Tuesday, 18 June 2019
Agent Resource Center
This Old House - Do-it-Yourself

Location, Location, Location – Avoiding Steph Curry's Real Estate Mistake

Written by Posted On Wednesday, 06 September 2017 08:15

Golden State Warriors star Steph Curry is sitting pretty, career-wise. At the ripe age of 29, Curry has already won two NBA championship titles and two MVP awards with the Warriors, who posted the most wins ever by a team last year. And this summer, the league’s first unanimous MVP signed a new five-year contract worth more than $200 millionWhile he has a winning basketball record, his performance in the red-hot San Francisco Bay Area real estate market resulted in a loss.

      Off the court, Curry and his wife Ayesha purchased a 7,520-square-foot house in Walnut Creek in late 2015 for $3.2 million. Less than two-years later, after dropping $500,000 on major home improvements, the couple sold the five-bedroom, four-bath mansion, with a six-car garage, at a loss for $3.195 million (minus sizable commissions and fees). Given their income, the Curry’s experience in the real estate market is easy to dismiss as folly, but it serves to remind other potential homebuyers of some key real estate realities.

Know Why You Are Buying a Home

      Understand the reason for your purchase on the front-end. Are you buying a home for lifestyle or for investment? Curry presumably bought the Walnut Creek home because he felt it was right for his lifestyle and family. When a person is buying a multimillion-dollar home, rarely is 100 percent of the decision centered on making the best investment. For homebuyers who are buying only for lifestyle, such as proximity to waterway or ski resort, you might sacrifice dollars in the long-term for the near-term convenience and lifestyle enticements.

      If you want to make investments, you should look for opportunities that have a better supply-demand curve. The high-end market in a somewhat remote area is unlikely to fit that description. If you only buy for investment, you might end up living in an area that is less desirable or buying a product that doesn't fit all of your needs.

Location is Still Key

       People talk about a hot real estate market, such as the one in the Bay Area of California, but that doesn't mean every neighborhood in the area has the same appeal or value. Walnut Creek is a fair distance from sections of the Bay Area in highest demand. This leads to less interest and more pressure on price. Further, high-end homes will always feel the pressure of price because so few people can afford to purchase them. Being 25 miles and a 1-hour minimum commute away from the epicenter of activity and business shrinks that pool even more.

Keeping up With the Joneses

      Another real estate maxim is to avoid buying the most expensive home in the neighborhood. Your home may be larger, nicer or in other ways "better" than others in the neighborhood, but its value is affected by those homes. Real estate prices –  and mortgage appraisals – are generally based on comparable homes (“comparables” or “comps”) in the area. The value of the most expensive home is based largely on the mean value of surrounding properties; therefore, homes priced above the local average are affected by the lower-priced homes around them. The exact same home located elsewhere would have a different value.

Purchase a Home You Can Stay In

      One common real estate rule of thumb is that homebuyers should plan to stay put for at least three to five years. Otherwise, you should consider renting instead. The reason for holding a home for a period of time is to recoup moving and selling costs. Another is presumably because you bought a place you want to live in.

      Less than one year after buying the Walnut Creek house, the Curry family paid $5.77 million for a bigger mansion. This time, they opted for a 10,290-square-foot residence that includes five bedrooms, eight-and-a-half baths, five fireplaces, a sauna, a billiard room, a library and an infinity pool. It sits on 1.5-acres featuring formal gardens in the neighboring community of Alamo. It is unlikely that their family or lifestyle needs changed that much in the 11-month gap between purchases; rather, it is more likely that, despite the $500,000 they spent on improvements, they were not happy with the first home they bought.

Improvements Should Improve the Value

      Home improvements are an investment in the value of the home. Changes should enhance the value and have a universal appeal. That's why most real estate experts suggest that the kitchen and bathrooms are the best places to upgrade. While it isn't known where the Curry family spent that half-million, adding amenities that do not appeal to other buyers, such as an unusually shaped pool, a bowling alley or a basketball court, is unlikely to add value to a home.

      While Curry could easily take the loss on his short-lived Walnut Creek home, considering his new contract, his mistakes provides an important lesson for people with lower incomes who are trying to find and afford the investment in a new home: Do not jump in too quickly without carefully considering the neighborhood, your lifestyle and your current and future financial situation.

Ryan Boykin is co-founder of Atlas Real Estate Group, a Denver-based full-service realty firm. 

Rate this item
(1 Vote)
Ryan Boykin

Ryan Boykin is co-founder of Atlas Real Estate Group, a Denver-based full-service realty firm, specializing in real estate investments, brokerage and property management. Learn more at
Set it and forget it Marketing, Agent Trusted for 21 years. Click Here

Agent Resource

How to capture your next prospect - click here

Realty Times TV

View More

Realty Times

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.