Nice Homes Need Cuts Too

Posted by Dave Fratello on Wednesday, September 15th, 2010 at 3:35pm.

The initial excitement around a couple quality, higher-priced homes in MB has faded, and now the cuts have begun.
445 33rd (5br/5ba, 3600 sq. ft.) is a pretty new, custom build we called "a true modern beach delight" when it debuted back in June. (See our "Weekend Opens" post from then.)

The big home is on a double-wide, but otherwise standard-size lot (2700 sq. ft.), up on the plateau. The top-floor kitchen and great room open, via nanawalls, to a big patio/deck with some ocean peeks and views across the Sand Section.  

The home was something of a sensation at first, and made an immediate deal with a start price of $3.125m. When those buyers changed their minds, the home returned to market. Hard to believe, but it's now a week away from 90 DOM.

This week's chop brings 33rd to $2.999m, not a qualitatively different price, but it's movement.

One of the problems with an early deal like the sellers found here is that such quick action can obscure the issue of whether a listing is priced right. Is a newer home on the plateau ever going to fetch $3m? This one did, then it didn't.

530 21st (6br/4ba, 3670 sq. ft.) is a classic, custom Cape Cod that features "extra layers of work heaped into finishes," as we said in this rather glowing review 6 weeks ago. (Sometimes we can't help it.)

We knew at the time that people would be dubious about the $2.599m start price. That's a chunk of change that doesn't fully factor in a location issue – the home backs up along Valley and near Live Oak Park. In our tour we found the speedway to be a nonfactor, but it is where it is.

Now 21st is down a tad to $2.459m (-$140k/-5%) after logging 7 weeks on market.

If you're inclined to use the PPSF measure, this one's now well below a nearby recent sale. A neighboring home, more or less across the street, at 515 21st (5br/4ba, 2550 sq. ft.) – a newer (2002) home that's quite a bit smaller on a much smaller lot – sold off-market for $2.0m in late June. That equates to $785/PSF, while 530 is now at $670/PSF, 14% lower, but most won't view the neighbor as a true comp.

Both 21st and 33rd are premium properties that will likely do well when they wrap up, at whatever price. But they're smart to start trying to generate action, as a natural, seasonal slowdown in sales is around the corner.

Looking east of the highway, a much longer-running listing on a premium property has also made a new cut.


1501 9th is a very big (6br/10ba, 8550 sq. ft.) newer (2008) home on a rare double corner lot. (For more, see our review from a March 2009 "East MB Bucket.")

The first time around, from March-November 2009, 9th was listed for $6.5m and came down to $5.995m. It returned in March this year at $5.495m, and by May was down again. (See "Price Adjustments East and West.")

The newest cut puts 9th at $4.895m, putting it down $1.6m (-25%) from a start price that we delicately suggested "might be a reach."

A curious factor with the last 2 properties – 21st and 9th – is that, in each case, the owner is the listing agent. On the plus side, each agent knows the sellers' motivation intimately. But you can also question whether they're able to be objective as to market value. Maybe the only way to measure that is in retrospect, after buyers make it clear what the homes are worth.
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