South End Costs Rising Still

By Dave Fratello | March 10th, 2015

There is no neighborhood in Southern California quite like the "flat" South End walkstreets of the Manhattan Beach Sand Section.

Once people see it, they want it. Then it's a question of: Can you get it?

Dave has sold 3 homes on those treasured blocks in just the past couple of years, always off-market. These properties just don't trade much. And with scarcity, you see prices jump.

That's how a lot recently traded near $4M, and a built home way over $5M.

First let's look at one that has finally closed, after hot rumors flew for weeks.

316 4th Street Manhattan Beach CA316 4th St. is a full-size corner lot running along the alley at Crest.

You can go either way on whether the alley is a plus or minus. You've got no neighbor on that west side and there are ocean views down 4th Street, so there's that.

We need not entertain the downside of living on the alley, since no negative thoughts entered into the bidding on this one.

Launched at $3.300M, about $500K above interior-lot comps, this listing has now sold for $3.770M. Expect a custom build.

Recent comps, from just late last year, would be:

401 5th, an interior lot set amid many similarly underdeveloped properties on one of the great walkstreets.

Many of the homes here are original or have only modest additions and remodeling. In that way, the block has a charming, throwback character to it.

A developer paid $2.710M with an eye on the dirt, in a sale closing in Sept. 2014. Arguably, with full commissions the sale price would have been a "market equivalent" of $2.777M.

Similarly, the lot at 440 8th traded off-market, also in September last year, for $2.700M.

That one is slated for a custom build.

You don't really need us to do the math for you, but to make it handy: 316 4th went for about $1M more than the very recent land sale comps, a 36% jump in just about 6 months.

One to watch: 328 6th (2br/2ba, 1300 sq. ft.), a truly darling, refreshed little beach cottage, but a case where the land value is very high and the structure is, therefore, endangered.

They listed 328 6th at $3.199M and have a deal currently. Where does it close?

Meantime, if you're wondering how much a built home is worth, that's shooting skyward also. 

In December, an off-market sale of 429 8th (4br/5ba, 4120 sq. ft.) closed for $4.950M

That's a 2010 build that had traded for $3.500M in those tender days before the current bull market.

To see a number near $5M was pretty amazing.

Earlier in 2014 there were 2 sales over on 9th St.:

425 9th St. (4br/4ba, 4275 sq. ft.), a 2003-built Mediterranean. Dave's clients bought it in April last year for $4.100M off-market, and did some cosmetic remodeling.

325 9th St. (5br/5ba, 4050 sq. ft.) is a 2003 "Nantucket" that was purchased for $4.200M off-market. Walk by now, and you see them working on a substantial interior remodel. (Moving walls, etc.)

So both of those were low-4's sales, but the owners are putting in more to modernize the homes.

The latest big South End walkstreet sale is at 440 7th St. (4br/5ba, 3900 sq. ft.), a terrific corner-lot property with Ingleside running along one side. It's a 2011 build that first sold for $3.650M.

Purchase price there: $5.500M off-market, in a deal that closed in late January.

So, to recap:

• Lot values have jumped from the mid-to-high-2's into the 3's

• Built homes have sold from the 4's into the 5-million range and even the mid-5's for one prime home

It's not getting any easier to get a slice of this particular paradise.

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