One small village, one big price difference

Two houses went on the market yesterday: one to the left us and one to the right. The first is a 1955 farm ranch that looks, apart from the new (2007) roof, as if it hasn't been touched since it was built in 1955. The second was the gardener's cottage to the Ferguson Estate and was completely redone and extended vertically in 2006. It's asking price of $1,750,000 reflects all the work that has been undertaken to turn the former cottage into an Italian-inspired villa. Even so it only has has three bedrooms, which may put off a lot of potential buyers and this house is situated right on the edge of the property line, backing up to a steep hill. You are literally 3' away from the road, so imagine the potential noise of trucks and schools buses making the incline all day long.
The price of the fixer-upper (that's Great Opportunity! in realtor-speak) is $799,000. Almost a million less than the renovated home. You do get a full, flat acre and 5 bedrooms but farm ranches aren't a popular style these days. My best guess is that this would be the value of the land only, and we're looking at another teardown. And at that price, in this village, it's a bargain.