Every community on the North Shore has been witness to the tear-down frenzy of the past 5 - 8 years. I am referring to the practice of people purchasing a home and then demolishing it in order to build a new and larger home in its place. Or, in some cases, one home is knocked down and multiple homes are built on the property. This practice isn't completely new to the North Shore. Over the years many estates have been split up into multiple properties, sometimes leaving the original mansion intact, and other times not. What seems different about it now is that almost any property has become a tear-down candidate.
Several communities have adopted more stringent rules about what homes can be torn down and become more restrictive about making exceptions to zoning regulations. Some townships have added red tape and additional fees. Other places have created incentives for home owners to expand their current space instead of starting all over with new construction. There are people who are concerned preserving historic properties and they have tried to save certain homes from the wrecking ball (do they really use a wrecking ball anymore?). None of these measures seems to have made a huge difference - the construction crews seem to be in every neighborhood. (Between the construction crews and the lawn maintenance crews, it is hard to navigate through some of the streets during the day!)
Meanwhile, there are over 330 new construction homes available for sale as of today on the North Shore* per MLSNI. That is about 16% of all homes listed and currently available for sale. (PLEASE NOTE: these statistics only include those homes listed in MLSNI, one of the multiple listing services used by REALTORS in the area. Custom homes being built for a specific buyer or not listed with a Realtor won't appear on an MLS.) All of these new homes are between $700,000 and $8 million, with the average price around $1.9 million. There is exactly one exception to those prices - there is a new 3 bedroom home listed in Evanston for only $489,000!
I had thought that the glut of luxury homes on the market combined with rising interest rates (which have actually dropped in the last several weeks) would stem the tide of tear downs. Many builders are sitting with a lot of inventory on their hands. Then, just this week 2 more houses came down on the very same street (not in one of the more exclusive/luxury areas on the North Shore). And yet, within this same small area there are already several new construction homes waiting to be sold, all with a price tag over a million dollars. Meanwhile, I have several clients looking for a home in the same area between $700,000 and $800,000 - and there is nothing really available that meets their needs. They already live in this area, and want something a little bigger for their growing families. Their homes, which are in great condition, will sell or have already sold for $450,000 - 500,000.
The rule of thumb for new construction is that the lot should be about 1/3 the price of the finished home. So, you can see the dilemma here. People are being priced out of their own neighborhoods. If someone purchases property in this area for $400,000 - $500,000, then they will have to build a new home for $1.2 - 1.5 million. I am not against tear-downs by any means. My 7-year-old home was built on property previously occupied by a small ranch on a double lot - now we have two homes on the same property.
Would love to hear your thoughts about tear-downs, or stories about new construction in your area.
Thanks for reading!
*see the WELCOME post for my definition of this area