The South Bay real estate market continues to be in one of the hottest times agents have seen in ages, if not ever.
From Palos Verdes to Manhattan Beach, buyers are fighting surging prices and too little inventory.
For this week’s post, I am going to get back into a micro market analysis like I used to do regularly before the pandemic. The focus will be on a pocket in the Manhattan Beach Sand Section that I have covered before.
Not only will it demonstrate how slower markets are catching fire, but it will also feature a client’s new listing. Ultimately, it will be a good exercise to demonstrate market dynamics and give some nice press for my client – even if it is a biased opinion.
Walkstreet Submarket Focus
In past blogs, I have written about walkstreet properties throughout Manhattan Beach.
From North Manhattan Beach to the flat walkstreets to specific numerical blocks, it has all been covered.
The most covered pocket for this blog, over the years, has been the 100 and 200-block of Manhattan Beach’s walkstreets surrounding the Pier. South of the pier to second street and to the North at 20th Street – truly coveted pockets of real estate only second to The Strand in the Sand Section.
It was well noted in my 2018 and 2019 posts that these pockets were soft and eventually headed into a minor correction.
See those posts below…
- 2018 Blog Post: “Manhattan Beach Real Estate Sub-Market in Minor Correction”
- 2019 Blog Post: “Manhattan Beach Walkstreet Home Sub-Market Sees Prices Fall by 15%”
There was a major lull in these walkstreet prices from 2018 through 2020 without question, and it can be argued even into early 2021. That looks to be reversing course, and quickly.
Before I write on 100 and 200-blaock strength, I want to cover the early 2020 – 2021 weakness to demonstrate how powerful the reversal is.
Bottom Formed During Pandemic
Prior to getting into the current surge, it is important to note when a bottom was put into the 100/200-block walkstreets around the Manhattan Beach Pier.
After years of weakness and enduring a price correction on the 100 and 200-blocks, the pandemic hit, and early in 2020 did no favors for these walkstreet values.
During this time, I wrote about an extremely important land listing as a “big test” for this pocket.
Look at the end of my March 2020 blog titled, “Smart Loan Protection & Big Test for the Manhattan Beach Market.”
- 116 16th Street, Manhattan Beach
- 3 beds, 2 bath, 1,252 sq. ft., 2,699 sq. ft. lot, Duplex
- Sold Price: $4,625,000
The asking price on this home, if you read my old blog, was $4.5 million. It would have been the lowest MLS land sale since 2013. Anything lower than $4.5 million would affect developers confidence in a big way, impacting new construction sales negatively, which ultimately drive the overall price of this market.
Thankfully, this listing sold in a flash and for $125,000 over-asking.
It was still a discounted price amidst the uncertainty of the early pandemic, but this represented the absolute bottom of pricing for the walkstreet pocket.
Spec Sales Struggle
Although 116 16th Street was the bottom, it was far from certain that 100 and 200-block walkstreet property had recovered from 2018 – 2020 weakness through the pandemic volatility.
There were plenty of weak sales in between during 2020 and early into 2021.
No better example exists than a spec sale, again on 16th, that sold twice to illustrate the uncertainty.
- 212 16th Street, Manhattan Beach
- 4 beds, 5 baths, 4,100 sq. ft., 2,700 sq. ft. lot
This spec sale had unfortunate timing of listing too high into the softness of 2019, and then gave us an idea of the pocket’s uncertainty/weakness with a resale of the same home in the first half of 2021.
To make this simple, look at the closed prices of both sales for 212 16th Street.
- Closing Price in 2019: $8,395,000
- Closing Price in 2021: $8,250,000
Even while the real estate market was roaring in 2021, with the huge demand for homes in the South Bay after the introduction of vaccines, this beautiful new home resold at a loss.
That did not ensure confidence into the small micro market, even amid rising prices pretty much everywhere else in the South Bay.
All that said, that new construction home put in the low for prices of new homes, and since then, confidence and prices have made a huge reversal in the second half of 2021 and into 2022.
Incredibly Strong Resales
Since the disappointing 2021 sale of 212 16th Street, the market has seen not one, not two, but three $9+ million sales on much older homes in the 100/200-block of the Manhattan Beach Pier walkstreets.
