How is this house worth $300K+?

Question

Story time:

So a couple weeks ago I made an offer on a house I really liked. It was completely re-modeled and it was a nice little small house and the only thing I could tell that could of used some improvement on was the roof. Everything else looked great.

It was a hot home on the market, a lot of offers were being placed and a lot of showings for the home even outside of open house days.

The home was being listed at $224k and was sold just 6 months ago for $170k and the investor's remodeled it. Based on research on the Inglewood market and comparable homes, I made an offer that was significantly higher above asking - but apparently they got multiple offers of above $300K (asking was $224k), and my offer was declined. It seems a bit ridiculous why one would pay that much for a 700 Sq Ft. home, I guess this shows that "a home is worth what someone is willing to pay!"

https://www.redfin.com/CA/Inglewood/106-W-Kelso-St-90301/home/6449507

Just thought this was an interesting story to share, some remodeling and touching up can make your home seem worth more than what it really is. Talk about a good investment deal that the flippers got out of this... :)

If anyone else has any feedback feel free to share!

David Avetisyan · Answer

In 2010/2011, similar homes sold in the low 100's, if not below 100K.

The area is low income, at best a C class neighborhood, and it's located in front of a school.

Save your money.  Better homes will come around in due time, much better homes.

To your success

James DeRoest · Answer

I'm sure we've been here before. Didn't end well. Did not end well.

Tatiana R. · Answer

Hi Adam,

Trippy! Followed the link and they did a great job for a house in Inglewood... point is exactly as you said that a house is worth what people are willing to pay. Whether poor or wealthy, people enjoy the sense of pride in ownership, that is why (I believe) investors should not be afraid of looking at all areas of opportunity.

Thanks for sharing! ~Tatiana

Linda Weygant · Answer

My realtor says he is working with a family here in Denver that is shopping in the ~$350 price range.  They are writing into their contracts that they will cover up to $30,000 of the difference between appraisal and contract amount if the house does not appraise.

AND THEY ARE LOSING!

So yeah, the house may not be worth 300+ now, but you can be darned sure that the market will use that as a comp for the next one, and within 6 months to a year 300 will be considered average.

Brent Paul · Answer

That is so true and in a competitive market like that the sky is the limit on what a buyer will pay.  If they really want a house they have no problem bidding over asking price.