DIGS is the premiere luxury real estate lifestyle magazine serving the most affluent neighborhoods in the South Bay and Westside of Los Angeles, California.
Issue link: https://www.southbaydiggs.com/i/1153046
It is fun for just about anyone to look at beautiful Strand home listings for sale. Most onlookers drool over the homes while walking by with their coffee, glancing over the multi-million dollar asking prices without giving much thought and think to themselves…"maybe someday." But, if you are actually in the market for a home on The Strand, then I am sure you are watching prices a lot more closely than others. And, if your focus is on Hermosa Beach Strand homes, then you would know that today property values are getting hammered. The Poster Child: 60 The Strand To start off this blog, I want to share the story of 60 The Strand that sold this week as it is the perfect case study of the Hermosa Strand's price collapse. The Purchase Purchased on spec by a developer, 60 The Strand, formally known as 58 The Strand, was acquired in February of 2016 for $5.2 million. At the time, this was a low purchase price in a rising Strand market- place. Quickly and efficiently, a beautiful contemporary home was in the process of being built on the 60 The Strand lot. In June of 2017, a new 3,575 square foot home was brought to market pre-completion to test the waters at an asking price of $10.9 million. The Original Comps The asking price seemed very reasonable in the Summer of 2017 based on a few sales. Home Prices on the Hermosa Beach Strand are Getting Crushed Richard Haynes Broker/Owner, Manhattan Pacific Realty 310.379.1724 richard@manhattanpacific.com DRE: 01779425 by Richard Haynes The above excerpt is from Richard's weekly South Bay real estate blog on July 26, 2019. To continue reading the blog and to subscribe visit www.manhattanpacificrealty.com/blog Advertisement In 2016, 3320 The Strand sold for $8.35 million after just one day on the market. 3320 The Strand • 3 bed, 4 bath, 2,910 sq. ft., 2,144 sq. ft. lot • Sold Price: $8,350,000 This 1990-built home was tired and in need of a refresh. It was in a more desirable northern Strand location, but the house was on an undersized lot and only 2,900 square feet, a smaller size than most comparable properties. Another northern located listing at 3330 The Strand sold for $8 million in 2016 to a flipper who planned to rehab the property and bring back to market at over $12 million. 3330 The Strand • 5 bed, 7 bath, 3,152 sq. ft., 2,084 sq. ft. lot • Sold Price: $8,000,000 Not to mention, another listing at 2654 The Strand sold for $9.2 million as a tear-down home on a stan- dard sized lot. 2654 The Strand • 3 bed, 5 bath, 3,180 sq. ft., 2,597 sq. ft. lot • Sold Price: $9,200,000 And lastly and most encouragingly, the month before in May 2017, a corner lot at 1540 The Strand sold for $14.15 million. 1540 The Strand • 5 bed, 6 bath, 5,015 sq. ft., 4,159 sq. ft. lot • Sold Price: $14,150,000 This home was a sizable corner lot and house with over 4,600 square feet of living space just north of the pier. While this home had cheaper construction and not the quality we are used to seeing on The Strand, it caught the market while at its hottest. So as you can see, two fixer homes sold in the $8 to $9 million range on the north end of the Strand and an over-sized spec closed for over $14 million. So, why not list 60 The Strand at $10.9 million? Turns out, there were no takers. The presumed reason for not selling was due to the home still being under construction. As a result, the developer took the home off the market to wrap things up. New Listing, Comps Start to Get Ugly In the 2018 New Year, 60 The Strand was com- pleted and freshly staged. Again, the asking price was still at $10.9 million. This was the year that the market began to deteriorate. Although there were some sales in line with the comps and some that were even higher, there were some strange happenings with properties that should have sold higher. A few months into 2018 in May, a spec home at 1932 The Strand came to market asking $13.2 million. 1932 The Strand • 4 bed, 4.5 bath, 3,826 sq. ft., 2,400 sq. ft. lot • Sold Price: $10,500,000 This home was by far in a better location and larger in size to 60 The Strand, however, this property lingered for over 200 days after multiple price cuts. It finally sold at a disappointing $10.5 million seven months later. In June, 3330 The Strand, which was originally purchased for $8 million as a flip, came to market at $12.5 million.