Real Estate

A look at Lido Isle

Written by Blue Door Magazine on March 3, 2024

A real estate update from Jon Flagg

When preparing my insights on the Lido Isle real estate market, I am continually surprised when I take a detailed look back at the year, especially when comparing it to prior years. In 2023, the Lido market proved quite resilient with a slight tug-of-war between buyer hesitancy, fearing prices might drop amid recession talks and mixed economic signals, and sellers who were clinging to low interest rates, not having replacement properties to move into. In retrospect, sellers won as equity continued to grow. Here are a few highlights:

Sales volume

There were 25 closings in 2023 per MLS, the lowest amount in the past 14 years—less than half of 2021’s 53 homes. Inventory has rarely touched 10-plus active listings during the past two years.

Prices/Averages

The average sale price for the year was $6.241 million for all homes compared to $6.75 million in 2022. The median sale price was $4.5 million, below the 2022 median of $5.497 million. Those differences can largely be attributed to the ratio of bayfront to interior sales. In 2022, 10 of the 26 sales were bayfront properties, and this number dipped to norms with just five of the 25 sales being bayfront properties.

Interior

The average price for the 20 interior closings in 2023 was $4.447 million compared to $4.167 million in 2022. The interior recorded its highest sale ever at $8.8 million.

Bayfront

The five bayfront homes that closed escrow in 2023 (plus one off-market sale) ranged in price from $7 million to $24 million with an average price of $13,420 million. It is my professional opinion that there are some bayfront homes that could secure prices above $50 million if a buyer could pry those owners out.

Days on the market (DOM)

The average DOM was 40 compared to 30 in 2022. In 2023, homes typically closed at 94% of their list price with only one home selling over the original asking price. That’s an interesting contrast to 2022 when eight of the 26 sales went for above asking price and 2021 when seven of the 53 sales went over asking.

Financing vs Cash

Fifty percent of the transactions were consummated with some sort of debt, while the other half were cash.

Locality

Of the 28 closings (including off-markets), seven had owned or did own a home on the island, plus three “tenants” ended up purchasing after taking a test run on the island. The remainder of the buyers came from areas ranging from Huntington Beach to Burlingame to Arizona.

Where are we heading?

We closed the year with nine homes on the market—the highest year-end level in several years. Yet, it’s not a level that leads to a buyer’s market. Although we are in an election year and there is a bit of uncertainty, the Fed’s easing on rates, should they do so, will provide moderate continued fuel for appreciation. Newer trophy properties will continue to command and receive a premium, and the “tweeners” may do as well as their neighbors did last year. However, buyers will not be stepping up to any price to secure these, especially since construction costs remain high. Unless inventory grows to the 20-plus range, the advantage will remain in the seller’s court, and buyers will continue to demand, and pay, to live in the paradise of Lido.