An empty 2.5-acre lot in Atherton on the market for over a year has found a buyer for more than $20 million, according to listing agent Michael Repka of DeLeon Realty.
Located near Menlo School, a prestigious private middle and high school, and country club Menlo Circus Club, 75 Isabella Avenue had been listed at $26.6 million since last April. It went into contract April 15, the second “prime buildable lot” that Repka has sold for more than $20 million this year, he said. He also repped 43 Santiago Avenue, a 2.5-acre property with an existing home that was purchased by luxury home builder Pacific Peninsula Group in January for $25 million and is currently the biggest sale in Atherton this year.
In addition to the $20-million-plus price tag, Repka said via email that the two properties were both on the market for “a significant amount of time without any bites last year.” The fact that they sold this year indicates that the high-end market has been “pleasantly resilient” of late, he added.
A 1-acre property with a 1960s-era home just down the street at 150 Isabella — which listing agent Kristin Gray of Compass describes in her marketing notes as “arguably the most coveted street in Atherton” — sold for just under $11.2 million at the end of April. That sale is another sign that $10 million an acre might just be the going rate for the country’s most expensive zip code.
“Land is still expensive,” said John Young of Golden Gate Sotheby’s, who is both an agent and a developer in Atherton. “We are not seeing bargains in land acquisition that would make obviously profitable finished development projects in the mid-peninsula.”
Young sold the Atherton spec house on two-thirds of an acre that he built with his wife and business partner Gloria for $14.5 million at the end of January, after an extended stay on the market last year. They are currently looking for “good developer-friendly lots” anywhere between Atherton and Los Altos for their next project, he said via email. But because “many sellers do not have to sell, or are reluctant to, given the steady appreciation over the past few decades,” he said many developers are “sitting on the sidelines until something changes.”
It is rare to find a lot with more than 2 acres, like 75 Isabella, and the question of whether it makes more sense to subdivide and build two homes or keep it one large estate is a “hot topic,” Young said. The state has been pushing more density even as “many developers have run into significant community opposition, because it potentially alters the character of a neighborhood.”
In the end, he said, a pair of finished 1-acre houses would probably fetch more than a single larger development. He suggested that the buyer for 75 Isabella was more likely to be an owner-user as the finished product would have to sell for around $60 million to make sense for an investment property, a “pretty rarified air for any developer.”
Repka said he could not comment on the buyer or their intention for the property since the deal is still in escrow. The seller does appear to be a developer, according to property records. Mighty Winner Development bought the property for $15 million in 2012.
Atherton is among the tony California towns currently fighting over its state-mandated housing requirements, but Young said it’s actually one of the easier municipalities to work with on the Peninsula for single-family developers.
“The typically large lots mean that what you do on your parcel does not affect your neighbors as much, so the town can have a lighter hand in approving designs,” he said.
For some Atherton buyers, the “blend of privacy, lot size, design flexibility and prestige that Atherton offers,” are a large part of the appeal, he said. Others care more about the bragging rights of being in “the #1 zip code for real estate in the USA.”
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