Tuesday, November 19th, 2013
Today is World Toilet Day (we are not making this up), and therefore a good time to check in on Manhattan Beach's Toilet Retrofit Ordinance.
As any buyer or seller of Manhattan Beach real estate has experienced over the past 3 years, the city requires a report on current toilets in each home at the time of sale. Toilets are supposed to meet the new standard for ultra-low-flow flushes (1.28 gallons per flush).
Buyer and seller sign the "Toilet Retrofit Declaration" and/or "Toilet Retrofit Transfer of Responsibility" forms, stating whether the existing toilets in the home are compliant, or not, with the 1.28gpf standard.
In theory, the buyer is promising to dump any noncompliant toilets within 6 months after taking title. (Somewhat newer, "lower flow" toilets with a 1.6gpf rating are "grandfathered" in through Jan. 1, 2014, and don't have to be switched out currently.)
But, really, experience shows that no toilets have to be changed at all. The city does not enforce the ordinance as originally intended.
True, generally speaking, buyers sign a form saying:
I, the Buyer accept the responsibility for retrofitting the above mentioned property as provided for in Ordinance No. 2138. I understand that I will be required to retrofit the property or apply for a demolition permit within 180 days following the change of ownership...
What's missing there? The buyer is "required to retrofit," or else what?
Or else... they'll have to talk about it again later.
The city's first idea was to require upgrades to be completed before close of escrow. It would be a seller responsibility. The ordinance still contains this presumption: "All existing residential buildings shall, at the time of sale before change of ownership, be retrofitted..."
After howls of protest, this became a responsibility that sellers could ask require buyers to take on – as reflected in the form quoted above. This has become standard practice in Manhattan Beach real estate transactions. The work is basically never done by sellers, and it's not even a point of negotiation when buyers take on the job and associated (hypothetical) cost.
For enforcement, the city's plan was to pinch buyers for a deposit, refundable only after the retrofit was done.
So you would put, say, $200 per toilet into the city's hands, go spend a like amount switching the toilets, then go back to the city for your refund.
But now the city does not collect deposits. Tracking all of that money in the pipeline would have been a new hassle. And no one wanted there to be "toilet police" in Manhattan Beach. So the one shred of paper enforcement turned out to be a dead letter.
Going forward, the city might enforce the requirement to change noncompliant toilets at the time a homeowner seeks a permit for remodeling work. Then, during the permit process, any noncompliant toilets can become an open issue that has to be remedied for the permit to go through. (This appears to be a requirement of the state building codes beginning next year.) Obviously, new construction will always include the newly required 1.28gpf toilets across the board.
It's nice to say that the current non-enforcement policy works in buyers' favor, at least, but it's also necessary to say that the original intent of the city ordinance has been flushed because the policy was watered down.
There will be a next act.
Unlike the plastic-bag ban, which MB pioneered among California cities in 2008, the toilet retrofit requirement is not an example of a "green" policy that MB chartered on its own. There's a state law, and state building codes, driving this. Cities need to comply.
On Jan. 1 next year, that exception for 1.6gpf toilets goes away.
Every home will have to get 1.28gpf toilets at the time of sale. Or within 6 months. Or else?
Bonus Fact 1: World Toilet Day, the real thing, was declared by the U.N. and exists to promote safe sanitation as a "human right." They say 2.5 billion people worldwide do not have access to a "clean and safe toilet." So if you want a little perspective to go with any gripes you may have about MB toilet policies, why not ponder that a bit?
Bonus Fact 2: This is an actual quote from Mahatma Gandhi: "Sanitation is more important than independence."
Bonus Fact 3: Actor Matt Damon is a renowned supporter of World Toilet Day. He has declared, tongue in cheek apparently, that he simply won't go to the bathroom until the whole world has access to clean and safe toilets. You think Lent is long? He made the pledge in February.
Monday, November 18th, 2013
From here, with strings of warm days and great sunsets, we can almost see Turkey Day. As the Holiday Season unfolds, you always expect lower inventory and less-active buyers in the real estate market.
We've got the lower inventory. A virtual crash saw the total number of listings in Manhattan Beach drop from 48 on Halloween to just 37 now.
Less-active buyers? Ha ha.
