Tiny California Home Crushed by Tree Is Listed for Half a Million Bucks—Why Buyers Are Lining Up

Article first appeared: https://www.realtor.com/news/trends/tiny-california-home-crushed-by-tree-lists-half-million-dollars/

A house crushed by a tree just hit the market in Los Angeles for a whopping $500,000—and as strange as it sounds, homebuyers are scrambling to make an offer.

The house in Monrovia, CA, suffered catastrophic damage in early May when a large pine tree crushed its roof, destroyed its fence, and took out a van parked in the driveway.

“Did you see on TV the home destroyed by an old stone pine? Perhaps miraculously, no one was hurt,” the listing observes.

The house is now missing a roof and walls and has already been “red-tagged” as a property deemed unlivable.

Nonetheless, looking at the bright side, Century 21 listing agent Kevin Wheeler joked to the Los Angeles Times that the property now offers an “open-concept floor plan.”

So, given the sorry state of the house, what’s up with the high price tag?

Why a half-crushed house can list for half a million dollars

Even without the damage, a $500,000 price tag on a 645-square-foot, one-bedroom, one-bathroom home might seem outrageous. But Wheeler told Realtor.com that he priced it according to comps in the area.

That’s because for buyers looking to move to Monrovia, a piece of property for $500,000 may feel like quite a steal. The small enclave of around 40,000 residents is just 20 miles northeast of Los Angeles, and the median listing price of homes there runs around $968,000—relatively cheap compared with L.A., where the median home price is $1.2 million.

“Monrovia has really changed from kind of a working class town to a really desirable place to live,” Wheeler tells Realtor.com®, “They totally, over the last 20 years, have regenerated their small town, and the public school district is great and well sought after.”

The problematic property also benefits from favorable zoning conditions; Monrovia’s construction and zoning rules offer leniency around natural disasters.

While the town mandates a city review for the demolition of properties more than 50 years old, an exception is made for homes destroyed by “acts of God”—such as a tree falling. That means buyers can fast-track the demolition and redevelopment of the property, though they’ll still have to get any building or renovation plans approved.

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The benefits of buying a damaged house

Put simply, the steep price tag may be due to where it is—not what it is. The cost of land in such close proximity to Los Angeles is at a premium.

“It’s strictly a land sale—no different when other natural disasters occur like hurricanes or wildfires,” says Jeff Lichtenstein, owner of Echo Fine Properties, a luxury brokerage in Palm Beach Gardens, FL. “The only other caveat is what insurance will pay out to remodel or use towards a rebuild.  If so, then who gets those monies?”

According to Wheeler’s listing, the sellers are “open to carrying the note,” so “a construction loan may not be necessary.”

That’s an especially attractive prospect to house flippers.

“Flippers and remodeling companies everywhere are getting pretty desperate to find their next venture,” says Stacey Miller, a Realtor® and owner of the Miller Team at RE/MAX Fine Properties in Peoria, AZ. “One great example is one of the most coveted areas, Highlands Parkway, in Dallas, Texas. Investors are buying homes that date back to 1913, completely demo-ing them, and building mansions. It really is all about the land value.”

It’s a tale as old as time, says Andrew Fortune, a broker with Great Colorado Homes in Colorado Springs.

He recalls that his grandmother bought a house in Houston in the 1940s for $18,000. Over time, the area became a popular place to buy among doctors working nearby. And though the home had “a severely cracked foundation, most of the doors wouldn’t close, the heater was broken, and the roof leaked,” his grandmother could sell the home for $1.6 million in the 2000s because the area had become so desirable.

Location, location, location

“The buyer isn’t paying for a house—they’re buying the rare opportunity to control a piece of land in a competitive area and potentially redevelop it into something far more valuable,” says Johnny Austin, owner of the Tacoma, WA-based Sell My House Now.

Tyler Drew, president of Los Angeles-based Anubis Properties, knows exactly what Austin means.

He lived in Monrovia for several years and calls it “one of the most desirable mountain-adjacent towns in Los Angeles,” citing its “adorable main street with festivals and farmers markets” and its convenient proximity between two major freeways and the Los Angeles Metro Gold Line.

“Most of the community and downtown have been untouched since the 1960s, opting to keep a small-town aesthetic in a large city,” he explains. “It also boasts some of the best public schools in the state. So yeah, $500k for just the land is probably a steal to a contractor who can build a similar house for cheap.”

In fact, Drew jokes, “Preferably, I’d like to have my trees fall on my homes before I purchase them. It saves a tremendous amount of money and time on my end. Plus, I don’t have to worry about it in the future.”

Denise Supplee, founder of Spark Rental in Doylestown, PA, notes the age-old real estate adage: “Location is everything—even a home destroyed by fire, flood, or crushed by a tree, will retain value.”

The worst-case scenario would be that the home would need to be demolished and rebuilt from the ground up, which Supplee estimates would cost around $250,000. That still puts a buyer “ahead of the game” when it comes time to sell, considering average home prices in the area.

But she warns: “It is important to take all costs into account along with the location of the property before purchasing. Make sure that you have good, solid contractors if you decide to embark on rehabbing or a full build. One wrong move there could set you back a lot.”