Pacific Palisades’ First Land Sale to Reset Market Comps

Early takes on real estate in the Pacific Palisades are being closely watched as the community’s first land sale inches to a close.

The first piece of land to go on sale in the Palisades after the start of the fires is asking $999,000, entering the market Jan. 16. The property, located at 17126 Avenida De La Herradura, is nearly 10,000 square feet.

KW Advisors’ Richard Schulman holds the listing and confirmed to The Real Deal there were 80 inquiries on the property, with multiple offers. He declined to comment on the sales price, given the deal is still in escrow, but said it is above ask.

Anthony Marguleas, founder and owner of Pacific Palisades brokerage Amalfi Estates, speculated during a community town hall this week the deal will close around $1.2 million to $1.3 million. That’s off about 30 percent from a pre-fire valuation.

“I hate to use one property [as a comp], but that’s all I’ve got right now,” Marguleas said in his real estate talk during the meeting.

The kickoff meeting for what’s expected to be a weekly gathering for residents of the Palisades was started in a bid to share information on rebuilding.

Marguleas added that in speaking with agents working in the Malibu and Ventura areas that were impacted by the Woolsey Fire, which burned nearly 100,000 acres in 2018, they saw a 30 percent to 50 percent decline in values.

“I think that’s probably a pretty close estimate of what we’re looking at for properties that have burned down,” he said. “Properties that have not burned down, are going to feel at least a $1 million to $2 million drop.”

Unsolicited offers to buy land, which are banned for a three-month period, are still occurring and undervaluing property.

“Unfortunately, there’s a lot of unscrupulous people, bottom feeders and opportunists that are offering 25 cents on the dollar, which is $750,000 to $850,000 for these lots that were worth $3.1 [million] four weeks ago,” Marguleas said. “Today, we believe they’re worth between $1.5 [million] and $1.8 [million].

Housing demand that’s spilled into cities and neighborhoods near the Palisades has fluctuated.

In the last four weeks in Santa Monica and Brentwood, home sales have jumped 15 percent to 20 percent, according to Marguleas.

“It’s like nothing we’ve ever seen,” he said.

Meanwhile, rents in those same areas have spiked 50 percent to 70 percent.

The huge rent increases would appear to fly in the face of price-gouging rules in effect since Gov. Gavin Newsom declared a state of emergency. However, the price increase maximums under the law apply only to short-term rentals of 12 months or less. Any lease terms above that are not subject to the price gouging rules.