Last week, I discussed how the Manhattan Beach market was ramping up its spring selling season, whereas other South Bay markets will likely start a month or so later.
Due to the activity, this post is a continuation of some new listings and some recent sales to demonstrate how certain sub-markets have performed and where they might go.
Manhattan Beach Walkstreet Action
For
this section, I want to focus on the 100 and 200-block walkstreets around the
pier.
For reference, south walkstreets are defined here as Manhattan Beach Blvd. to 1st Street, while north walkstreets are defined here as Manhattan Beach Blvd. to 19th Street.
Let’s dive into the north walkstreets first.
North Manhattan Beach Walkstreets
If you read my June 2019 post, “Manhattan Beach Walkstreet Home Sub-Market Sees Prices Fall by 15%,” then you got deep into the weeds of what was going on in the north walkstreets based primarily on new construction and land sales.
In a nutshell, 2015 had a peak sale of $9.475 million for a 4,747 square foot home. In 2019, we saw a well executed 4,100 square foot new construction home go for $8.395 million.
Although these are just two sales, if you read the June blog post, you saw the sales over five years, which clearly demonstrated a steady decline that lead to that 15% lower sales price.
Here
is a quick summary of the latest listings and recent sales to show what the
market is doing presently:
- Poorly located land sale
- 228 19th Street
- Sold Price: $3.8 million
- 228 19th Street
- Better located land listing (BIG recent price cut)
- 127 16th Street
- Asking Price: $5.999 million
- 127 16th Street
- Interesting existing sales for value
- 229 19th Street
- Sold Price: $5 million
- 128 18th Street
- Sold Price: $6.65 million
- 229 19th Street
- Incredible spec sale for a big price
- 221 19th Street
- Sold Price: $9.7 million
- 221 19th Street
After
years of slow decline for new construction in this pocket, a developer decided
to go big. Rather than going 4,200 square feet and play it safe with finishes,
this developer went for it all…and it paid off.
221 19th Street, the incredible spec sale mentioned previously, offered some of the top finishing’s and an epic basement that brought it to huge 5,650 square feet. This bold new build also happened to offer with amazing views. It sold quickly for almost full asking to boost new construction values (for big bold homes) to new highs.
On the flip side, an existing home at 128 18th Street that was built in 2012 (only eight years old people!) followed some past weaker comps and sold at $6.65 million. This was just $1 million more than what it was purchased for new in 2012…that is under a 20% gain eight years later in a hot Manhattan Beach market.
What these two sales are showing us and what we have been seeing for years, is that Manhattan Beach buyers will pay up huge for gorgeous, brand new construction in the right locations.
If something is considered out of style or doesn’t have the newest bells and whistles, then even eight year old homes can have a disappointing result of only a small gain despite a longer time held and a great year to buy back in 2012.
The
sales are now mixed and are waiting for bullish or bearish sales.
Could this sub-market go from 15% down to a 20% pop with one more great spec sale?
Or, will more existing sales that are not too old disappoint?
And, will a land listing like 127 16th Street make a deal close to $5.999 million thanks to the amazing 19th Street spec sale or will it have to cut further to accommodate for more risk?
There
is some fun action here and this pocket could go either way.
South Manhattan Beach Walkstreets
As for the south walkstreets, there has been some recent fireworks.
After
having little to no comps and a disappointing sale or two, a 2004-built home on
5th Street sold for a price not seen in a while.
- 120 5th Street
- 4 bed, 6 bath, 5,000 sq. ft., 2,706 sq. ft. lot
- Sold Price: $9.6 million
This was an extremely strong sale that will likely give sellers and buyers confidence that the sub-market is doing much better than the sub par comps over the last few years.
That bullish 5th Street sale lead to what looks to be a huge escrow on 2nd Street and Ocean Drive.
- 202 Ocean Drive
- 5 bed, 6 bath, 4,155 sq. ft., 2,701 sq. ft. lot
- Under Contract Asking: $12.75 million
This would be a monster sale for the south walkstreets and really create a quickly rising tide in this market, and even help support the north walkstreets to go higher.
The trend is higher and too tough to deny here.
Which leads me to last week’s newest “wow” listing, a neighboring two parcel property that is asking $12.695 million.
- 124 6th Street
- 5 bed, 6 bath, 4,014 sq. ft., 2,706 sq. ft. lot
- 120 6th Street
- 4 bed, 3 bath, 1,848 sq. ft., 2,687 sq. ft. lot
These
two parcels are being sold together asking a total price of $12.695 million.
