East Hermosa Beach
A grand total of two, that’s right, only two single-family homes are on the market in East Hermosa currently.
Unfortunately for buyers, the two listings are both small two-bedroom offerings that do not service the typical buyer in this area that needs three or more bedrooms.
To be fair, the East Hermosa home market is not as big as others. From 4/1/2017 to 3/31/2018, a full calendar year, there were 45 home sales which come out to about 3.75 sales a month.
During that same time period, only seven offerings were taken off the market with two eventually selling later. Without question, the market is tight as there are five properties in escrow with the majority of them making deals in under a month.
Why is the market so tight? One can only guess.
I believe if you are willing to sacrifice for a smaller East Hermosa lot, then you can achieve a nicely sized home with ocean views in the $600 to $700 per sq. ft. range. That is a major discount from other areas west of PCH that almost always command over $1,000 per sq. ft. when the ocean is within view.
In East Hermosa, buyers can have a great beach city address, great schools, and a short distance from fabulous restaurants and the beach. So that discount in price relative to other options in the area is compelling, thus the current tight supply.
Last September, I wrote about East Hermosa new construction and it seems the market has shifted in the last eight months.
1260 Bonnie Brae Street closed at $2,400,000 which was on the higher end of the market “holding steady.” Then, the most expensive listing, 826 18th Street came out asking 4,200,000 which was almost $1 million higher than the highest sale ever. They took a huge discount but still closed at a record of $3,440,000.
Since those two sales, there have been ZERO new construction homes sold on the MLS.
As a result, we have seen buyers opt to pay big bucks for new construction town homes instead.
1619 and 1621 Golden Avenue town homes sold for $2,799,000 and $2,790,000, respectively. There have also been three town homes sales on Prospect that got $2,515,000, $2,675,000, and an East Hermosa town home record of $2,835,000.
What is shocking is the highest sale of 2017 single family homes in East Hermosa per the last blog was $2,449,000. These town home sales have shattered that price with ease.
Existing sales (we will call it 2010 and older) can be tricky in East Hermosa because it is a hodgepodge of small bungalows, larger newer homes, and tall and skinnys, all while having varying lot sizes from very small to quite big. And since this is a small sub-section of the market with limited sales, it can be tough to gauge pricing from year to year.
Using our 4/1/2017 to 3/31/2018 time period, year over year, there has been little change in the median sales price of East Hermosa existing homes. The median price over the last year was $1,299,000, while the same period in the prior year was $1,287,500.
With new construction being a driver of existing sales, it seems like there should have been more growth in the median sale price due to the massive push higher in new construction town home sales. If you dive deeper into the numbers, you will see that there were 39 sales this past year while the year prior there were 48 sales. So even with the limited inventory, the existing home market in East Hermosa seems to be “holding steady” much like what I wrote in my new construction blog eight months ago.
Of course, now knowing that the new construction market has gone bananas right after that steady time, perhaps the existing market is about ready to pop? The lack of inventory and fresh new construction comps seem to only be positive for this market.
It is anyone’s guess (and pure speculation when it comes to appreciation) but the signs seem like the East Hermosa market is poised to go higher in the near future.
New Listing Coming
With a little self-promotion here, I do have a new listing coming to relieve prospective East Hermosa home buyers. It is a nicely updated tall and skinny that offers three bedrooms…yes, three bedrooms! This single-family home is a great size at 1,865 sq. ft. with a small peak-a-boo ocean view off the back deck at an attractive asking price of only $1,299,000. Check out 824 3rd Street if you are in the market.