Heated Venice resi market anticipates cooldown
During the past year, the average single-family home price in Venice rose 9.1 percent and the average price per square foot shot up 16.1 percent, according to a new report by Halton Pardee + Partners.
“Venice has been hot commodity the last four or five years,” said Louis Leal of Halton Pardee. “Prices have increased every year, but in Venice’s 3.5 square miles, there is still a high concentration of 40,000-plus people who live here in some 7,000 dwellings.”
Up to 40 percent of those dwellings, Leal said, are multi-unit properties being scarfed up by investors. As a result, most individual buyers are priced out of the multi-unit mini-market rife with the charm of 1940s and ‘50s subway tiles and pastel motifs.
At least 25 percent of Venice transactions in the past 12 months were comprised of income properties. During the second quarter, an 11-bedroom, nine-bathroom income property on 28th Avenue sold for $4.5 million. While this might seem reasonable for units promising a large return — a two-bedroom apartments rent as high as $4,000 or $5,000 a month in Venice — the high price points held true for smaller investments, too. A two-bedroom, 2.5-bath, 1,944-square-foot property at 1782 Washington Way near pricey Abbott Kinney sold for $1.9 million in May.
Venice’s condo market, while a much smaller share, remains active. Second-quarter sales averaged $1.4 million per property.
Overall, residential sales are netting $1,242 per square foot, a number skewed by developers buying aging housing stock, which they promptly tear down to make way for new builds.
In single family homes, the real news is a widening inventory, Leal said. In the past 12 months, the number of homes for sale has increased from a rolling 49 units to 63 units, signaling an almost 29 percent rise, Halton Pardee reports.
“In the last few months, we’ve seen newer inventory coming to the end of a build cycle,” Leal said. “We now have 25 houses with an over $3 million asking prices in Venice.”
The inventory, price point and an expected leveling of the market is expected to slow sales time.
“People are sitting on their prices and not coming down,” Leal said. “Things are staying on market longer, about 60 days, which is long—and a telltale sign of a leveling off. People are not quick to make a deal anymore. They are waiting for right buyer.”
Languid or not, sales of single-family units are still on pace to exceed last year, according to Halton Pardee. The total single-family units sold year-to-date is 101. In 2015, a total of 199 units were sold.