Teardowns in Silicon Valley’s Atherton Reach $10 Million

Atherton’s hottest commodities aren’t the palatial homes housing some of Silicon Valley’s biggest players, but the land on which they sit.

A property at 123 Stockbridge Avenue in West Atherton, for example, fetched $9.5 million in October — a steal by Atherton standards — as a teardown, the San Francisco Standard reported. The buyer’s identity has not been disclosed.

“Really, it’s land value,” said Gina Haggerty, the Compass listing agent who also represented the buyers. “The home had no significant value to it.”

The nearly 1.2-acre lot attracted 14 offers and interest from developers and buyers looking to build their dream home.

It hit the market Oct. 1, asking under $8 million, and was in contract two weeks later. The property was in distress, as the previous owner owed nearly $5 million on a 2017 loan on the property. A notice of a trustee sale had been published, and the fast turnover and relatively low sale price was likely due to sellers wanting to avoid a foreclosure sale, said Ken DeLeon, founder of Palo Alto-based DeLeon Realty.

A home at 57 Fairview Avenue also recently sold for its land value.

The 1-acre property was listed for $7.8 million and sold last month for $10.7 million, almost a third more than the price of a comparable lot last year.

“Even I was surprised that it jumped so much higher than just last year,” DeLeon said.

DeLeon’s clients have been spending between $2,200 and $2,600 per square foot on construction costs for new builds on teardown lots. A typical 20,000-square-foot estate will run the teardown buyers almost $50 million in addition to the $10 million lot.

“The lack of supply of good Atherton lots, coupled with increased demand due to [artificial intelligence] liquidity, will drive the luxury market to new heights next year,” DeLeon said.

That prediction is held among many observers who’ve noted the uptick in luxury home sales over the past year, including Haggerty. “People are feeling more confident in buying a big property,” she said.

As more AI companies and wealthy people move into the region, competition for such properties has increased — so much so that San Francisco is experiencing an AI-related mansion shortage.

— Chris Malone Méndez