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.
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.
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!