In just these past 2 weeks, we saw 19 properties go newly into escrow. (For kicks, we'll list them all below.)
The mix of new deals spans homes priced high and low, east and west, long DOM periods and new listings. There were bidding wars for a Hill Section short sale (1011 Pacific) and a (likely) lot sale in the Tree Section (750 35th). All in the first half of November.
Here's the quick overview on active inventory:
- 37 active listings as of 11/15/13
- 27 SFRs (-14 from 10/31)
- 10 THs (+3 from 10/31)
Active listings by region of Manhattan Beach:
- Tree Section: 9 actives (flat to 10/31)
- Sand Section: 13 actives (-3)
- Hill Section: 2 actives (-3)
- East MB: 13 actives (-5)
You can see the complete report on active listings, with live links to every property, in this single spreadsheet on our data blog: "MB Inventory as of 11/15/13."
We're also providing a report on pending and closed sales by region of MB.
Sales are organized by sub-region of Manhattan Beach.
Here's a link to the spreadsheet on our data blog: "MB Pending/Sold as of 11/15/13."
For closed sales, we provide the past 6 months' worth of sales by region. This is the typical window of time used by appraisers.
Remember, these links are always live under the top "navbar" of the home page, right under "MB Market Updates."
Here are all of the 19 Manhattan Beach properties to go newly into escrow between Nov. 1-Nov. 15, 2013:
|750 30th Street||3/1||1158||5417||$1,150,000||$993||5||$115,000||11/09/13|
|801 18th Street||4/5||3335||5266||$2,199,000||$659||27||$2,199,000||10/16/13|
|3521 Walnut Avenue||4/4||3248||4645||$1,769,000||$545||64||$1,799,000||09/14/13|
|3521 North Poinsettia Avenue||2/2||1679||4643||$1,400,000||$834||8||$1,400,000||10/31/13|
|3520 Walnut Avenue||3/2||2249||4647||$1,449,000||$644||75||$1,499,000||09/04/13|
|644 33rd Street||5/5||4225||5045||$2,899,000||$686||170||$2,950,000||05/11/13|
|316 23rd Street||3/3||1940||1352||$2,895,000||$1,492||371||$2,995,000||11/05/12|
|200 Kelp Street||2/2||963||1354||$1,175,000||$1,220||20||$1,175,000||10/23/13|
|215 19th Street||4/5||4264||2701||$4,799,888||$1,126||163||$4,999,888||06/06/13|
|124 17th Street||2/1||882||1503||$1,499,000||$1,700||32||$1,499,000||10/17/13|
|211 North Dianthus Street||3/4||2225||3250||$2,479,000||$1,114||24||$2,479,000||10/25/13|
|1011 Pacific Avenue||6/6||6000||8028||$3,465,000||$578||43||$3,465,000||10/01/13|
|19 Lafayette Court||2/2||1474||1902||$829,000||$562||11||$829,000||11/07/13|
|1554 2nd Street||3/2||1300||5036||$949,000||$730||4||$949,000||11/06/13|
|1641 21st Street||3/1||1004||4983||$950,000||$946||25||$950,000||10/24/13|
|1417 12th Street #8||3/3||1352||17238||$695,000||$514||2||$695,000||11/06/13|
|1421 18th Street||6/6||4430||7001||$2,699,000||$609||32||$2,699,000||10/17/13|
|1501 Magnolia Avenue||3/2||1539||4855||$1,295,000||$841||8||$1,295,000||10/24/13|
|1609 6th Street||5/4||4964||7501||$2,100,000||$423||36||$2,100,000||09/25/13|
Sunday, November 17th, 2013
It's somewhat surprising to say, but with inventory crashing to new lows, we actually have 5 new listings to review for the weekend.
Meantime, total SFR + TH inventory citywide is down to 37 listings. This is the way the Fall and Winter may go.
To plan your weekend open-house tours, try this Redfin map list of open houses – sort by price or sub-region of MB by clicking the title on a column.
Or click here for the new-format Beach Reporter list of opens.
607 Bayview (3br/3ba, 2075 sq. ft.) is a 90s TH with quite good views over the roof of the companion front unit, but maybe a need for some updates.
