If I told you a South Bay home sold for record AFTER a price cut of $30,000,000 would you believe me? Well, believe it!
Record Sale
After five and a half years on the market, 1 Buggy Whip Drive in Rolling Hills finally sold at auction for $22,400,000. That is only $250,000 from the highest South Bay home sale ever, which was sold earlier this year at 417 Paseo de la Playa in Hollywood Riviera.
Many photos of this home have been taken off the MLS, so below is a listing description of this nine-bedroom, 25-bathroom, 51,000 sq. ft. estate property for reference:
Hacienda de la Paz, a millennium of art, architecture and engineering under one roof. An extremely rare property that MUST be experienced! Positioned in Los Angeles’ preeminent equestrian community on 7.4 acres, the authentic Spanish estate is the only U.S. residence designed by world-renowned architect Rafael Manzano Martos. 17 years in the making, this private palace is the 36th largest residence ever built and still standing in the U.S. Perched 1100 ft. above Los Angeles at the crest of the Palos Verdes Peninsula in the 24-hour guard-gated city of Rolling Hills; one of the safest and wealthiest cities in America. Breathtaking and unencumbered 180-degree panoramic views encompass the Pacific Ocean, beaches, downtown and the San Gabriel Mountains. Resort amenities include a 10,000-sq. ft. hamam spa fit for a king, 15,000 sq. ft., 40 feet high neoclassical grand ballroom (easily converted to a full size basketball court, indoor horse arena or to accommodate large car collection), 2 tennis courts; indoor hard court & outdoor red clay court, 2 swimming pools; indoor & outdoor, direct access to horse stables, arenas and 57 miles of equestrian & hiking trails, guesthouse, bocce court, gym, yoga room, wine cellar, catering kitchen, energy and cost efficient geothermal heating & cooling system, radiant heated flooring, elevators, 6 car garage, motor court and romantic gardens.
History of the Sale
Here is a summary of the listing history of Buggy Whip Drive:
- 2014: $53,000,000 asking price
- 2015: $53,000,000 asking price
- 2016: $53,000,000 asking price (new agent)
- 2017: $48,000,000 asking price (another new agent)
- 2018: $40,000,000 asking price (yet another new agent)
- 2018: $22,400,000 sold at auction with no reserve
As you can see, this property has a complicated history. There are many risks associated with super customized property that has palatial amounts of square footage. In addition, much of this home was built underground due to Rolling Hills’ building restrictions, which usually means less desirable square footage for obvious reasons.
The previous South Bay record sale at 417 Paseo de la Playa sold at a whopping $2,220 per sq. ft., which puts it in the top 5% of PPSF (price per square foot) sales in the South Bay. Conversely, Buggy Whip Drive sold at a measly $439 PPSF, ranking it among the bottom 10% of PPSF from El Segundo to Palos Verdes.
This sale just goes to show that no matter what agent you hire or what price you ask, the market always rules. In this case, Buggy Whip Drive deserved a record price, but not a record price that is double the previous high watermark. In fact, it likely sold below replacement value.
The Rolling Hills Market
The last blog I wrote about Rolling Hills was almost 13 months ago titled “Rolling Hills is a Buyer’s Market for High-End Homes.”
Looking at high-priced homes now, Rolling Hills is still slow. The year of 2017 wrapped up with only one sale over $5 million and 2018 is still low with only three sales including Buggy Whip Drive.
Although the high-end Rolling Hills market has been struggling the past couple years, the overall market does seem to be getting healthier. Sales below $5 million are picking up and median prices are finally starting to rise in 2018.
Here are prices and sales since the last peak in 2015 (trailing 12 months from Q4 2017 to Q3 2018):
- 2015: 29 Sales – $3,300,000 Median Sale
- 2016: 22 Sales – $2,820,000 Median Sale (down 15%)
- 2017: 18 Sales – $2,580,000 Median Sale (down 8.5%)
- 2018: 23 Sales – $2,935,000 Median Sale (up 14%)
With a few years of downward pricing pressure, the Rolling Hills market has popped. Up 14% the past four quarters year-over-year, this battered market is finally getting some good real estate news. Some owners may still be down from the 2015 peak, but 2018 looks like a good year for owners to recover a chunk of losses.
To give you some perspective, the median home sale this year is $2,935,000 at 5 Chuckwagon Road. These buyers got a huge property at an amazing $526 per sq. ft. relative to over $1,000 per sq. ft. by the beach. Yes, this home needs work, but buyers are paying bigger prices in this area because you can get way more bang for your buck!
Conclusion
The Buggy Whip sale was long overdue and a $22 million price shows that the area is still desired by the ultra-wealthy…even if it had to be sold via auction.
Without question things are looking up for the general Rolling Hills real estate market. Will this continue into the New Year? Or will this be a one-year aberration? I think 2019 will be a big year in determining if “Behind the Gates” real estate is back.
Richard Haynes
DRE: 01779425
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The Richard Haynes Real Estate ShowA leader in South Bay real estate for the better part of a decade, Richard thrives as an advisor to his clients with over $248 million in sales as a broker or investment principal at his boutique agency, Haynes. Richard is known for his keen local market insights which have been featured in the L.A. Times, The Street, and Forbes, along with his weekly South Bay real estate blog. [read more]