$5.3 million 'shack' just 651 square feet

When calculated for square footage, this home is actually the nation's most expensive.

Posted by Mai Ling at MSN Real Estate on Friday, November 19, 2010 10:47 AM

Just how much are you willing to spend on a view?

• What's the value of a view?

This 651-square-foot home overlooking California's Pacific Coast may look like little more than a shack, but it's actually worth more per square foot than Candy Spelling's $150 million mansion.

Stephane Fitch with Forbes argues that this home, listed at nearly $5.3 million, is actually the nation's most expensive home -- at a cost of $7,060 per square foot. (Thanks to HousingWatch for the link.) Fitch says that's nearly three times Spelling's asking price per square foot for her 123-room, 56,500-square-foot home set on 4.6 acres in the Holmby Hills neighborhood of Los Angeles. (Bing: Photos of some of the world's best beaches)

• Check out some of the world's most expensive homes

In contrast, the beach home pictured above, in the tony beach community of Carpinteria, has three bedrooms and just one bathroom, and it sits on just less than a half-acre. But listing agent John Henderson notes in the Forbes post that its 92 square feet of beachfront are twice what neighboring properties have.

So yes, you're really just buying the view. Already, the city has given its approval for the existing home to be torn down and replaced with a 2,600-square-foot house. Fitch considers the options:

So maybe it's not so expensive. If you plunk down $5.3 million for this house and spend $300 a square foot building a high-end home that fits with the approved plans, the $6.1 million total investment will bring your per-square-foot price down to $2,300.

But honestly, I don't see what's so wrong with the existing beach home, and I personally wouldn't call it a shack. Sure, it's a little on the small side, and Henderson even notes in the Forbes piece that, "It’s got probably the smallest master bedroom I’ve ever seen," but it's way too bright and cheery for my idea of a shack.

• Check out photos of the listing on Realtor.com (an MSN Real Estate partner)

However, homebuyers with $5.3 million to spare on beachfront property may have a very different interpretation of what is "cute" and what is a "shack."

And believe it or not, the home has quite a bit of competition for the most-expensive-per-s​quare-foot category. In research Zillow conducted for the Forbes piece, it found plenty of other homes smaller than 1,000 square feet listed at more than $1 million, including about a half-dozen also worth more than Spelling's mansion.

• Scene stealers: How to deal with view-blocking neighbors