Now That's Appreciation

By Dave Fratello | March 24th, 2015

1308 North Ardmore Avenue Manhattan Beach CAA new listing at 1308 Ardmore shows the power of real estate appreciation over time.

But maybe first and foremost, the staying power of this home is what impresses.

An original cottage was built at 1308 Ardmore way back in 1905.

The city of Manhattan Beach was not even formally founded for another 7 years.

There weren't so many residents in the area then, but MB was becoming a tourist destination. Most folks came to splash around at the beach by way of the Red Car electric trains, on tracks running along the sand, right about where volleyball courts predominate now.

The little cottage soon had neighbors as Manhattan Beach was built out. Fast forward a great deal, and we see in tax records the last time this property changed hands: 1973, for the princely sum of $22,000.

Inflation-adjusted, that acquisition price translates to $116,304 here in 2015.

The new owners did some additions and remodeling in the 1980s, and here we are now, 110 years after the home was first built.

List price: $1.899M.

If 1308 Ardmore were to sell for that price, it would be the equivalent of a $45,000/yr. annual increase in value for every year since 1973. (Putting aside the little complicating factors like the cost of the remodel, etc.)

That could be a 36% year-over-year-over-year (and so on) increase from the inflation-adjusted acquisition price. [Update: We've had two statistically minded readers suggest better ways of couching this appreciation rate – one suggesting it's more like 6.9% annually, another 11% annually. The simplest statement is that it's almost $42K/yr., but calculating the annual value increase is another calculation. Thanks!]

Using a wayback machine here on a shelf – a book! - we found an old-timey pitch for buying land in Manhattan Beach that promised returns like that.

If you had $200 way-back-when, you might have been able to grab a Manhattan Beach sand lot.

The ad earnestly says, "Experience has taught us that beach property is a good investment."

It also notes that prices in the area have "increased over 30% each season."

Someone should have told them that kind of appreciation can't go on forever.

Unless it does.

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Photo credit: This ad appears in local historian Jan Dennis' book, Manhattan Beach, California. That book, and several other books, photos and products are available on Ms. Dennis' website. Recommended.

Bonus reading: Back in January 2009, MBC did a post about the first 5 Manhattan Beach homes to receive recognition as "culturally significant landmark" properties. (See "Local Assets.") One of those landmark homes is a neighbor at 1220 Ardmore.

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