One Non-Crazy Resale

By Dave Fratello | December 5th, 2014

You don't need us to tell you that this has been a year with some eye-popping sales, and resales, in Manhattan Beach real estate.

But guess what? The sales here aren't always crazy.

Look at 320 33rd Place.

This is a newer (2008) townhome that was very well done, with solid details – great quality cabinetry, slick kitchen and master bath, attractive cherry wood floors. The floorplan is open on the top floor.

And the views!

It's a splendid panorama. Truly the whole top floor gets views. You can see all the way out to PV to the south, and the deck, facing north, gets huge views due west and north up to Malibu.

You're looking over a small, obsolete house next door, then the alley at Crest, where the hill drops notably. Properties on the west side of Crest look to be unlikely to ever obscure the views.

OK. Nice property. Great views. Why didn't people go crazy?

First, dial back the calendar a bit. Because this property has sold twice this year, not going crazy either time.

Way back in March, this home was offered, off-market first, then on the public market, for $2.3M. That was the first time we had clients look at it, love it, and then decline to pursue it.

For those clients, the problem was the risk to the views. You could not justify paying a premium for views that could/will mostly go away when the immediate next-door neighbor gets built up new. And in March, $2.3M involved a clear premium against other comparable sales.

Just in case, for those clients, we ran the numbers to figure out what the property should sell for. The comps said $2.100M. We actually told the listing agent that at the time. And in April, that's exactly what a buyer paid: $2.100M.

But just a few months later, something changed for that brand-new owner. The decision was made to resell. And with the rapid rise of the market, the seller seemed to see a chance to make a quick buck.

The list price in August: $2.456M, a markup of $356K (+17%), less than 4 months after the close of escrow. 

That was not to be.

We had a second set of clients look at the property on its new listing, and they had much the same reaction as our other clients earlier in the year: Very well-built house, jaw-dropping views, but no, that risk to the views is too high. Can't do it, and certainly not at that price. (They also weren't big fans of the location.)

That first resale listing of 320 33rd Place ran a month, cut down to $2.3M, then quit. A new team came in to market the property. They started at $2.250M.

The final sale price, though, was 3% lower: $2.185M.

So, yes, that was a markup, 8 months later, to the April price... A bump of $85K.

But that's just a 4% increase over April, neither a crazy number, nor enough to cover typical costs of sale.

So the seller got out just about whole. And the buyer made a good deal in a market that often seems bonkers.

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