MB Market Update for 12/15/09, Hill & Sand

By Dave Fratello | December 17th, 2009
As we noted yesterday, the new MB Market Update spreadsheets are online for your viewing by clicking here, or at any time by using the pull-down menu at the top of the page under "MB Market Updates." The current update, dated 12/15/09, covers the first 2 weeks of this month.

Our first post on this month's activity so far covered the Tree Section, a little inversion of the norm that helped us make up for a missing update. It also meant we focused right away on where much of the buying action was in December.

Back we go now to the Hill Section and Sand. (For the 11/30/09 updates on these regions, click here for Hills and here for Sand.) 

Hill Section

Inventory is getting scarce in the Hills now, down to 8 as we near year end. (Click here for the list of actives.)

The only notable action with any "active" listing was the dropping out of 114 N. Poinsettia (5br/6ba, 6400 sq. ft., including basement), the new-not-so-long-ago Spanish at the corner of busy 2nd and Poinsettia.

The home is quite beautiful, but has always been overpriced.  It began at $7.750m in May 2008, dropped substantially, quit late last year, and moved down further during this year's attempt to sell. Last at $4.995m.

Historical note: While priced at $7m in August 2008, 114 Poinsettia "won" an MBC pricing poll, being nominated as the most likely out of three $7m listings to drop to $6m first. Turns out, $5m should have been an option.

Also in the Hills, we saw 3 closed sales (click here for the Hill solds page):

  • 408 N. Dianthus (3br/3ba, 2175 sq. ft.), a nice remodel acquired in March 2006 for $1.708m, has closed at $1.590m (-$118k/-7% from then). The home sold fairly quickly – less than 2 months – and just $5k below asking. Maybe you're thinking: Smart seller, didn't mess around. Yep. Also true: Seller is a real estate agent.
  • 903 10th (6br/7ba, 5120 sq. ft.) was discussed recently in "A New Low in the Hills," a story which generated some debate over whether PPSF was a relevant measure of the deal the buyers got on this very big home, paying $2.475m. What's obvious is that if this was a spec project, it didn't work: the lot was acquired for $1.725m in August 2007, leaving very little margin for construction costs to be covered by the sale.
  • 808 Duncan Place (5br/5ba, 3525 sq. ft.) has closed for $2.088m, down 13% from its start in July, but healthy nonetheless.
That's the Hills, folks. Now to the beach.

Sand Section

As of 12/15/09, there were 32 active SFRs in the Sand, with 14 priced below $2m (click for the <$2m actives page) and 18 priced above $2m (click for the >$2m actives).

We'll start with the 4 new offerings, 3 of which launched at about the same time and almost the same price, $3.6m:

  • 476 33rd is a maxed-out (5br/5ba, 4300 sq. ft.) new home at the the end of the block and the top of the plateau, just about exactly at the top of the sand dune that makes Sand Dune Park both famous and notorious. (Were the dune open, the home would experience some impacts from dune users, mainly those walking north to cars or to access the beach via 33rd.)
If you can suck up that location issue, though, you get a tremendous benefit: A side yard that nearly doubles the lot's official 2700 sq. ft. footprint. It's an easement courtesy of the city.
Out of the blocks, the price is $3.6m, but there's this: An NOD was filed in August, and a notice of trustee's sale was issued 2 days before this listing began. Let's just say this listing won't follow the usual course.
  • 228 34th (4br/4ba, 3725 sq. ft.) is the beach-close party house mentioned in "Open-Air Living, Open-Air Driving," the story so entitled because they're throwing in a Porsche convertible for the lucky buyer. Price here is also $3.6m, down from $3.999m the last we saw it on market.

  • 328 16th (4br/5ba, 4200 sq. ft.) is a Mediterranean designed and built by 2 familiar names around town. We find the location charming, with both ocean views from high up 16th and downtown proximity without the noise.
The build has signatures of the architect, including lots of round archways and an overall modern feel. Starts at $3.6m plus $43k. The lot was acquired for $1.850m in Feb. 2008.
  • 217 35th Place is back after a hiatus, once at $1.5m, now returning to market at $1.2m. For that you get a former duplex, now SFR, offering 2br/2ba, 968 sq. ft. Acquired in April 2006 for $990k, so they're still looking for that nice markup – just not 50% like before.
We should also note the return of 435 10th, at the end of the 10th St. walkstreet near downtown and along Valley, which had a deal briefly and flopped out, dropping the price to $1.650m in the process.

The one other price cut in the Sand brought one more newer home near $3.6m, as 332 20th dropped to $3.695m – now $1.1m below its debut price in February 2008.

This remains one of our favorites, but it always seems to lag on price.

Worth noting: The lot here, like 328 16th, was acquired for $1.850m, but much earlier: June 2005 versus Feb. 2008.

Just 2 closed sales in the Sand in this period, and they're closely related. (Click here for the Sand solds page.)

Neighboring 317 17th ($2.0m) and 321 17th ($2.3m) were sold at the same time, closing a week apart, to the same new owner.

The difference in dirt value traces to the difference in lot sizes – the standard 2700 sq. ft. for 317, and a bigger 4050 sq. ft. at 321 (that's 1 and a half, math geeks).

Suddenly that's a 6750 sq. ft., ocean-view lot near the top of the hill, near downtown, ready for anything. Can you imagine a good way to make use of that?

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