When someone decided to put up a nicely located, stylish, newer Tree Section home at $4.6m, we figured we'd have some time to discuss and debate the listing.
Nope.
850 18th was put on public offer just 2 weeks ago, on April 1, and it's already in escrow. (No joke.)
It's another dramatic case of the persistent demand for higher-end listings in town.
850 18th is just 2 years old, and offers 6br/6ba and 5950 sq. ft. The lot is a comfy 8,000 sq. ft.
And where do you start with the superlatives? Lush. Posh. Gigantic. Highly stylized (in a Spanish vein). You could melt into this home. (Click the smaller pics for larger versions.)
Yum.
You hear it said that the best homes are going to just keep selling regardless of broader conditions. Here's some supporting evidence.
Nearby, 826 18th, a 10-year-old, slightly larger home (6br/5ba, 6175 sq. ft.), sold for $4.45m in April 2007. 1718 Pacific, a 2003 rebuild with a (comparatively) huge 10,000 sq. ft. lot plus a 5br/4ba, 3550-sq.-ft. home, sold for $4.037m last November.
So, the folks coming into the immediate area find $4m+ to be the norm for big homes on big lots in the Trees. And while you know that these are not mainstream homes or buyers, there's no doubt that these sales help to anchor the MB market, skewing everything upwards. If you're selling, that seems like great news. If you're buying, you need to understand how dramatically the market is bifurcating as we speak.
Thursday, April 17, 2008
We Hardly Knew 850 18th
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49 comments:
Definitely some big homes in that area. I think the house next door dwarfs the one at 850.
I assume the homes mentioned in the article went for listing price. Or were there multiple offers causing the sale price to go above list. If it's the former rather than the latter, that would indicate that the market still has dropped off from the peak even for the most desirable homes.
8:47am - So if a home sells for the listing price, that means the market has dropped off even for the most desirable homes?
Please explain your logic (or lack thereof).
8:47 PM:
I think I understand your point. At the peak, homes were getting multiple bids above list. Today, they aren't, therefore the market is down from the peak.
In theory that might be true, but I think it's at best a tenuous argument and at worst a thinly veiled attempt to make your case in the face of truly contradictory evidence, namely what the bulls have been saying. Good homes continue to sell, and at high prices.
So far I have to agree with them because I have yet to see data that says otherwise. But, I do think we will see that data later this year.
Sorry, that's obviously AM, not PM.
Based on Q and A's in the past, it is worth mentioning that the builder on this big, beautiful, lush home that one "melts into" was Mike Davis. He does indeed build some of the most wonderful and high priced (resale) homes in Manhattan (just my opinion)!
8:56
A few years ago, almost everything that went on the market got multiple offers within days of being put up for sale. This caused a bidding war that would drive up the price from the initial listing price. Often buyers would anticipate this and put in offers above listing hoping to get lucky. The fact that these homes are going fast but only for listing price indicate that there are not multiple buyers aggressively competing for the same home. Comprende?
I don't believe 826 18th was ever on the open market.
1718 Pacific opened at $4.5m last year and came down $463k (-11%) to $4.037m. But hey, it still sold for $4m.
Interesting question on 850 18th – it was built in 2006 and here it is for sale 2 yrs. later, but I don't see a sale record for 2006, so it would appear to be a custom build (owner is an agent). Lot sold for $1.8m+ in '03. Hard to gauge from outside what the profit might be at 2 yrs.
Yes, comprende, but can't believe it was even considerede...
If that isn't reaching for a trend, I don't know what is. I can see it now: "High end Market in MB Crashes! Homes Taking Two Weeks to Sell Instead of Two Days" Should make for a good weekend commentary on this website!
Seriously, go back a couple of years and look at high-end home sales. It was the "lesser" homes that got the battles. Not that there weren't some perfectly-located homes in the +$4mm range that didn't see a battle, but, for the most part, it took a bit.
Seriously, people. Listing prices are a terrible indicator to look at for trends. They are entirely based on what the owner thinks his house is worth, which often times is completely irrational. To point out trends based on list prices is ridiculous.
9:50, I know what you're saying, but it's not always completely wrong to use list prices. You just have to be careful what you are looking at, and what you claim based on the data.
