A housing market so hot that a burned-out home listed for $400,000

By Anna Bahney, CNN Business

The housing market has recently cooled from white hot to merely red hot. But it’s still a great time to get top dollar on a home, even one that needs a little work. Or one that is a charred shell of a house.

That’s the case with a home outside of Boston that was literally on fire only a month ago. The burned-out three-bedroom, one-and-a-half bath home in Melrose, Massachusetts, was listed last week for $399,000 and is already under contract, according to its listing on Zillow.

“House is in need of a complete renovation or potential tear down and rebuild,” the real estate listing from the Marrocco Group with Coldwell Banker Realty reads. “Great potential to build a new and adorable home in desirable Melrose, a town where property values continue to rise.”

Agents at the Marrocco Group were not immediately available for comment on the listing.

Indeed, the listing is priced well under what the house was estimated to be worth earlier this summer — before it caught on fire. In June, the home was valued at $640,700, according to a home price estimate on Zillow.

And the price is below what the typical home is going for in Massachusetts right now. The median price of a single-family home in Massachusetts was $552,000 in August, up 12% from a year ago, according to the Massachusetts Association of Realtors.

The hitch is that it’s not habitable now.

During the fire at the end of August, firefighters had to rip out walls and ceilings in the home to stop the blaze, according to the Boston Globe.

The home’s quick time on the market is a real-life version of the Onion’s satirical headline from early August: “Desperate California Homebuyers Locked In Bidding War Over Charred Remains Of Ranch House.”

Low inventory and strong demand have caused prices to skyrocket this year and have pushed desperate homebuyers to compete over even the most undesirable houses.

This summer an agent listed a five-bedroom home in Colorado Springs for $590,000 that she called a “little slice of hell.” The home had been trashed by a former tenant with nearly every surface spray painted. Rotting food and dead animals gave the house a smell she said you could “feel.” It sold for $580,000 in July, according to public records on Redfin.

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