Friday, August 25, 2006

What Do Big Bucks Buyers Know You Don't?

You can't pick up the Daily Breeze or the LA Times without noticing the articles about the slowing housing market. Stories are everywhere about the imminent decline of Real Estate, especially in California. Buyers are waiting for the market to crash and sellers are praying it doesn't.
Let's take a look at the Big Bucks Market along the Strand in Manhattan Beach and Hermosa Beach. If you check out Strand prices in 2004, 2005 and 2006 you may be surprised. Prices are up and up big time!
In 2004 the median sold price of a Strand property was $4,250,000. Today the median sold price is $6,450,500. That's an increase of about 60%.
In 2004 the most expensive property sold on the Strand was a double lot( 2 lots that could be split) in Manhattan Beach which sold for $6,050,000. Today one of those lots is for sale for $5,250,000.
In 2005 the most expensive property to sell at lot value was a double lot on a corner in Hermosa Beach that sold for $8,000,000. Today two homes have been built on the site. They are priced at $10,000,000 and $10,600,000.
A home on the Strand in Manhattan Beach which will probably be torn down was listed at $9,400,000 and had multiple offers. When the price is released after close of escrow it will be a record price.
There are only a finite number of homes in the area that have ocean views or are walking distance to the beach. Without a lot of fanfare these properties are being purchased for premium prices when the come on the market. The Big Bucks Buyers plan to buy as much beach property as they can when it hits the market. They aren't worried about prices dropping slightly or sales slowing. What the Big Bucks Buyers know that you don't is that there is only so much beach property. They aren't making any more of it. Big Bucks Buyers will step up and pay the price for a little castle by the sand and smile on their way to the bank to get the money.

No comments: