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Do you think housing prices are insane where you live? You ought to see London’s Chelsea district. The BBS News reports that a “table-sized” apartment is selling for £170,000 (roughly $334,000US). Here’s the complete story:
A flat roughly the size of a snooker table has gone on sale for £170,000 in London’s upmarket Chelsea. The former janitor’s storeroom measures 11ft by 7ft and has a cupboard place for a shower and kitchenette area.
Potential buyers can expect to fork out an extra £30,000 to make the room habitable as there is no lighting and it is full of rubble. Even the estate agent selling the property admitted the flat was “incredibly depressing”. “We have to go in with a torch because the lights do not work and it is full of rubble,” Jason North, associate director at Lane Fox.
Nevertheless, the flat is expected to attract buyers due to its close proximity to the fashionable bars, shops and leisure facilities of Kensington and Chelsea. In fact, the £170,000 price tag may make it one of the few affordable properties in what is London’s and the UK’s costliest borough. According to research from property website Rightmove, released on Monday, the average asking price for a house in Kensington & Chelsea in January was £1,145,791.
Is there a housing bubble in London? Or is this a normal price? This room is 77 square feet — slightly smaller than a college dorm room, but slightly larger than a prison cell.
Despite rumors of a “burst bubble”, housing prices remain strong in Portland. We’re not seeing double-digit increases anymore, and homes are on the market longer than they were two years ago, but there has been no decline in prices. From my perspective, the bubble has not burst — it’s merely stopped expanding.
Read more about at The Seattle Times or this discussion at Metafilter.
[BBC News: 'Table-sized flat' for £170,000, via Fascination Place]
This article is about Funny Money, House and Home, News Wednesday, 24th January 2007 (by J.D. Roth)
January 24th, 2007 at 5:44 pm
More of an unreality bubble — this is off Sloane Street and a stone’s throw from Harrods. More than just a rich area: it’s a super-rich area.
(This Seattle Times article , linked from MetaFilter yesterday, puts it at 18 Cadogan Place.)
Londoners will know that there’s a rich tradition of silly prices for tiny properties: the first being the sale of a Knightsbridge broom-cupboard back at the peak of the greed-is-good 80s boom. Here’s a similar story from 2002 that collects some of them together.
January 24th, 2007 at 7:30 pm
I think the reporters on this one are having their leg pulled. (One leg, shared by many reporters. It’s fun to watch them try to walk.)
First, the flat hasn’t *sold* for $334k, just listed at it. And that listing was enough to get it free advertising on the BBC, if you know what I mean.
Second, according to the Seattle Times article, there are offers on it, but it might still go to auction, which means (1) the offers are not for anything near $334k and (2) the owners don’t expect to get anything near $334k.
So what’s it worth? Less than the asking price, probably significantly less, but more than it should be!
(Also: $60k to make an 11×7 room habitable? That seems… high, even if you take out everything that isn’t structural and put new in.)
January 24th, 2007 at 7:43 pm
Question for you real estate types out there: What exactly does “We’re not seeing double-digit increases anymore” mean? What I think it means is “double digit percentage gains on the value of your property”, right? ie you buy in for $200K and 1 year later its worth $220K.
So the question that that naturally leads to is: Are you guys getting your house appraised every year? How else would you know it went up in value 10-12%? I am a first time homeowner, and trying to figure all this stuff out, so sorry if this sounds like a completely stupid question, but I’ve seen language like this bandied about on other sites too.
January 24th, 2007 at 7:48 pm
The location is unbelievable. You are within 3000 feet of Buckingham Palace! Though, what would be more exciting to me is how close it is to Hyde Park. Oh how I would love to go to Speaker’s Corner every weekend.
*sigh* One day… maybe I’ll be rich… slowly, of course.
January 24th, 2007 at 8:36 pm
Another interesting thing about London is that most of the land is still owned by feudal landlords like the Duke of Westminster. They do not sell the land under your apartment, just rent it for 99 years. Since there has not been any revolution there in 500 years, the aristocracy is well entrenched.
January 25th, 2007 at 12:52 am
I don’t know why that price tag is so extreme to you? All you have to do is multiply the number of square feet with the price of one foot. Thats just the price apartments have in that part of London. I don’t think New York or Tokyo is any different. It just happens to be a really small space and that is why the price is frowned upon.
January 25th, 2007 at 4:24 am
I live 5 minutes from there and my rent is £300 pm so even though its an expensive place to live you can always find a deal.
January 25th, 2007 at 7:04 am
Fazal - Baltimore and parts of Maryland are still under the ground rent system from the colonies. Just read on http://www.Baltimoresun.com about how people are losing their houses for failing to pay $33 yearly rents. (edit by J.D.: Here’s the story in question.)
January 25th, 2007 at 7:46 am
icup, from what I can tell, the change in value of a particular real estate market is determined by looking at statistics of what places sold from year to year. The survey of prices might encompass a county, a city, or a neighborhood.
Oftentimes price gains are reported as changes in the “median single family home price”. If all the sales of a particular time period are ranked from largest sale price to lowest sale price, the median price is the one right in the middle of the list.
When reported for a large area (city, county), that list of all home sales reflects tiny, decrepit houses in bad neighborhoods as well as huge gorgeous houses in good neighborhoods, of course. Generally the median-priced homes are OK house of moderate size (maybe 3 BR) in OK neighborhoods. There may be neighborhoods within that area that are hotter (see more appreciation) or less hot (see less).
So, no, it’s not that every person’s house is appraised every year. Those appreciation values reflect the general “temperature” of the real estate in a given area. How any particular individual property will fare also depends on specific location and trends in that specific area, as well as the condition and specifics of that particular property.
January 25th, 2007 at 8:29 am
I imagine portland will be seeing a drop in prices, if the market corrections in other areas hold true. It won’t drop past what it was 2 years ago, but go back 6 mos - 1 year before the peak - and that is what true pricing will be at.
January 25th, 2007 at 11:06 am
Angie, thanks for the reply. That makes alot more sense than what I thought it was. And its alot easier to look up that statistic than trying to constantly gauge the actual value of my home.
July 16th, 2007 at 2:36 am
Chelsea is one of the most expensive and most popular part of London, also Knigtsbridge. In Chelsea, some properties are worth £9Million, but this property has 3 beds and 3 baths!
However, Chelsea does not show the typical property prices in London. The average house price in the UK is about £200,000, which is under $400,00.
July 16th, 2007 at 10:47 am
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September 26th, 2008 at 3:41 pm
Slight glitch in the archives: this entry is listed as “Tiny London Apartment for 4,000″ which sounds quite reasonable