Before next week’s blog where I will post the latest Q3 South Bay home numbers, I am going to highlight rather large price swings in the local marketplace.
I’ll share three examples throughout the South Bay that are actively listed right now. Many times, large price swings are the sign of a red flag or a mispricing to the high side, but that is not always the case.
Sometimes a big price swing can represent an opportunity or just simply be the proper asking price.
You can be the judge.
Hollywood Riviera Increase of $550K
The first big price swing I want to highlight is in Hollywood Riviera on Pacific Coast Highway.
First thing to note here is that this home sold about 18 months ago for $1.275 million. It was a fixer candidate that got a total refresh (although no added square footage) and is now asking for more. See below…
4920 Pacific Coast Highway
4-beds, 2.5-baths, 1,572 sq ft
Asking Price: $2,100,000 (up $550k)
What’s more, the home was previously listed (in its current, rehabbed condition) in August asking a much lower price – $1.55 million.
Now, a $275k mark-up for a complete refresh seems very reasonable at the first $1.55 million asking, if not a darn good deal to skip the headaches and capital needed to rehab a home. That is just a 17.7% premium from the acquisition price.
Unfortunately, the original resale listing did not find a buyer after 40 days on market and the listing was canceled.
Fast forward to the end of September, the property was relisted at a much higher price of $2.1 million.
Will the homebuyer marketplace be willing to pay a little over $800k for a quickly rehabbed home in Hollywood Riviera on PCH?
Or will buyers hesitate after seeing the property did not move at $1.55 million and now balk at a new price $2.1 million price today?
We probably all know the answer here.
Rancho Palos Verdes Drop Close to $4M
I have held many casual conversations with local homeowners and clients regarding the stunning property on Oceanaire Drive in Rancho Palos Verdes.
Many are infatuated with the property’s listing history. Let’s look at the property first and then I will fill you in on the details…
45 Oceanaire Drive
5-beds, 6-baths, 7,100 sq ft
Asking Price: $5,999,999 (reduced by $3.88M)
Originally sold in September of 2020 for $8.4M, this property has had a unique listing history and a “wow” reduction this week.
Sept 2020 – Sold for $8.4 million
October 2021 – Relisted for $9.98 million
April 2022 – Price increased to $11.5 million
August 2022 – Canceled listing at $10 million
August 2023 – Relisted for $9.88 million
September 2023 – Priced reduced to $5.99 million
That is some wild listing history. Not to mention the almost $4 million reduction to its current asking price, which is well below the acquisition price back in 2020.
Who really knows what is going on here except the parties closest to ownership.
According to assessor’s records (which can sometimes be horribly incorrect), it shows a transfer from an individual who purchased in 2020 ($8.4 million) to an LLC for $4.5 million in May of 2021.
For essentially 7,100 sq ft of brand new construction and awe-inspiring views of the Portuguese Canyon, this represents a huge price drop against this property’s own comp in 2020.
This one really makes you think.
Hermosa Strand Price Bump of Nearly $2M
Last up is another property that has been on and off the market over the years, patiently waiting for its price.
100 The Strand in Hermosa Beach
5-beds, 4.5-baths, 3,764 sq ft
Asking $10,700,000
As with the Oceanaire property, it is worth noting the history for perspective…
June 2021 – First asks $12.8 million
November 2021 – Relists asking $10.9 million
March 2022 – Relists asking $10.89 million
September 2022- Resists asking $9.89 million
February 2023 – Relists asking $8.999 million
April 2023 – Increases its asking to $10.7 million
July 2023 – Relists again at $10.7 million
There are additional nuances during that period of minor price cuts or increases after going through a few different listing brokerages.
While the market has increased since 2021, ultimately, there has been no sale consummated at this property.
Anyone with information via their Realtor, or online websites, has access to this listing history and can come to their own conclusions on value.
It is still difficult to value, however, as Strand properties are oftentimes inexact science. While the recent price swings are not massive, this listing has been a moving target over the years.
Knowing the listing history and current market…what would you pay?
Final Thoughts
These are just a few examples from real-live listings with larger price swings.
Big price movements happen multiple times a year, each and every year in the South Bay home marketplace. Some properties sell and some do not.
I am guessing our readers can spot the over-ambitious listings, reasonable listings, and which might be a super deal right now 😊
Hope you enjoyed this week and stay tuned for next week’s extremely important data-dump of South Bay Q3 home numbers. I can’t wait to research and share the numbers with you!
Richard Haynes
DRE: 01779425
For more South Bay real estate insights, subscribe and follow Richard’s social channels below:
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]