Adjusting Expectations for East MB New Construx

By Dave Fratello | August 31st, 2015

It seems harmless – today – to overprice new construction while waiting for the market to (perhaps) catch up midway through the build.

Some East Manhattan new construction projects launched with hugely ambitious asking prices, and are now adjusting.

1131 6th Street Manhattan Beach CATake the mega number on 1131 6th (5br/5ba, 5025 sq. ft.). This is a new home due next year that's under way now. Location: A few doors in off of Sepulveda.

Asking in February 2015: $4.499M.

The prior top sales of new construction in East Manhattan:

  • 111 S. Meadows (5br/6ba, 4200 sq. ft., huge 9500 sqft. lot) at $4.000M in Oct. 2014 (the Sunset "Idea House"); a special case given the nature of the house and huge lot size
  • 1632 Voorhees (5br/5ba, 4500 sqft., 7500 sqft. lot) at $3.251M in June 2015; the current high for a conventionally large home on a standard 50x150 lot
  • 1416 3rd (5br/5ba, 4765 sq. ft., 6650 sqft. lot) at $3.199M in Dec. 2014
  • 1420 3rd (5br/5ba, 4765 sq. ft., 6650 sqft. lot) at $2.899M in Nov. 2014

1131 6th was way over all of those. It ran 6 months at $4M+ numbers, then recently rebooted with a new MLS# and new price, $3.999M.

Around the same time that 1131 6th launched early this year, another new spec home (same builder) at 1321 21st, more in a Mediterranean style, also came out, guns a-blazin', demanding the same $4.499M. This pre-completion listing ran 6 months and retired late in August.

If the pattern holds, then that 5br/5ba, 5060 sq. ft. home on 21st will come back to the MLS soon at a reduced asking price... but one that's still hard to compare against actual East MB sales.

An ambitious new home at 1304 Lynngrove (5br/6ba, 3750 sq. ft., 5400 sq. ft. lot) also came out higher than you'd expect for Liberty Village, with that "gorgeous custom contemporary" home asking $3.199M to begin. (See February 2015's "Pushing $3M in Liberty Village?")

That $3.2M listing ran about 6 months, quit in mid-August, and is back now at $2.999M.

Here's the thing.

There has never been a sale posted to the MLS within the Liberty Village pocket east of Redondo Ave. that has gone over $2.000M.

The highest-ever sale in the LV was last year's Mediterranean resale at 1605 Wendy for $1.965M. There's an active listing now at 1805 Faymont (5br/4ba, 3500 sqft.) looking to quietly break that record with a list price of $2.150M. But that's still $850K short of 1304 Lynngrove.

All of these pre-completion offerings may just as well try their huge sticker prices. Maybe a buyer will come sniffing around and they can make the deal. Otherwise, the builders/sellers have shown that they'll just create a "new" listing as the time for real marketing nears.

There's one new-construction project lingering on the market, however, that tried shooting the moon and has taken time to settle to Earth.

1431 18th Street Manhattan Beach CAThat's a large new modern at 1431 18th (5br/6ba, 5275 sqft.).

The build is attractive, with tons of light, a very open kitchen/great room, spacious bedrooms and a bonus basement-level media room and extra bedroom.

There are nice views toward the Hollywood sign and downtown LA from the master and, to a degree, from the big family room.

Launched in April at $3.999M, 1431 18th wasn't even the priciest new spec build looking for buyers at the time. (Although it was the only one that was habitable.)

But now the listing has made 2 separate cuts of $300K each. It's now offered at $3.399M.

Right across the street, a comparably sized new build in a Plantation style, 1430 18th (6br/7ba, 4600 sqft.) is in escrow. The list there is $3.495M. We'll see how that closes up, as it's obviously relevant to the modern at 1431 18th.

(Disclosure: Dave has shown both 1431 and 1430 18th St. to clients.)

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