$3M New Construx in the Trees

By Dave Fratello | June 15th, 2016

There's no dispute anymore that Tree Section new construction prices are slipping.

868 27th Street Manhattan Beach CAToday's crop is a bit hard to evaluate fully, because so many are in less-than-prime locations. But the trend is clear nonetheless.

It seemed that $3.500M or so was the going rate for a time. You saw 3101 Maple (5br/5ba, 3200 sqft.) pre-sell at that price in January this year, as well as 868 27th (5br/6ba, 3520 sqft.) [pictured] at $3.520M in April this year.

Two new construction listings in the Trees took that pricing as gospel and shot for the same mark.

2409 North Poinsettia Avenue Manhattan Beach CA2409 N. Poinsettia (4br/5ba, 3550 sqft.) came out at $3.499M in late January. (We'll put aside the fact that it began at $160K lighter before upping the price 51 minutes into the listing.)

To their credit, the sellers saw that the wind was not blowing into their sails by early March, and made a quick, big adjustment, cutting $300K and almost single-handedly re-setting the market. The $3.199M list price still didn't formally get them into escrow until 2 months later, though. The sale posted late last month at $3.100M.

756 36th Street Manhattan Beach CA756 36th (6br/7ba, 3600 sqft.) also began in January too high.

The list price was $3.579M, but there have been a string of corrections since then: $130K, $100K more, $170K additional, $80K more...

A new, achem, re-listing of the property now shows it asking $2.995M, the first time it's been under $3M. It's a 16% drop from the start.

Now look at the competition they are up against at roughly the same price point:

3521 Laurel Avenue Manhattan Beach CA3521 Laurel (5br/5ba, 3350 sqft.) is actually a 2014 custom build, but we'll group it with new construction because it's very much in "today's" style and feels all but completely new.

The style and feel are very familiar here in 2016. A mix of "Beach Plantation" and modern, with wide-plank floors, open spaces and mostly bright, white kitchen and baths. Out of the blocks, it's priced at $3.050M.

3401 Pacific Avenue Manhattan Beach CA3401 Pacific (5br/5ba, 3550 sqft.) is nearly around the corner from 3521 Laurel – not as close to Rosecrans, but on busy Pacific. Location was presumably priced into both properties as they came to market, and certainly will be by the time they wrap up.

3401 Pacific is a near carbon copy of 2409 Poinsettia, one of the recent sales referenced above, with all-but-identical floorplan, style and finishes. It is at $2.999M.

A beauty at 2602 Pacific (4br/5ba, 3200 sqft.) is part of this group as well, shooting for $3.050M.

If you're looking for new or newer family homes in the Tree Section, you've suddenly got all those choices right at about $3M.

Just a step up (well, $400K+), also in the Tree Section, are 3 more new homes:

3312 Poinsettia Manhattan Beach CAThe twin new construction homes at 3308 Poinsettia and 3312 Poinsettia [pictured] (5br/4ba, 3600 sqft.) each have basements, high ceilings and great attention to detail.

There are small differences in the styling of each home, but the floorplans are identical (albeit reversed).

The twins began at $3.649M and both have now cut to $3.399M (-7%).

860 27th Street Manhattan Beach CAThere's also 860 27th (5br/5ba, 3500 sqft.), next-door-neighbor to the new construx that presold at $3.520M (and is pictured at the top of this post) at 868 27th.

This one's got a more "modern" take on "Beach Coastal Style" (per the listing).

It also sports an unusually wide 50' wide lot with a 100' depth. Generally speaking, you can feel that extra 10' of width in a Tree Section home with a floorplan that sprawls out more and gives a greater sense of space to the common rooms.

860 27th is asking $3.499Mhey, the neighbor got more! – but is now finishing 7 weeks on market.

You can see that buyers who want new or newer homes are getting those options.

Prices are becoming more attractive – at least among this recent crop. Resales of older homes, even remodels, will need to adjust to suit the reality of what's going on with new construction prices.

It's an interesting time to be a buyer, in that sense.

One big question is whether this wave of new construction may have crested for a while. Lot values have skyrocketed, but it's now a much more uncertain time for a spec builder to take on a new project, if that means paying anything near retail for the land.

Here at MBC we like our long-arc trend stories. We'll touch back on this theme down the road as these new homes sell and as we watch what develops in the land-value and spec markets going forward.

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