Last week I got to tour one of the most interesting listings in California right now, and I have a few thoughts about comps. If you didn’t know, when Ronald Reagan was governor of California, he began building a huge mansion in Carmichael, and this unicorn property is now listed for sale.
UPCOMING SPEAKING GIGS:
5/7/26 Empire State of Mind
5/13/26 Investor Webinar TBA
5/14/26 Event TBA
5/15/26 Nevada County TBA
5/21/26 Event TBA
5/27/26 Solano County TBA
6/3/26 Wisdom Wednesday in Elk Grove
8/6/26 PCAR Auburn
10/2/26 PCAR Rocklin
10/21/26 Coldwell Banker Sierra Oaks / EDH
A BRIEF HISTORY OF THIS ESTATE
The State of California built a Governor’s mansion in the 1970s in Carmichael, which is about 10 miles from Downtown Sacramento. This mansion began construction under Ronald Reagan’s leadership, and he would have likely lived there, but it was not completed until Jerry Brown took office (Brown refused to live in this house, which he dubbed “The Taj Majal”). This home located at 2300 California Avenue has 8 bedrooms, 8 full bathrooms, and is just under 12,000 square feet of living area (11,984). If you want more information about where Reagan lived in Sacramento, check out a post I wrote years ago.
CURRENTLY LISTED FOR SALE AT $7.5M
This estate is now listed for sale by Hattie Coleman. It’s been on the market now for almost 200 days. Check it out here. Thanks for letting me tour the place last week. I’ve been meaning to get out there, and I’m so glad I did.
AN OUTLIER ABOVE OTHER OUTLIERS
This mansion sold previously for $4,062,500 per MLS ($4.1M in Tax Records), and it was an outlier above other outliers in the entire county. It originally sold from the government in 1983, but I’m not sure what the price was then.
And here’s a look at Carmichael sales compared to the mansion. This is a good reminder that comps may not necessarily come from Carmichael. More on that below. Where would you choose comps?
THE ZESTIMATE CHASES THE LIST PRICE
I had to check, and sure enough, the Zestimate chased the list price when this home was listed for sale. The Zestimate was at $5.2M, but as soon as it listed, it jumped to $7.1M. Look, online estimates are interesting, but I put zero weight on any of them. Like I always say, Zillow can’t smell if 20 cats live there. I just like to point out how this works because I think some consumers place too much emphasis on the Zestimate while not seeing the games that happen behind the scenes. And you’re telling me it was only worth $2M in 2021 before jumping to $5M in 2024?
And here’s Homes dot com. Again, I don’t put any weight on these estimates. I just think it’s interesting to watch so we can compare these to what the property actually sells for.
SOME PICS OF THE PROPERTY FROM MY VISIT
I took these pictures last Friday when visiting the property. This is the largest Mid-Century Modern home I’ve personally seen. It doesn’t get too much bigger than this in Sacramento when it comes to size. As you scroll, check out the time capsule next to the fountain. It’s not to be opened for another fifty years, and I wonder what’s in there. Look at those doors too. Imagine what those would cost today.
WHAT DO WE DO FOR COMPS?
In real estate text books, comps are easy. There are always three model match sales in a one-mile radius over the past ninety days. But in this case, this property is a total outlier. What would someone pay for something with a substantially-larger lot size and square footage – not to mention some cool California history? On that note, are there bragging rights to own a home like this?
QUESTIONS I WOULD ASK ABOUT COMPS
I don’t have a perfect answer for comps because this is a unicorn property, but here are a few ideas swirling through my mind. I suspect we would have to ask all of these questions if trying to value the home.
- What would it be worth without the history? And does the history add extra value?
- What is the land worth? (substantial lot size)
- What did it compare to during the prior sale in 2004? Granted, we have to take previous sales with a grain of salt because the sale may or may not represent the way the market sees the property today. Moreover, the property has been refreshed, so it’s not necessarily the same home as back then.
- What are buyers willing to pay in the region for stately homes? My graphs above show this estate sold above any other home in Sacramento County at the time. I mention this because sometimes we have to pull comps from much further away if warranted. Yet, we can’t forget this property is still tied to a location, so we have to be careful with this and make location adjustments if need. There is such a thing as too dissimilar though. I think of a real estate agent who told me the best comps were in Napa for his listing in Sacramento. Yeah, that doesn’t smell reasonable.
- Where is the top of the price market? What is the most a buyer would pay for something like this before moving on to a different home?
- Are there other homes with historic or almost historic significance that might be a good frame of reference?
