A new real estate trend has made its way to the Bay area. Buyers across the country are spending millions of dollars on luxury homes, just to tear them down.
Perhaps the most expensive teardown in the surrounding area took place this month when a nearly 7,000-square-foot home in Culbreath Isles, overlooking the Bay, was torn down for a whopping $4.5 million.
“I think this is a pretty big trend,” said Martha Thorn, a local Coldwell Banker agent. “I have six that I can verify (as teardown’s),” Thorn continued, clarifying that one of those teardowns was a $1.2-million home on Clearwater Bay.
The increasing price of luxury homes seems to be the driving force behind this unique teardown movement, according to Thorn. Rather than buying the homes of their dreams for $6 million or more—the going rate for several Tampa area homes this year—buyers are opting to purchase somewhat older luxury homes, with enough property space and in the neighborhoods they like, tearing them down, and starting from scratch. This allows buyers to get exactly what they want for under the market price.
“They just want to build their own thing,” Thorn added.
These teardown homes tend to be outdated and some rundown, but the location draws in wealthy buyers. Such was the case for the more than 1,600-square-foot Mease family home overlooking the St. Joseph Sound in Dunedin. Sitting on a double lot on a picturesque street, the house was in need of some TLC; it made the perfect candidate for a teardown.
“It was meant for someone who wanted to build a dream waterfront house and live in Dunedin,” Peggy Mateer, realtor for the Coastal Properties Group, said. “There’s a beautiful view there, and everybody is charmed with Dunedin at the moment.“
The Dunedin home sold for $2 million to a pair of Northern natives, who planned to tear down the home and build a more modern, tropical dwelling.
Another contributing factor to the teardown movement is Florida’s “50 percent rule.” This rule limits the dollar amount that can be spent on improving homes in flood-prone areas to half of a home’s assessed value. This budget is typically not enough to make all of the needed, not to mention desired, improvements to an outdated luxury home.
“If you’re paying $2 million for a lot, obviously you’re going to put a lot into the bricks and mortar,” Mateer said.
Realtors have made their best attempts at assessing the teardown trend, but some high-end buyers are defying logic by tearing down million-dollar listings already in beautiful condition. The best explanation is that buyers like something about the property, but maybe not the homes themselves. For more information, [Click Here].