Transaction highlights, July 1 - 27 East

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Transaction highlights, July 1

author on Jun 28, 2010

26 Merriwood Drive, 

This 2,000-square-foot contemporary is located on one acre, south of the highway on a quiet street.

The house was built in 1976 and consists of three bedrooms, an open kitchen, dining and living area. Seller purchased this house in 2004 for $1,151,000. At that time the wood ceilings and trim gave the house a heavy and dark aspect, and the tan siding was tired and unremarkable.

The seller improved this house by completely renovating the interior: including a chef’s kitchen, finished basement with laundry area, and updated bathrooms, giving the interior a crisp, clean, modern look. On the outside, the appearance was dramatically enhanced with new clear cedar siding, landscaping, Gunite pool with patio, outdoor fireplace and mahogany deck.

Assuming an interior construction cost of $150 per square foot (the typical renovation cost to completely renovate a home whose finished value is $300 per square foot), and adding $50,000 for the basement and $100,000 for outside improvements, seller’s renovation may have cost approximately $450,000. If so, then this sale represents a gross profit of about $365,000, or about 4 percent compounded annually, roughly equal to inflation.

165 Main Street, 
Sag Harbor, 

This classic Victorian, built in 1865, is a mansard-roofed townhouse in the center of the village. It sits on a tiny .08 acre lot.

In keeping with the prevailing lifestyle of its day, the house has public rooms on the ground floor—living room, dining room, music room and kitchen in the back—and two bedrooms upstairs. There is also a third floor that was originally an attic.

Seller purchased this house in 2005 for $1,425,000 and renovated and furnished each room in a contemporary style. This kind of renovation can be quite costly, and it is difficult to assess seller’s renovation costs, which could easily have been $300 per square foot, or $900,000 for this 3,000-square-foot house.

If the renovation costs were in the $900,000 area, then the seller earned a gross profit of about $850,000, or about 6.5 percent compounded annually, in line with national averages. While this is not an extraordinary return, it is quite impressive considering the inherent difficulty of turning a very old home with small rooms and a layout which is not suited to today’s lifestyles into a very attractive contemporary-styled residence while retaining the essential historic character of the house.

285 Hill Street, 
Southampton Village, $3,200,000

This home near the center of the village was originally constructed in 1848. Like many historic homes, it sits on what has become a busy road.

The house, located on .9 acre, is a classic summer cottage in appearance. And, like other houses of the period, has many rooms that are small by today’s standards where an open floor plan is often favored.

The central, original portion of this house has a music room, sunroom overlooking the grounds, eat-in kitchen and living and dining rooms with fireplaces. There are six bedrooms, including one that is primarily a reading room in an upstairs turret, and a separate wing with game room and art studio.

The grounds contain mature landscaping and a circular pool with pool house. This old house has changed hands twice in the last 15 years, with each owner altering and expanding it to its present 4,500 square feet. Thus, it is difficult to estimate the cost of each renovation and expansion.

But this sale price, which is quite reasonable for a large and interesting home of this quality, illustrates that historic homes can be very good values if one is willing to live in a central and somewhat busy location.

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