Flip That Lot?

By Dave Fratello | December 4th, 2018

3412 Palm Avenue Manhattan Beach CAA mere 4 months ago, an oversized Tree Section lot at 3412 Palm sold for $1.720M.

It was the end of a process that may have been frustrating along the way.

The listing racked up 103 DOM, despite coming out at a good time of year (March) and having no real competition. The 6150 sqft. lot on a corner opened up all kinds of development possibilities.

Must have been a price problem, you say?

The listing began at $2.049M.

But within 5 weeks, they fixed that. The price was cut to $1.799M.

Another 10 weeks rolled by, with no deal.

The buyer who came in July paid the aforementioned $1.720M, and it was done.

Feel like you missed it?

Now, you can have the same lot for $2.195M. (Here's the new listing.)

That'd be $475K more than acquisition, 28% higher than the prior sale.

As is sometimes the case in listings like this, they're offering plans for a new build with the lot. (The design is a bold, monumental modern. Renderings are only available as downloads from the MLS, not shown in the actual listing.)

For the builder, this may simply be a case of trying to pocket the profit without building the house. Who wouldn't take $400K or so to not work?

This sort of quick flip actually succeeds sometimes.

A few times recently, we've seen resales of lots in the Hill Section.

407 N Poinsettia Avenue Manhattan Beach CA407 N. Poinsettia sold for $3.495M in a delayed bidding war in early 2016.

By October 2016, the would-be developer sought to get out, asking $3.999M.

If the original price seemed rich at the time (discuss), the resale price was even more ambitious.

But Hill Section values were rising rapidly. They sold for $3.800M after parking it on the MLS for 5 months.

And, yes, they sold it with "approved plans." The plot is now an active construction site.

837 9th Street Manhattan Beach CAMuch the same happened very recently at 837 9th in the Hill Section.

The corner lot was acquired for $2.700M (off-market) in October 2016.

It resold in October 2018 for $3.200M... with plans. (Although in this case, it wasn't a spec builder reselling, but owner/users who simply changed gears.)

And a bit below the radar, a 10K sqft. view lot at 823 6th sold for $5.900M in late 2016 and resold 13 months later, in early 2018, for $6.200M. (None of the sales are on the MLS.)

Funny, the examples we've got here for successful resales above acquisition are all in the Hill Section, most with views, at a time when that submarket was rising notably.

We'll engage in some quiet contemplation here later to try to recall similar instances in the Tree Section or other parts of town recently.

For now, we'll simply place a marker here to watch what might happen with 3412 Palm. Will they flip the lot or build?

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