The answer: Buy high, and buy in a less-than-prime location
Golden State Warriors star Steph Curry is seemingly incapable of losing.
Off the court, not so much.
Somehow, Curry and his wife Ayesha have reportedly managed to lose money in the one of the hottest real-estate markets on the planet right now. While scores of Bay Area home sellers are getting multiple all-cash offers over their asking price, the Currys have learned that scoring big-time with real estate isn’t always a slam dunk. After paying $3.2 million for their 7,520-square-foot Walnut Creek mansion in late 2015, and putting in nearly a half-million dollars to fix it up, the couple has sold the place for $3.195 million after dropping the price last month from $3.395 million. And that price had been dropped from the $3.7 million they were asking back in October of last year. The more recent sale went pending July 5.
The answer to how to lose money on Bay Area real estate seems to be a combination of buying high, and ignoring the first three commandments of home purchasing: location, location, location.
“Since homes valued at more than $2 million make up only a small percentage of properties in Contra Costa County, it’s a very niche market,” says Steve Mohseni, a real-estate agent with RE/MAX in Pleasanton. “So there’s limited demand for this type of home.”
Mohseni checked sales in the past year of homes listed in the city of Walnut Creek for $2 million or more, the definition of high end. He found that out of the 494 homes sold, only eight were in that category. Of those eight, four sold under the asking price, three sold at asking and one sold for $30,000 above the listed price. And, says Mohseni, “none of those were over $3 million, until now. So Steph had the most expensive house sold in the city.”
Anything can happen, of course. A recent survey by the real-estate powerhouse Pacific Union showed that in some parts of the region the high-end market is doing gangbusters. The report shows that home sales activity in the Bay Area increased by 3 percent year over year in June and 2 percent for the first half of 2017, with Alameda and San Francisco counties posting the largest pickups in the first half of 2017, thanks to more sales of higher-priced homes. In June, said the survey, 40 percent more homes priced between $2 million and $3 million sold in the Bay Area year over year. And sales of homes priced higher than $3 million were particularly hot in Santa Clara County last month, with transactions jumping 50 percent from last June.
Unfortunately for the Currys, the Santa Clara market is about 50 miles south of their home on Sugarloaf Court. And as Mohseni reminds us, real estate is all about location. The Curry home sits on a nondescript cul-de-sac south of downtown Walnut Creek, just a few blocks off an Interstate 680 exit and with its backyard sloping down to a major thoroughfare.
“The place is kind of remote and there’s no prestige, no view of the Golden Gate Bridge,” he says. Combine that lack of pizzazz with the home’s placement on the lonely nose-bleed section of real estate and you’ve got, well, you’ve got out less money than you put into it.
“It’s the mainstream that’s hot, not necessarily the high end,” says Mohseni. “And in many areas even the high end is not as hot compared to four years ago when we saw a lot of Chinese buyers paying all cash and over the asking price. That, as a rule, has slowed down.”