Additionally, we are seeing land sales pop by 15% to 20% and they would go even higher if construction costs had not accelerated higher in such a substantial manner, due to supply and labor shortages…not to mention slowing times with city approvals.
To quickly breakdown some of the much bigger/more significant sales, take a look at the big resales in 2021, reversing the micro-market’s weakness:
- 220 8th Street, Manhattan Beach
- 4 beds, 4 baths, 4,195 sq. ft., 2,709 sq. ft. lot
- Sold Price: $9,200,000
- 208 20th Street, Manhattan Beach
- 5 beds, 6 baths, 5,673 sq. ft., 2,704 sq. ft. lot
- Sold Price: $9,050,000
- 116 4th Street, Manhattan Beach
- 4 beds, 5 baths, 4,226 sq. ft., 2,692 sq. ft. lot
- Sold Price: $9,000,000
These sales helped build confidence in the market today with few options. Even with agents claiming that any brand new construction spec now would fetch $10+ million.
Furthermore, land sales occurred (or are occurring) at higher prices than the pandemic bottom land sale on 16th Street discussed above.
- 124 8th Street, Manhattan Beach
- 3 beds, 2 baths, 1,760 sq. ft., 2,704 sq. ft. lot
- Sold Price: $5,100,000
- 128 7th Street, Manhattan Beach
- 2 beds, 1 bath, 1,296 sq. ft., 2,696 sq. ft. lot, Duplex
- Asking Price: $5,300,000 (with multiple offers)
These land sales moving at $5.1 to $5.3 million are strongly higher (15% higher) than the $4.6 million pandemic land sale…and again, would be much higher if construction prices have not surged with inflation.
Thrice Sold Duplex Jumps
Finally, Let’s look at a duplex that has sold THREE times in recent years.
- 220 16th Street, Manhattan Beach
- 5 beds, 4 baths, 2,701 sq. ft., 2,707 sq. ft. lot
This is the breakdown of the MLS closings to demonstrate sale to weakness, and then morphing into strength.
- Closing Price in 2019: $5,150,000
- Closing Price in 2020: $5,025,000
- Closing Price in 2022: $5,750,000
You can see the purchase in a slow market back in 2019, and then the resale a year later during the pandemic where the owner took a loss on an even lower price.
And today, just two years later, a reversal and very strong jump higher of about 15% to begin 2022.
This is about as clear of proof that I can provide to show that the market has reversed course in a big way.
Conclusion: The 100/200-Block Walkstreets are Back to Growth
After a tough 2018, 2019, and 2020, the 100 and 200-block walkstreets around the Manhattan Beach Pier are back to growth.
You can clearly see it with land prices jumping, $9 million resales, and the 16th Street duplex landing a strong premium after being sold three times in this key time period.
If that was not enough, a home on and off the market for nearly four years came yet again to market last month and made a quick deal at its highest asking price over the multiple year period.
- 232 16th Street, Manhattan Beach
- 6 beds, 5 baths, 4,400 sq. ft., 2,694 sq. ft. lot
- Asking Price: $7,495,000
Not only does the home have a current tenant, but the location is very tough, neighboring busy Highland Avenue. If this gets near asking, the $9 million sales will look like great deals.
Pair this quick escrow with zero inventory in this pocket and the market is poised to begin surging higher with the rest of the South Bay home market.
New 100-Block Walkstreet Listing
That leads me to highlighting my new listing in a prime 100-block walkstreet location.
- 124 17th Street, Manhattan Beach
- 4 beds, 3 baths, 1,720 sq. ft., 2,695 sq. ft. lot
- Two Single-Family Residences
- Asking Price: $6,250,000
This walkstreet offering affords buyers a multitude of options which is so important when investing in this area.
Choose to utilize the turnkey property as a move-in ready beach house, an easy to manage investment property, and/or land bank it to build your dream home in the future (or today).
It is a rare opportunity that is worth serious attention from any discerning Manhattan Beach Sand Section buyer. Come on by to visit and I am sure you’ll agree.