It happened quietly. On February 25th, an iconic Hermosa Beach strand home was put up for sale. I first heard about it a couple of days later when a friend snuck it into a casual chat we were having while both of us waited for tables at a Manhattan Beach restaurant. He passed on the news nonchalantly, but I was stunned at the prospect of this.
The asking price, a daunting $25 million, is astonishing. There has never been a home sale in the South Bay for greater than $13 million, at least not that I am aware of. Is this price plausible? Can a home really be worth that much? What does it say about the local real estate market, especially when the business press incessantly addresses the challenged state of the housing industry? Does it in any way portend a better economic climate for the beach cities?
The home is located on the northern section of the Hermosa Beach strand. The listing agent, Bryn Stroyke of Stroyke Properties Inc., describes it as being “the perfect one-of-a-kind collectible”. There is no question that this seven bedroom home, with just over 9,800 square feet of living space, is unique, if not impressive. There are few strand properties like it.
Interestingly, another large new home is under construction just a few houses away. It generated fanfare with an unprecedented asking price of $15.9 million when the listing first appeared late last summer. The home somehow squeezes 8,000 square feet of living space in a 4,640 square foot lot. The only other Hermosa strand property for sale in this league sits on more than 7,000 square feet, though with a house that was built back in 1920. The asking price for this home was recently lowered to $13.25 million. Both of these properties would set the South Bay selling record if they were to sell at or close to their list prices. To put these prices into context, there have only been a handful of strand homes with final sales over $10 million, none of which eclipsed $12 million.
At a minimum, a potential buyer of this home would probably need at least $12 million for a down payment and then be able to demonstrate an income in excess of $200,000 per month. My guess is that the state of the economy and credit markets have thus far sidelined any members of this exclusive club from jumping into the market in such a big way. So, if they were to pick up a prized property such as this one, would it be a leading indicator of a positive outlook for the economy? Could it be a shot of confidence for the rest of the market? Or will this house sit on the market for many months before being pulled off as quietly as it first appeared? Time will tell.
Tony Cordi is the owner of Beachtime Realty, serving the South Bay since 2007. He specializes in beach properties across the South Bay and Palos Verdes. Tony has helped several clients identify properties where they can add value by remodeling or developing the property.