There were some unmistakable trends I noted in late February in this story on ask-close spreads:
http://tinyurl.com/39prat
You have to admit there is a degree to which asking prices, in bunches, are representative of where the market is or was. And if bunches of them come down, that's an indicator.
I also think they're a leading indicator, rather than lagging – as median price seems to be.
Exactly correct, Anon 9:50. We used to see discounts from list price all the time back when inventory was just as high as it is today in 2000-02, before the market took off. That's called a normal market.
Discount from list price is just today's COTC 'reasoning' for why they believe MB home prices are in free fall. Tomorrow it will be one month's YOY median sale price decline based on a statistically relevant sample of about a dozen sales. Day after that it will be stats for LA County as a whole because then MB gets averaged in with Palmdale (our sister city, in the minds of the COTC). Day after that, one of the COTC will copy-and-paste the national Case-Shiller chart for the one billionth time.
It's really all very predictable.
A quick reminder, forget the daily snapshots as they can be very misleading. Watch for the trends.
PS Why does that "COTC" person continue to post? Are they attempting to shout up the market, or maybe change people's opinions? If so, shouting up the market during the economic times we're headed for is like peeing into the wind. And if changing reader's minds is the goal, they surely don't have much skill in that reagrd. Whew!!! What a putz!
"And if changing reader's minds is the goal, they surely don't have much skill in that reagrd."
I don't think that is his goal. You guys aren't going to go from clueless to intelligent. That is clear.
His goal is to make sure that the rest of the readers don't, for some odd reason, think that the COTC's dribble is actually accurate.
10:58 We take it you RSVP'd "NO" to Huggy's welcome back party.
And we are here to keep an eye on your dribble as well, 11:31.
I think we need a new advertising campaign, "Just say no to overpriced housing" or "Things are not different HERE", or "Don't be a homedebtor if you want to send your kids to college".
You get the idea. Sometimes its just better to WAIT.
Well, 12:03, here was my approach,
Years ago I said "yes" to what the crowd said was overpriced housing, and have made a ton of money; I said "yes" to things are different here, and they are regardless of what the crowd thinks; and I said "yes" to being a home debtor, and put numerous kids through college, some of whom like it so much they may never leave. I know many others who did the same. So what's your point?
I'm willing to be that most of the people on the sidelines and sharing their thoughts on this Blog are first time buyers.
A little perspective from a 25+ year Manhattan Beach resident and homeowner:
At the time, each of the 3 homes we have purchased always seemed to be at the top of the market and the interest rates were certainly higher than they are today.
Each time we sold at a substantial profit and it wasn't because we were trying to time the market. The holding times were 10 years, 5 years and 10 years to present.
The point being, if you see something you like and it works financially, go for it and hang in there because over time it will work out. In the meantime, you are enjoying home ownership in a great community.
I think some of you are ignoring the still historical low interest rates that represent a great long term opportunity to keep payments low in light of historical high interest rates that I had to deal with. How about 14%+ in the early '80's?
Interest rates move up, yes, but also DOWN (When the market equalizes and prices meet demand) Never
pay too much for a house in a declining market, that
price, my friends, is fixed and never coming down!
1:30: You are absolutely correct. Your comments, however, will fall on deaf ears (take 1:42pm). Your key point was "first time homeowners". They don't know any different and can't look beyond 2 years, as they have never had to make a long term decision like this. Most of these people are hypnotized about a home being an investment (because of the boom in housing prices) and think, if they wait, they too will buy at the bottom and get 15% a year risk free. Those days are over.
well 8:37,
i am not a first time buyer. i have owned several homes for the last 15 years. i moved here 18 months ago fully intending to buy a manhattan beach home. my children are enrolled in the schools here.
i surely hate to spend money on a rental. but, why in the world would i buy a home today. interest rates are falling, homes are selling below asking, and the economy is tanking.
and who cares if fellow readers are first time buyers or not. I am in good company with my “on the sidelines’ friends who see the logic in waiting to see how low the national economy, the la economy and the manhattan beach economy can go.
finally, why do home OWNERS even care about this blog ? why do you people feel the need to defend your home value on a blog that clearly tilts toward the buyers ? i think this blog is a thorn in your side and you should ignore it. Let the buyers enjoy the free statistics that MBC provides. i am spending my available time looking for a home and reading everything i can in order to buy.
you homesellers should be surfing, fishing, and spending your time enjoying everything mb has to offer.
