Double Your Money?

By Dave Fratello | February 27th, 2014

We thought this would happen more last year. 

The word was out on the street already: Bidding wars are back. Prices are rising. Some sales are shockers. In short: It might be a great time to sell.

With that, we expected more listings, and more shoot-the-moon prices, with sellers jumping far ahead of the market, "just to see what happens." But in 2013, not so much.

Today's new listing at 312 44th does seem to fit that category. The $2.700M start price on this ocean-view condo is around $1,000/PSF – not unheard of for something slick with views in the Sand Section. But the building that this one is a part of has not been an easy sell in the past, and the price is double what the sellers paid just 3 years ago.

The building has been tough because of that often overlooked key factor in real estate: Location. It's right on Highland Ave. in furthest north El Porto. That means constant traffic noise and a bit of a challenge to walk around town. (This unit is back behind the ones fronting Highland.)

This one is pretty big for a condo (4br/3ba, 2675 sq. ft.) and gets its ocean views over rooftops. (See the listing photo.) It's fairly new (2009 build date) and these are the first owners. They picked up 312 44th for $1.269M in Jan. 2011. So today's list price is well over twice the acquisition price. (Not that that's controlling, but it's notable.)

For more on the history of this building, see the end of this post.

When we think of ocean-view townhomes in El Porto shooting the moon, we think of 316 45th (3br/4ba, 2140 sq. ft.), a nearby neighbor that sold last year.

Last August, they shot for $2.635M for a TH they had basically just bought for $1M less. (See "Good Work If You Can Get It.") Alas, they knew that 2.6+ pricetag was crazy and they took a lot less: $1.995M in a fairly quick deal (sale closed in November). It was still a nice profit.

The views there at 45th were really, really something, panoramic and huge, unobstructed even by rooftops, and with almost nothing to the north. (Some power lines and a gas station.)

So the question at 312 44th, where the views are nice but not like 45th's, is whether they'll go more the way of 316 45th and take a good deal, or hold out for a "make me move" price. (It's a FSBO so you have a hint there.)

As we scan the market now for some other, shall we say, ambitiously priced homes in MB currently, 312 44th is joining:

  • 2903 Manhattan Ave. (3br/4ba, 4175 sq. ft.), a 90s Southwestern with great views, asking $5.000M;
  • 3314 Laurel (4br/3ba, 3335 sq. ft.), a nicely remodeled 80s original, asking $2.699M; and
  • 588 36th (5br/5ba, 3300 sq. ft.), asking $2.299M after a run on the market last year at the same price.

Everyone's got their argument for why they should get their number. We'll watch the market settle the question for each one.

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More on 312 44th: We dug way back in MBC's virtual archives to find some interesting nuggets on this building. The developer of this 5-unit complex first slapped a $2.299M pricetag on 312 44th back in 2009. And that was ambitious way-back-when – too ambitious by about $1M, it turned out, when they had to sell into the down market. (For $1.269M.)

The whole complex was conceived during the last bubble, with the big, empty plot at 4321 Crest selling in Feb. 2007 for $3.0M. By March 2008, the developer was well under way, and MBC discussed what was afoot in "Coming Soon to El Norte." That was a heck of a time to build new. As we said (gulp) 6 years ago:

It's an ambitious project starting up at a rough time for the local market. (Let alone the credit markets.) Give the developers credit for having cojones.

We also said in 2008: "The units will have ocean views, and they'll be new, but the location is going to be a problem."

As the units all sat for a year or so – it was 2009-2010, and that's what properties did, they sat – MBC took to calling the development "The White Elephant of El Porto." We did a roundup in December 2010 to summarize the ask/sale prices, showing that the start prices of $1.6M-$2.3M on the various units had all been high by $400K-$1M.

Everything looks hard in a bad market, just like everything looks easy in a rising one.

We're only aware of one trade in this building since the first round of purchases. 4320 Highland (3br/3ba, 2250 sq. ft.) was bought in late 2010 for $1.150M and resold in Dec. 2012 for $1.430M, a nice jump of 24% as the market went from the dumps to a forward-looking, optimistic sort of frame. 312 44th is priced as a 113% jump.

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