Here are my picks for the deal of the week. (1/24/08)
These are homes that I feel are currently priced well based on their size, location and condition of the property.

1) 411 28th Street, Hermosa Beach, CA 90254 $2,399,000
Features: 4 bedroom, 4.5 baths, small office, roof-top deck, small ocean views, very nice hillside views.
WHAT MAKES IT A GOOD DEAL? This is a very well built home, built by Schaar homes. They are a local builder that has been around for a long time and has built a nice reputation. This home looks very nice on the outside with shingle siding and lots of molding and other details. It is also a very short walk to the beach, Hermosa Valley Park and close enough to walk to both downtown Hermosa and downtown Manhattan. The one flaw I do see is they gave a lot of usable space to the interior stair case which really impacts the 2 main living spaces. (one on the bottom and one on the top) It really squeezes them down and makes them feel a little small. One other comment on the home is some people do not like the builders choice of cabinet color in the kitchen but it’s just paint! It can be changed very easily.
The value of this house is that it is a large, new home very close to the beach, in a great part of Hermosa Beach and it is listed for a price that you could not match if you were to buy a lot on that same street and build your own home. It should also be mentioned that the finishes of this home are very nice and high quality compared to other homes in the market place. Also there are sold comps at $2,500,000.

2) 742 27th St. Manhattan Beach, Ca 90266 $2,100,000 Features: 4 bedrooms, 3.5 baths, 3,548 square feet, 5,120 square foot lot.
This is a very nice house and a good location of the Manhattan Beach Tree Section, it is a very good size home on a larger than average size lot. It was originally built in 1991 but it has been very nicely updated and customized which gives it a nice feel. It also has a few features that are included that give it an advantage over buying one of the new homes, for example it has a large flat screen T.V. included along with a built-in BBQ in the back yard. Right now for the money I think it is the best buy in the tree section for someone looking in that price range. ($1,900,000-$2,400,000)

Last weeks “Deal”…
Last week there was a new listing at 2341 Hermosa Ave. Hermosa Beach. This was a 6 year old Single Family Home literally one house from the beach. It was a 3 bedroom 3 bath house (approx 2,700 sqft.) on a short lot, but had very nice ocean views from the living level and the roof-top deck, it also had a very large basement bonus room that was great for home theater and games. Considering houses of this age on the strand (see my article the strand report) are selling for 6-11 million this was a good deal at its listed price of $2,999,000…which is why it went into escrow in 4 days.

This is the first of many reports presented by me based on knowledge I have obtained through my work and investigation. This first report is on the Hermosa Beach Strand and specifically the houses that have been recently sold on it. The strand is about a mile and a half long and contains Hermosa Beach’s most expensive residential real estate.

One general principle about the Hermosa strand is that the northern end seems to be the preferred end, values at the north end of the strand seem to be higher as reflected in the comparable sales than in the southern end. Another principle in regards to these properties is (in general) every lot is different in size, the difference is mostly made up in the length of the lots with most lots on the strand being 30 feet wide. These lots also vary in their zoning; the majority of the lots are zoned for single family, some are zoned for multi-unit use but most-likely do not have the require lot size to build more than one unit. The difference in zoning does effect the height limit, R-1 zoning is a 25′ height limit and r-2 and r-3 are 30′ height limits (these are general zoning rules, to check zoning please go to www.hermosabch.org) . All of these factors can and do contribute to the value of a specific property. One thing they are allowed to have that separates them from Manhattan Beach strand properties is they are allowed to have roof top decks, which makes for great private areas to relax and enjoy the sights and sounds of the beach. In the last 3 years (going back to Jan. 2005) there have been approximately 15 sales which is about 5 per year.

Sales in 2007 that are closed on the MLS are:
2115 the strand: 3 bedroom, 3 bath, built in 1985 , 2,518s.f. sold price: $5,000,000

2014 The strand: 3 bedroom, 3.5 baths, built in 1992 , square feet 2,390s.f. sold price: $5,000,000

1632 the strand: 3 bedrooms, 2.5 baths, built 1974 square feet 2,200 sold price: $4,290,000 this house was sold to a developer for land value, it is currently being torn down and will be a new house in the future.

3001 The strand: 5 bedroom, 5.5 baths, built in 2007, square feet 6,204. sold price: $10,000,000 This house is a new construction home designed by Louie Tomoro sold in pre-construction. Very beautiful home.

802 The strand: 5 bedroom, 5.5 baths, remodeled in 2006, square feet 3,540. Sold price: $8,500,000. (This property was purchased in 12/2006 for $5,000,000 and then totally remodeled and resold in 2007)

Also found a closed sale that was recorded with the county but did not hit the MLS:

2126 The Strand: Lot value sale, older home on a smaller lot. Sale price: $3,640,000.

There are 2 sales currently in escrow (January 2008)

3003 The Strand: This is new construction 5,747 sft. list price $11,900,000

2826 The Strand: This is an old beach cottage on a large lot in Northern Hermosa that is rumoured to be sold to a builder. List price of $7,900,000.

WHAT DOES ALL THIS MEAN???

Land value on the strand is now above $3,000,000 in the least desirable locations and up to $7,000,000+ in the best location with the biggest lot size (single lot). To give you an example of appreciation in the last year we can look at 1632 the strand; it sold for $4,290,000 (6/29/2007) and is currently listed on the M.L.S. for $5,800,000. It is being sold as a building site, it is currently a vacant lot and the plans for a beautiful new house are fully approved through the city. Keep in mind this is not an official sign of appreciation since the property has not officially re-sold for the the new/higher price but gives you a clue that values have gone up.

To give you an idea of what your “middle of the road” (not land value, not brand new, not an A+ location) properties are selling for we can look at the two sales of 2014 the strand and 2115 the strand. Both selling for $5,000,000. 2115 the strand was more of a traditional house with two levels and decent living square footage. 2014 was an older contemporary style with similar square footage but 3 levels of living space. Both are located north of the pier but not considered to be “north Hermosa”strand.

The highest sale on the strand is currently 3001 the strand which was sold at the end of last year after just before being completed with construction from the ground up. This sale was inked before the construction was done at a price of $10,000,000. This is currently the biggest sale on the strand until its neighbor that was being built at the same time closes escrow. That house (3003 the strand) was listed at $11,900,000 and currently in escrow (official sales price is unknown). From what I am seeing of land values these high prices will not be the top for very long (i.e. 2826 the strand).

WELCOME TO MY NEW BLOG.THIS YEAR MARKS MY 6TH YEAR IN THE REAL ESATE BUSINESS AND I WANTED TO SHARE MY INSIGHT OF THIS YEAR AND OF THE LOCAL SOUTH BAY MARKET WITH ANYONE WANTING TO READ IT.This Blog will contain entries ranging from general market status, homes that I feel are priced well, specific area reports, and insights to experiences I have had in transactions that might help others if they come across a similar situation.