From a renter and first-time buyer in the making:
I will concede that if circumstances warrant, and if you're sure MB is the right place for you long-term, then now is probably not a bad time to buy.
But some of us don't need to buy. When you're single, don't need the space, and like the hassle-free renting lifestyle, then it does in fact come down to more of an investment decision. Or at least it does for me.
If I had a wife, a kid, and another on the way, I'd be putting in bids (in MB or many SM) instead of typing up this comment.
I think the younger generation has a significantly different reality that previous generations....I'm 38, so an older gen-xer.
I've changed jobs 3 times in the last eight years. Sold one house. Moved for all three jobs.
My supposed pension got cut by 30% two weeks ago.
I submit that your advise is completely useless if my jobs have a 5 year time frame. But that is the way that it is for younger professionals these days.
Tell me, if I am not sure that my job will be in this part of Los Angeles in two years, should I take a risk on purchasing a house that I can barely afford? Have you ever tried to sell a house during a recession and your spouse laid off? I can tell you from experience that it really, really, really sucks.
Hey 2:24, I've got two kids and rent in MB. Lot cheaper than renting while waiting for things to wind down.
Fair enough 2:29. I guess my point was that, for me, there'd be a very high intangible value on owning if I had a family. I'd be willing to take the market risk for the security of knowing that I wouldn't have to move my family if my landlord decided to boot me.
Not true for everyone.
But to 2:27's point, I would never, never, stretch to buy in this market if I wasn't very secure in my job AND was 95% certain that MB was the place for me long-term.
2:03,
In case you haven't heard, real estate is one of the number one topics of conversation in Southern Califonia...always has been...probably always will be.
As an owner I'm more interested in hearing what's going on in the market than anyone. I have a huge stake in it.
I find time for this blog as well as sufing, bike riding, etc. I have many interests.
Plus I probably won't always be a MB owner. May change venues...who knows. Just adding my viewpoint that has worked very well for our family.
The short-term career hoppers do have a different viewpoint and I certainly respect it.
I've travelled around a fair amount and have found a lot of nice places to live but I stay put for a reason.
MBWatcher, I agree that purchase prices relative to list prices can be looked at in bunches and some determinations can be made. I was more responding to the post directly before mine, which was asinine, although I should not have been so definitive with my statement. I would disagree with you, though, they are "leading indicators" in that they are predictors of continued declines. Rather, I believe they show that the market is softening right now, before our very eyes.
Most of the subsequent posts are reasonable, as everyone has different situations, but I do believe that if you think you have a good thing going in MB/HB and you find a place that works financially, now is as good a time as any to buy, probably even better than most times, since we all KNOW it's a buyer's market right now and you will have leverage when transacting. I own two properties and am definitely a buyer in this market.
I bet you it will be a 20% more off buyers market this november with even move buyer's leverage...
Why?
Yes, Mike Davis was the builder of this lush home, but I hear that the wife was the one to style the place to its current beauty. You should see the inside...you would just love it!
MB watcher...the owner DID build this home and it was on the public market.
Agreed, 5:22. Exceptional home with a basement media room to boot. Mike Davis does build good homes, for the most part, but he can be a tad eccentric at times.
Can't wait to see the home he's building above Ardmore in the Hill section (the agent who is selling his 850 18th home is an investor in that project as well). One feature of note - 10-foot doors! Pau Gasol, are you listening?
5:50 - I had said I didn't think 826 was on the market last year; regarding 850, your comment is confusing me. He built this and lived in it about 2 years, right? Maybe you're saying the lot was on the market a few years ago? Overall a great project and probably a sweet profit, great.
To 5:10 PM:
Why? Because spring selling season will have fizzled. And summer will be a dud. People selling in November will be the ones that need to get out.
Dear 1:30 Thank you for some wise advice. We have a little family and your words give us hope.
