The South Bay has become a mixed bag of micro-markets. A few years ago, everything was going up but now each micro-market has its own story. Some areas are still on fire while others are cooling off!
Seriously, Hermosa Beach condos are HOT. If you read my blog back in December (Hermosa Beach Condos are on Fire!) then you know the market was strong. This strength continues and is probably even stronger than it was during the holidays. Today, only two condos are currently on the market. With average days on market and current supply below 30 days, sellers have all the advantages.
Surprisingly, the high-end market in Hermosa Beach has begun to show signs of life. After a rare Strand sale of $8.35 million at 3320 The Strand and an expensive $1,830 price per sq. ft. sale at 37 20th Street for $4.394 million in the 4th quarter, the high end is making deals. In the Hermosa Valley there are asking prices of $7.995 and a $4.799 million that are pending, and in the not-so-loved South Sand Section, there are pending properties at $5 million (new construction), $3.9 million (duplex), and $4.798 million (walk street).
What are we in, Manhattan Beach? If those high priced homes sell, then Hermosa Beach could be in for a bump in price.
Is Redondo Beach the last affordable South Bay beach city? With over 500 sales below $1 million in the past year, we could make that case. Redondo Beach has a huge housing stock and a nice mix of town homes and condos that make home ownership affordable. But if you are a Buyer in this area, make sure you are up for some competition.
Most sales in Redondo under $1 million, especially North Redondo, are in multiple offer situations and going over asking price. Here are the stats for property under $1 million in Redondo Beach: In the past year Redondo is averaging 42 sales per month, and today, there are only 30 homes on the market. That is about 21 days of supply. And if any of those listings have been sitting for more than a month, then they are wildly overpriced. A properly priced home whose value is under $1 million…these days, it’s gone quickly.
It is a scary time to be a seller in the gated city of Rolling Hills right now. There is enormous pressure to the downside in this area, even buyers need to be careful as well.
Here is a clip of email I sent to a client interested in Rolling Hills in middle February:
“Here is a link to 19 actives and just two pending sales right now….That is one ugly list, my friend. Additionally, I went back the last 360 days. There have been only 8 sales. If you do the traditional months of supply calculation, that is a whopping 28 months’ worth of home inventory. A market at equilibrium is six months. To be fair, Rolling Hills is a small market and has sellers that can afford to wait or take their property off the market; however, I would hate to be a seller right now. Be patient my friend, with numbers like that, prices have nowhere to go but down.”
Rolling Hills is small, but you can’t fight the math. And if you want an ominous sign, 3 Flying Mane Lane, an almost 3,500 sq. ft. home with west facing views just took a massive almost $600,000 reduction to close at $2.332 million (that is a 20% drop!). This comp could put the Rolling Hills market to the test. If there are no strong sales in that price range this spring, that recent Flying Mane closing could reset the entire market down a few hundred thousand. Yikes!
Manhattan Beach West of Sepulveda
Remember a couple years ago when Manhattan Beach seemed to be the hottest market in the Southern California? It was WHITE hot…much hotter than low priced North Redondo today. At that time, there were big prices making big records….not anymore!
Many people are still in the mindset that Manhattan Beach is surging. It is not. The market is now fairly normal; it is just really really expensive…especially west of Sepulveda. I pulled the past six months of sales west of Hwy 1 and of the 99 sales, 12 got asking price, 19 went over asking, and a whopping 68 sales took price reductions. The market is officially taking a breath and slowing down.
Manhattan Beach is not falling in price, but it is soft. The end of the crazy market, as I see it, was February of 2016. After that time, inventory more than doubled into the summer and Manhattan west of Sepulveda has really become a market where buyers have control and can now negotiate.