Pacific Palisades August Real Estate Round-Up
By Jeffrey T. Sandorf
The Palisadesâ€™ single family home market showed encouraging signs in August as prices have increased over the past few months.Â With a total of 27 homes sold (closed escrow) in August, the 2011 median price of a single family home (through August 2011) in the Pacific Palisades now sits at $1,703,750, an increase of about 4%Â since June 1, 2011.Â This price rebound is particularly important considering that through just the first six months of 2011 the median price was approximately 10% (now about 6%) below the 2010 median.Â
The boost in prices can be attributed in part to a slight surge in the luxury market, particularly with more new(er) built home sales.Â In August alone there were sales of $6,000,000 (1304 Marinette; Built in 2010), $5,500,000 (13544 Lucca; Built 1928) and $3,999,000 (533 Via De La Paz; Built 2008).Â September expects to continue the trend as of September 9 the following newer built homes sold (closed escrow): 916 Kagawa ($3,475,000; 2011), 458 Toyopa ($9,800,000; 2008), 16048 Northfield ($2,459,000; 2007) and 773 Hartzell ($2,350,000; 2004).
There are benefits to buying a new(er) built home versus buying a â€œtear downâ€ property and building a new custom home.Â Besides the obvious hassle of working well over a year or more on the planning, drawings and the actual construction, there is pretty stiff competition to purchase tear down properties in the Palisades between both homeowners and developers.Â Additionally, the recent anti-mansionization changes to the City of Los Angeles zoning code means that in most cases the future newly constructed homes will be required to have less square footage and a smaller footprint than pre-2011 built ones.Â Lastly, unless you plan on paying for the building costs with cash, obtaining construction financing is not a slam dunk.Â Lenders typically will loan about 70% of the total project cost (land + building costs) but the borrowers will be subject very strict lending guidelines. Â Â Â
The 27 homes sold in August represent an increase of 50% against the same period last year as 18 homes sold in August 2010.Â Additionally, the August 2011 homes were sold about 25% quicker than a year ago with an average of 55 days on the market.Â The average sales price for the month was $2,005,838 (12% higher than June 2011) which is pretty impressive considering that 15% of the homes sold in August closed escrow at a price at or under $725,000.Â Â Â Â Â Â
There were a total of 176 homes available for sale in August 2011 as compared to 210 in August 2010, a decrease in supply of 16%.Â In fact this was the fourth consecutive month of a decrease in total inventory.Â The total supply of homes is calculated as the as the overall number of single family properties that could have been purchased in a given month as opposed to a snapshot of inventory on a specific day of the month.
With supply in check, strong transactional volume and evidence of prices starting to appreciate closer to 2010 levels there are positive indicators of a stabilizing market and an equalizing playing field between buyer and seller.Â Â Â Â Â Â Â
Jeff Sandorf is a Partner in
Amalfi Estates, a Pacific Palisades
real estate company. Contacts:
(310) 625-4099 or visit