This Week's Column & Links (July 24-25)

Saturday, July 24, 2010

This week's edition of South Bay Confidential appeared in the "Home Guide" in Saturday's Daily Breeze (print edition), and is also available below.

We discuss 4 separate homes for sale on the Manhattan Beach Strand. Here are links to those active listings:

1600 The Strand, now at $13.5 million. (The Breeze features a nice photo – see the print or "layout" version.)

3516 The Strand (pictured) newly down to $9.850m (from $14m last year).

2920 The Strand, marking about a year on market, now at $11.750m.

1804 The Strand, the newest entry of the bunch, 30 days on market, start price of $11.9m.

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Here's the complete column as it appeared in the Daily Breeze:


In the Market for Luxury and Grace?

It's summer, and that means everyone wants to be at the beach.

If you lived on The Strand in Manhattan Beach, you'd already be there.

Prestige homes on Manhattan Beach's Strand are the priciest in town, and some of the most expensive in the whole South Bay. Here's a look at a few that are currently for sale:

1600 The Strand (three bedrooms/five baths, 5,225 square feet) is a visionary 1980s modern home designed by architect Ray Kappe. Its curvy lines, concrete, steel and glass combine for a bold look reminiscent of a passenger ship.

Totally unique properties tend to have a limited audience, though. The home's been marketed since February this year - more than five months - at $13,500,000, with no cuts and no buyers yet. [UPDATE: The property has cut to $12,499,000 and is featured in this unique video.]

3516 The Strand (six bedrooms/five baths, 5,550 square feet) is a high-end, Italian-inspired home that was completed last year. They've even named it Villa Toscana Sul Pacifico and, to add an authentic feel, brought in old, reclaimed materials (bricks, beams and tiles) while having other pieces custom-made in Italy.

One thing that's not so retro: a home theater with a huge screen.

Despite its charms, 3516 The Strand has now lingered more than 8 months on the market. It began at $14 million and made a big cut this week to $9,850,000, more than $4 million below its start.

2920 The Strand (seven bedrooms/seven baths, 5,675 square feet) needs the most help among current Strand offerings. Though the design has some flair, and the home boasts a larger-than-normal corner lot, inside, the home needs updates. The layout is also chopped up, with the home built around a small pool in the center.

On the (big) plus side, the rooms up front along The Strand are generous, particularly the gargantuan master bedroom, with panoramas of sand and sea stretching up to Malibu.

The home was first listed in June 2009, recently came off the market briefly and returned at $11,750,000. The owner paid $9 million in July 2006.

1804 The Strand is the newest offering of the bunch. Just 30 days on market, but with a start at $11,900,000, it could linger a while, too.

Built custom for a family that's now moving away, the new (2010) home is both sharp and comfortable. Ocean and Manhattan Beach pier views are a big draw from the built-in table just off the kitchen and the two mini-master suites on the top floor.

Still, the main house is quite modest in size, limited because there's a small two-bedroom unit in the back, intended as guest quarters. This gives the main home less of the feel of a permanent residence and more like a second home, perhaps limiting the buyer pool.


Not For Sale

While we're talking about Manhattan Beach's Strand, it's worth noting some development at the south end of town.

Where once there were six separate lots between 2nd and 3rd streets, there are now only three; lots were combined to enable some large new homes to take shape here.

The Strand’s only triple-lot home, right at 3rd, is a charming modern California beach bungalow completed last year. Despite the fears of residents that the home would be huge and imposing, like a big hotel, its actually scaled nicely, with much of the living space tucked back away off The Strand in an L-shape.

Down at the corner with 2nd St., the scaffolding just came off another brand-new custom home that mixes a classic Mediterranean look with some modern touches.

Between those two beach mansions is a gap, for now soon to become a double-lot home.
After several straight years of construction in the area, you'll see Manhattan Beach's south end quietly become a special new island of luxury and grace, raising the bar for the rest of The Strand.