The layout is a bit unusual for a TH, with just the master on the middle (entry) level, then two smallish bedrooms downstairs which open to a little patio. There's a shag-like carpet in the master and faux saltillo tiles in the downstairs bedrooms. (Those secondary bedrooms are not shown in the listing photos.)
The top floor is what it's all about – a big, wide open space with plenty of light and those views. Flooring is a recently refinished light maple. The kitchen is noticeably 90s with white appliances and a dated granite.
The way prices have moved recently, one question that occurred to us was: What's this South End view TH worth after being updated?
607 Bayview starts at $1.999M, and is open Sun. 1-4pm.
2211 Vista (3br/4ba, 2250 sq. ft.) is a rear-unit TH that gets just a partial ocean view from the kitchen right now, though that could go if/when the neighbor builds up.
It's a solidly built newer (2005) Mediterranean with all the bells and whistles of the style.
We happened to notice that the listing language describing this home is 100% identical to the language used in 2005 by a different agent to sell the property. It's a complete copy-and-paste job with only the extraneous period at the start to distinguish the verbiage from '05. Well, let's hear it for recycling.
2211 Vista starts at $2.079M and is open, well... You won't see this one on the public lists of opens, for whatever reason, but we were told it would be open Sunday, so assume the regular hours 1-4pm if you want to drop by.
3516 Blanche (3br/3ba, 3000 sq. ft.) sports a recently completed remodel that brought new baths and other fixes to a home that looked pretty decent when it last traded in 2010 (for $1.337M).
The layout sprawls along the length of the lot, with both garages and the entry near the back and coming off of busy Blanche, and two of the bedrooms at the very front of the lot facing out to a garden on 36th St. The big master suite with its terrific bath takes up the 2nd floor.
With 3000 sq. ft. and so much of that spread along the first floor, you'd be tempted to look for a place to add a 4th bedroom, but no. As a result of the way this home's been added onto over the years, there's really no place to get that 4th.
The kitchen here is newer, the hardwood flooring in good shape, and the living spaces fairly bright.
There's no getting around the noise factor from Blanche. It's a busy street for this area of the Tree Section and the home's close to Rosecrans, to boot. And while you'll see a nice outside patio in the listing photos, be aware that it's accessed through the garages at the very southern end of the lot – not directly off any living areas.
3516 Blanche starts at $1.884M and is open Sun. 2-4pm.
1126 11th (4br/4ba, 2300 sq. ft.) is a well-built 2-on-a-lot TH with a location issue. It's noticeably near Sepulveda and right across from the large parking lot of a commercial building – through the archway of that building, you can see and hear traffic from MBB as well.
Still, they've done just about the best they could do here, with a modern-feeling home with good detail work that has held up nicely since its 2006 build.
All 4 bedrooms are upstairs, with ample living spaces spread around the first floor – more of a pocketed approach with discrete spaces rather than a completely open layout.
A little side patio on the western edge off the living room features a waterfall.
You might remember this one from its long run on the market in 2011-12. It racked up 9 months' worth of DOM and sold $100K under asking price at $971K in July 2012. Yes, but, in case you haven't noticed, people are getting markups to their 2012 purchases all over town. Can it happen here?
1126 11th starts at $1.299M (+34% over last year) and is open Sun. 1-4pm.
38 Fairway Dr. (3br/3ba, 1820 sq. ft.) is a mostly original condo that backs up to the golf course.
It's got the same layout as the recently sold 10 East Sausalito (listed at $1.099M and sold higher, pending now) but a better location than the Sausalito unit.
This one really begs to be refreshed everywhere, with a newer kitchen, removal of the carpet and some unification of the flooring, now a mishmash of different styles of wood and faux wood. Frilly, frumpy wallpaper used as accents in some rooms further dates the place.
Accounting for the condition, this one comes out priced notably under 10 East Sausalito, but watch and see what the market does to it.
Disclosure: Dave has toured this property with a client.
38 Fairway Drive starts at $975K and is open Sun. 2-4pm. (Open not listed publicly but confirmed.)
Friday, November 15th, 2013
It had launched at $11.0M, run nearly 6 months and just wasn't having people grooving on its ultramodern, 2br vibe. MBC described it as "the definition of a custom, modern home – exactly what someone wanted, but with questionable appeal beyond the party that ordered it built."
