Subscribe below to keep up with our latest updates

    Main Content

    Home Prices on the Hermosa Beach Strand are Getting Crushed

    July 26, 2019

    By: Richard Haynes
    Hermosa Beach

    It is fun for just about anyone to look at beautiful Strand home listings for sale.

    Most onlookers drool over the homes while walking by with their coffee, glancing over the multi-million dollar asking prices without giving much thought and think to themselves…“maybe someday.”

    But, if you are actually in the market for a home on The Strand, then I am sure you are watching prices a lot more closely than others.

    And, if your focus is on Hermosa Beach Strand homes, then you would know that today property values are getting hammered.

    The Poster Child: 60 The Strand

    To start off this blog, I want to share the story of 60 The Strand that sold this week as it is the perfect case study of the Hermosa Strand’s price collapse.

    The Purchase

    Purchased on spec by a developer, 60 The Strand, formally known as 58 The Strand, was acquired in February of 2016 for $5.2 million. At the time, this was a low purchase price in a rising Strand marketplace.

    Quickly and efficiently, a beautiful contemporary home was in the process of being built on the 60 The Strand lot.

    In June of 2017, a new 3,575 square foot home was brought to market pre-completion to test the waters at an asking price of $10.9 million.

    The Original Comps

    The asking price seemed very reasonable in the Summer of 2017 based on a few sales.

    In 2016, 3320 The Strand sold for $8.35 million after just one day on the market.

    • 3320 The Strand
      • 3 bed, 4 bath, 2,910 sq. ft., 2,144 sq. ft. lot
      • Sold Price: $8,350,000

    This 1990-built home was tired and in need of a refresh. It was in a more desirable northern Strand location, but the house was on an undersized lot and only 2,900 square feet, a smaller size than most comparable properties.

    Another northern located listing at 3330 The Strand sold for $8 million in 2016 to a flipper who planned to rehab the property and bring back to market at over $12 million.

    • 3330 The Strand
      • 5 bed, 7 bath, 3,152 sq. ft., 2,084 sq. ft. lot
      • Sold Price: $8,000,000

    Not to mention, another listing at 2654 The Strand sold for $9.2 million as a tear-down home on a standard sized lot.

    • 2654 The Strand
      • 3 bed, 5 bath, 3,180 sq. ft., 2,597 sq. ft. lot
      • Sold Price: $9,200,000

    And lastly and most encouragingly, the month before in May 2017, a corner lot at 1540 The Strand sold for $14.15 million.

    • 1540 The Strand
      • 5 bed, 6 bath, 5,015 sq. ft., 4,159 sq. ft. lot
      • Sold Price: $14,150,000

    This home was a sizable corner lot and house with over 4,600 square feet of living space just north of the pier. While this home had cheaper construction and not the quality we are used to seeing on The Strand, it caught the market while at its hottest.

    So as you can see, two fixer homes sold in the $8 to $9 million range on the north end of the Strand and an over-sized spec closed for over $14 million.

    So, why not list 60 The Strand at $10.9 million?

    Turns out, there were no takers. The presumed reason for not selling was due to the home still being under construction. As a result, the developer took the home off the market to wrap things up.

    New Listing, Comps Start to Get Ugly

    In the 2018 New Year, 60 The Strand was completed and freshly staged.

    Again, the asking price was still at $10.9 million.

    This was the year that the market began to deteriorate.

    Although there were some sales in line with the comps and some that were even higher, there were some strange happenings with properties that should have sold higher.

    A few months into 2018 in May, a spec home at 1932 The Strand came to market asking $13.2 million.

    • 1932 The Strand
      • 4 bed, 4.5 bath, 3,826 sq. ft., 2,400 sq. ft. lot
      • Sold Price: $10,500,000

    This home was by far in a better location and larger in size to 60 The Strand, however, this property lingered for over 200 days after multiple price cuts. It finally sold at a disappointing $10.5 million seven months later.

    In June, 3330 The Strand, which was originally purchased for $8 million as a flip, came to market at $12.5 million.

    • 3330 The Strand
      • 5 bed, 7 bath, 3,152 sq. ft., 2,084 sq. ft. lot
      • Sold Price: $10,500,000

    About four months and some fast/sharp price cuts later, this property closed at $10.5 million as well.

    To add further pain, a south end Strand listing at 12 The Strand came to market at $6.68 million at the beginning of 2018, after not making a deal in 2017 at its asking price of $7.98 million.

    • 12 The Strand
      • 4 bed, 4 bath, 2,693 sq. ft., 2,552 sq. ft. lot
      • Sold Price: $5,194,000

    After being on market for nearly all of 2018, this 1987-built home sold for a crazy low price of $5.194 million. That is almost a 35% discount from its original asking price and a shocking blow to the south end marketplace.

    And finally, another low sale occurred at 3435 Hermosa Avenue, also known as 3435 The Strand.

    • 3435 The Strand
      • 2 bed, 2 bath, 925 sq. ft., 1,779 sq. ft. lot
      • Sold Price: $4,400,000

    This undersized lot with a duplex came out asking $5.5 million and eventually sold at $4.4 million, a price not seen on The Strand in quite some time. Although this property may have deserved the low price, this ultra-low sale contributed in chilling the Strand market.

    As all of these sales materialized, 60 The Strand cut its asking price from $10.9 million to $9.95 million.

    Then, the price was cut from $9.95 million to $9.45 million.

    As more inventory hit in 2018 and into 2019, the price was cut again to $9.20 million.

    Keep in mind, the property was receiving offers, but always slightly below what seemed to be a reasonable sale to the comps which kept it from making a deal.

    As a result, the property kept sliding on down with the market.

    More Competition, More Price Cuts, and Capitulation

    Unfortunately for 60 The Strand, after two years, even more property came to market on the south end of the Strand. And, those properties came out asking even lower numbers.

