Hat tip to daytrip for sending this in from the latimes.com:
The front-end loader swung to the right and took a bite out of the shingled roof of the quaint cottage. The roar of the engine and crackle of buckling lumber carried down Elm Avenue in Manhattan Beach.
Within 40 minutes, a demolition crew reduced the 1950s one-story to rubble. The 782-square-foot house would be replaced by a 3,300-square-foot Cape Cod.
“It feels exactly like the good old days,” said the property’s developer, Mike Leonard.
Those days of booming demolition and construction came during last decade’s housing bubble. Now, tear-downs are again on the rise in Southern California’s affluent communities, as a rebounding housing market triggers a residential reconstruction boom.
With little vacant land left, developers and wealthier buyers are snapping up small, older houses in sought-after locales, then leveling them to build modern mansions.
The wave of demolition has revived criticism that the new homes tower over those next door and clash with neighborhood character. Residents complain that their once-quiet streets have become perpetual construction zones.
The upscale South Bay town of Manhattan Beach exemplifies the trend. Builders in the city pulled permits to demolish 84 residential units from July 2012 to June 2013, the latest available data. That’s nearly double the number pulled for the same period a year earlier. In August, one Manhattan Beach City Council member described the ongoing construction as a “tsunami.”
That force has rattled Manhattan Beach homeowner Jane Guthrie.This summer, she said, workers hammered large metal beams into the ground a few houses away from her one-bedroom house, shaking the walls. Workers, she said, were installing a deep basement for a 3,500-square-foot, three-level house that replaced a small 784-square-foot cottage near the beach.
“It was like having an earthquake in your living room — for six hours a day,” said Guthrie, a retired art director for ad agencies.
The rebounding housing market has sparked the demolitions. In November, the median price for a home in Southern California was $385,000, up nearly 20% compared with the same month a year earlier, according to research firm DataQuick. Builders such as Leonard are constructing houses “on spec,” confident that they’ll find buyers.
In other cases, wealthy homeowners are buying cottages, then hiring builders to knock them down and erect dream homes.
“You’ve got an amazing increase in new construction coming on the market” in Santa Monica, Brentwood and Pacific Palisades, said F. Ron Smith, a founding partner at high-end real estate brokerage Partners Trust.
In the city of Los Angeles last year, builders received approval to raze 1,227 houses and duplexes from January through mid-December, according to Department of Building and Safety records. That’s 29% higher than in all of 2012, though still well off the pace of more than 3,000 in 2006, during the housing bubble.
Developer Igal Azran recently built a five-bedroom house near the Beverly Center in Los Angeles. The 5,000-square-foot mansion replaced a modest, one-story Spanish-style home. With glass walls and vaulted ceilings, the modern two-story towers over the adjacent 1920s homes with red-tile roofs. Public records show Azran bought the property — then a 2,180-square-foot duplex — for $856,500 in 2011. The house he built sold in October for $3.5 million.
Construction of new, high-end homes raises property values for neighborhoods, Azran said. Those building their homes shouldn’t be confined to the sizes and styles favored by their neighbors, he said.
“People like different things — people like Spanish, modern, French-style,” he said.
But many longtime residents resent the scrapping of quaint, older homes, including Clark Carlton, 57, who lives near Azran’s project. He says he’s growing his hedges higher to regain privacy lost to another newly constructed mansion.
“I am at the point now I have to make sure I am decently clothed to cross my backyard,” he said.
Carlton and his neighbors want the city to take action. They are pushing Los Angeles to tighten the so-called anti-mansionization ordinance passed in 2008. Critics say it has failed to stop the construction of outsized homes that rob views, block sunlight and alter the character of established neighborhoods.
In October, the Los Angeles City Council imposed additional size limits on new houses in the Beverly Grove neighborhood. But the changes don’t mandate a particular style.
The cost of dirt.
http://www.redfin.com/CA/Manhattan-Beach/104-The-Strand-90266/home/6712526
Insane
Daniel, we have a friend that lives a few blocks down on a larger ocean front corner lot. I think he paid close to $3 mill 20+ years ago. Older bachelor … don’t think he has done much to the house since he bought. Very odd floor plan and would probably be cheaper to knockdown rather than try to fix the major layout flaws. Fun area to visit.
I’m in a very desirable town in LA due to our top schools. Pretty constant demand for homes. Most homes that have sold the past 2 years have had major remodels done right after the closing. Some teardowns too. Our GC friend wishes that his crystal ball would have shown him that there would be such a quick turn around in the market, because they would have tried to pick up many more fixers during 2010-2012. They were all very scared to take on any flips at that time. There are no bargains now.
Yep, and I think that frustration is leading to some semi-panic buys now just to grab something.
Those retail buys will need to be retail-plus when they come back, helping to keep prices moving skyward.
Exactly Jim. In the past few years our friend has mostly bought 1800 sq.ft ranches for 800-900k. Enlarged them to 2400 sq.ft and sold them for $1.3m. Couldn’t find anything in that size and price for a new project, so they are taking a gamble … paid $1.3 for the last one and will be expanding it to 4000 sq.ft and hoping to sell in the $2.5m range.
He does great work and always has paid remodels/builds as well as his own projects. Their flips usually sell during the first open house.