And just like that, the second quarter of 2021 is over.
If you remember the last quarterly update from Q1 of 2021, I discussed “easy comps” as the Coronavirus significantly reduced real estate sales for much of March and April of 2020. Those months fell in both quarter one and quarter two, which allow for this year’s quarterly numbers to easily beat year-over-year.
Take a look at the past blog from Q1 of 2021 here: “First Quarter South Bay Home Numbers Show Strong Start to 2021”
That all said, the numbers are always important to review; however, the absolute key data will be shown in quarter three and quarter four of 2021. I believe we will catch a glimpse of a continuing strong market or perhaps see some slowing based on tougher comps.
Remember, these are EASY comps. If you are a buyer, do not get down; and if you are a seller, do not get too cocky.
I honestly cannot wait for third quarter median prices and sales, but for now, let’s dive into the second quarter for good measure.
Manhattan Beach
The April 2020 numbers in Manhattan Beach were not nearly as bad as March 2020, so the year-over-year jumps are not as significant as quarter one’s numbers.
Below are median prices for the Manhattan Beach home market of Q2 of 2021 versus Q2 of 2020:
- Manhattan Beach Median Prices: UP +14.96%
- Q2 of 2021: $2,922,809
- Q2 of 2020: $2,542,500
While a 15% jump in median prices year-over-year is incredibly impressive, it is interesting to note that the median price number slipped from $3.1 million in quarter one to just over $2.9 million today.
I am splitting hairs here, but the Manhattan Beach market underperformed from a price perspective compared to last quarter.
- Manhattan Beach Closed Sales: UP +122%
- Q2 of 2021: 160 sales
- Q2 of 2020: 72 sales
If you are at all worried about lower prices compared to quarter one, then worry no more. Closed sales absolutely blew year-over-year comps out of the water. To see sales jump 122% is about as strong of a demand as one can hope for.
Just last quarter, sales were at 97 closings which was a 45% increase year-over-year.
It is apparent that demand was robust in the second quarter and that median price slipping can be taken with a grain of salt.
Palos Verdes Peninsula
The massive real estate market that is the Palos Verdes Peninsula had a huge second quarter compared to last year’s performance.
If you read old blogs, Palos Verdes was slow to go down in March of 2020, and took a bigger hit in April of 2020, so perhaps these are the easiest comps for The Hill rather than quarter one as many of the Beach Cities experienced.
Regardless, some of the median price jumps below are massive:
- Palos Verdes Estates Median Prices: UP +28.5%
- Q2 of 2021: $2,442,186
- Q2 of 2020: $1,900,000
- Rancho Palos Verdes Median Prices: UP +29.3%
- Q2 of 2021: $1,700,000
- Q2 of 2020: $1,315,000
- Rolling Hills Estates Median Prices: UP +20.9%
- Q2 of 2021: $1,650,000
- Q2 of 2020: $1,365,000
- Rolling Hills Median Prices: UP +39.3%
- Q2 of 2021: $4,250,000
- Q2 of 2020: $3,050,000
The Palos Verdes home market has a lot of things going for it…perfectly built to “get out of the city” during the pandemic, offers bigger homes and yards, and fabulous schools.
Behind the Gates in Rolling Hills almost hit a 40% price increase, and the rest of the hill was at 20% or more growth. Simply amazing.
Again, these are the easiest comps Palos Verdes will see in a long time.
Now onto sales below:
- Palos Verdes Estates Closed Sales: UP +160%
- Q2 of 2021: 60 sales
- Q2 of 2020: 23 sales
- Rancho Palos Verdes Closed Sales: UP +74%
- Q2 of 2021: 172 sales
- Q2 of 2020: 99 sales
- Rolling Hills Estates Closed Sales: UP +109%
- Q2 of 2021: 44 sales
- Q2 of 2020: 21 sales
- Rolling Hills Closed Sales: UP +171%
- Q2 of 2021: 19 sales
- Q2 of 2020: 7 sales
Just like Manhattan Beach, all four cities in Palos Verdes blew away quarter one sales increases.