But surely, some sports star or celeb could love this beachfront vanity palace.
Alas, it appears no.
The sale price has posted at $8.700M, a discount to the last list of a cool $1.0M.
But do they mean to use the house?
According to rumors and this blog post, no. The buyers are said to plan a complete reboot. Down to the ground with the 2br, 2-story modern. Make way for something bigger and better.
It's a fascinating turn that offers a cautionary example. If you build something way too custom, you may be the only one who will ever love it.
But don't cry too much. The seller grabbed the land 13 years ago for $2.340M. This is well over a $6M spread over the decade-plus. Subtract out the costs of building and holding, and that's still a very nice profit for having grabbed this sliver of MB's Strand back in the day.
The sale marks only the 5th truly on The Strand this year (we call one TH sale 4303 "The Strand" because it's up and off the strip by 20 yards).
Last year, there were 10 sales on The Strand, including SFRs, TH units and lot sales – but no lot sale within $1M of the $8.7M paid here at 2316 now.
Wednesday, November 13th, 2013
Dave's been working on an offer for what seems the umpteenth bidding war of 2013, and a novel concept crossed our desks here.
In the news now is a possible change to the bidding process for Japanese professional league baseball players who wish to come to the USA and play for the MLB.
Wait, what's the connection to Manhattan Beach real estate?
It's this: US baseball teams are upset about the "blind" bidding process used to get access to top Japanese players. Right now, the way US teams get the "right" to negotiate with Japanese players is by paying a hefty fee to the Japanese team that a given player is locked up with.
The US teams must submit blind, sealed bids – typically multiple millions of dollars – as to how much they're willing to pay the Japanese team just to speak to the player.
Blind bidding like this, wherever you find it, is no fun for the buyer.
In a multiple-offer situation in real estate, for instance, you never know on the first round, or any later rounds, how much, exactly, other buyers might be offering – or even how many other qualified buyers are in the mix. To "win," you might have to pay quite a bit more than the second-place finisher was ever willing to pay.
Facing a comparable problem, now MLB wants to change the process with regard to the Japanese "posting system," as the player-bidding process is known.
The (proposed) solution, which seems brilliant: The top bidder would still "win" and secure the right to negotiate with the player, but the winning bid amount would become the average of the top two bids.
So, if one team bids $20 million to negotiate with a player, and the second-place finisher bids $10 million, the "winner" pays $15 million, meaning that team won't "overpay" by $10 million, but by $5 million. It's somewhat less unfair – literally, $5M less unfair than blind bidding in this example. (The example here rhymes with a real-world case involving Dice-K [pictured], in which the top two bids were separated by $11M.)
Sure, an open auction with all parties transparently engaged would be the most fair to buyers.
But this notion, averaging the top two bids, is less awful for the US team "buyers" than totally blind bidding. And better for the "seller" (the Japanese team) than a totally open auction.
So imagine a real estate world in which "bidding wars" still exist, but by some rule, regulation or gentleman's gentle person's agreement, the highest bidder still gets the property, but at somewhat less cost than that party's own maximum bid. You tie the final deal price to the second-highest price offered, average them out, and you have first-position buyers who know they have not overpaid drastically – just enough to win.
Nonsense! comes the response. The existing "blind" system for real estate bidding wars delivers the best price possible for the seller. If that winning buyer pays vastly more than anyone else would have, that's great for the seller! You can't mess with that!
And hey, legally, listing agents can't agree to something that harms the seller's best interest. Are you really going to force sellers to choose a specific party, and/or take less money?
But what about buyers? Don't we all need them to make this system work?
Don't buyers' agents have the same responsibility to buyers, to help them succeed in acquiring their target properties, without overpaying? So shouldn't buyer's agents be willing to angle for some variant on this new MLB-Japan policy?
OK, it's all a flight of fancy, to be sure. Thanks for walking down the lane with us.
We're not burned out on bidding wars – we've won quite a few. But when it doesn't pan out, you feel for the people who do not succeed. It's a lot of work for everyone, not to mention the emotional investment, but in the end there's just one property at stake. And so from the finish line, for most, it's on to the next one.
Tuesday, November 12th, 2013
Was it just Friday when we were talking about the limited number of sub-$1M listings?
