Buyers Resist Doing Finishing Touches : Houses-in-Raw Experiment Falters
Builder Al Saks has been spending a lot of time on Winnetka Avenue lately, vowing never to do that again.
What he did was build a pair of three-bedroom houses on Winnetka near Lanark Street in Canoga Park with the interiors, driveway, and landscaping unfinished. The walls are raw, and the front yard is like a dust bowl. But the houses are cheap: just $99,950, well below the cost of most new single-family homes. To keep the price down, Saks isn’t even using a broker.
“It’s a lot of house for the money,” he said.
Most Are Scared Off
The idea was to sell the houses fast, but it hasn’t been easy. Most potential buyers are scared off, despite Saks’ assurances that do-it-your-selfers can finish one for $6,000 in materials, or have it completed by an outsider for twice that amount, but still at a substantial savings.
Indeed, the median sale price of homes in the area was $139,000 last month, according to the San Fernando Valley Board of Realtors, although smaller houses on busy streets like Winnetka might sell for less.
A lot of people are aware of how high housing prices are, but it doesn’t seem to make much difference, according to Saks, who said he is not too pleased with his experiment.
“It’s not something I think I would try again,” he said. “The average person can’t handle it. It scares them off.”
One House Taken Back
Saks finished--or rather, didn’t finish--the houses “three or four months ago,” he said, and a couple of weeks later sold them to a speculator who planned to finish and resell them. But that person, whom he won’t name, ran into financial troubles and Saks had to take the dwellings back.
Eventually he sold one, but the other remains unsold, and Saks has been spending time standing around in it, waiting. Ads in the papers and a big sign out front have yet to turn the trick, not that some people don’t recognize a value when they see one.
“I think it’s a good deal if somebody came in and could do the work themselves,” said Gabe Gayou, who looked the place over one recent morning. “I’m sure you could sell it for $125,000, easy.”
Fairly Standard Dwellings
Gayou, who lives in an apartment nearby, has built a couple of houses before but said he doesn’t have the time right now to finish this one. He might buy it, he said, if he could get his nephew interested in doing the work.
Except for their raw state, the 1,400-square-foot, one-story houses are fairly standard for the area, if small. They have two baths, drywall construction and stucco exteriors.
Saks said he built four other unfinished houses elsewhere in the San Fernando Valley earlier this year--he won’t say just where--and that they sold somewhat more swiftly. His latest experience has soured him on the whole idea.
“I’m better off going ahead and finishing the home, turning it over to a broker and forgetting about it,” he said.