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Dave Fratello is a Manhattan Beach resident who writes the
www.sbconfidential.com. and www.mbconfidential.com real estate blogs. He can
be reached at mbwatcher@gmail.com.

This Week's Column & Links (July 17-18)

Sunday, July 18, 2010

This week's edition of South Bay Confidential appeared in the "Home Guide" in Saturday's Daily Breeze (print edition), and is also available online below.

As Summer kicks into gear here, the column notes that the home selling calendar is getting shorter. Advice to sellers: If you mean to sell, act like it. Price it right unless you want to be stuck till the holidays.

Following up on last week's column just a bit... we discussed the auction for 18 condos at Silver Spur Court in Rolling Hills Estates. The auctioneers are still working things out, but the first bit of news is that all 18 condos did wind up with buyers.

Not every auction looks like a success right after it wraps. Consider the auction in late 2008 in Manhattan Beach/Hermosa Beach, discussed recently at MB Confidential. (See "Revisiting the MB/HB Auction.")

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Here's the complete column as it appeared in the Daily Breeze:

Acting Like a Seller

Pricing your home to sell is not easy, in part because you don’t really know what the market will bear.

I’ve been counseling some friends who are preparing to sell, but their house is unique in their neighborhood and thereby very hard to compare to anything nearby.

They deferred to the judgment of their real estate agent. In their meeting, he suggested a start price which, in his opinion, was very close to its likely market value.

My friends agreed, but shortly thereafter they were asking me:

  • It seems low, what if we could get more?
  • Shouldn’t we price it higher and come down only if we need to?
  • If we get a lot of interest, won’t that just mean we under-priced it and left money on the table?
My personal advice was this: Look at the calendar. It’s summer. There might be 10 to 12 good weeks left to sell this year, then we’re nearing the holidays, when there will be far fewer buyers.

Price it right now, and you should draw interest and have a real chance to sell. Price it high now, and you might be correcting the mistake in September or October. That’s when potential buyers start packing it in for the winter, maybe planning to come back next spring to search again.

For now, my friends are sticking with their agent’s recommendation for their list price. But it’s easy to see why many sellers listen to a market value assessment and then add 5 to 15 percent to their start price. Or if they don’t exactly “add” to the suggested price, they might pick the highest possible list price their agent suggests.

The calculation sellers make is that buyers who like the house will just offer what they think it’s worth, and a negotiation can take place with the sellers keeping the “high ground,” if you will. You can’t leave money on the table if you’ve added a fat cushion to your start price, right?

In reality, buyers tend to brush off overpriced listings and wait for the owners to show they are realistic — to show that they’re really sellers. Buyers often fear that offering 10 percent or more off the list price will just waste everyone’s time.

This is how standoffs are born, and listings wind up lingering for three months, six months or more.
So if you’re setting your list price, ask yourself: How long do we want to have this house on the market? Price accordingly.

As to all those listings getting stale nowadays, I have to say the same thing as I said to my friends: Look at the calendar. Time is not your friend. If you really mean to sell this year, make a move, make it bold, make it soon. If waiting around for people to drop in, fall in love and make an offer hasn’t worked, act like a seller.

How to Linger and Lose

In Manhattan Beach, the market I track most closely, we’ve had a good first half of 2010, but there are plenty of listings that are getting long in the tooth.

I’m thinking of one smallish, nicely remodeled East Manhattan Beach home in particular where the owners are relocating out of state. The sellers began too high in April. Immediately, verbal offers came in at about 9-10 percent below the start price, but these were deflected at first. The owners were feeling bold.

At this point, nearly three months into the listing, they haven’t made a price cut or a deal. I’d bet the home eventually trades for about 15 percent off their start price, partly because it’s hung around so long now.

If I’m right, overpricing and holding fast when that first flood of interest came in could cost the sellers $50,000 or more in the end.

To my mind, you’re more likely to leave money on the table by overpricing than by “under-pricing.”

