Real Estate

What $9 million won't get you in Old Palo Alto: A house on a lot

Vacant property listed for sale after sitting undisturbed for decades

A quarter-acre property for sale in Palo Alto is turning heads for what's not included in its $9-million price tag: a house.

The vacant lot at 1628 Bryant St. went on the market on April 11 for double Palo Alto's $3-million median home value, or about the price of what it would cost for three single-family homes in the city.

The Old Palo Alto property, once part of the grounds of the adjoining historic 1920s Wickett estate, has sat virtually undisturbed behind a stucco wall serving as a home for a giant oak tree and a grove of redwoods since being split off from the main estate in 1972. The longtime owners reportedly had planned to build a home on the site decades ago, but nothing was ever constructed, and the property remained in their hands unchanged. There have been no improvements, no permits and — until last week — not even an address assigned to the undeveloped land, which was assessed at $69,012 in June 2018, according to the Santa Clara County assessor's office.

Adam Touni, broker-associate and listing agent from The reSolve Group at Compass, said the 11,375-square-foot lot is a rare find in Old Palo Alto that provides buyers the ability to build whatever home they want, especially in an area with many historic homes whose facades can't be changed.

"This is a blank space for a prospective buyer," Touni said. "There's value in that. Buyers have the ability to build a modern home or a Craftsman or whatever they want."

He said the value of property in Palo Alto is in the location of the land and what a buyer can build on it. On this site, that means a 4,000-square-foot house with another 2,000 feet of basement space, Touni said. An architect has created conceptual drawings to show what can be built there, he added.

The median home values of homes in the Old Palo Alto neighborhood range between $7.73 million for a five-bedroom home to $4.1 million for a three-bedroom home, according to online real estate database Zillow. But sales prices can vary widely.

Next door to the Bryant lot, the 6,625-square-foot Wickett house at 1600 Bryant St. went on the market last month with a list price of $19.8 million. (Touni said the sale of the two properties is a coincidence. They are not linked in any way.)

Another nearby property on Coleridge Street is listed for $17.5 million.

Touni said he estimates that the Bryant lot could be worth between $15 million and $20 million once a home is added to the site.

"The properties in this area of Palo Alto are all unique," he said.

While only a half dozen empty lots go up for sale in Palo Alto during any given year, according to anecdotal information from local realtors, the Bryant lot isn't the first vacant property in Old Palo Alto that raised some eyebrows in recent years when it went on the market. In 2016, a vacant 5,250-square-foot lot at 2257 Bryant St. made local headlines when it sold for $2.7 million — more than $200,000 over asking price. (The lot, now with an estimated value of $3.4 million, is still vacant.) Another empty lot in the neighborhood at 2051 Waverley St. sold for $11.4 million in 2014 after a historic home on the site was demolished. That property also is still vacant.

According to Zillow, two vacant Palo Alto lots were on the market near Gunn High School earlier this week: A 1.03-acre site off Arastradero Road advertised as "the only flat vacant acre parcel in Palo Alto" was listed for $15 million. The other lot, a 9,896-square-foot parcel on Arastradero Road, was listed at $2.58 million.

Xin Jiang, a Realtor at Alain Pinel Realtors in Palo Alto, said vacant lots are often preferred by buyers looking to build a new home.

"It's a cleaner cut versus lots with old homes, as not all homes can be torn down easily," she said. "The fact that some old homes are on Palo Alto's historic registry or potentially eligible for historical status always makes buyers who intend to re-build hesitate."

She said the uncertainties associated with whether an existing home can be easily demolished, normally bring down the price of a property. Many local and foreign buyers are waiting for the lot at 2051 Waverley to come back on the market because a 26,344-square-foot lot is a rare opportunity in the heart of Old Palo Alto, Jiang said.

There are drawbacks, however, to purchasing vacant lots, she said. It's difficult for buyers to acquire traditional financing because a piece of dirt without a dwelling normally won't appraise, she said. In these purchases, she said buyers typically have to use all cash or more expensive non-traditional financing.

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