My blog posts the past couple of months have covered the lack of inventory and fevered strength in our local South Bay housing market. Palos Verdes has been featured often because it is aligned with changing buyers’ habits thanks to the Coronavirus pandemic.
Not to be forgotten, Manhattan Beach continues to have broad based market demand and increasing prices.
One does not have to look far to see the surging prices in the South Bay’s most exclusive beach city.
I can easily pull sales data in Manhattan Beach just over the last 10 days on the MLS (13 closings to be precise) and give examples to show off a market that is as hot as it has been in a decade.
Let’s dive right in…
Example #1
- 652 26th Street
- 5 beds, 4.5 baths, 3,639 sq. ft., 5,122 sq. ft. lot
- Sold Price: $4,500,000
If you are looking for an idyllic Tree Section home in a great location with a larger lot, then look no further than this recently closed sale that lasted on the market for only six days.
Priced at $4.15 million, this listing attracted multiple bids and went $350,000 over asking. Below you will see its best comp that sold in April of 2021.
- 649 26th Street
- 5 beds, 5 baths, 3,500 sq. ft., 5,120 sq. ft. lot
- Sold Price: $3,700,000 (April 2021)
As you can see, it is the same size home and lot from a square footage standpoint, just a touch older with a 2006 building date versus a 2008 date.
All in all, this $3.7 million sale is not quite as turnkey as the $4.5 million subject, but some new floors and rehabbed bathrooms would make a mighty fine comparable.
The subject listing asked a price with a premium to this $3.7 million sale, knowing the market had advanced six months later and it possessed a few more updates. A $450,000 asking price premium felt right on the money.
As you can see, the market wanted it even more and its final sale price went for a whopping $800,000 premium to its most comparable comp just six months ago. Simply incredible.
Example #2
- 324 17th Street
- 4 beds, 5 baths, 3,634 sq. ft., 2,707 sq. ft. lot
- Sold Price: $6,300,000
“Rarely does an opportunity arise to purchase an architecturally significant, modern estate perched high above the Pacific on a coveted walkstreet in the heart of Manhattan Beach…”
….unless you were in the market back in 2017 when it was listed as well. And, while I appreciate the rosy listing description from the agent to best represent the sellers, this 2017 to 2021 sale is to demonstrate just how far and fast prices are moving in a short time.
This is the 2017 sale:
- 324 17th Street
- 4 beds, 5 baths, 3,634 sq. ft., 2,707 sq. ft. lot
- Sold Price: $4,950,000 (June 2017)
With our system, you might not be able to see the previous pictures, but the updates include exterior paint. That is pretty much it…paint!
Thanks to this fast-paced market the final sale was a $1.450 million increase (or almost 30%) in just four years. If you financed by putting 20% down, well, your ROI would be 146%. You don’t see a huge return in real estate like that in a short period of time with merely just some exterior paint.
Even for buyers aware of the previous sale, the home was listed at $5.999 million and quickly bid up by $301,000.
Example #3
- 429 31st Street
- 4 beds, 5 baths, 4,246 sq. ft., 2,705 sq. ft. lot
- Sold Price: $3,565,000
This home took a full 18 months to sell, but finally closed last week.
Completely overpriced in the June 2020, when it debuted asking $3.799 million, this property held firm and waited for its price…essentially, this roaring market grew into the asking price.
While this home offers 4,200 square feet in the North Manhattan Beach 400-block, it is an older model that needs some refreshing since it was built back in 2002.
These are its new construction comparable sale counterparts.
- 453 31st Street
- 5 beds, 5.5 baths, 4,302 sq. ft., 2,700 sq. ft. lot
- Sold Price: $4,375,000
- 428 36th Street
- 4 beds, 5 baths, 4,064 sq. ft., 2,702 sq. ft. lot
- Sold Price: $4,547,000
As you can see these are NEW construction sales that sold to our subject at a premium of around $800,000 and $980,000.
The interesting thing with the sale is that at $200 a square foot, to undergo a major renovation, it would cost the new owner about $850,000. Not only is that a lot of work, time, and liquidity but the 2002 floor plan will likely never stack up to the new construction models.
In 2020, buyers refused this trade-off. But with the incredible run up in prices and the lack of inventory, someone finally, was willing to sacrifice to “get in” to the Sand Section with a significant amount of square feet at a discount. Damn the construction costs down the road!
Just 18 months ago, this asking price seemed nearly insane. Today, it is just another deal.
Conclusion
The market is a blood bath out there for buyers.
These sales are just examples from the past 10 days. It has been roaring like this for months.
As you have read from past blogs, inventory is tighter than ever, the holiday season will not deliver the inventory the market needs, and buyers are ready to make sacrifices and pay record prices.
Life is good for sellers. Buyers are working their tails off.
We’ll continue to watch it all and report every single week.
Cheers.