There are fewer now, with new deals posted.
Even a $1.4M property that seemed to us to be "unlikely" to find a suitor at that price found a buyer quickly.
Downsloping lots were all the rage these past few days:
1554 2nd (3br/2ba, 1300 sq. ft.) offers 3br and a 5000 sq. ft. lot on one of the busier streets in East MB.
If you saw this one as an immediate "must have" type sale, good for you. You've got your finger on the pulse. This one racked up all of 4 DOM.
One attraction was surely that this one came out under $1M.
As of last week we noted that it was one of just 3 listings of SFRs in MB under $1M, all of them priced at $950K. (OK, $949K in this case.)
3521 Poinsettia (2br/2ba, 1675 sq. ft.) was perhaps the greater surprise, listed at $1.400M.
That seemed not only like a lot of dough for 2br in a subpar location, but the home's got a shared driveway with the neighbor and that downsloping lot to contend with.
And marketing-wise, this one defied the rules. First, they decided to stick it to the man: just 2.0% for buyers' agents, not the standard 2.5%. They offered few and poor photos, one of the street with a FedEx truck and driver featured. The description was brief, in ANNOYING ALL CAPS and with a misspelling, seemingly the expected norm. Plus, this one is a bit tougher for buyers – it's completely as-is, no repairs, etc.
It ran 8 DOM.
And here we'd gone out on a virtual limb at MBC and said 3521 Poinsettia seemed "very unlikely to hit its moonshot target." (Alas, you learn, as a blogger, that reality will sometimes make irrelevant your published opinions. We risk being proved "wrong," because what fun is it to be safe and say nothing?)
The other sale taking a lower-priced option off the board was over at 1641 21st (3br/1ba, 1000 sq. ft.).
That was less of a shock. We saw this one and found it, while smallish, pleasant enough and a decent starter home.
There were multiple offers against the $950K start price, so look out above on that one as the East MB entry-level bar gets raised.
There's one new entry on the market in the Trees: 750 30th St. (3br/1ba, 1150 sq. ft.) coming in at a jaw-droppingly-low $1.150M.
If you're paying close attention, though, you know it's not going to sell anywhere near that number. (Uh-oh, Dave, there you go again, predicting!)
Sunday, November 10th, 2013
If there's one thing that can cause stress and disruption in a family, it's youth sports playoffs.
You might view this as a 3-day weekend suitable for a little pre-Thanksgiving getaway. But not if the kids are busy being wrung through the playoff wringer.
The thrill of victory, the agony of defeat. Oh, yes, it is very hard for the coaches. But they have earned the vacations many of their players will now give them.
To plan your weekend open-house tours, try this Redfin map list of open houses – sort by price or sub-region of MB by clicking the title on a column.
Or click here for the new-format Beach Reporter list of opens.
711 18th (5br/4ba, 2540 sq. ft.) is odd and dated, a rare 3-level home owing to additions over the years, but it's got one of those must-have locations in the Martyrs neighborhood. There will be buyers.
Entry is along the side of the house, coming into living spaces built around a patio toward the back that's enclosed on 3 sides.
Of the bedrooms, you've got 3 on a middle level steps up from the entry, the master another level above those, and one in a full guest suite way in back in an addition on the first floor.
Stairs up to the the main bedrooms are concrete, reflecting construction of an earlier time. The 3 br together on that middle level share a hallway bath. (Though there's also a half along with the laundry room.)
It's impressive to see what a little fresh carpet and staging can do to remove the overwhelming sense of the home being tired and needing updates. We've seen plenty of homes with similar bones and vintage that were shown empty and with old, rental-caliber carpeting, and they can be dreary. Not here. But the fresh feel won't take away from the fact that the home wants a thoroughgoing modernization.
711 18th starts at $1.865M and is open Sun. 1-4pm.
1733 Pine (5br/6ba, 3115 sq. ft.) is all white, bright and shiny new, a nice execution of the "Plantation" style that's all the rage now.
There's a big, bright kitchen/great room in back with boxed, coffered ceilings and a mix of white marble and black granite counters that keep the kitchen interesting. A breakfast nook is tucked in back toward the backyard. Double doors open to the yard, which has just enough space for a partly covered patio and a little grassy patch – no soccer field here, but not the tiniest yard we've seen in the Trees.
