2011: A Year of Highs, Part II

Posted by Dave Fratello on Thursday, December 29th, 2011 at 2:37pm.

Now let's wrap up our look at the year that was, with more record-breaking sales in MB's prestige areas – the Strand, the Sand and up the Hill. (Click here for our first installment.)


Sand Section

There are a few high-dollar sales in the Sand worth a mention here, each setting a record of its own in 2011.

The most publicity has probably been generated around 1600 The Strand (3br/5ba, 5225 sq. ft.), the architectural modern fairly near the pier that sold for $10.9m before an expensive renovation began.

Here at MBC, you'll recall the vaguely seductive video tour that hawked 1600 The Strand (see "You Sexy Thing"). That little snippet became a modest internet sensation.

In the end – with all the work he's undertaking – who knows, the new owner of 1600 The Strand may wind up into the deal well over $12m.

1600 The Strand holds the MLS record for a Strand sale at that $10.9m figure. 

But someone paid more than that for an existing home in 2011: 1800 The Strand (5br/7ba, 5725 sq. ft.). This one quietly sold off-market in late March this year for $12.250m.

This year's sale at 1800 is a markup of $600k (+5%) over August 2009, when the same home traded for $11.65m.

With a 12+ trade, this one tops out the Sand Section sales of the year by a goodly margin, and sets a new record for a home on a standard-size lot on MB's Strand.

Finally, we'll turn our attention to a Sand Section plateau sale that hit another record of sorts.

Here it's not a new high for the total home price, but for PPSF, which is a way of saying they got more for the house than anyone else had before.

The home is 445 33rd (5br/5ba, 3600 sq. ft.), which we've been openly enthusiastic about since the home debuted on the market in Summer 2010.

We recently noted that the 2 highest-priced sales on the plateau (400 blocks of the Sand, 27th-35th St.) were at $2.989m and $3.0m right at the end of the bubble – Summer 2006 and Feb. 2007. At 445 33rd, the first listing was over $3.1m, but the recent off-market sale came in at $2.775m. (See "Beachy-Modern Marks New Plateau High.")

The PPSF: $772/PSF, far exceeding the $703/PSF on the $2.989m sale from the bubble years, and the 600-ish prices seen more commonly among higher-end plateau homes. Wow.


Hill Section

As we move up to the ocean-view parts of the Hill Section, the word "wow" is really going to feel lame for the purpose.

That's because the highest-priced sale in MB this year was even higher than 1800 The Strand. According to our research, it's the highest price paid for residential real estate in MB ever. (Our search went back to Jan. 2000.)

The new record-holder is 853 3rd at an eye- popping $16.0m. The sale closed off-market in late September.

Before that sixteen-point-o figure was hit, 1800 The Strand had held the record high – for what turned out to be 6 months. (Interestingly, the same agent represented the sellers on both of this year's top sales, both off-market deals.)

We find just 4 homes in MB that sold for more than $10m in the past 11 years – 3 of them this year, all mentioned in this story.

The custom-built, high-style home at 853 3rd was completed in 2007 and has 6br, 7ba and 8100 sq. ft. Big but, no, not a totally ginormous house.

The lot is an 11,400 sq. ft. corner on a low-traffic street with very good ocean views. The architect's page, which features a thorough slideshow of high-quality photos (that link goes offsite), notes that the L-shaped home was built for "seamless indoor/outdoor living" – a nice grassy area and large pool take advantage of the large lot.

We're a bit late to bring out this story, which was rumored all Summer and closed in September. We wanted to bring you more than just a number. We've now pieced together a bit more of the story to understand the "why" behind that enormous purchase price.

In short, the owners who custom-built the house for themselves had no real interest in selling. This became their major asset once buyers took an interest.

True, they toyed with offering the home as a pocket listing in 2010, got a couple of showings, but then decided that, no, they weren't selling. Nonetheless, more and more buyers started inquiring. The owners wouldn't do much in response.

And then came that one buyer with an absolute must-have attitude toward the house. There was a first offer: Rejected. Another, bigger offer: Rejected. And over weeks and months, mountains of money were being put on top of the mountains already on the table. The third time was the charm – the parties made a deal at an unheard-of, unpredictable, almost outlandish figure. By holding out, and by truly not wanting to sell, the owners got at least a few million extra.

Is the home "worth" $16m? By one definition of market economics – a willing buyer and a willing seller agreeing on price – sure. By any other measure, probably not. (Really: $1975/PSF? Has there ever been a more irrelevant PPSF figure?)

But if you're asking whether the right value was $16m, maybe you're asking the wrong question. The buyer won the prize, the object of affection. Mission accomplished. And a new record for MB that should stand for quite a while.
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