The South Bay sells a lot of new construction homes. Manhattan Beach closes a great deal of new construction in the Sand and Tree Section, and even east Manhattan Beach (27 per the MLS this year). Hermosa Beach has had a number of meaningful sales of both single-family homes and town house/condos (22), quite a bit for such a small city. And Redondo Beach is a hot bed for new construction especially town homes (44), spread out fairly well between north and south of the city.
But…as we march up The Hill to the Palos Verdes Peninsula, an area that has accounted for over one third of all sales in the aforementioned cities (37.5% year-to-date), you would expect an equal amount of new construction, right? Nope. There have only been 10 home sales built after 2015.
Digging further into the data of the most desirable areas on The Hill, Palos Verdes Estates and Rolling Hills, there have only been four new construction homes sales year-to-date. Those sales have not come easily to developers. The homes tend to sit on the market for a long long time, and all have taken discounts.
Looking at the 5-bed, 4,300 sq ft home with spectacular views at 2317 Via Acalones – this property debuted in August of 2015 for $5.795 million. After 154 days on market and a price cut to $4.998 million, it canceled. Shortly thereafter, the property was re-listed, armed with a different agent, freshly staged, updated pictures, and the same slashed price. Fast forward another 154 days and the home was finally sold for a discount again at $4.45 million this past May. It took almost a full year and a 23% price cut of $1.345 million to get the darn thing off the books.
Even a well-priced $895/sf Doug Leach inspired home in the highly desirable Lunada Bay area took 123 days on market to sell. While selling in only 40 days,c1609 Via Garfias was marketed pre-completion on the MLS for 156 days before expiring and waiting to re-list with completed pictures.
Currently, there are five new construction properties sitting…waiting…
A fickle property that comes to mind is 5 Open Brand Road behind the gates that has a continuing days on market of 308 days. It was re-listed for the third time in the last year yesterday, and has only offered a minute discount of $100,000 during that time.
The Rolling Hills/PVE new construction sales have ranged between $800/sf and $1,100/sf in 2016, but 980 Via Rincon proves how tough it can be to sell on The Hill when this massive 7,236 sq ft home asking only $662/sf ($4,795,000) has been sitting for almost half a year. Sure the property has underwhelming views for Rincon, a few awkwardly laid out areas of the home, and had no staging (until last month), but you have to think there is someone willing to grab a brand new home with tons of square footage on sale. Hopefully the staging helps.
Many would assume an area with tough building standards, art juries, long time lines, and a low supply of new construction would have more demand from buyers. But, with a housing market like The Hill with winding roads, differing views, varying lots, and a multitude of other factors not seen by the beach, this market will continue to be a risky proposition for developers with the fickle buyers on the Palos Verdes Peninsula.