    22 The Strand debuted in 2018 at $7.895 million and is still on the market today at $6.249 million.

    • 22 The Strand
      • 4 bed, 5 bath, 3,600 sq. ft., 2,554 sq. ft. lot
      • Asking Price: $6,249,000

    718 The Strand, a 1999-built contemporary, finally sold after years on the market for $6.363 million. This home first came onto the market in February of 2016 asking $7.75 million. After exactly three years on market, the home sold for almost a $1.4 million discount.

    • 718 The Strand
      • 3 bed, 4 bath, 3,081 sq. ft., 2,397 sq. ft. lot
      • Sold Price: $6,363,000

    Not to mention, other spec homes were coming close to completion that would offer even more competition.

    As a result of this sale, 60 The Strand cut again from $9.2 million to $8.89 million.

    Shortly after, 60 The Strand was cut again to $8.25 million and then finally cut to a price of $7.999 million…that is when it officially opened escrow!

    60 The Strand closed this week at $7.675 million.

    What was originally a reasonable asking price in 2017, truly turned into a nightmare listing that rode the market down over a two year period.

    To pour salt in the wound, three properties down my client closed on 44 The Strand for $5.6 million. This was a land sale that was an over-sized lot and a half.

    • 44 The Strand
      • 5 bed, 3 bath, 2,317 sq. ft., 3,607 sq. ft. lot
      • Sold Price: $5,600,000

    If you remember, 60 The Strand was acquired for $5.2 million in 2016. For 50% more in lot size, my client paid only 7.5% more in price over three years later… Wow.

    New Lot Values

    With 60 The Strand’s closing paired with my client’s lot purchase, one can reasonably assume that new south end standard size lot values are now around $4 million for a developer.

    That is a 23% drop in value from the $5.2 million purchase in 2016 over the past three years.

    Quite simply, a developer needs a much lower price for a spec sale if prices are now in the $7 million range. Especially, if a lot and a half is now valued at $5.6 million.

    One can assume the price is higher closer to the pier and towards the north end of the Strand, but who would want to touch a land sale for any more than $5 million with all the risk involved today?

    Desperate Inventory

    Spec developers are now seeing the writing on the wall. They got caught in a pullback and will likely do anything to sell.

    Take for instance, 2120 The Strand…

    • 2120 The Strand
      • 5 bed, 7 bath, 3,658 sq. ft., 2,261 sq. ft. lot
      • Asking Price: $9,950,000

    This property was purchased for $8.1 million in 2015. It came out asking $10.2 million this year which is most certainly a price that would already yield a loss for this Seller.

    Recently, it was cut to $9.95 million and still sits on the market today. They will likely lose a lot of money.

    Here is another spec listing at 212 The Strand…

    • 212 The Strand
      • 5 bed, 6 bath, 4,403 sq. ft., 2,374 sq. ft. lot
      • Asking Price: $10,900,000

    This property was purchased for $5.8 million in 2015. It has been marketed for years and currently is sitting on the market at $10.9 million.

    It is 1,000 square feet larger than the 60 The Strand sale, but, being only two blocks away from that comp, it is hard to imagine that they will get anywhere close to that price from a sophisticated buyer.

    Property Values that are Getting Hammered

    If you have made it this far in reading my rambling blog post, I salute you.

    Now that you have been properly educated on some of the painful Strand comps, take a look at sales from a few years ago that demonstrate my point that some Strand owners are getting crushed on their property values.

    2654 The Strand sold for lot value at $9.2 million in 2017. It would be nearly impossible to recoup today with the ultra-low land comps clearing today around $5 million.

    • 2654 The Strand
      • 3 bed, 5 bath, 3,180 sq. ft., 2,597 sq. ft. lot
      • Sold Price: $9,200,000

    802 The Strand sold for $8.9 million. Although in a more desirable location, another corner lot at 22 The Strand is still on the market today asking $6.249 million.

    • 802 The Strand
      • 5 bed, 5.5 bath, 3,540 sq. ft., 2,435 sq. ft. lot
      • Sold Price: $8,900,000

    1830 The Strand was purchased for $6.581 million in 2017 by a spec developer. Remember my opinion of lot value between $4 and $5 million? In hindsight, they overpaid for the lot.

    • 1830 The Strand
      • 6 bed, 4 bath, 2,850 sq. ft., 2,410 sq. ft. lot
      • Sold Price: $6,581,250

    This 1830 The Strand developer is boldly moving forward with construction and will be all-in for the property between $9 and $10 million. With comps between $7.5 and $10.5 million and loads of other new construction on the market, I wish them the best of luck.

    There are more examples of property like the above being shopped off-market. Additionally, there is aspirational inventory that will likely not sell, and in general, just an ugly marketplace for The Strand in Hermosa Beach.


    While most are in awe of Strand homes and rarely pay attention to price trends, there is a real bloodbath going on in Hermosa Beach…or at least a major Strand correction from the highs seen in 2016 and 2017.

    Right now, there are a lot of sellers and very few buyers.

    For the buyers that are patient and disciplined, one can snag a deal among the carnage and come out with a great long term investment.

    Happy hunting and good luck!

    In other news, for those looking for an affordable turnkey home, I have a super chic listing in South Torrance (Seaside Ranchos) that hit the MLS yesterday.

    • 4729 Vanderhill Road
      • 3 bed, 1.5 bath, 1,152 sq. ft., 6,398 sq. ft. lot
      • Asking Price: $929,000

    Seriously, this home is more nicely appointed than some of the Strand sales discussed in the blog (click the address above to see the pictures). I think this is one of the best starter home opportunities in all of the South Bay. Come by this weekend as it should go fast!

    Skip to content