This listing could be the “wow” sale of the year due to its prime location, views, and multiple redevelopment and sale options to whomever is the lucky buyer.
Tear
down both properties and build a massive estate as the rendering shows. Or,
play the various games of rehabbing or building to keep one and sell the other.
Either way, this offering has a lot of different avenues which appeals to a wider audience and increases its value.
Word on the street is that it has multiple offers and will be going to escrow shortly.
East Manhattan Beach New Construction
If we have learned anything over the last 24 months, there is insatiable demand for new construction in East Manhattan Beach.
The
record sales prices are not just high watermarks but blow it out of the water
record highs.
My August 2019 post, “East Manhattan Beach Record Homes Sales and the Fascinating Dichotomy,” talks about the record sales leaving existing inventory in the dust.
That
post highlighted the $4.465 million record sale for this sub-market. Well, now
2020 is kicking off an even stronger record on 8th Street.
- 1751 8th Street
- 6 bed, 6 bath, 5,826 sq. ft., 7,500 sq. ft. lot
- Sold Price: $4.855 million
Back in 2018, there were zero sales going over four million. Now, just two years later, a spec home in this sub-market is going for over $4.8 million. That is truly jaw-dropping.
Today, we are now seeing other new construction homes sales in not as desirable locations and not as grand a scale now selling for premium prices. Take a look at these two properties below for reference.
- 1226 3rd Street
- 6 bed, 5 bath, 4,000 sq. ft., 6,269 sq. ft. lot
- Sold Price: $3.55 million
- 1607 Nelson Avenue
- 5 bed, 7 bath, 4,400 sq. ft., 7,497 sq. ft. lot
- Sold Price: $3.725 million
Again, Manhattan Beach buyers will pay premium prices for brand new construction and make the proper adjustments for scale and location.
These new construction sales are providing opportunity to find deals in existing construction. Below are a few examples of 2019 sales where buyers went for value on existing construction.
- 1447 10th Street
- 5 bed, 6 bath, 4,041 sq. ft., 7,502 sq. ft. lot
- Sold Price: $2.5 million
- 1411 8th Street
- 5 bed, 5 bath, 4,128 sq. ft., 7,500 sq. ft. lot
- Sold Price: $2.805 million
- 1404 5th Street
- 5 bed, 4 bath, 4,162 sq. ft., 7,507 sq. ft. lot
- Sold Price: $2.927 million
Additionally, there were lot sales throughout East Manhattan Beach on standard 7,500 square foot parcels that sold between $1.45 and $1.9 million, which gives a wide margin to spend money and build new.
When your home could be worth between $3.5 to $4.8 million the is a lot of room if your land acquisition price starts with a one as its first digit.
There
are signs that existing home owners want in on the party for the big bucks like
new construction.
- 1247 6th Street
- 5 bed, 5 bath, 4,482 sq. ft., 7,502 sq. ft. lot
- Asking Price: $3.75 million
This is a well-done existing home in a great location asking a premium price even though it is not new construction. If this one goes, then existing homes will get a boost in price and open the door for the market to climb higher.
There are a lot of bullish trends here, especially if existing home sales start to pop.
Affordable Manhattan Beach Options
Alright, enough talk about luxury homes with prime view double-lot locations or brand new East Manhattan Beach estates…let’s talk “affordable” options in Manhattan Beach.
Did you know that excluding the Manhattan Village sub-market, there were 11 sales under $1 million in Manhattan Beach?
That is some major value in a city where the median home price is pushing $2.4 million.
To land and score a sub $1 million home, you need to be okay with two bedroom condos along major thoroughfares, but they do exist both east and west of Sepulveda Blvd.
Even
though the Manhattan Beach spring selling season has kicked off, I am sorry to
disappoint and say that nothing under $1 million has come onto the market.
Furthermore, there were another dozen sales between $1 million and $1.2 million to end the year. A lot of them were three bedroom options with a good chunk of room.
Unfortunately, as of now, there is zero inventory for this asset class as well.
Last year’s sales, however, show that these more affordable options will come to market in the spring through summer.
Be patient as they will come.
And watch this early action throughout the entire Manhattan Beach market. It is fun to see new properties come to the MLS and the new deals being made.
The current trend is positive and that momentum can be very powerful.