A Pacific Palisades Property Listed Under $1 Million—and It Went Under Contract Immediately

What matters

1. $138/SF on land. The sub-$1 million price brought buyers out immediately.  There are many Palisades lots sitting on the market. This one reportedly went under contract almost immediately.  At approximately $138 per land square foot, it was priced about 42% below the $239 median from the closed Palisades land sales I have saved. The market’s response suggests there is meaningful demand when the land price is low enough.
2. Sunset Boulevard is the problem and possibly the opportunity.  The property fronts Sunset Boulevard, which means traffic, noise, access and resale will all be legitimate concerns. A great local broker, Max Marguleas, pointed out that this location could make the completed home harder to sell. I agree that it deserves a substantial discount compared with an interior street. But at a $995,000 land basis, the buyer may have enough room to build a smaller, well-designed home that enters the market around $3 million to $4 million.  I think this could be an interesting market where there are brand new entry level homes in the Palisades for 3-4M.  
3.  Is new supply a threat or evidence of recovery? Max raised another important concern: hundreds of newly constructed homes could eventually come to market, creating competition for buyers. I see the other side.  When hundreds of homes are rebuilt, buyers may no longer be looking at a damaged or empty community. They will see new houses, active construction, returning families and a neighborhood visibly moving forward. The supply could pressure sellers. But it could also bring back confidence in the entire Palisades. 
4. The Alphabet Streets may be providing the earliest market signal. According to Max, the Alphabet Streets are currently performing the best. He believes zoning and building-code conditions there are allowing some owners to rebuild more quickly, while pricing has started to rise. His read is that the market bottomed approximately six months ago and has recently been appreciating by roughly 1% to 2% per month. That is one broker’s real-time observation not yet a conclusion I would apply across the entire Palisadesbut it is exactly the type of local intelligence I want to track against future closings and share back.