The real estate market isn’t perfectly efficient, but buyers seem to recognize “deals” and move on them quickly. Listings that get old become shark bait, and sellers often settle for less.

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Dave Fratello is a Manhattan Beach resident who writes the
www.sbconfidential.com. and www.mbconfidential.com real estate blogs. He can
be reached at mbwatcher@gmail.com.

This Week's Column & Links (July 10-11)

Saturday, July 10, 2010

This week's edition of South Bay Confidential appeared in the "Home Guide" in Saturday's Daily Breeze (print edition), and is also available below.

The story today concerns the Silver Spur Court condo project, which flopped and heads to auction this Sunday. (This photo is from one of the units with 2-story high ceilings and a frontage on Silver Spur; they say this unit could be mixed commercial/residential, but I don't quite see it.)

For more information and a brochure, see: www.silverspurcourtauction.com

Note that this Rolling Hills Estates condo auction is wrapped up with another auction in Pasadena in the promotional materials – confusing at times.

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Here's the complete column as it appeared in the Daily Breeze:

How Many Pieces of Silver for That Condo?

Condos! Condos!

Come and get your cheap condos!

That’s roughly the pitch for 18 newly built units in Rolling Hills Estates headed for auction tomorrow.
The Silver Spur Court condo project flopped when it was brought to market a couple of years ago. At the time, the units were offered for prices ranging from $930,000 to $1.7 million.

Now, the auction’s come-on prices average one-third of those long-forgotten start prices. For instance, unit 8, known also as 975 Silver Spur Road, first hit the market at $1,255,000. The auction price is $395,000, or 69 percent off that stratospheric beginning.

Whether or not you can actually get these condos for those giant discounts, there’s still something attractive and different about the complex that’s driving interest in the properties now. The Spanish-style building, launched as an ambitious luxury development four years ago, features lots of open, common outdoor spaces, including a large terracotta-tiled courtyard, grand staircases and another lushly landscaped area that feels like a private yard off a few of the units.

Every unit is different, though they share design elements: dark-stained hardwood floors, modern kitchens, snazzy fixtures, spacious rooms. Wrought-iron railings adorn the stairways. Most units have fireplaces and some kind of private outdoor space — a roof-deck patio here, a narrow and grassy yard there. A few have hillside views.

They’ll tell you that each unit cost $1 million or more to build, when considering land and construction costs.

But buyers stopped short of paying $1 million or more. In fact, none sold. It’s understandable.

For one thing, the real estate bubble popped between the green-lighting of this project in 2004 and the first time the condos were offered for sale in mid-2008.

Moreover, dense development is something new for the area. Single-family homes are the norm in Rolling Hills Estates and surrounding communities, not tight-knit condo complexes.

And the location for the new condos, at the corner of Crenshaw and Silver Spur, means that traffic is noticeable from several units. The site, formerly home to a McDonalds, also backs up to a large post office building.

Why build condos here, then? The Silver Spur Court development is part of the original “Peninsula Village” plan to turn the immediate area into a “European-style village” that combines shops and residences. (A series of mini-malls joins a full-blown mall a few blocks down the road.) Though the massive plan has been scaled back, a few residential projects remain.

Back in September 2006, when the Silver Spur project first broke ground, one of the developers told the Palos Verdes Peninsula News, “We think it’s going to be kind of a landmark for Rolling Hills Estates.”

It probably didn’t occur to anyone that every unit would fail to sell and would head to auction instead.
It’s too bad to see such a strike against this sort of infill development. Moving some “smart growth” up the hill is an innovative concept. You could see some empty-nesters or young professionals loving the urban groove if it develops fully over time. But this project was timed terribly, launching late, building slowly and finishing up during a real estate crash.

The big question is: What are these condos worth today? They’re hard to compare to much nearby.
On Sunday, we’ll find out. There are plenty of registered buyers. The sellers have set minimum (“reserve”) prices for the condos that are likely above those start prices — we don’t know, as the reserve prices are known only to the auctioneers. But if auction buyers go above those minimums, we’ll finally see the first sales at Silver Spur Court, and the first residents in the months to come.

