what is wrong with this house?

I pass by this newly constructed, crisp & clean, MODERN home at least once a week.  I have attended open houses there a dozen times. Frankly, it is my fantasy house -- an open plan, built around a courtyard, no yard, flat roof, plank ceilings, ocean view, not too big, and not too small. It has been on the market for 511 days.

711 K'Thanga Drive, Corona del Mar, CA. Over view compliments of Google Maps.

A year and a half unsold? What is wrong with this house?

When the house was first listed May, 2011 at $3.8M, it was over priced considering the massive recession. But, the price has continued to drop for nearly 18 months with the latest drop to $3.1M a few months back (from the former low of $3.25M.) And still it sits. And houses around it, not newly constructed, are selling for $3.6M, $3.7M, and as high as $5.2M within the last six months. So there are CLEARLY buyers with the money. What is the problem?

Picture by Eric Olsen, the architect.

Here is what I know about this little gem. It was built upon the site of a 1966 mid-century modern that had been abandoned by the owners due to a fire. It sat empty for several years, as the real estate market plummeted. It was finally sold to spec developers in April, 2007 for $1.6M (data at Zillow) which may seem like a lot for a burned out house, but there was an ocean view. It may have still been too much as the market was still fairly soft. 

The spec developers hired Eric Olsen to architect the house. Erik does great work. He happens to have a house in our development which looks super cool from the outside. And back in the early days of his business in Southern California, he did a really nice modern patio hardscape for a friend of mine.

Here is what the Weir Properties real estate listing says:

Newly constructed, custom home by residential designer Eric Olsen. 3415 s.f. of living space in a split level soft contemporary home that takes advantage of 180 degrees ocean and bay views. High volume entry space with floor to ceiling glass provides strong indoor/outdoor connection to a private courtyard landscaped with water-wise plantings and mature Olive Trees. Landscape provides serene environment for outdoor dining and lounging. High end finishes throughout including custom walnut cabinetry and Viking appliances in kitchen, and unique marble and limestone and walnut vanities throughout bathrooms. Master Bathroom includes a Stark soaking tub, and a private outdoor shower area. 

I love this landscape. Remind you of anything? 

This Pool/TV room is under the kitchen, just off the garage entry door (which is street level). It is unusual in this neighborhood to have two levels, due to a 14 foot construction roof limit maintained by the homeowners' association. This house got away with it because it is on a hill and the garage was dug down into the hill (clever architect).

The view is a rooftop view as opposed to a full ocean view. This should provide a bit of a discount from a true unobstructed ocean view.

This is a guest bath. The house actually officially lists at 3 bedrooms and 4 baths. Yes, it has one more bathroom than bedrooms.

Do the bathrooms remind you of anything?

 This is a living area right off the front entrance. The window to the right exposes an office.

The mini office. Even though there is just the one window at the back, I would still close down the view window into the living room on the left. Our office is not fit for human eyes.

 Sitting area off the second level kitchen.

Master bath. Shower behind the bathtub. Outdoor shower to the left.

The bit of land in the distance is Catalina. The palm trees are on Balboa Island.

Master bedroom. Master bath is to the right. The sliding barn doors are all the rage right now. Frankly, I don't dig them.

This is how I want our future kitchen to look. They used Blizzard Caesarstone like we did in our remodeled bathrooms.

View of outdoor shower from a second bathroom. The outdoor shower is "cool," although it is in a slightly uncomfortable location. It sits on the street side of the house, which runs parallel to Pacific Coast Highway (which is truly a highway). And the house is under the John Wayne airport flight pattern. One may feel a tiny bit exposed out there soaping off.

Another view of the master bath.

This is the front entry gate, before you get to the courtyard. Really spectacular. I may copy someday.

 Outdoor shower and private sun patio.

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And the view.

Great picture of interior courtyard. The square box against the back wall is a water feature that has never been turned on.

 Master shower. Tub is on the other side of this wall.

Guest powder room.

Could there be any profit in this house left? The investors are paying property taxes of at least $21K a year according to Zillow not to mention whatever loans they procured to purchase and build the home.

View from dining area into the kitchen.

View from dining area into the upstairs sitting area.

A guest bathtub and shower.

Another view from kitchen to dining to sitting area. Love the chandelier by the way.

So why hasn't it sold? I think bad timing combined with a few unfortunate features. For example, the office with the window into the living room cannot be counted as a bedroom and the pool room cannot be counted as a bedroom (if memory serves right, no closets and no doors). And the initial listing price of  $3.8M for 3,405 square feet was probably just too rich in the 2011 economy. The comparable houses are all in the 4,000 plus feet level. If I had $3.1M, I would buy it. At this price, it is a bargain.

Would you buy this house if you had $3.1M? 

(Plus annual property taxes of $31K?)

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