Chasing the Neighbors, Almost Catching Them

By Dave Fratello | June 5th, 2015

Among the many issues that can arise between neighbors, one is envy.

In real estate, price envy can turn quickly to calculation.

A person sees the neighbor sell for $X, and starts to think: "What's my place worth?"

408 26th Street Manhattan Beach CAFrom the outside, that looks to be what evolved over at 408 26th, a newer, rear-unit townhome near Grand View school, over the past couple of years.

Way-back-when, when the kids were young and smart phones were small, back in 2013, the front unit of this 2009-built Mediterranean complex snagged a then-astonishing $2.799M off-market. That was 2520 Alma (3br/4ba, 2520 sq. ft.), which gets panoramic views since it is the front unit and the top floor is set somewhat higher than neighbors across Alma.

That sale, basically unprecedented when it happened, became a market-maker. By one year later, there were 3 sales around $2.8M east of Highland in the same general area. (See "Now 3 East-of-Highland THs Sell at $2.8M+.") There have been more since.

At 408 26th, the owners looked at that 2013 sale and appeared to say something like, "If they can get $2.8M, can't we get $2.5M?"

408 26th Street Manhattan Beach CAAnd so they tried, ever so briefly, listing for 10 official DOM in Summer 2013 at $2.495M.

It was not to be. Rear units don't typically get valued near the front units with all the views. The listing canceled.

Then, very soon after its Spring 2013 sale, that same front unit (2520 Alma) sold again off-market in March 2014 (furnished this time) for $3.139M.

Now an Alma townhome was worth $3+?

That sale and others might have begun a new round of thinking: "If they can get $3.2M, can't we get... that or more?"

But they waited.

And if you wait in this market – THIS market, folks, not every market, not always, not permanently – then you see values rise.

And so when the sellers listed 408 26th in March this year, the sellers were thinking: "If they can get $3.2M for the front unit, why can't we get $3.3M for the back?"

Which doesn't really add up, but that was the list price: $3.295M.

Fast forward to this week, and the sale has closed. And they didn't do half bad after all.

The closed sale at $3.075M now at 408 26th is a virtual hair's breadth from what the front neighbor got last year, and that was fully furnished, with surpassing views.

More to the point, the new sale at 408 26th is nearly identical to the price just paid 6 weeks ago at the newer, front-unit, name-builder, ocean-view Cape Cod TH at 2412 Alma (3br/4ba, 2400 sqft.), which closed for $3.100M.

You already knew that 3 is the new 2 when it comes to Sand Section townhomes.

For a back unit to crack 3 million+ underscores the trend.

And it might now have the folks in that front unit at 2520 Alma thinking: "If they can get $3.1M for the back unit, what's ours worth?"

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