South End Walkstreets Afire Again

By Dave Fratello | October 12th, 2021

A couple of new sales, including one at 416 9th St. (aka 417 8th Place), suggests that the South End walkstreets may be finally joining the rapid-value-inflation party in Manhattan Beach.

The property currently hosts a little duplex with 3br/2ba and 1400-odd sqft. spread among the units. The original build was 1939, and despite some remodeling, it wasn't the structure driving the value, it was the land.

Asking: $3.400M

Sold: $3.851M (+$451K)

This appears to be the highest-ever price for land on the South End's flat family walkstreets (4th-10th, 300-500 blocks).

Location is certainly one factor making for the high price.

9th St. is considered by some - well, at least the 9th St. residents! - to be the "best" of the walkstreets. (See "'9th Street Crew' Embraces Manhattan Beach Walkstreet Lifestyle," from DigMB.com. They've got their own merch!)

9th is probably the longest and flattest of the walkstreets, and "just close enough" to downtown to be effortless. (We have clients on too many of the walkstreets to take a definitive position, haha.)

But scarcity wasn't exactly the factor behind this sale that you might expect. Before 416 9th, there were 4 other walkstreet sales this year of smaller old cottages or old buildings. All presented a comparable opportunity. And all sold notably lower. (More detail below.)

There's also a new apparent record for a fully built home amid the South End flat walkstreets.

325 6th Street Manhattan Beach CAThat's 325 6th (4br/5ba, 4675 sqft.), a 2017 build that lasted approximately no time at all on the market when it debuted in late August.

Sold price: $7.250M. It's almost incidental that this price was $100K below asking.

In this case, the buyer had eyed the property for some time and dropped everything to offer on it once it became available officially.

The same home had sold new in Spring 2017 for $6.550M.

That middle-6's price set a record at the time, which lasted for about a year until 337 7th (4br/5ba, 4240 sqft.) sold in June 2018 for $6.900M.

It looks like 325 6th can have the record for a bit, unless 337 7th comes back. (That home was briefly offered in late 2020 for $7.500M, but rented out instead of selling.)

With all that's going on in the market these past 18 months, you shouldn't be surprised to see a headline like "highest prices for land and built homes in the South End."

But, while it's hard to prove with data, there was this impression for a time that the South End flat walkstreets had sorta calmed down.

While the rest of the market was carving out new peaks, maybe somehow the South End had already peaked.

It goes back to around 2015-16, as raw land value for a lot on the treasured walkstreets first shot suddenly into the 3's. (See, for instance, "South End Costs Rising Still," March 2015.)

For instance, in March 2015 it was 316 4th (an ocean-view corner) selling for $3.770M, followed in April 2015 by a cottage at 328 6th selling for $3.315M, with the buyer intending to keep the house, although that was arguably a land-value sale.

By May 2016, it was 404 4th getting bid up from $3.400M to $3.700M.

There were plenty of trades in the middle-3's over subsequent years, but the price point seemed largely stable.

Suddenly in 2017, a midblock lot at 400 9th hit $3.799M (the asking price), perhaps falsely portending a rise in interior lot values toward $4M.

That rise never happened.

Three years later after 400 9th's sale, in Aug. 2020, a built house nearby (albeit one desperately in need of remodeling) at 420 9th (4br/4ba, 3100 sqft.) sold for less, $3.656M.

Were prices reversing? Stable?

Just before 420 9th closed last Summer, a massively tricked-out, perfectly revived walkstreet cottage at 329 4th (3br/2ba, 1700 sqft.) (pictured) sold for $3.787M, more than $200K below its acquisition price the prior year. (That was a case where our Edge office represented the buyers, and, yes, we are still proud of that smoking deal.)

The extreme remodel on 329 4th also suggested a land value for the walkstreets in the lower-to-middle 3's.

And you didn't see much of a hint of giant value increases in more recent sales.

Here are late-2020's and 2021's South End walkstreet sales prior to 416 9th:

* 317 8th (ocean-view corner, full lot [2700 sqft.], $3.250M in Dec. 2020)

* 401 6th (4br/2ba, 1885 sqft., $3.560M in Jan. 2021)

* 413 5th (4br/2ba, 1585 sqft., $3.250M in May 2021)

* 444 9th (3br/3ba, 2300 sqft., full lot, $3.300M in May 2021)

* 341 6th (3br/2ba, 1400 sqft., full lot, $3.575M in July 2021)

If you're following, that's 3 out of 5 at $3.300M or below, including a corner lot, and nothing over $3.600M.

When 416 9th hit the market, it was easy to compare it to 413 5th, which similarly hosted an old, dated duplex, and which seemed to sell "lower" than it should have at $3.250M.

A reasonable hypothesis was that California's current law (encoded by SB 330) that says new development may not reduce the number of units may have hit the value for the 5th St. property. A pure SFR is not allowed to be built on a lot that has hosted 2 units; at the very least one must build in some kind of ADU (alternative dwelling unit).

That was a reasonable hypothesis! But it was wrong!

416 9th was just too great, drawing multiple offers, marking out a new ceiling, and maybe really starting the party on the walkstreets.

Please see our blog disclaimer.

Latest Listings Among
Manhattan Beach Homes For Sale