As you know, the first quarter of 2021 concluded this past Wednesday.
And, although agents may not have entered in 100% of all of their closings, we have enough data to bring this out to print to get you the latest information on the South Bay real estate market’s strong start to the new year.
As mentioned in past monthly and quarterly updates, the numbers are going to get choppy as the pandemic throws off seasonal trends.
Please keep in mind, this quarter (Q1 of 2021) and next quarter (Q2 of 2021) are going to have “easy comps” as our local markets really pulled back in March and April of 2020 as the Coronavirus pandemic ravaged confidence and markets.
It is hard to believe that just a little over a year ago, I wrote, “Coronavirus: How to Play the South Bay Real Estate Market” and received messages that I was being an alarmist. And then just a few weeks later I wrote, “How the ‘Stay-ay-Home’ Order is Affecting South Bay Real Estate” sharing that South Bay home sales were starting to fall off a cliff.
Those were scary times, and as a result, March and April were months that performed very poorly in our housing markets. Both of those months will impact year-over-year comps in quarter one and quarter two of this year.
So, the next two quarters will have very strong numbers, and believe me, the market is just about as strong as I have ever seen it. That said, the numbers here are exaggerated thanks to those “easy comps.”
You should study these latest quarterly results for sure, but our most important quarter of 2021 will be the third quarter as those comps begin to normalize.
Now, let’s get to the numbers…
In March of 2020, Manhattan Beach saw its pending escrows fall 72.3% and closed sales down 42%. You can see how drastic the fall was just a year ago and how comps are going to be easy to beat.
Below are median prices for the first quarter of 2021 versus the first quarter of 2020:
- Manhattan Beach Median Prices: UP +34%
- Q1 of 2021: $3,100,000
- Q1 of 2020: $2,300,000
It seems like a lifetime ago when the “stay-at-home” orders first were announced. But, if someone were to tell you that median price would go from $2.3 million to $3.1 million just a year later, I am not sure anyone would have believed that.
Hard to imagine a better recovery or result for Manhattan Beach real estate.
The same goes for sales where we have seen closed escrows rebounding strongly even amidst lower inventories.
- Manhattan Beach Closed Sales: UP +45%
- Q1 of 2021: 87 Sales
- Q1 of 2020: 60 Sales
The Manhattan Beach home market is so strong right now, driven by low interest rates. And, even more so by the large homes and yards offered in the Hill Section and East Manhattan Beach.
Palos Verdes Peninsula
With the huge size of the Palos Verdes Peninsula, I am going to break down the four cities of the Hill and leave out the unincorporated areas like I always do. But honestly, don’t sleep on those unincorporated areas of Westfield and Academy Hill that offer some major value these days.
For reference, Palos Verdes’ 90274 zip saw pending escrows down 58% and closed sales down 19% in March of 2020. And, we saw Palos Verdes’ 90275 zip pending escrows down 62% and closed sales down 22% in the same time period.
These are the year-over year first quarter numbers with similarly easy comps to those seen in Manhattan Beach:
- Palos Verdes Estates Median Prices: UP +12%
- Q1 of 2021: $1,916,450
- Q1 of 2020: $1,700,000
- Rancho Palos Verdes Median Prices: UP +13%
- Q1 of 2021: $1,427,500
- Q1 of 2020: $1,259,000
- Rolling Hills Estates Median Prices: UP +49%
- Q1 of 2021: $1,439,000
- Q1 of 2020: $964,500
- Rolling Hills Beach Median Prices: UP +46%
- Q1 of 2021: $3,775,000
- Q1 of 2020: $2,575,000
The Hill is in line with statewide growth when it comes to Palos Verdes Estates and Rancho Palos Verdes, but obviously Rolling Hills Estates and Rolling Hills shine as outperformers.
In my last quarterly report, I wrote the following below about RHE:
- Fewer condo sales are happening during the pandemic, so there are fewer low-priced sales in buildings like The Estates.
- Larger homes with backyards and privacy are hot. As a result, the new luxury development at Rolling Hills Country Club has gone bananas. Essentially, they are selling out of product and are having their best year yet.
