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Regional Report : Builder Is Banking on High-End Homes

January 27, 1994|Compiled from Times Suburban staff reports

On Crest Road in Rancho Palos Verdes, a 4,500-square-foot estate home once priced at $2 million sold for $725,000 in a bank foreclosure sale last year.

This was just one of dozens of posh homes on the peninsula that nose-dived in value when the bottom fell out of the real estate market.

But developer Rob Dick bets that high-end home buyers still want to move into a new home overlooking the ocean, even if the $700,000-plus homes are slightly smaller and have a decidedly less exclusive mailing address: Torrance. The 28 homes he plans to build in the Hollywood Riviera, a beachfront section of the city that neighbors the peninsula, are among only a handful of pricey digs being built in the Los Angeles Basin.

In April, the first four-bedroom model is scheduled to open in the Riviera Beach Colony, offering buyers gated access, views of Santa Monica Bay, in-home security and built-in stereo systems.

With interest rates still low, Dick said, house hunters will have the confidence by spring to buy once again.

"You have got to gear up and be ready for when things turn," Dick said. "That's when people get caught, when things turn around and they are not prepared to be competitive."

He said more than 300 people have expressed interest in touring the first of the Mediterranean-style homes.

"You'll always be affected by the layoffs, but there's also a huge percentage of people working," he said. "And people forget that there still are people moving in, executives relocating . . . or retirees who have a larger home and want something a little smaller but still offering an active lifestyle."

Dick and his sales force plan to impress buyers with amenities. The homes will include expansive master bedrooms with walk-in closets, whirlpool baths and fireplaces. Many also will have media rooms designed to hold home theater systems.

But even with all the frills, real estate agents say his project will be a tough sell. Median home prices on the hill have declined from a peak of $665,000 in 1990 to $474,000 last year. Sales have picked up--from 478 homes sold in 1992 to 696 sold in 1993----but the majority of homes were $500,000 or below, said Carolyn Malmquist, a Palos Verdes Estates real estate agent.

"These will have to be dynamite, wonderful homes," Malmquist said of the Riviera Beach Colony. "It's a tough price range."

In the past eight months, only three of six new homes in a scenic neighborhood near the old Marineland site have sold. The original prices were $1.3 million to $1.4 million, but the homes have fetched about $900,000, according to Larry Arman, broker at RE/MAX Rolling Hills.

About 80 homes that have been repossessed by banks and other lenders are for sale on the peninsula, and they will try to unload their real estate at deep discounts, Arman said.

"They're going to have a hell of a time (in the Riviera Beach Colony)," Arman said. "Whoever's doing it now is insane."

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