The Sand Section in North Manhattan Beach can be quite a confusing market for someone not intimately familiar with how the area is valued. There is a hodgepodge of factors to analyze in this ever-changing market: walkstreets versus alleyways, single-family homes versus town homes, half lots versus full lots, tear downs versus fixers, etc. These factors are just scratching the surface…as you dig deeper there is much more to consider.
In today’s blog, I will breakdown a small micro-market within North Manhattan Beach (the 400-block!) to give you a clear picture on value in this specific area. For the sake of this blog, I want to focus on the “highest and best use” properties. These properties have close to the maximum square footage allowed (above ground). Additionally, I am going to use a chronological history starting from 2017 and I will choose one home size to draw accurate value conclusions. Let’s dive in…
The 400 Block Micro-Market
The 400 block in Manhattan Beach has a life of its own and appeals to very specific buyers. This area can be described as Vista Drive to the west, Sand Dune Park to the east, 36th Street to the north, and 26th Street to the south (reference map for visual).
A vast majority of the lots in this area consist of a full 2,700 sq. ft. running from street to alley. The further west you are, the more potential for ocean views, while the further east you are, the more potential for tree section views.
From there exists a mixture of old bungalows, remodeled additions, newer builds, and of course, brand new construction.
Newer Existing Sales
March 2017: 421 32nd Street ($4,025,000, 2003 build, 4 beds, 5 baths, 4,252 sq. ft., 2,705 sq. ft. lot)
June 2017: 440 32nd Street ($4,000,000, 2006 build, 5 beds, 5 baths, 4,204 sq. ft., 2,704 sq. ft. lot)
These homes are only about 13 years old, turnkey, and offer around the same square footage. The market was extremely efficient allowing them to sell at virtually the same price with two very different styles. Kind of like a Chanel or YSL purse…same function, same price, just different styles (or so my Fiancée tells me).
Both traded at about $950 per sq. ft.
New Construction Sale
January 2018: 420 31st Street ($4,637,500, 2017 build, 5 beds, 6 baths, 4,302 sq. ft., 2,699 sq. ft. lot)
This home came out in late 2017 asking $4.995 million. Much to the market’s surprise, it sold rather quickly, closing for a record price of just over $4.6 million.
When looking at the two sales listed in the previous section, the buyer and seller had to agree on what premium new construction commands over newer existing construction.
At that time, the agreement was that new construction commands a premium of close to $600,000 over newer existing homes.
This home traded at about $1,075 per sq. ft.
Existing Fixer
April 2018: 452 27th Street ($2,988,750, 1990 built, 5 beds, 4 baths, 3,851 sq. ft., 2,684 sq. ft. lot)
Although this home needed a major overhaul, this is quite a sizable discount from comparable sized homes selling in the $4 million plus range. Would a $1 million remodel make this place look brand new?
All in all, this home sold closer to $3.1 million as the buyer’s agent represented them self and gave the commission back to the seller. Clearly, the market was saying that a heavy fixer was worth about a $1 million discount to the 2017 sales of around $4 million due to the cost and headache of construction.
This home traded at about $775 per sq. ft.
Newer Existing Sale
May 2018: 433 26th Street ($3,850,000, 2004 built, 5 beds, 5 baths, 4,247 sq. ft., 2,761 sq. ft. lot)
Although this home was not as nice as those newer 2017 sales, it made up for it with its views, making it comparable to those sales from 12 months earlier.
The question of this sale was whether the new construction comp would pull the price higher or if the heavy fixer would pull the price lower?
As it turns out, the latter won and rather than selling for $4 million (like the properties above), it sold for $3.85 million.
This home traded at about $905 per sq. ft.
Conclusion
In 2017 through 2018, using comparable home size examples in this 400-block micro-market, you can loosely come to these conclusions…
Newer Existing Homes: $950 per sq. ft.
New Construction Homes: $1,075 per sq. ft.
Existing Fixer Homes: $775 per sq. ft.
And with the most recent update…
Newer Existing Homes: $905 per sq. ft.
Does this mean the market is going down? Heck no! This is just the natural ebbs and flows of the price war between brand new, newer, and fixers.
Just wait until next week when 2600 Grandview Avenue, asking $5.499 million, closes and changes the whole game again.
*Bonus*
Check out my new listing to throw into the mix of this blog.
472 29th Street (Asking $3,399,000, 2003 build, 5 beds, 6 baths, 4,603 sq. ft, 2,998 sq. ft. lot)
The home is asking $740 per sq. ft.
This home price truly represents a “deal.” The condition is between a “newer existing” and an “existing fixer” but it is priced as a fixer. In fact, the price per sq. ft. is even lower than the last fixer sale due to the sizable livable square footage and it being an over-sized lot to boot.
This home is a can’t miss. With minimal work needed and the lowest price per sq. ft. in the Sand Section…it can’t be beat. Make an offer before it is gone!