Record High Asking and Discount in East MB

Now that there's finally been a sale on the new construction by Mira Costa high school at 1544 Mathews (5br/6ba, 4701 sqft.), we can examine it from a few analytical angles.

First, the news is that they got $5.300M in the end. 

We know of a few people who were tracking the property. (They had liked the house, but not the location.) This price lands right about where some of them saw it.

First fun fact: When listed publicly in late January, this listing sought a record high price for any East Manhattan new construction home on a standard-sized lot: $6.100M.

Second wow fact: They actually got into escrow within about 10 days, on Feb. 7. (Do we need to remind you what was happening in the market at the time?)

Third sad-trombone fact: The deal didn't stick. They were out of escrow after 3 weeks. 

Fourth oh-really? fact: Falling out of escrow was no big whoop for the seller. They raised the price to $6.200M, setting a new record for asking price. (Do we need to remind you what was happening in the market at the time?)

Fifth you-saw-this-coming fact: It took 2 months to adjust the price, and then to just $5.990M. 

We'll take a break from those facts to note that the highest-ever sale of new construction like this in East Manhattan did occur in May, while this home was still asking a dime short of $6M.

That was at 1608 11th (6br/7ba, 5100 sqft.), which closed for $6.150M in May. It was never listed on the MLS while for sale, so 1544 Mathews keeps the record for asking price (or both records, $6.100 and $6.200).

We put that sale on 11th in context with many other East MB new construction sales in, "East MB New Construx Hit $6M - Once."

And yes, you might note that 1608 11th looks very much like 1544 Mathews. 

Alright, more facts.

Sixth ask/close fact: The eventual sale price, being $900K below the highest asking, and 15% lower, was more than double the highest ask/close gap we could find on recent East Manhattan new construction. In Oct. 2024, 1847 9th closed for... wait for it... $5.300M (there's that number again), after starting $395K and 7% higher.

Seventh PPSF fact: The closing PPSF for 1544 Mathews at $1,127/PSF is the lowest among any comparable sale since... wait for it... 1847 9th a year ago. 

Seven is a lucky number – unless you're talking about the number of games you'd like to see in this year's World Series – so we'll stop there. (And, hey! Maybe go to the World Series!)

We do not know how much there is to generalize here from this one new construx sale, as it faced a couple of types of winds. 

There was the "wind beneath the sails" effect by which the seller set a price for this property that was already too high to begin, perhaps because they read the market as overheated in the weeks immediately following the tragic LA County wildfires. 

Would the market approve that $6.100M price? It did, apparently, till it didn't.  

And there were headwinds.

That location is too close to the high school for most, and faces south toward Artesia Blvd., where you do have some multi-unit buildings as a buffer, but, phew, it can be loud. That's a location double-whammy that can keep a lot of buyers away – even if they would come walk through to see what the house is like.

Still, the sale process appeared unhurried, with the asking slashed down to only $5.690M at the time a deal was made. 

Yup, they left it up to the buyer to shave off the final 7% off the asking. They probably knew $5.7 was still high, but weren't sure how high, so they made the people with the money do the work. 

All of this is said with full appreciation that new construction like this only recently began to hit $5M, so the fact that they took a discount doesn't mean they made a bad sale. 

Heck, you see builders "bake in" their profit all the time on the land acquisition. Here, they did amazingly, getting the lot for just $1.650M in Fall 2022, at a time when better-located, comparable lots were in the low-to-mid 2s. 

So, not so bad.