Manhattan Beach Walk Streets
After years of price appreciation, some of the most highly coveted real estate in the Manhattan Beach Sand Section is in correction territory.
By no means is this meant to cause panic or scare anyone into selling their real estate. This is simply an analysis of past sales in a small Manhattan Beach sub-market that got a little ahead of itself on pricing.
This small sub-market in question is the Manhattan Beach walkstreets. These homes sit on full 2,700 sq. ft. lots on the 100 and 200 blocks. More specifically, the homes discussed in this blog are located south of the pier to 21st Street, which tends to be the most desired walkstreet location for home buyers in Manhattan Beach.
Now let’s dive into past sales…
2015 Sales
205 20th Street
Asking Price: $8,999,900
Sold: $9,475,000
4 beds, 4 baths, 4,747 sq. ft., built in 2014
In July of 2015, this desired walkstreet sub-market reached its peak with the sale of 205 20th Street. Asking $8,999,900, this contemporary new construction home made a deal in only three days and eventually sold over asking price at $9,475,000. This price still exists as the high watermark for the sub-market.
2016 Sales
200 16th Street
Asking Price: $9,475,000
Sold: $9,000,000
4 beds, 5 baths, 4,150 sq. ft., built in 2015
125 2nd Street
Asking Price: $10,300,000
Sold: $9,241,000
4 beds, 5 baths, 4,258 sq. ft., built in 2014
Both of these properties tried to continue the wave of record pricing but had no such luck. The 16th Street sale came out asking the record price of $9,475,000 but ended up selling four months later for a reduced price of $9,00,000. The 2nd Street home was looking for a home-run buyer but reduced their price quickly (and smartly) to make a deal and cash out after two months on market.
Were these signs of a correction? I wouldn’t say so. Some blamed the reductions to seasonality as both listings debuted in the winter of 2015 and 2016.
2017 Sales
132 16th Street
Asking Price: $10,499,000
Sold: $7,600,000
4 beds, 5 baths, 4,047 sq. ft., built in 2013
This 2017 sale is an eye-opener when compared to previous year’s sales.
This home went to market asking $10,499,000 in September of 2016. After sitting on the market for three months, the priced dropped to $9,899,000 in early 2017, and was eventually taken off the market. It was relisted at an aggressive price of $8,499,000 and finally sold for $7,600,000, another $900,000 discount, and over a year on market.
Just 18 months earlier, the 2016 sale of 200 16th Street sold for $9,000,000 right up the walkstreet. This new 16th sale took $1,400,000 haircut from that comp or almost a 16% reduction. This was completely unexpected by the marketplace. This sale single-handedly reset value for this entire walk street sub-market.
Since this 16th Street sale, the sub-market has had trouble coming back ever since.
120 9th Street
Asking Price: $5,999,000
Sold: $5,600,000
6 beds, 4 baths, 2,583 sq. ft., built in 1908
This 4-plex did not help the value of new homes in 2017 as well. This property was sold off-market after being listed in 2016. When lot value dips to the $5,000,000 range, it is no longer compelling to spend $9,000,000 on new construction when you can build a comparable home for $2,000,000 and save a couple million.
2018 Sales
208 20th Street
Asking Price: $9,250,000
Sold: $8,700,000
5 beds, 6 baths, 5,673 sq. ft., built in 2010
In May of this year, 208 20th Street went to escrow quickly after a tough year in 2017 for walkstreet listings. Asking $9,250,000, the market watched to see if 2016 and 2017 were aberrations of buyers taking a breath. Thankfully, it was neither good or bad news. A $550,000 discount cleared in June unveiling that the market was not in the $7,000,000 range but still a far cry from the mid $9,000,000s we saw back in 2015.
Current Market
Although the 20th Street sale this year created a higher floor price, there is still a lot of current inventory for buyers.
130 19th Street
Asking Price: $8,999,000
4 beds, 5 baths, 4,200 sq. ft., built in 2018
This new construction home started at $9,250,000 in October of 2017 and is still waiting for a buyer after dropping the price by $251,000.
222 17th Street
Asking Price: $6,995,000
5 beds, 4 baths, 4,279 sq. ft., built in 2009
Today, a 2009-built contemporary is one of the most compelling buys based on the comparable sales. It asked $7,595,000 in 2017 and failed to find a buyer. Listings like this property show that walkstreet homes still have a lot to overcome, even with the $8,700,000 20th Street sale.
And finally, here are some remodel and lot plays that are crowding the market as well…
232 16th Street
Asking Price: $6,991,475
5 beds, 5 baths, 4,978 sq. ft., built in 2015
224 16th Street
Asking Price: $7,195,000
5 beds, 5 baths, 4,224 sq. ft., built in 1992
228 3rd Street
Asking Price: $4,595,000
3 beds, 3 baths, 2,056 sq. ft., built in 1938
127 16th Street
Asking Price: $7,200,000
5 beds, 3 baths, 2,157 sq. ft., built in 1924
Conclusion
As you can see, it looks like the Manhattan Beach walkstreet sales around $9,500,000 are a thing of the past. With low sales in 2017, one could argue prices were down 20% from the highs of 2015, although the comps were not a true apple to apple comparisons.
Thankfully, with the 20th Street sale this year, the sub-market would only be down 8% from the 2015 high. However, the 20th Street location and year built does not live up to the location/quality of the 2015 high watermark.
All that said, I think it is clear that walkstreet homes are certainly well off their highs and in a minor correction. With existing inventory asking lower prices, lots and remodel options getting more reasonable in price, and many listings accumulating significant days on market, the prices for walkstreet homes will likely continue to be soft until we have a blowout sale that boosts the market.