- What would this property cost to build today? Per Wikipedia, “In 1972, the legislature budgeted $150,000 for preliminary plans for the mansion and $1.3 million for the construction of the building.”
- Are there any other non-residential uses possible for this estate? In my conversation with the public over the past week, I had a few people mention some potential uses beyond being owner occupied. What does zoning allow? And what is the highest and best use?
- What other questions am I missing here?
POLARIZING REACTIONS
I find Mid-Century Modern homes can be polarizing. What I mean is people either love them or hate them. So, some look at this home and think it’s gorgeous, and others might think it’s really plain. That’s the nature of the beast with MCM architecture, I think. Ultimately, when it comes to real estate value, all that matters is what actual buyers think (we still get to have opinions though). Know what I’m saying?
Anyway, I hope that was interesting. Thanks for being here.
Questions: What do you think of this property? What would you do for comps? What did I miss? Anything to add?
If you liked this post, subscribe by email (or RSS). Thanks for being here.
What an interesting problem. Maybe throw the Eddie Murphy house at this?
I would plead incompetence if asked to appraise it.
You know, sometimes the best answer is to simply put it on the market. The market will tell you what it’s worth. I will say, this was a cool property to walk. I may go to another event there soon. I’ll let you know if something happens.
It all depends on the client… Any thing you do could be questioned. Looks like a revision nightmare.
I hear you there. I can’t imagine an appraisal like this for a lender. This unicorn just isn’t going to compare well with so many other homes. As I walked the property, I was very aware at the sheer size also. It would take a good chunk of time to even measure the square footage alone.
It’s a unicorn in many other ways than just the size and the lack of comps. How many doors were open in that photo? Some homes are just not functional as a home and this looks like that, unless you are a diplomat or an ambassador who needs space for many guests and are surrounded by staff. As you said, only time and the right buyer will define the value.
Oh, interesting thought George. Thanks. I think it would be interesting to spend a little more time at the property and maybe get a feel for the house with doors both opened and closed. This one is definitely meant for entertaining. No mistaking.
This house just came up as I began looking what’s out there on Zillow within my geographical and 4+ bedroom preferences but before I put a cap on the listing price. I saw it and my first question was, “Why would anyone want this many bedrooms and bathrooms?”
Yeah, this is not for everyone. I can’t imagine what I would do with eight bedrooms personally or all that space. Though I suppose I could come up with ideas. Skateboard collection showroom, home office, home gym, guitar room, etc… 🙂
There are real pricing factors here to consider: this isn’t the Bay Area or LA where mid-century modern has a following; a group of real estate and contractors creating a more contemporary modern design movement. It is also only i certsin higher end areas like Palo Alto, San Mateo and older, coveted areas of LA. So here we are in a Sac property that never really got to be it’s intended target. Is it worth it. No, it’s not. The best and highest use would be to sell it at a reasonable price, and bring it to a modern version of the current, liveable model it could be. The grounds make it a very good base-level modern. We struggle to make property here look like other areas but we don’t support it with jobs to sustain the prices. What does this mean for real estate prices elsewhere? The current version of this kind of price point is also threatened by the layoffs and restructuring of technology jobs, entertainment jobs and incomes. I wouldn’t want to think about selling something like this right now. What it could be? At the right price- really would like to do that one.
Thanks Debra, I really appreciate your take. And yeah, this is where the property is tied to location. Imagine the price on something like this in portions of the Bay Area? 12,000 sq ft on more than four acres.
I think it was in 2005 when the Appraisal Institute had their annual conference in Seattle….which I attended. One of the CE seminars conducted by appraisers Marc Campos and Richard Hagar was “Where are the comps for these homes?” (Or a similar title.) But the main objective was to look at some highly wealthy people’s mcmansion “cottages” overlooking or on Lake Washington, while we cruised by on a boat. (Bill Gates, etc.) Rich and Marc emphasized that if you had to ‘comp’ such properties, you likely would not find anything similar locally. Thus expanding the search ACROSS THE COUNTRY would be appropriate and acceptable…..as long as proper explanations were included in the report. And very likely, those sales may not have appeared in the local MLS. The CA gov mansion is unique in that aspect! But the home is certainly valuable to a high ranking diplomat, major corporation executive, etc., who needs a pretty secure place from which to conduct business or entertain.
Thanks, Dave. I really appreciate you chiming in here. This property is incredible for hosting events. It has nearly four acres, and there is so much space for guests (and even parking in the front of the house). I have to think potential entertainment is a huge aspect for the target buyer.
Fun post Ryan. Thank you.
Thanks so much, Gary. I had fun with this one.