Clogged Strand Finds a $6m Option

Posted by Dave Fratello on Thursday, May 26th, 2011 at 6:33pm.

It's a wonder that it took 6 months for 3112 The Strand to reach $6m. (Technically, $5.999m.)

Was it not obvious by late last year that the $6.9m start price was a drastic overreach?

Clearly, anyone's free to ask $1m, or $2m, or however many m's more than their property's worth. But 3112 The Strand seemed to start a bad trend along The Strand this year, so it stands out for special attention.

Back in early March, we featured 3 pretty new Strand listings, all now proving to be overpriced. One was 3112, the others:

  • 2504 The Strand (4br/5ba, 3415 sq. ft.), touted as "exquisite" and "stunning," but actually dated with an older modernistic update (to a 50s original). Some square footage is tucked away in the back part of a duplex. 
Nearly 90 days into this listing, we can read the market's reaction as, roughly, "Please don't ask $7 million for a house that needs so much work."
The start and current list price: $7.190m.

  • 3308 The Strand (technically 3309 Ocean, an SFR with 4br/5ba, 3100 sq. ft.) is also 1950s construction. It's pretty plain on the inside, clearly showing off its past, and a bit unusual, with an interior, brick-paved courtyard off the middle (Ocean Dr.) level. Nice feature: bedrooms on the top and bottom floors get ocean frontage.
Blogger Janie Sue Nagy once hinted that 3308 The Strand could be viewed as a "Strand bargain" at the start (and current) price of $6.590m, but we didn't really agree, and almost 90 days into the listing, neither does the market. Also, it seems that a sense of urgency conveyed in the listing language was misplaced ("Call today before this bygone era Beach House is buy gone!").
In a completely different league is 2016/2020 The Strand, a double lot that has been up at $30m for 4+ months. Obviously the dirt value of each lot, taken alone, does not justify that price – consider simply that the lot at 2020 traded (off market) just last year for $9m. It's the scarcity factor – the difficulty of putting together 2 Strand lots in a good location – that is supposed to add lots of extra value. How much? TBD.
What's Strand dirt really worth? There's a lot to debate when you're looking at location, even along The Strand. But we did see one sale near the pier this year at 1012 The Strand, marketed as "land value" pricing with an attractive Spanish triplex as a bonus. The triplex is staying and the sale came in at $5.895m in February. (See "New Strand Sale <$6m," which also discusses a few prior lot sales.)

Last year, we saw 112 The Strand (3br/4ba, 4400 sq. ft.) close for $7.334m. That price reflected the adequate and updated late-80s home on site, but that has now been razed to make way for a custom, personal build. Sometimes you have to pay extra, even if you just want the dirt. 

That phrase, "Strand bargain" from up above keeps ringing. If you want to find one, it's probably 3516 The Strand (6br/5ba, 5550 sq. ft.) a bit far north for some tastes, and clearly somewhat too custom in its over-the-top, Tuscan-inspired details. But the listing seems to have been punished enough.

It began far too high at $13.999m in mid-2009, but now 2 years later it's at $8.5m. Just try to get a $5m-$6m lot and replicate this one for a similar price. When 3516 finally goes – and we're not betting against further price cuts to get it sold – odds are we'll call it a deal.
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