Style matters.

Today, we learn a quick lesson: style matters.  Size doesn't.  And what better example of that than our famed Lunada Bay McMansion (See this post).  Remember this home, which I wrote extensively about, was listed initially for $3.8M>  It was then reduced to $2.9M, then de-listed, then relisted at $3.3M, then reduced to $3.0M, then reduced again to $2.949, and yesterday, reduced again to $2.799M.

(Source: MLS)


If we do some quick math, assuming this property sells for asking, after the 6% realtor fees, Mulligan and Co. will net $2.63M.  Recall from my previous entries that Mulligan bought the vacant lot for $1.5M in September 2010.  Netting out the land cost, this leaves Mulligan with approximately $1.13M.  The house, which spans 5,576sf, cost in the neighborhood of $1.1-1.2M to build (based on average construction costs in the South Bay of $200/ft).  Thus, my guess is that the developer just wants to unload it as quickly as possible so he can free up capital for the house he's building right in front of it.  That house is below:

(Source: NJC)

So what is the lesson learned here? That style matters.  Building a massive tasteless home,where the siting of the house is off, makes absolutely no sense.  Had Mulligan focused more on the architecture of the home, the siting of the home and spent the incremental dollars to make the house feel more authentic and timeless, this home would have sold long ago at much more than the $500/sf it is currently listed at.  What never ceases to amaze me is how little importance developers place on architecture.  It matters guys. A lot. 

In an equally unsurprising update, Mulligan's other Lunada Bay listing on Chelsea Rd was recently taken off the market, site unsold.  Could have been leased, but more than likely it will re-debut again in a couple of weeks ahead of the summer.