price cuts

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There have been precious few examples of inventory "bulges" in Manhattan Beach in recent years. Mainly, the story – and the complaint – has been about a lack of choices for buyers.

But in East Manhattan Beach this Fall, there was a (temporary?) growth in inventory of comparable homes at comparable prices. As we detailed those listings in "What's (Not) Happening in East MB?" here at MBC, we called the group "a fairly diverse set of 7 comparable homes, all priced between $2.2M-$2.4M or so, competing for buyers' attention."

Now, some have sold.

And what economics suggests might have happened has happened: Prices dropped in response to the expanded supply.

Sold Listings (3)

1561 Gates (5br/6ba, 4375 sqft.) (pictured) is a 1980s Mediterranean that came

It can be hard, in the middle of a bubble market rally, to notice that sellers' asking prices aren't always met or exceeded.

You get so accustomed to talk of "bidding wars" and "over asking price" sales, you might forget that:

  • some sellers overshoot,
  • some properties don't have the inherent value that the first calculations suggest, and
  • some buyers have leverage, too, these days to get decent deals.

But the proof comes in the sale prices... quite a few at this time of year, for whatever reason, seem to be coming in low. Here are some of the more interesting closings to post recently where the original asking price wasn't too close to the mark.

835 17th (6br/6ba, 5900 sqft.), which we've called a huge and luxe Spanish on a rare 50' wide Tree

In this rising market, it's pretty easy for sellers to dream of a huge payday. As often as not, they get all they want and more.

But there are a couple of old rules that still apply today:

1) Location matters, and

2) Overprice, and you may get less.

Our case study here is 3102 Blanche (5br/4ba, 3400 sqft.).

In the hot, hot Spring this year, 3102 Blanche came out of the gates asking $2.750M.

That was $809/PSF, which would have put this home on a par, by the square foot, with two better-located sales that had closed just before the listing launched:

2001 Agnes (5br/4ba, 3470 sqft.) at $2.811M and $811/PSF (pictured)

633 26th (5br/5ba, 3380 sqft.) at $2.637M – a "gross equivalent" price of $2.700M because the buyer took no buyer's agent

New construction at 1817 Oak (5br/6ba, 3120 sqft.) has now completely smashed the prior record for prices on the street.

Oak ordinarily sees lower values because the street is the first block in off of Sepulveda. But sales activity on the street has been busy and values have reached new highs up and down the block.

The sale price on this bold, undersized and slightly different new construction was $2.699M.

You could note that the sale is $300K under asking, exactly 10%, but that's not the story.

The highest price ever for any home on Oak came 11 months ago at 1720 Oak (4br/4ba, 3470 sqft.), a spectacular remodel on the "wrong" side – backing up to commercial.

The sale price in October 2014: $2.227M. In that case, they got a ton more than the asking