Pacific Palisades Update

[George Hatch]

Pending and closed land sales in the last 90 days

--------------------------------------------
SFRs that went under contract after the fires

 

[gregb]

Nobody cares about the plight of rich folks-they already have another house to relocate to. Some have noticed that Newsom is prepping for a 2028 run.

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[glenn walker]

Crazy I think prices went up

 

[The Bob]

GH,

What do you think the land/value ratio will end up being once new houses are built on those lots?

 

[Joe Flacco]

Great info for adjustments.

 

[Joe Flacco]

GH,

What do you think the land/value ratio will end up being once new houses are built on those lots?

Based on Santa Monica (North of Montana) directly to the East, probably around 50/50 ratio. Spec projects there are selling for around $6.5m on $3.2m lots. Some of the nicer homes on those small lots are at 2/1 ratio.

 

[George Hatch]

GH,

What do you think the land/value ratio will end up being once new houses are built on those lots?

I don't know. On the one hand the early adopters might be paying a premium right now. By the time we get to thousands of SFR parcels coming online at the same time, "supply" won't be the issue. But on the other hand it'll be about effective demand and I think there's going to be a lot of effective demand for new construction in those areas. These areas are "destination" areas where people work all their lives to get to.

The foot bone is connected to the ankle bone and the ankle bone is connected to the knee bone. Vacant SFR lots in inland Santa Monica (away from the beach zone) were selling in the $1.5M range before the fires. There are a couple actives for SFR zoned sites but they come with plans and (ready to issue) status - those are listed in the $2.5M range but will save their developers a year in plan check and permitting. I don't know that Pacific Palisades (just north) will settle below that. Santa Monica is a slightly quicker commute to employment centers in West LA and Downtown LA.

Slightly further to the east in the Culver City area the small subdivision lots and lots with beater houses have been selling for ~$1M - $1.1M. I doubt the Pacific Palisades parcels will drop that low. Not when there's new construction and heavy rehabs in the neighborhoods.

 

[gregb]

There are currently 69 active lot listings in Pacific Palisades.

 

[The Bob]

A year for planning and permits??...that's crazy. We built a new house in '21-'22. Contract on builder's
lot in March '21, finalized plans and structural options shortly after and they broke ground a month later in April. That included the builder having to re-submit all new plans for structural changes. I think they got the plans approved the same week they were turned in. There were over 2700 new SF houses built in this county in 2021.
I don't see how it takes that long on existing lots. Hopefully they speed that process up.

 

[Joe Flacco]

This is what we have so far in this area of Pacific Palisades.

That blue area around W Pampas Ricas Blvd is $1 million better than the other two for a typical 8,000 SF lot.

Everything west of Temescal Canyon Road is less than $1.6M so far.