The neighborhood I live in is a sizzling-hot real estate market. When a house is put up for sale there, it’s usually sold before the week is over—for substantially more than the asking price. According to The Wall Street Journal, home prices in my ZIP code have jumped more than 30 percent in the last year alone. No doubt about it, it’s been a great time to sell in my little corner of the world—except for one house that has been on the market for several months now.
The house has a good location, close to transportation and shopping. It looks like most of the houses in the neighborhood, at least on the outside. The streets are lined with cute little brick Cape Cods with welcoming front porches, circa 1930, that match this one exactly. What’s really surprising about this house, though, is its interior—it’s fabulous. (OK, call me nosy. I admit to cruising local open houses, but it’s just professional curiosity. Really.)
This house has been retrofitted with stuff they never dreamed about in 1930. It’s got a great, new kitchen with lots of marble and stainless steel. A home office/media room has been added. And the attic has been transformed into a big, skylighted master suite with plenty of closets. The very cool master bath includes a whirlpool tub; a separate glass-enclosed shower; and a trendy, blue glass vessel sink. To top it all off, the house has been wired for whole-house audio. And yet the house languishes on the market while lesser ones get snapped up in a weekend. What gives?
My best guess is that this is a case of not knowing the market. The owner (a very talented carpenter) clearly remodeled the house to suit his own needs. But he must have thought future buyers would share his readiness to spend money on extras that make his small house the most expensive for its size in the neighborhood. In fact, the price of this house has pitted it against bigger houses in a more prestigious section of the ZIP code. This is an easy trap to fall into, and one many custom builders are snared by when they venture into building a spec house. And that is my point in telling you about a small house for sale in an obscure neighborhood near Washington, D.C.
If you’re going to build a spec house, you’ve got to put aside your own ideas about what you personally would like in a house. You have to do your homework. That means researching your market by talking with real estate agents, checking out the competition, surveying past customers, whatever it takes to find out what buyers in your area and price range are willing to pay for. If you don’t go into the design phase of the project armed with that objective information, you’re not just building a spec house, you’re speculating. You’re gambling that the buyers you want to attract will be exactly like you. And you may end up like my neighbor, living in your house when it should be long sold.