I’ll report back after we see what goes down.

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Dave Fratello is a Manhattan Beach resident who writes the
www.sbconfidential.com. and www.mbconfidential.com real estate blogs. He can
be reached at mbwatcher@gmail.com.

This Week's Column & Links (July 3-4)

Saturday, July 3, 2010

This week's edition of South Bay Confidential appeared in the "Home Guide" in Saturday's Daily Breeze (print edition), and is available below.

The home discussed this week is 815 Pearl in S. Redondo (click highlighted address for more pics & details via Redfin). 

It's a flip, but a professional flip – not like one of those quickie jobs you used to see on cable TV. 

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Here's the complete column as it appeared in the Daily Breeze:


A Pearl of a Flip in South Redondo

It blew me away to see one of those home-flipping remodeling shows on
a friend’s TV the other day.

What, they’re still making these shows? Three or four years after the
housing bubble burst?

The last time I had seen a “reality show” featuring a home flipper was over
a year ago, and even by then the genre had changed noticeably from the go-go
days when amateurs would remodel homes and garner big profits.

The person featured in the show I saw was a first-time flipper, a clueless
woman with ridiculous remodeling plans, delusional expectations for her
resale and just one asset: a mom who kept bailing her out.

Unfortunately, they never showed how the final product fared in the market,
though I’m guessing it would have made for a grim second episode.

It crossed my mind that the whole show could have been a put-on, with an
actress hired to impersonate a naive flipper, and all of the remodeling
costs underwritten by the cable network. Hey, if the show sells ads …

You don’t see those sorts of individual flippers out in the real world very
much these days. But the pros are still profiting here and there.

For a model of how they can do it, look at 815 Pearl in South Redondo Beach
(south of Torrance Boulevard).

Late last year, word got out that the tired, chopped-up house was going to
be available. It didn’t hit the open market, but investors got word. One
jumped, paying $680,000 for the house in November.

The home needed everything. The late-1940s original had been split up into
two units, but a single-family home would be more attractive on the open
market.

So the remodel at Pearl required a redesign of the interior, upstairs and
down. Walls were moved, floors and windows replaced. There would be major
updates to plumbing and electricity, plus, of course, a modern kitchen (with
stainless steel appliances, de rigueur) and upscale baths. They even moved
the garage entry from the street to a back alley to create more yard space.
(Sound easy? Try it.)

About eight months later, the final product is a bright, open home with the
distinct feel of new construction. The three bedroom/four bath home boasts
nearly 2,500 square feet on a newly landscaped corner lot. Each bedroom has
its own bathroom — a modern luxury you wouldn’t get in a quickie remodel
like you might catch on cable TV.

Meanwhile, one artifact of the old structure remains: off one side of the
house, you’ll find a small, low-ceilinged suite downstairs. Once a part of a
second unit, it could be great for storage, a kids’ clubhouse or your
teenagers’ band practice. You have to love quirks like this.

After all that work, the pro flipper has marked up the final product by more
than $500,000 to $1,199,000.

The challenging remodel cost something over $300,000, listing agent Tony
Puma told me. The work went through some unforeseeable problems and tasked
the patience, skill and time of the interim owner, but he got it done. One
of those cable flippers would have been buried or in foreclosure by now. The
pro flipper here stands to get out with an attractive return, depending on
how buyers respond.

We’ll check back with 815 Pearl as it progresses over the next few weeks or
months.

Meanwhile, 815 Pearl will be open from 1-4 p.m. today and from 12-3 p.m.
Sunday.

[UPDATE: The home sold for $1,000,000 in December 2010.]

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Dave Fratello is a Manhattan Beach resident who writes the
www.sbconfidential.com. and www.mbconfidential.com real estate blogs. He can
be reached at mbwatcher@gmail.com.

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