It's Worth What They'll Pay

By Dave Fratello | December 12th, 2013

We now see resolution to half of one of the more vexing valuation puzzles in Manhattan Beach real estate.

That comes with the closed sale at 124 17th (2br/1ba, 880 sq. ft.) for – ready? – $1.540M.

We've called this "a fresh and cozy little 1936 original with updates, including a very nice kitchen, and one good-size bedroom and another on the small side."

Who doesn't want to be near the beach, with a 100 block address, where the biggest problem may be that the sounds of crashing waves can be a might overly loud?

But there is a catch. And it's a major snag in trying to calculate the "proper" value here.

This home is on the frontmost half (actually 1500 sq. ft.) of what would be a 2700 sq. ft. lot. It's officially separate from the 1200 sq. ft. lot behind it, and therefore "landlocked," with no garage, parking or alley access, and no prospect of that any time soon. Lack of parking restricts development of the site.

The lot is also precluded, we're told, from being joined with the smaller lot on the alley thanks to a deed restriction. Hm. Call that a second snag.

So what is a "half" lot home worth if you can't do much with it? And what about that hassle of having no place to park or store your stuff? That's a pain whether it's your full-time residence, part-time beach house or vacation rental.

You could say it's worth a share of what the full lot value is – if you can figure that. It's somewhere deep into the 3's and approaching $4M. (Some of your reference points for inferring full lot value would include 112 18th, a remodeled 80s modern duplex that sold for $4.800M, 112 20th at $4.200M – now getting a big remodel – and 128 20th at $4.200M, a highly custom build we have imagined would get a massive re-do by the next owner.)

A new build on the full lot at 124 17th could command one of the highest prices ever on a lower walkstreet, somewhere in the 6's, but that's purely hypothetical due to the deed restriction and a separate height restriction affecting the back unit, 125 16th Place (now on the market at $1.700M, at 48 DOM). Yes, a third snag.

We'll confess, trying to establish a "proper" value for this one bent Dave into odd shapes. (We had clients interested.)

But it turns out, you don't have to run the numbers, figure out the hypotheticals or solve the problem of the various restrictions on development here.

What's 124 17th worth? It's worth what someone will pay.

Here, that was $1.540M. Case closed.

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