Vacant Lots in San Francisco Are The New Gold Rush—It’s The Land
One could assume that real estate value in San Francisco is mostly based on the building itself, on all the design, materials and crafting and location that goes into a residential home or condo. But no. In SF that’s not true. According to experts 80% of the value in any given home property (and all properties) is in the dirt—leaving 20% value in the building itself. Arrian Binnings says, “There was someone in the 1880s who said there’s ‘gold in them thar hills’ and I’ve always said ‘those thar hills *are* gold’ because … it’s extremely valuable dirt we have here.” The land-to-house value ratio in SF is the opposite of what many other cities experience. In Dallas, Texas, the land is worth 10% of the total land/building value.
Currently there are only 18 vacant lots for sale in the city. And they are worth their weight in gold—almost. There’s a plot at 19 Arguello, adjacent to the Presidio entrance, is going for $5.5 million (with plans for a mansion thrown in). Over on 477 Eucalyptus Drive there’s a smallish, crumbling concrete pad on land that’s available for $1.6 million. In the Richmond District a small plot with weeds is going for $1 million.
Binnings says that buying a lot and building on it is a risky venture as the cost of construction can include unforeseen expenses and do-overs.