POULSBO — Ruth deMille hates the house at 19159 8th Ave. NE.

She wouldn’t buy it. She thinks it’s a bad investment. And she’s the listing agent. In fact, if someone wanted to buy it, she said she’d refer them to an agent she doesn’t like.

The house has been a time suck for her. She’s an agent for Coldwell Banker Bain and, she said, sells 25-30 listings a year. But she can’t sell this one, let alone put a positive spin on it.

The house needs a new roof, the paint may have lead in it, and it’s located within feet of the south fork of Dogfish Creek, a salmon-bearing stream. Lest we forget, the basement is prone to flooding.

The latest potential buyer recently pulled out — “The guy got cold feet,” she said. The house, which is in foreclosure, is now headed to a bulk auction where it will be sold with other houses that Freddie Mac can’t unload.

“My first recommendation is, this should go to the city,” deMille said Aug. 18. “The highest and best use would be to turn it into a park. Tear it down and call it good.”

DeMille said the federal government loses when a house goes to bulk auction; for example, an investor bought a condo in Bremerton for $13,000.

“But [that loss] could be a win for the city,” she said.

Poulsbo Mayor Becky Erickson is interested. If the city can acquire 19159 8th Ave., it could improve fish passage under 8th Avenue — it’s currently a small culvert that frequently causes the creek to overflow — and the city could do stream restoration work on the property, where the stream naturally deltas.

The house has been on the city’s radar for a while. Two years ago, Barry Loveless, at the time the city’s public works director, said the city was interested in buying the property to remove the house and do stream restoration there.

“Absolutely, we’ve been interested in this house for a while,” Erickson said Aug. 18. “But it’s been in litigation, then in foreclosure. It’s been legally challenging.”

She considered asking the City Council in July to discuss buying the property, but backed off when she heard the house had been sold.

Now that the sale fell through, she’d like to figure out how the city could acquire the property.

DeMille said that now that Freddie Mac has decided to go the bulk auction route, the city couldn’t make an offer at this point. But the city could approach the winning bidder and make an offer.

DeMille didn’t know when that might happen. Erickson hopes she has time “to find out the steps to legally purchase it.”

According to Judy Driscoll of the Poulsbo Historical Society and Museum, an early owner of the property applied to the city in 1910 for a gravel pit on the property “and in the subsequent years [he sold] a lot of gravel to the city and was also working on the city streets,” Driscoll wrote.

“Now, I’m wondering if that is how the flat area where public works is located was developed. It would certainly make sense that his gravel could have been mined out of that spot and with a creek running through there, gravel would have been plentiful.”

Driscoll said a house was located on the property at that time, but the house that is there now is a different house that was likely moved there in the mid- or late-1950s. Marge Smallbeck said the house was not there when she lived next door in the 1950s. She said her father bought the property where the house and the public works yard are in 1951 or 1952 and “there was nothing there except the creek, which flooded all the time.”

Turns out, building or placing the house so close to Dogfish Creek wasn’t such a good idea. The channel is narrow on the property, and Mayor Erickson said the creek “deltas” there; the house’s basement and the adjacent city public works yard regularly flood during high-water winter months. The house couldn’t be built that close to Dogfish Creek today; the city’s critical areas ordinance requires a 200-foot setback.

And then, at some point, someone turned the house into a duplex without obtaining the proper permits.

On her website, DeMille struggled to make the property attractive by description.

“Right smack in the heart of Poulsbo, this is a very special home!” she wrote in the listing description. Then … “Currently an illegal duplex …” Photos of the house can’t hide the water in the basement.

DeMille continued, “… with proper restoration this house could SHINE.” But in an interview with the Herald, she acknowledged that restoration work might require additional review — by the state and the Suquamish Tribe — because Dogfish Creek is a salmon-bearing stream, and the state’s fisheries are co-managed by state and tribal governments.

DeMille said many potential buyers “have gone down to the city and asked, ‘What can we do?’ And they run away. I can’t sell it. I’ve sold 200 of these over the years, and I can’t make this go away.”

The assessed value of the house peaked at $293,620 in 2008, according to Kitsap County Assessor’s online records. The house is currently assessed at $110,400, its value of 13 years ago.

The house’s last owner bought it for $171,319 in March 2013; the assessed value then was $152,230. The house was previously sold in July 2002 for $169,000; its assessed value was $119,520.

Today, the property is a repo, held by Federal Home Loan Mortgage Corporation, aka Freddie Mac. The 1,507-square-foot, two-bedroom, two-bathroom home, with 1,045-square-foot basement on .35 acre was last listed at $99,000.