The layout here benefits from having the buried garage in an upsloping lot. That means no first-floor space wasted on the garage and a nice deck off the living room over the garage. Indeed, that deck makes the formal living room more attractive as a place to gather – perish the thought – rather than a forgotten space to show off untouchable furniture and knicknacks.
The flooring is worth a note. By now, you know that wide-plank oak flooring is the style of the moment, and very dark stains have begun to fade in popularity. Here, rather than one of the greyish-brown stains we've seen on similar flooring, they tried something different – a "white-wash finish" after a dark stain that seems to leave a ghostly white outline of the grain pattern against a darker backdrop. It's quite an effect.
With just 3100-odd square feet to go around, nothing feels large. We did like the positioning of the office/guest room on the first floor, far out of traffic, but it's not huge. Most of the kids' rooms upstairs are a bit cozy as well, partly because they each got their own baths. And the master suite, while large enough and with a pretty great bath, is also not gargantuan by any stretch. Call the layout "efficient" for what they were able to fit into it all.
New construction in the Trees... we're starting to see more of it. A home two blocks over on Poinsettia is nearing completion by another builder with comparable bed/ba/square footage and at a rumored presale price of $2.750M.
1733 Pine, on a street that's less busy and with the sunny west-facing backyard, asks the same: $2.749M. It is open Sun. 1-4pm.
3604 Palm (5br/4ba, 3250 sq. ft.) is a surprisingly pleasant, newer (2008) Craftsman spec house that first tried to sell at an unfortunate time in the market: late 2008 through mid-2009.
It was not to be. But here, 4+ years later, the market has come back and this one has got a fair shot. It's out at $2.2M, just what the builder first sought in the crashing market of 2008.
This is a good and familiar layout; great room in back, formal dining and living up front. The sunny porch/deck over the garage is a nice feature off the living room. Similarly, in back, a sizable, raised stone patio opens off the great room before a little step down to an ample, grassy yard.
Basically this is a modern home in a classic style, warmer than might be expected.
Now, you don't see many addresses that begin with "36," and that always signifies "close to Rosecrans." (Or double-chai, extra good luck – depends on your perspective.)
Make it a Cape Plantation, pull it away from Rosecrans and you might approach the $2.7M+ they're asking over at 1733 Pine. Well, if wishes were fishes, everyone would eat well.
Another interesting comparison would be 3521 Walnut (4br/4ba, 3250 sq. ft.), newly in escrow with a list of $1.769M. That one's a 1999 build with a location that's got the refinery feeling somehow more present. The layout at Palm here is more open and the yard is better as well.
3604 Palm starts at $2.205M and is open Sun. 1-4pm.
The first line of the description for 200 Kelp declares that it is "not your typical 1950s El Porto beach shack."
Which is true, partly because it sports a build date of 1979. But is it, otherwise, an El Porto beach shack? Yes. One that needs a coat of paint yesterday.
But it's also true that this is not typical. The layout is not one of those simple 60s boxes that sprouted all over El Porto and other high-density areas of town back during an uninspiring architectural period. The top floor has high, angular ceilings and a little bonus loft space above. The somewhat updated kitchen is reasonably large and opens nicely to the living areas. And there is plenty of light and ocean to be seen.
There's one bedroom suite downstairs with a shower that's got easy access for the surfer who just trudged back up the hill. A back patio area that's relatively generous for a half lot. The second bedroom suite is upstairs off the living areas, ample enough. The surprise is the little loft area accessed off of a metal ladder bolted to the wall. Office? Extra roomie? Collectible storage? Sure.
200 Kelp had a deal recently but flopped out, and they want a new one yesterday. It's listed at $1.175M and is open Sun. 2-4pm. (No it's not on any lists, but MBC confirmed it.)
Friday, November 8th, 2013
On occasion of Dave's new listing in late September, MBC ran a "Sub-$1M Update," basically noting how homes under $1M were scarce, and becoming even more so, in Manhattan Beach.
The listing, 3017 Elm (2br/2ba, 960 sq. ft.) came out at $925K.
But the sale will settle today quite a bit above that list price, and well above $1M, at $1.050M.
