The short answer to whether it pays to have the best house in a popular neighborhood? It depends.
The question was prompted by an unusual Cedar Hills listing that hit the market just 11 days ago. Financed and newly built by a small development company in the area, the house has luxury features and finishes and over 3600 square feet, occupies a 0.37-acre lot on Butner Rd a short hop west of Cedar Hills Blvd, and is priced at $1.185 million. Click here for a video tour.
As a “location, location, location,” Cedar Hills has a lot to recommend it. Just southwest of the junction of Hwy 26 and 217, it’s close to downtown Portland and Hillsboro; is served by Beaverton schools and nearby MAX stations; and has good shopping, including New Seasons and an outpost of Powell’s Books.
Beyond these tangible assets, Cedar Hills has soul. Established in 1946, it features a large stock of mid-century ranch homes built around Foothills Park and Commonwealth Lake. Neighbors walk, run and rub shoulders on the lakeside trail. Also a hub, its recreation center offers classes, a pre-school program and fitness facilities. The homeowners association meets monthly and organizes an annual garage sale, clean-up and 4th of July parade.
So it’s no wonder demand for homes in the area is high. According to Redfin, the average property is just under 2000 square feet, has 3 bedrooms and 2 baths, and sells for $449,000 in just 14 days. The median sale-to-list price is 99.5 percent.
Of course, averages can be misleading – masking trends in different sub-areas and at different price points. Cedar Hills Blvd divides the neighborhood into eastern and western halves that are roughly equal in size but not in property values. Many homes in the higher-priced eastern half range well above the mid-400K average, with those near the crossroads of SW Lynnridge and Mayfield approaching or topping a million. This pricey enclave falls outside the boundaries served by the Cedar Hills homeowners association, but within what are commonly regarded as the boundaries of the area.
The new million-dollar listing on Butner is a first for the lower-priced western half of Cedar Hills. According to records in the Regional Multiple Listing Service, the highest list price ever recorded there was $679K in 2014. Located on Spring Lane just a block from the Butner new build, the record-holding property was built in 1962 in the Northwest Regional style. It has vaulted wood beam ceilings, a stone fireplace in the great room, over 3000 square feet, and a swimming pool and outdoor kitchen on the 0.8-acre lot. The property sold for just $4K under asking price at $675K, also a record high and an appreciation of 87.5 percent since its previous sale in 2003.
In fact, no other home in the western half of Cedar Hills has ever sold above the $500’s. Four other sellers have tried, as far back as 2007 and as recently as last August. As shown in the last column of the table, a remodeled ranch on Faircrest was relisted at $569K last month after 92 days on the market at $600K.
|Lot size||0.5 acre||0.5 acre||0.52 acre||0.29 acre|
|Sale Price||520,000||512,000||579,400||Relisted @ 569,000|
|Market time||82 days||214 days||82 days||92 days @ 600,000|
|Yr sold||2007||2013||2015||Still active|
So what’s the lesson? Does the real estate mantra – “Buy the worst house in the best neighborhood” – apply? Though the housing recovery was still underway in 2014, the sellers of the Spring Ln property fared well with an 11-year return of almost 90 percent. And the pricey Lynnridge-Mayfield enclave has also seen strong appreciation – for homes not bought at the top of the market pre-recession and owned for several years or longer.
But at $327 per square foot, the new build on Butner is priced far above both the sale price record set in 2014 for west Cedar Hills ($221 per square foot), and the average ($244 per square foot) for homes sold since 2014 in the Lynnridge-Mayfield enclave of east Cedar Hills.
Unless there’s some sea change underway in the neighborhood market, it’s hard to imagine that the Butner property, grand though it may be, will sell at list price. It’s on my RMLS watchlist and I’ll report the sale price on my Facebook page once it closes.
And here’s a final word for readers who are not looking to buy or sell a million dollar home – in Cedar Hills or elsewhere. Having mined their vast data holdings, the CEO and Chief Economist of Zillow published this revisionist take on “buy the worst house in the best neighborhood” a couple of years ago.
Here’s what the data says: Buy a decent house in the right neighborhood. What’s the right neighborhood? It’s the most expensive one where you can afford a home that is not in the bottom 10 percent.