Shaving Off a Quick Million Bucks

By Dave Fratello | February 21st, 2020

Real estate pricing often contains an element of mystery, especially when the property really has no direct comp.

There's always data and science in the background somewhere, but sometimes a seller may just want to try to see how high a price can go and still draw a buyer's interest.

2104 Flournoy Road Manhattan Beach CAIf that doesn't work, it's best to be ready to make a quick correction.

Or two.

Consider the case of 2104 Flournoy (5br/5ba, 4300 sqft.).

This Tree Section home on an unusually large lot (~8600 sqft.) is definitely worth more than a similarly sized & styled home on a standard lot (~5000 sqft.).

But how much more, with that extra land and the wider, flowing layout that the lot makes possible? (Not to mention style and remodel, etc.)

The start price a month ago was $6.995M, and, wow.

Literally, there has only ever been one pricier sale in the Tree Section, and it occurred just last June, at a home with the same street number.

2104 Palm Avenue Manhattan Beach CA2104 Palm (5br/6ba, 4500 sqft.) wasn't just a large, remodeled home with a pool and pizzazz.

It also boasts a whole separate neighboring lot (2100 Palm) that was sold along with it as part of the $7.000M price. That made the total land area sold with the house about 9900 sqft.

We're very familiar with 2104 Palm and its relevance (or not) to potential sales in the area.

The key takeaway, though, is that you get full value (or more) for the extra land (2100 Palm) because it could later be split off and (re-)developed.

In other words, the utility of the extra land is high. It's not just good for a nice, large backyard (or side-yard).

By contrast, if you have a home with an unusually large lot, it's a bit more challenging to peg the extra value of the land if it can't be separately developed. There are formulas to apply and so forth, but, again, there's mystery to setting that value. It's largely going to be up to the buyer.

(Does this sound like a conversation we've been having? Check.)

2104 Flournoy Road Manhattan Beach CAAt 2104 Flournoy, the first big $500K cut came just about a week after market launch. It was at $6.495M by Jan. 29.

Now, another $500K cut has come along, and the property is at $5.995M.

Now, at least, we can say there are 9 Tree Section sales higher than that, although all were newer homes (5 new construction). (This reflects 8 sales posted to the MLS, plus an oversized new home at 825 17th on an 8000 sqft. lot sold in mid-2017 for $6.550M.)

So we'll see now how 2104 Flournoy fares at its newer pricetag.

They got their reach pricing out of their system by late February, so there's still plenty of time to find market value.

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