It's Dave's 5th listing this year to sell over the starting price – the 4th in MB. (That 5th sale, 1642 Steinhart in the Golden Hills area of North Redondo, was sold for clients who were moving into MB.)
And the $1.050M sale further pushes into the rearview mirror the very idea of MB homes selling for under $1M.
Remember Dave was quoted on the front page of the LA Times early this year, saying of MB, "The days of little cottages for under $1 million are mostly behind us." Yep.
Now, to be straight, the $925K start on 3017 Elm was intended to be a bit low. The seller meant to draw offers right away, and hoped for more than one to help set the market value.
The property was, admittedly, hard to value. There are few 2br sales that aren't teardowns. This one isn't; it's got a lovely vintage-style remodel inside and is very cozy place well-suited to a young family, or perhaps a retired couple. It has been a reliable rental.
And more to the point, the lot is unusual. The total lot square footage is 3732 sq. ft., and it's an odd triangular shape, with nearly 100' of frontage along Elm tapering back to a point in the southwest corner.
Doing the math gave us some ideas of what the value ought to be, but we knew that the true value would have to come from the vagaries of personal reactions to, and interests in, the property.
That's how you get to $1.050M, and some very happy buyers. (Worth noting: The property appraised at the purchase price.)
When 3017 Elm was first listed, there was just one other offering under $1M in the Tree Section: 3616 Pine (3br/1ba, 1075 sq. ft.), asking $949K at the time, and recently closing for $950K.
At this moment in time, all 3 Manhattan Beach SFR listings under $1M are priced at $950K and are east of Sepulveda: 1554 2nd (3br/2ba, 1300 sq. ft.), 1201 Wendy Way (3br/2ba, 1500 sq. ft.) and 1641 21st (3br/1ba, 1000 sq. ft.).
And the only 2 listings in the Tree Section that are, in some way, reminiscent of 3017 Elm are priced quite a bit higher, on the same block far north near Rosecrans:
- 3601 Poinsettia (pictured, 3br/1ba, 1070 sq. ft.) at $1.249M, and
- 3521 Poinsettia (2br/2ba, 1675 sq. ft.) at $1.400M (ouch!).
So, yes, with both of those, $1M is far in the rearview mirror. Though, of course, asking prices aren't sale prices, and 3521 Poinsettia in particular seems very unlikely to hit its moonshot target.
Thus does this market continue to raise the bar and redefine what an "entry-level" property is in terms of Manhattan Beach real estate.
Thursday, November 7th, 2013
This year is full of stories of short-term holds resold for a profit. It's a classic rising-market (bubble?) phenomenon.
One of the boldest is the newest listing to hit the market, 88 Manhattan Ave.
This is a 3br/4ba, 2150 sq. ft. detached TH with a mid-90s build date and much more recent updates that gave it a modern feel.
This one traded back in May 2012 for $1.925M, and is back now offered to the public at $2.650M. That's a markup of $725K and 38% over the acquisition price about 18 months ago.
Interestingly, the same property was offered three times during the slow years of 2009-2011 at prices ranging from $1.899M down to $1.799M. It never could sell. The 2012 sale was arranged off-market.
What matters, of course, is not the history, but the current moment. The sellers clearly have scarcity on their side, and a home with significant assets – good style, great views (we recall seeing the waves break in Hermosa down 35th St. from the top floor), a South End location.
Can they near the $1,229/PSF they're seeking, or take much or all of that $725K profit they're after?
Well, look what the (fairly nearby) neighbors just pulled off at 421 3rd.
That's a 3br/3ba, 2500 sq. ft. single-family home – not so much different, sizewise, from 88 Manhattan Ave. The sleepy 3rd St. location is in more of a family neighborhood and does not offer ocean views.
When 421 3rd hit the market last year, we found it imperfect and – we thought – overpriced at $1.809M. (Just before it came out, Dave had sold a home a block away, representing the buyers of 521 2nd, who succeeded in a bidding war and got a 60s house for $1.370M.)
But 421 3rd drew an immediate bid and sold at asking price in April 2012 (just before 88 Manhattan sold last year). That was then. And the market was only beginning its rise.
Come this year, 421 3rd sold immediately once again, upon hitting the market in August.
