Strand Re-List Down $2.5M, Below TV Show Estimate

By Dave Fratello | January 25th, 2018

108 The Strand Manhattan Beach CAIt's rare that you get a true behind-the-scenes look at pricing decisions made by sellers.

On TV, there are shows where you're led to believe that you're privy to discussions of pricing. One of them recently featured a Manhattan Beach Strand house.

Now that 108 The Strand (5br/7ba, 6900 sqft.) has pulled a bogus re-list this week to celebrate a new price cut to $17.500M (and to reboot the DOM), it's worth dialing back to the pricing discussion dramatized for that show and aired in November last year.

We don't promote other brands or names here at MBC, so we'll refer to the show in question as "Zillion Collar Misting." (You can stream the episode [Season 10, Episode 1] online here if you log in with your TV provider info.)

Many MBC readers and Confidential Realty clients saw that show and commented on it at the time. (The most alert even caught Dave's 1.5-second cameo.)

When it came to pricing 108 The Strand, here's a transcript of the interaction between two agents:

Josh: "What do you think pricewise?"

Tracy: "As long as we’re under 20... just keep it right under 20, 19.995."

Josh: "Nah, we gotta be lower. This house on the Strand, if we priced it at 20 million, in a very competitive market, where there are actually quite a few new constructions coming up… It might sit for a little while."

108 The Strand Manhattan Beach CA"My idea? You undercut the competition. I think we should keep it closer to 2700 a foot, I think 18.5."

Tracy: "That’s too f*&#$@ low!"

"The house next door sold for over 3000 a foot. I’m simply asking for 2800 a foot. I don’t think that’s unreasonable. It’s the perfect place on the Strand. The comps support it."

After that disagreement, the agents rope in their broker for a final decision:

Tracy: "I think it’s all day 19.995, I think if we keep it under 20 million we’re safe."

Josh: "I think it’s gotta have an 18 in front of it, just something with an 18. I just don’t want to be on the market in 150 days, or 180 days."

Tracy: "But you have to face the fact that that’s what it takes to sell these houses!"

Broker Steve: "I really want to be sure that we get them the most for this house. So I want to go with the 19.995. It will be the best for the seller, and you guys gotta get that done."

OK, let's dissect and observe.

104 The Strand Manhattan Beach CAFirst, Tracy is correct, the home next door at 104 The Strand (5br/8ba, 6125 sqft.) did sell for $3,000/PSF.

In fact, at $18.400M, this March 2017 sale clocked in at $3,005/PSF. (See our post, "If You Had $18M, You'd Already Be Living Here.")

There are points for both agents here.

The idea of $18.500M for 108 The Strand makes sense because the neighbor just sold for essentially the same amount.

But... Maybe the estimated 800 sqft. more of interior square footage at 108, or the garage lifts, or other features, in combination were worth another $1.5M+?

That 104 The Strand sale did have some unusual features. For instance, it was locked up under contract in September 2015, while it was a pile of sand with a few steel girders in place. Who knows what something's worth 18 months out? Moreover, the purchase carried with it the opportunity to fully customize a brand-new house. There's a premium for new and custom like that.

Oh, and that price at 104 The Strand was $2.650M higher (+17%) than any other public-market sale of a move-in-ready home on The Strand, ever.

So the plan was to try to top the highest sale by $1.6M before the owners of 104 The Strand had even had time to hang up all their pictures.

And then there's the general point that the Strand seems to have softened up a bit recently, after a big run-up early in this cycle. Even out-of-area agents would probably pick up on that trend.

Still, when Tracy said she's asking for $2,800/PSF, and doesn't think that's unreasonable, well, she's right.

3420 The Strand Manhattan Beach CAA late-2017 Strand sale at 3420 The Strand (5br/6ba, 5500 sqft.) did sell for exactly $2,800/PSF. (And $15.400M.)

But maybe PPSF is not the best way to price a property. It's convenient and seems scientific, but if PPSF calculations got homes sold, robots could do the job.

As to Josh's worry about being on the market 150-180 days, well, that's already happened.

The official "CDOM" count ("combined days on market") is 200 at this moment, a solid 7 months of marketing over the span of 4 separate listings by the same company, dating back to September 2016.

In fact, the day that the discussion was filmed, in March 2017, the brokerage had had the listing already for 6 months, including some time that it wasn't on the MLS. So Josh was saying he was worried about something that might happen... which had already happened.

And as to the public pricing, the home had already been priced publicly for $19,995,000 for 6 months. A few months after filming, the property returned to market, again at $19.995M.

But when the TV show finally aired, the price already had been dropped to something with "an 18 in front of it," $18.950M.

A month after airing, the price was even lower: $18.350M. That was the first time 108 The Strand had been priced lower than the next-door neighbor's sale price.

And now, the "new" listing is up at $17.500M, a price no one on the show had discussed at all.

Although perhaps some in the audience, popcorn in hand, had opinions.

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