Reconsidering the Speedy Speckies

By Dave Fratello | June 26th, 2013

We last checked in on the progress of the crop of new construction we've called the Speedy Speckies back in April.

Back then, it was starting to look like the investors behind the speckies were going to have the last laugh.

One of the original crop, 1605 Pine, was due to close near $2M after having failed to sell on the first offering and turning into a rental. (See "Speedy Speckie May Hit $2M;" that post also has a thorough rundown of the crop of Speedy Speckies and their fates to date.)

We said of the builders then: "They're defying the naysayers, and starting to rake."

Since then, they've had even more success.

1605 Pine closed at $1.980M, the highest price yet for one of these homes, and the neighboring home at 1601 Pine followed soon thereafter at an even higher price, $2.055M.

For perspective, that price on 1601 Pine is more than $300K higher than its last offering price, $1.749M, from 2012. (Indeed, the list price had once dipped as low as $1.699M, back in late 2011.)

The situation at 1605 was somehow less dramatic – it was "only" offered as low as $1.799M to start (in Sept. 2011) and its jump to a sale at almost $2M was "only" a total of $181K, or a boost of 10% over the start price.

And now they've put another of the Speedy Speckies into escrow, 807 Boundary Place.

That home (5br/5ba, 3200 sq. ft.) listed from July-October 2012 from $2.199M down to $1.999M, quit and rented out. It came back this Spring at $2.099M, then boosted its price back up to $2.199M about 2 weeks ago.

Just like with 1605 Pine, this Boundary Place home made a deal after increasing the public list price.

What we're seeing here is the successful execution of a vision and a plan hatched back in late 2010/early 2011.

The basic notion was: Buy lots while they're at recent lows, and deliver the only new construction available in the Tree Section. People love new, we'll give it to them.

They did grab most of the lots around $800K. You can't do that anymore.

The homes were built extraordinarily quickly, several in an assembly-line fashion, with simultaneous work at several sites. This raised eyebrows and some questions. Would there be a market for them?

The answer is now, definitively, yes. So much for the naysayers. 

For some reason, the unfolding scenario of the Speedy Speckies calls to mind a somewhat famous quote:

[W]hen we act, we create our own reality. And while you're studying that reality – judiciously, as you will – we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors… and you, all of you, will be left to just study what we do.

That was attributed to a Bush administration aide in 2004 (suspected to be Karl Rove), speaking of the Bush team's leadership of a new American "empire."

History hasn't been kind to that "empire" notion, but here in Manhattan Beach, the little empire of spec houses launched nearly 3 years ago is charging ahead, undaunted. We can just study what they do.

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