Anthony Marguleas Gives an Update on Palisades Real Estate Market

Founder of Amalfi Estates Anthony Maguleas analyzes the current market.

Anthony Marguleas, Founder of Amalfi Estates, has done a deep dive into the last five months of land sales in Pacific Palisades. click here.

Inventory vs Sales

“New land listings continue to outpace sold lots even as buyer interest picks up,” Marguleas said. “The encouraging news is that the gap is lessening.”

Marguleas said that one trend to watch is active land listings, which are going down. In March there were 101 listings, there were 97 in April, there were 75 in May and “June is looking to be around 60,” Marguleas said.

“The main reason the number of land listings has dropped is sellers realize their lots have lost 35-40% of their equity (except for the Huntington, which has held its value much better),” Marguleas said. “Many residents are deciding whether they should sell now or wait for the market to recover in a few years – if they have the time and financial resources to do so.”

About 6,800 Palisades residences were destroyed during the January Palisades Fire.

“We expect about 30% of people will not want to rebuild, so around 1,800 – 2,000 lots will eventually come on the market,” Marguleas said. “We need to see many more lots come on the market, or it will take 20 + months for Palisades’ land inventory to peak (20 months x 75 new land listings per month =1500 + the existing 300 that have already come on=1800 lots).

“We expect active inventory to increase from 195 currently to a peak of 1000 active lots (at one time) on the market before we can start shifting from a buyer’s to a seller’s market,” he said.

LOT SALES:

Marguleas said 67 lands sales have closed in the five months since the fires.

1. Eight of the 67 sales were off the market. But, “this percentage is consistent with off-market activity before the fire,” Marguleas said.
2. In an effort to see if developers or large institutional syndicates were buying multiple properties, Marguleas analyzed the mailing addresses of owners rather than buyer names. “This approach revealed multiple-property ownership, even when names varied,” he said and added that “No buyer owns more than three properties.

“One developer purchased three properties,” he said, and “Three developers purchased two each.”

3. Of the sales, about half of the buyers are owner-users, while the rest are developers or investors.