schlage locks. Tile is basic - just lots of it - and probably bought in bulk.

[robr2]

Originally Posted by Moh1988

I did indeed! Hopefully, it's looking better now after two months of rainy weather
The owners will be referred to as "the aliens" by the OGs of the neighborhood!

Give it 2-3 years and that street will look completely different.

[newenglandgal123]

Wow, almost $500K over list for this?! $2M, 1845 built cottage in need of a refresh on a solid double yellow road in Hingham. Does the fact that it is within walking distance to downtown and the commuter boat make it worth it?! I guess to someone it did! https://www.realtor.com/realestatean...3_M32149-61762

[jayrandom]

My wife got a random text today from what seems like a REA looking for "the owner of (my address)". The only thing I can think is that there is still a major inventory shortage and agents are getting increasingly desperate.