Looking back at quarter one, Palos Verdes Estates was up +116%, Rancho Palos Verdes was up +29%, Rolling Hills Estates was down -22%, and Rolling Hills was up +71%.
As you can see above, those cities saw its closing growth accelerate into quarter two indicating some of the highest demand in all of the South Bay.
Hermosa Beach
As for the small but mighty city covered in my weekly blog, Hermosa Beach keeps on trucking.
- Hermosa Beach Median Prices: UP +11.8%
- Q2 of 2021: $2,040,000
- Q2 of 2020: $1,825,000
Not only was Hermosa resilient during the pandemic, it continues to grow in price through quarter one and quarter two of 2021 with much tougher comps. Just like its neighbor, Manhattan Beach, the price growth slowed to 11.8%, down from growth of 25% in quarter one.
That said, Hermosa’s median price is still higher, up to $2.04 million in the second quarter compared to$1.97 million in the first quarter. A healthy sign.
If you read my print quarterly newsletter, you will see how single-family homes versus town home/condo prices and sales drove the market in different ways.
- Hermosa Beach Closed Sales: UP +100%
- Q2 of 2021: 82 sales
- Q2 of 2020: 41 sales
Sales were up a whopping 100% year-over-year on the quarter. This represents strong demand as last quarter saw just a 37% increase. Without question, this was driven by Hermosa’s large condo market and confidence coming back to those assets thanks to the Coronavirus vaccines.
Redondo Beach
Another large real estate market here to cover is Redondo Beach.
Below, you will see numbers for the entire city, and then I have split it up between North and South Redondo, which represent two very different markets.
- Redondo Beach Median Prices: UP +17.7%
- Q2 of 2021: $1,295,000
- Q2 of 2020: $1,100,000
Redondo Beach is starting to gear up when it comes to price increases thanks to its affordability. A 17.7% jump is quite impressive…accelerating from a 13% jump in quarter one.
Below are sales which further reinforced the strength:
- Redondo Beach Closed Sales: UP +101%
- Q2 of 2021: 252 sales
- Q2 of 2020: 125 sales
With sales up 101%, that pace is accelerating as well compared to quarter one, which was a strong 70% jump. As mentioned in the past, Redondo got hit the hardest so it should have room to recover, albeit perhaps slower than other cities.
- 90277 Redondo Beach Median Prices: UP +16.2%
- Q2 of 2021: $1,360,000
- Q2 of 2020: $1,170,000
South Redondo accelerated its price increases compared to quarter one (UP +12%) which is a great sign.
- 90278 Redondo Beach Median Prices: UP +20.3%
- Q2 of 2021: $1,275,000
- Q2 of 2020: $1,060,000
The same can be said about North Redondo beating quarter one’s growth (UP +17%). It is also interesting to note that North Redondo is continuing to outperform South Redondo through the first half of the year.
Conclusion
This is pretty much the same story we saw in quarter one. It is an incredibly strong market from a numbers perspective, but much of that can be owed to “easy comps.”
The real test comes in the second half of the year when the comps get tougher.
If the market can soundly beat year-over-year numbers in the second half of 2021, then this might be a market with staying power to rival a “roaring 20s” type scenario.
If the market shows signs of slowing down, then patient buyers will likely be rewarded heading into 2022.
Regardless, the South Bay real estate market had one of the strongest quarters on record.
Have a great summer and I am excited to deliver third quarter numbers in October.
Cheers.
Richard Haynes
DRE: 01779425
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The Richard Haynes Real Estate ShowA leader in South Bay real estate for the better part of a decade, Richard thrives as an advisor to his clients with over $248 million in sales as a broker or investment principal at his boutique agency, Haynes. Richard is known for his keen local market insights which have been featured in the L.A. Times, The Street, and Forbes, along with his weekly South Bay real estate blog. [read more]