Median Home Prices in California
According to the California Association of Realtors, the Los Angeles County median home price in December sat at $577,690. There is not much for sale by the beach in that price range except for some very small 2-bed condos in the Hermosa Valley (like 1600 Ardmore Avenue #219) or an even smaller 1-bedroom fixer in The Village in Redondo Beach (like 610 The Village #315). It has become a reality that buying a home under $1 million in the South Bay is hard…really hard.
The Deal
What if you could find a lot more space than a small condo, like maybe over 2,400 livable sq. ft. with 4 bedrooms, 2.5 bathrooms, and a beach city ZIP code? This brings me to my deal of the week.
If you like the sound of the above home description, then 2210 Harriman Lane #A in Redondo Beach is the spot for you.
Built in 1990, this town home offers a single-family home feel, listed at only $949,000. That price already sounds really good but it gets even better when you see that it is asking ultra-low $385 per sq. ft. For reference, the median sale price per sq. ft. in Redondo Beach in 2017 was $544. Nice!
As a real estate professional with investment and development experience, I love the potential this property has for the future.
Direct New Construction Comps
$1,399,000 sale at 2315 Clark Lane #A (4-bed, 3.5-bath, 2,500 sq. ft.)
$1,399,000 sale at 2315 Clark Lane #B (4-bed, 3.5-bath, 2,500 sq. ft.)
Very Comparable New Construction Comps
$1,399,000 2106 Graham Avenue #A (4-bed, 3.5-bath, 2,580 sq. ft.)
$1,400,000 1814 Marshallfield Lane #A (4-bed, 3.5-bath, 2,580 sq. ft.)
$1,400,000 1814 Marshallfield Lane #B (4-bed, 3.5-bath, 2,580 sq. ft.)
$1,400,000 1912 Huntington Lane #A (4-bed, 3.5-bath, 2,600 sq. ft.)
$1,400,000 2207 Harriman Lane #B (4-bed, 3.5-bath, 2,602 sq. ft.)
These very similar sized new construction sales above suggest that perhaps a completely remolded home could get maybe slightly less, let’s say $1,300,000? That does not seem our of the realm of possibility.
If the best developers in North Redondo can build at $200 per sq. ft., then why can’t the future homeowner of our deal of the week do a major remodel for $125 per sq. ft. and spend $300,000 to make it shiny and new? At a $949,000 asking price, a major $300,000 remodel today would have equity almost assuredly. That is speculation with no remodel comps, but, with newly listed new construction at 1729 Harriman # A and 1729 Harriman #B asking $1,499,000 and $1,509,000 respectively, it is reasonable to assume that new construction will drive the value of this property higher.
Still not convinced? Let’s take a look a the existing comps in the last six months.
Direct Existing Comps
$1,012,050 2015 Havemeyer Lane #A (4-bed, 2.5-bath, 2,577 sq. ft.)
$1,099,000 2609 Huntington Lane #B (4-bed, 2.5-bath, 2,532 sq. ft.)
$1,130,000 2106 Huntington Lane #B (4-bed, 2.5-bath, 2,554 sq. ft.)
There is nothing selling below $1 million and one could argue that town homes of this size are easily trending higher than $1,100,000.
Conclusion
This deal of the week is a can’t miss opportunity under $1 million and likely still a fabulous buy under $1,050,000. Most residential buyers cringe at paying over-asking price, but if you’re reading this blog, use this information to your advantage. Make a hard push for this one up to $1,050,000 (but still hope for something lower). If you are lucky enough to win the bidding war, enjoy the home over the long term as-is and complete a major remodel a few years before selling. You’ll be glad you did!
Richard Haynes
DRE: 01779425
For more South Bay real estate insights, subscribe and follow Richard’s social channels below:
The Richard Haynes Real Estate ShowA leader in South Bay real estate for the better part of a decade, Richard thrives as an advisor to his clients with over $248 million in sales as a broker or investment principal at his boutique agency, Haynes. Richard is known for his keen local market insights which have been featured in the L.A. Times, The Street, and Forbes, along with his weekly South Bay real estate blog. [read more]