Last June, I wrote a blog titled “Manhattan Beach Real Estate Sub-Market in Minor Correction.” In the blog post I discussed Manhattan Beach’s Sand Section walkstreets on the 100 and 200 blocks from 1st Street to 20th Street and how the sub-market was experiencing a minor correction.
Now, 12 months later, it is safe to say this sub-market is in a full blown correction.
Since the last blog, there has been less activity south of the pier and loads of activity between 15th and 20th Street. For this blog, I am going to focus deeper on the 15% correction between 15th and 20th and then try to bring some positive news from activity south of the pier at the conclusion of this post.
Past Sales to Present Day
Even after years of price growth following the Great Recession, it seems that 2015 was the peak year for most of the prime 100 and 200 block walkstreet homes. Let’s take a look…
- 4 bed, 4 bath, 4,747 sq. ft., built in 2014
- Asking Price: $8,999,9000
- Sold Price: $9,475,000
This is what I believe to be the peak sale between 15th and 20th street’s 100 and 200 blocks. After only three days on market, this home sold for almost $500k over its asking price.
- 4 bed, 5 bath, 4,150 sq. ft. built in 2015
- Asking Price: $9,475,000
- Sold Price: $9,000,000
This fabulously executed spec home did not get greedy and came out asking the same price as the record sale in the previous year. This home was about 600 sq. ft. smaller but was in a better location. Some people blamed the size, some blamed the timing of the listing during the winter months, but ultimately, this weaker sale was a sign of things to come for the sub-market.
- 132 16th Street
- 4 bed, 5 bath, 4,047 sq. ft., built in 2013
- Asking Price: $10,499,000
- Sold Price: $7,600,000
This home was the “eye-opener” sale as referenced in my blog post last year.
Based on the previous two years sales, this home came to market way overpriced in 2016 at $10.5 million and did not make a deal until 2018, closing at $7.6 million. That is about a $2.9 million discount in price! Ouch…
This was a shock to the market with 200 16th Street selling for $9 million a year prior. Since this sale, the market has bounced back slightly, but really never recovered to prices seen in 2015 and 2016.
- 208 20th Street
- 5 bed, 6 bath, 5,673 sq. ft., built in 2010
- Asking Price: $9,250,000
- Sold Price: $8,700,000
A lot more sales activity ensured in 2018 which really furthered the story of the walkstreet price correction. This 20th Street sale helped prove that the $7.6 million may have been more of a capitulation by the Seller at the time.
- 130 19th Street
- 4 bed, 5 bath, 4,200 sq. ft., built in 2017
- Asking Price: $8,599,000
- Sold Price: $8,085,000
130 19th Street came to the market in October of 2017 asking $9.25 million. After struggling to sell for the longest time, it finally closed for $8.085 million, almost a $1 million drop from the $9 million price tag for a spec sale seen just two years earlier.
- 222 17th Street
- 5 bed, 4 bath, 4,279 sq. ft., built in 2009
- Asking Price: $7,595,000
- Sold Price: $6,850,000
Lastly, 222 17th Street was a “newer” home with a very funky floor plan. The home first came on the market asking $7.595 million. It was then taken off the market, and then re-listed for $6.995 million. After a total of 15 months on the market, a deal was finally made at $6.85 million, which basically put walkstreet Sellers on notice that home listings were officially a Buyer’s market.
- 212 16th Street
- 4 bed, 5 bath, 4,100 sq. ft., built in 2019
- Asking Price: $8,795,000
- Sold Price: $8,395,000
And finally just this year, another well-executed spec home that was better than 130 19th Street came to market. It sold for a slight premium to the 19th Street spec at $8,395,000. Whew! Thank goodness.
Peak 2015 to Trough is Ugly
So if we take the high sale in 2015 of $9.475 million vs. the latest spec sale this year at $8.395 million, that would equal over a 10% decline in pricing for this walkstreet sub-market. No doubt a solid price decline that I am sure not many Sellers would have anticipated back in 2015.
Furthermore, one could take the $8.085 million sale from 2018 vs. the peak sales price in 2015 which gets you to a big 15% decline in price.
And even then, it still might get worse before it gets better.
Current Listings and Recent Sale Will be a Drag
There are two current properties that are not quite up to par with the recent comps shared above but are close enough to affect the market. Take a look at 204 16th Street and 229 19th Street.
- 204 16th Street
- 4 bed, 5 bath, 4,285 sq. ft., built in 2007
- Asking Price: $7,850,000
This is a resale from the same luxury builder of the 2016 spec sale that went for $9 million. Only nine years older and a quality build, the Sellers were realistic about the market and came out with an intriguingly low price of $7.85 million.
And the biggest drag perhaps is the most recent closing a few days ago at 212 18thStreet.
- 212 18th Street
- 5 bed, 5 bath, 4,269 sq. ft., built in 2004
- Asking Price: $6,980,000
- Sold Price: $5,350,000
It is definitely not the prettiest of the 2000-built homes in this post, but that is a big home selling for far below asking prices of much smaller and/or older homes on the walkstreets. Not to mention, the price was dropped to $6.39 million in April and just a week later, the Seller took an offer $1 million below their asking without reducing the price. That is motivation!
For now, expect this area to continue to feel pricing pressure that could be painful for some time to come.
Some Positive News to End
Unfortunately, the walkstreet sub-market between 15th and 20th street had a tough run over the past few years.
That said, the one saving grace is the massive closing of 120 5th Street.
- 120 5th Street
- 4 bed, 5 bath, 5,000 sq. ft., built in 2004
- Asking Price: $9,975,000
- Sold Price: $9,600,000
After listing for a short while in 2018, this listing was taken off the market during the holidays and brought back in the new year. Just two weeks after listing in February, the Sellers made a deal and sold at $9.6 million.
Is the south end of the 100 block walkstreets insulated from the rest of the market by a $2 million buffer? Or, did the Buyer jump to make a deal a bit too quickly?
Inventory like this home on the south end has been tight. If one wanted a south end walkstreet 100 block home like this recent sale, your last chance would have been in 2016 with 125 2nd Street.
- 125 2nd Street
- 4 bed, 5 bath, 4,258 sq. ft., built in 2014
- Asking Price: $10,300,000
- Sold Price: $9,241,000 in May 2016
Personally, I am a big fan of the south end. But with the carnage going on just north of the pier, this recent purchase on 5th Street could prove to be a risky one.
That said, this was a much needed sale for the walkstreet Sellers to help keep pricing up…at least for a bit longer.
As you can see, the north of the pier walkstreet sub-market’s strong run in 2015 and 2016 seems to be a thing of the past. Sellers are clearly not able get those sky-high numbers that were seen four years ago.
Until walkstreet homes see some significantly higher sales, this sub-market will continue to remain in a correction territory. I will monitor the data and update you in a year with the latest.