The marked-up resale price: $2.250M, a jump of $441K (+24%) in the span of 16 months.
Further up north (still Sand Section), you'll find a couple more very recent examples.
The first is 2411 Vista, a TH with high style that sold for $1.720M in June 2012. They came back to market in October asking $1.925M and made an immediate deal.
It's not sold yet, but that prospective $205K markup over 16 months seems relatively paltry when we look at the South End listings above.
And there's the glam TH at 316 45th with monster ocean views.
That one offers 3br/4ba, 2140 sq. ft. – not much different in profile from 88 Manhattan Ave.
The current (outgoing) owner picked it up for pennies last year – $1.537M as a short sale.
After listing this August for a huge markup ($2.635M), they quickly corrected to $2.375M and made a fairly quick deal.
Thursday the sale posted at $1.995M – far short of those lofty ambitious, but still a very nice markup over one year (+$458K/+30%).
We mentioned this one "Good Work If You Can Get It," we closed out by saying, "They won't make $1 million, but if they sell, they'll do great for a 1-year hold."
Great, yes. $450K will do.
Others will do well, too, it seems, recycling this year what they bought last year.
UPDATE: This post first went up before the sale closed at 316 45th; it has been updated with the sold price information.
Tuesday, November 5th, 2013
It's been about 7 weeks since we took a look at a few (then) new listings offering back-to-back half lots and the promise of, perhaps, combining those for full-lot redevelopment.
We said the existing homes "aren't ghastly, but they're dated," with the 24th St. house at just 1100 sq. ft., and the alley home on 23rd place weighing in at a whopping 500 square feet inside. (Our apologies for the botched "weighing in" metaphor. Where's the coffee?)
Each listing pointed to the other, beckoning buyers to grab the whole lot. But at list price, that would be $1.928M before the planning stage. And the frontage of the lot on busy 24th St., overlooking the elementary school's blacktop playground, along with the lack of ocean views, seemed to make it even less likely that someone would really move to combine these lots to build a maxed-out dream home.
Both sales have now come in:
- 424 24th St. at $1.100M (+$101K)
- 425 23rd Place at $955K (+$26K)
We took particular note of the sale price of the 23rd Place home. There was a similar back alley half-lot sale from 421 32nd Place that closed back in May this year at $825K. The home there was a very similar, tiny, original cottage, just 725 sq. ft. (In that case, the listing shot way too high at the start, $1.299M.) This one came in $130K higher.
What we believed at the outset proved to be true: The properties were priced too high to be attractive as a combined purchase, and the future at each one will be set independently by new owners. No merger here.
We're still waiting for one of the other sales mentioned in that prior post to wrap up.
That would be 128 18th St., offered as a single property but is actually, legally, 2 separate half lots. (For now.)
OK, focus now. 100 block. Close to down. Ocean views from front and back.
That one was going to be rich.
The sellers thought so, and shot high, asking $4.150M.
That's not the lot value, unless simple scarcity drives the buyers wild. They made a deal quickly, so we'll see where it ends up.
Finally, after that post went up, we saw a new combination of half lots hit the market.
Now, "half" lot doesn't quite accurately describe either one. The 17th St. property offers 1500 sq. ft. of land, while the back unit gets 1200 sq. ft., with the advantage of alley access. As we said of 124 17th in a "Sunday Opens" post:
This home is on the frontmost 1500 sq. ft. of what would be a 2700 sq. ft. lot, officially separate from the 1200 sq. ft. lot behind it, and therefore "landlocked." There's no garage, parking or alley access, and no prospect of that any time soon. The lot is also precluded, we're told, from being joined with the smaller lot on the alley thanks to a deed restriction.
With no parking, the city won't let you build much bigger than the existing home, though in theory you could rebuild new to the same (small) size.
Basically, what you see is what you get – a fresh and cozy little 1936 original with updates, including a very nice kitchen, and one good-size bedroom and another on the small side.
Let's be clear: Combining those asking prices and paying $3.200M for the combined lot(s) would look like a steal, given the location.
But if you can't combine the lots, how to value each one becomes much more confounding.
As we write, the "landlocked" cottage up front has just made a deal. That restricted back unit – not yet. These will be interesting to see as they settle out.
Disclosure: Dave has toured 124 17th with clients.