This still holds true and is the reason why Rolling Hills Estates is outperforming thanks to Rolling Hills Country Club and the lowest inventory ever for the city know for horses, peacocks and now a world-class links golf course. And not to be left out, behind the gates in Rolling Hills was perfectly suited to ride out a worldwide pandemic, thus seeing its real estate surge higher.
- Palos Verdes Estates Closed Sales: UP +116%
- Q1 of 2021: 52 Sales
- Q1 of 2020: 24 Sales
- Rancho Palos Verdes Closed Sales: UP +29%
- Q1 of 2021: 120 Sales
- Q1 of 2020: 93 Sales
- Rolling Hills Estates Closed Sales: DOWN -22%
- Q1 of 2021: 31 Sales
- Q1 of 2020: 40 Sales
- Rolling Hills Closed Sales: UP +71%
- Q1 of 2021: 12 Sales
- Q1 of 2020: 7 Sales
You can see that sales are up strongly in an amazing recovery.
The one “sore spot” is Rolling Hills Estates, but again, that is thanks to all-time low inventory for the city, and you can see that effect with prices up 49% year-over-year. Lower sales are purely the result of an inventory problem.
As for the smallest city covered on my blog, Hermosa Beach, price growth is still super solid:
- Hermosa Beach Median Prices: UP +25%
- Q1 of 2021: $1,970,000
- Q1 of 2020: $1,575,000
Across the board, Hermosa Beach has performed well in the first quarter of 2021. And, just wait for condo and town home demand to come back. For a city with many large condo and town home buildings, the second quarter should see price strength in those asset types as well.
- Hermosa Beach Closed Sales: UP +37%
- Q1 of 2021: 59 Sales
- Q1 of 2020: 43 Sales
Again, closed sales are up in a big way. That is impressive because in March of 2020, Hermosa Beach did not see its closed sales fall off a cliff like other cities. In fact, they were up 11.1% in March of last year. So seeing sales in quarter one of this year up 37% is quite an impressive performance for this local real estate market.
There are a bunch of different ways to process real estate numbers in the biggest city we cover here on the blog.
To keep it simple, I like to look at the city overall and then break it down between South and North Redondo (90277 zip & 90278 zip, respectively).
Below, please see the median prices for quarter one year-over-year:
- Redondo Beach Median Prices: UP +13%
- Q1 of 2021: $1,240,000
- Q1 of 2020: $1,094,500
Redondo, by far, was the city that got hammered the most during the early pandemic days. And, it took a couple of months longer for it to recover compared with the other markets on the blog.
That said, Redondo’s price rebound has been solid and very impressive, up double-digits. Additionally, its sales jump below is amazing after dropping almost 80% in March 2020.
- Redondo Beach Closed Sales: UP +70%
- Q1 of 2021: 201 Sales
- Q1 of 2020: 118 Sales
Sure March 2020 was an easy comp, but January and February were decent months for the affordable beach city, so seeing a massive jump of 70% amidst an inventory squeeze is simply amazing.
Below is the breakdown between South and North Redondo:
- 90277 Redondo Beach Median Prices: UP +12%
- Q1 of 2021: $1,280,000
- Q1 of 2020: $1,135,000
- 90278 Redondo Beach Median Prices: UP +17%
- Q1 of 2021: $1,237,500
- Q1 of 2020: $1,055,000
Again, super solid numbers on price. South Redondo sales were up 28% and the main driver of sales growth was focused in North Redondo with a whopping jump of 109% year-over-year. Wow!
All the numbers above show the strength of our South Bay home markets. It is incredible news compared to what we were experiencing just a year ago.
While local markets might be as strong as they have ever been, some of the numbers above are truly “easy comps.” Please remember that important fact when valuing your home or beginning your real estate search.
You can expect strong numbers like this again for quarter two of 2021, so do not be shocked with the continued strength, and a lot of confidence from sellers.
It will really start to matter when we hit the second half of the year and have quarter three numbers, as those comps will not be nearly as easy to beat. Be ready to thoroughly study quarter three as it will be important data that will give us a glimpse into the future, and perhaps helpful clues to see if the market can continue its incredible run, or if it might begin losing some steam.
For now, enjoy the ride higher. Cheers.