A North Redondo neighborhood pocket that I always enjoy writing about is Golden Hills’ “Tall & Skinny” home market dynamics.
Since the inception of my weekly blog in late 2015, I liked to check-in on “tall & skinnys” every six to 12 months because I thought it was a great barometer for entry-level beach homes that were easily comparable.
Thanks to the sensational home market moves in the South Bay due to the pandemic, I have only been able to cover Golden Hills’ latest market happenings once in the past three years.
That ends this week.
If you are a longtime reader then you will know that over the past decade, this specific “tall & skinny” home type has done nothing but go up.
In fact, my last blog post title in early 2021 was: “North Redondo Tall & Skinny Home Price Growth Remains Unstoppable.”
The “tall & skinny” market truly has been unstoppable.
These specific Golden Hills homes have been perfectly positioned to have the wind at their back thanks to beach home demand, Millennial family formation, and low interest rates.
I want to dive in and see how that growth remained unstoppable in 2021 (obviously) and how the market is performing in 2022 amid the shifting home market.
Setting the Parameters
So, what makes for a North Redondo “tall & skinny” home?
The lot size is typically 2,500 square feet and strictly 25-feet wide. As a result, homes have nowhere to go but up, giving it that tall and skinny feel.
Homes are normally newer than the post-war 50s and 60s builds we see in the South Bay as many of the homes are 70s, 80s, and 90s built, and then of course, spec developers building larger and taller for profit in the 2000s.
For the purposes of this post, I refine the homes to their later builds (70s thru 90s), with 1,700 to 1,900 square feet of living space, and then obviously 2,500 square foot lots.
A Summary of Price Growth
If you go searching for my past blogs, you will see that below I am going to add to my sampling of example sales in Golden Hills that reflect a standard tall & skinny sale.
This will help demonstrate a little history and then end with 2021 results along with a glimpse into 2022.
2017 Example Sales
- $1,150,000 Sale – 1546 Steinhart Avenue
- $1,175,000 Sale – 1738 Havemeyer Lane
- $1,189,000 Sale – 1636 Morgan Lane
2018 Example Sales
- $1,205,000 Sale – 1630 Haynes Lane
- $1,224,000 Sale – 1640 Steinhart Avenue (my listing and sale)
- $1,245,000 Sale – 1809 Goodman Avenue
2019 Example Sales
- $1,225,000 Sale – 1610 Stanford Avenue
- $1,275,000 Sale – 1618 Carver Street
- $1,310,000 Sale – 1741 Dixon Street
2020 Example Sales
- $1,330,000 Sale – 1203 Stanford Avenue
- $1,376,500 Sale – 1616 Haynes Lane
- $1,401,500 Sale – 1741 Havemeyer Lane
2021 Example Sales
- $1,425,000 Sale – 1312 Stanford Avenue
- $1,500,000 Sale – 1543 Goodman Avenue
- $1,588,000 Sale – 1109 Stanford Avenue
Before I get into the 2022 numbers, I think it is interesting to analyze the leap in 2021 prices.
If you give this list the old eyeball test, you can see the strong and smooth appreciation over the years in the marketplace. What’s more, you can see that the 2021 leap in prices were significant thanks to low interest rates and demand brought on by the Coronavirus pandemic.
My early 2021 blog post spoke of sparse inventory and that certainly continued throughout 2021.
The market remained unstoppable and gathered even more strength!
Present “Tall & Skinny” Dynamics
But, 2021 is so last year.
What about today? What about 2022 with shifting market dynamics and 30-year interest rates approaching 6%?
While higher interest rates are likely not reflected fully in the first half of the 2022 comparable sales, below I will share example sales and speak about inventory.
2022 Example Sales (First Half)
- $1,560,000 Sale – 1719 Havemeyer Lane
- $1,580,000 Sale – 1714 Stanford Avenue
- $1,680,000 Sale – 1622 Carlson Lane
As you can see the market is up.
Not up as significantly as in 2021, but that is to be expected only halfway through the year.
If we dive a bit deeper, you can compare a lower and a higher sale in 2022 to see the range:
Furthermore, there are two pending sales asking in the $1.6 millions and one pending at the $1.4 million price point.
Looking at the above 2022 action and the pending sales, tall & skinny prices are on solid footing. They are demonstrating growth, just at slower pace – and it seems there are still some higher sales in the in escrow pipeline.
What about inventory and price cuts?
For the first time in a long time, 2022 has in fact brought price cuts to North Redondo which we rarely saw in 2021. Additionally, there is inventory – three listings under my parameters – and sellers cannot get as aggressive as they used to.
Those three listings are beginning to gather days on market, and one has had a price cut.
It is far from a massive rise in inventory to shift power over to buyers, but the marketplace was use to essentially zero inventory with almost all homes selling in their first week. Buyers likely feel a bit better and are willing to wait for the right home.
Inventory will be something to follow, along with coming closings to see if prices go lower, hold firm, or have slight growth. The third quarter action will be key!
All in all, the tall & skinny market under these parameters looks pretty darn healthy considering the tough interest rate challenges buyers must face today.
While I really love to focus on the tall & skinny market, it is likely not reflective of the entire South Bay market as a whole, but it is most definitely an important piece of the puzzle.
As mentioned earlier in the post, Golden Hills has been in the right place at the right time over the past decade – beach city home demand, now great public schools, the largest home-buying generation (Millennials) beginning to form families, low interest rates, etc., all add up for perfect growth dynamics for these entry-level beach homes.
Other South Bay markets may not be able to buck the rising interest rate trend like tall & skinnys are doing now. And remember, tall & skinnys are making prices cuts and there is inventory presently.
If this unstoppable market, as stated in my early 2021 writings, begins to get weaker – then that is a sign that the whole market is potentially due for some softness.
For now, Golden Hills is doing just fine.
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