As mentioned in most of my recent blog posts, I share additional forms of South Bay real estate data through different media channels.
There are mailed quarterly newsletters, IGTV quarterly posts, and a podcast…I have dropped the ball on that and recorded just one episode.
It is busy as a rookie dad and full-time Realtor. That said, the podcast will happen eventually every month, so thanks for being patient!
Redondo Beach Year-Over-Year Data
From a price growth standpoint, the city of Redondo Beach has done very well over the past few years. South Redondo has been strong and in recent years, North Redondo has surged higher due to its affordability and proximity to the beach.
After 10.38% price appreciation in 2018, the city of Redondo Beach took a step back and median prices fell by 2.73% in 2019.
That price weakness was equally shared throughout North and South Redondo.
On the contrary, a bright spot for Redondo Beach was the Golden Hills sub-market and its “tall & skinny” homes, which have been on a tear for the better part of a decade. This North Redondo sub-market bucked the negative trends and rose 10% in 2019 with a $110,000 leap in price.
For more on the Golden Hills tall & skinny market, check out my June 2019 blog post, “North Redondo Tall & Skinny Home Appreciation Has Been Unstoppable.”
The Avenues Update
In the past, I have written extensively about The Avenues in South Redondo Beach because it mimics the Tree Section in Manhattan Beach.
There is plenty of new construction activity on comparable lots, that sets a market for new homes which, in turn, sets land value for developers. From there, there is everything in between land value and new construction pricing for various sizes and types of existing homes.
The last post I wrote on the Avenues was in April of 2019 titled: “South Redondo’s “The Avenues” New Home Prices Keep Climbing.”
That post will give you a refresher on the past data as I won’t be diving as deep into the same data in this post.
New Construction Data
The new construction sales are pretty darn simple year-over-year because there are only a few of them.
2019 New Construction Sales:
- 626 Avenue C (sold in 2018 and 2019…see below)
- 5 bed, 5 bath, 4,000 sq. ft., 6,581 sq. ft. lot
- Sold Price: $3.15 million
- 703 Avenue A
- 5 bed, 6 bath, 4,200 sq. ft., 6,109 sq. ft. lot
- Sold Price: $2.98 million
2018 New Construction Sales:
- 332 Avenue E
- 5 bed, 7 bath, 4,822 sq. ft., 5,504 sq. ft. lot
- Sold Price: $3.4 million
- 626 Avenue C
- 5 bed, 5 bath, 4,000 sq. ft., 6,581 sq. ft. lot
- Sold Price: $3.2 million
- 740 Avenue C
- 5 bed, 5 bath, 4,674 sq. ft., 6,586 sq. ft. lot
- Sold Price: $3.1 million
At first glance, the “eyeball test” looks like things are a bit soft in the new construction market along the Avenues, especially with 626 Avenue C selling for $50,000 less in just under one year.
But, that does not seem to be the case.
If you take the time to dig deeper on the size, location, and the photos of each home, the 2018 sales were higher-level properties than the sales in 2019. Sure, the 2019 prices are lower, but the homes were a bit less desirable, yet still commanded prices that look to be in tact with 2018 trends.
So, in a nutshell, The Avenues new construction looks to be flat but healthy from a closed sale perspective.
There does seem to be a bit of potential risk ahead due to inventory rising…
- 824 Avenue A is a partially-built risky listing asking $2.099 million.
- 842 Avenue A is an undersized three-level home asking $3.15 million.
- 326 Avenue E is an eight-month-listed spec trying to get $3.55 million.
- 1203 S. Gertruda Avenue, a hugely over-sized listing, is smack dab in the middle of the Avenues and has not been able to land a record price after a year on the market. Its current price is $4.199 million.
If more inventory comes to market and/or this inventory begins to take discounts, then the flat market will go from healthy to soft. This is definitely something to watch as we head into the Spring.
Lot Sale Data
I have taken a proper sampling of the lot sales on The Avenues to see how things are moving year-over-year. Take a look…
2019 Lot Sales:
- 502 Avenue D
- 3 bed, 1 bath, 1,112 sq. ft., 5,008 sq. ft. lot
- Sold Price: $1.24 million
- 341 Avenue F
- 3 bed, 2 bath, 1,436 sq. ft., 5,510 sq. ft. lot
- Sold Price: $1.265 million
- 400 Avenue D
- 2 bed, 2 bath, 1,175 sq. ft., 6,400 sq. ft. lot
- Sold Price: $1.3 million
- 325 Avenue G
- 4 bed, 2 bath, 1,392 sq. ft., 5,511 sq. ft. lot
- Sold Price: $1.36 million
2018 Lot Sales:
- 631 Avenue C
- 3 bed, 2 bath, 1,884 sq. ft., 6,081 sq. ft. lot
- Sold Price: $1.35 million
- 837 Avenue A
- 2 bed, 2 bath, 1,194 sq. ft., 6,090 sq. ft. lot
- Sold Price: $1.4 million
- 622 Avenue B
- 3 bed, 2 bath, 1,232 sq. ft., 6,079 sq. ft. lot
- $1.42 million
- 703 Avenue C
- 3 bed, 2 bath, 1,174 sq. ft., 6,083 sq. ft. lot
- Sold Price: $1.425 million
The “eyeball test” is clear here: 2019 lot sales are showing weakness from the previous year.
Based on the above sales, back in 2018, one could expect to pay in the $1.4 millions for a lot, and today, the numbers are starting to slip into the $1.2 millions.
Furthermore, I represented a Seller of a lot sale off-market in 2019 that sold for $1.25 million, which further indicates softness in lot sales.
**Side Note: In full disclosure, the Sellers acted against my advice to bring the property to the MLS and wanted to sell off-market for personal reasons. I had them sign a waiver that they could be selling their home for potentially $100,000 less than what they could get if they listed their home on the MLS.**
So, with new construction home prices still intact but lot prices down, what gives?
The most likely answer is growing construction costs, labor costs, and developers getting more risk averse as their margins start to shrink.
If new construction listings sell higher, I expect lot sale prices to quickly recover.
But if new construction inventory grows and takes some price reductions, then lot values could continue to decline.
There are some interesting trends on existing sales data on the Avenues as well.
That data is much more intricate than lot sales versus new construction sales and prices. I would need a whole other blog post to fully cover it…and in a few months, I will write one.
For now, the long and the short is that new construction prices are flat and remain healthy, but there is some downside risk if inventory cannot get sold and we do not see some quality homes fetching higher prices.
Lot sales are likely being hurt by material and labor costs to build, and are adjusting down accordingly. The fate of these land sales is in the hands of new construction prices.
Let’s see how the Redondo market shakes out as we head into busy Spring selling season.