Yeah 6:24 (aka Huggy), and you are a virus that won't go away. Don't you have a house to sell? Come on banner-year boy, pump it up. What's wrong? 6 months of deterioration in market conditions got you down?
MBwatcher: the owners have had the property for 5 years. Then they tore down the existing property in mid 2004 to build the current property. I have been inside. It is full of unbelieveable upgrades like arte international lighting, had painted tiles, glass tiles, and a huge back yard, etc, etc, etc. One lucky buyer. I hear this realtor and his wife do a lot of projects in rebuilds/ new construction/ upgrades, etc...and theycalways do an incredible, upscale job! Cant wait to see the project on Pacific/ Ardmore!
8:53 - new project, where exactly? There's a remodel under way at that corner, is that it?
7:41pm - Buy a clue you moron. That isn't Huggy. Huggy is a bull, not a bear. If you are going to comment, you clueless wonder, at least get THAT right. Are you teh only one that doesn't know Huggy is a bull?
Whoa, whoa, whoa 9:50 Huggy is a bull?! I cannot sleep now, I am in shock. Please alert the media to this. Wolf?! Wolf Blitzer?! You're not going to believe this!
Thanks 9:50. I just turned on my computer and read 7:41 and thought I was hallucinating.
7:41 comment was addressed to incorrect post. Huggy's orignal post (standard COTC gibberish) was censored and is now gone. My mistake..but take it easy.
A little perspective from a 25+ year Manhattan Beach resident and homeowner:
At the time, each of the 3 homes we have purchased always seemed to be at the top of the market and the interest rates were certainly higher than they are today.
Each time we sold at a substantial profit and it wasn't because we were trying to time the market. The holding times were 10 years, 5 years and 10 years to present.
Lets run those dates backwards.
present minus 10 years = 1998
1998...hardly a top.
1998 minus 5 years = 1993
1993...more of a bottom than a top.
1993 minus 10 years = 1983
1983...another bottom.
here is the case shiller chart...
http://www.canadian-housing-price-charts.235.ca/images/ShillersHousing.jpg
Wow, what a price spike. Is that a plot of entire US?
Hey 2:34 AM (really AM?!)
I'm not saying it was a market peak for everyone...just for us.
Every time we bought we thought to ourselves, "How can the prices ever go up?" This was even for that first purchase at $150K.
Once again we just bought at the time we needed a place to live or a larger place to live. we weren't hung up on being on the Strand or in the Sand...just the best home for us at the time for the price. Was not even considering market timing.
I still believe that lower interest rates trump higher prices if you are going to stay somewhere for a long time. Just add up the interest costs over time and put a nominal market increase in your home. I think 3% annually takes care of market ups and downs.
Gotta love the Cult of the Clueless - 2:34 am being the latest example (bars close at 2:00 am, right?). Most have never bought a home, they can barely spell the words 'real estate', but suddenly they are experts on real estate market timing. And, of course, their sole source of info is Case-Shiller which I predicted would make its appearance in short order (see my 10:40 am comment above).
For those unclear on the concept, Case Shiller is a national chart, not local and not particularly relevant to Manhattan Beach. A recent study by PMI Mortgage Insurance Co. is titled "House Price Declines Have Been Bigger for Lower Priced Homes" and uses Case Shiller data to show that home price declines are more prevalent in low-priced neighborhoods (think Palmdale) than high-priced neighborhoods like Manhattan Beach. Those of us who follow home prices with regularity already know this (Median home price year-to-date for single family home sales in MB is $1,825,000 this year, $1,760,000 last year at this time). Those who follow this blog do not.
But thanks for your "insight", 2:34 - hope you're sleeping off that hangover.
Congratulations Lisa and Barret Pulver on the sale of 850 18th street! Working with both of you on the design of your home was a great experience, and I have always been proud of the work we all did on your home! Looking forward on working with you again someday! Thanks, Paul L'Esperance-Paul L'Esperance Design Associates
11:36 You must be a real estate agent. I wonder how bitter you will sound after a whole summer of empty open houses.
Paul L'Esperance is an incredible designer. Anyone fortunate enough to have his help in designing their home is one lucky person!
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