Pretend you are a developer. You buy a perfectly nice house on a nice piece of land for $870,000. Then you knock it down. When you can't get what you want (townhouses galore on the demolished property), you sell the same property, minus the house, for $1.195 mil.
That's exactly what Desmond Neill has decided to do, as a result of the emergency downzoning order we told you about here. Will the 1/2 acre lot -- what one commenter describes here as now a "mud puddle on North Mountain" -- fetch that kind of cash?
Here are some comps. A smaller lot off Grove Street on Mount Vernon Road sold for $335,000; a new house is being built on the site and is for sale now for just slightly over a million.
A lot sized 1.3 acres, located at 354 Orange Road, sold for 1,200,000 in July.
Here's what others think about Neill's latest move, including realtor Roberta Baldwin...
From the Star Ledger:
"I don't know, like $325,000," Roberta Baldwin, a Montclair real-estate agent, said when first asked to guess the asking price. When told the figure, she considered the scarcity. "There are so few lots for sale. ... So really, it's up for grabs, but will they (buyers) come?"Baldwin, who works with Montclair's ReMax Village Square Realtors, said there are some mansions nearby but that the locale is not ideal.
"It's a wonderful in-town location, but it's not a gorgeous, a Fairway or Estate location where you'd be building a very large and elegant home," she said. Still, she said, there's positives. "That part of North Mountain is very sweet."
One lot Baldwin recalls for sale was on Lorraine Ave. It went for $425,400; a new house built on that lot sold for $1.5 mil.
A general rule of thumb for developers is that the price of the land should not exceed 1/3 or the combined selling price of the new structures put on the land. Even if the lot were subdivided for 2 single family residences, a builder would have to put up 2 $1.8mm homes to justify the cost of the land. It doesn't seem like the economics would work on this particular lot.