We are just around the corner from starting a new decade. Time sure does fly!
With the past 10 years in mind, I thought I would share the data on the best and worst performing real estate submarkets covered in my weekly South Bay blog. Those areas covered weekly are the Palos Verdes Hill, Manhattan Beach, Redondo Beach, and Hermosa Beach.
Those cities have submarkets defined by the multiple listing service (MLS), which are 33 unique areas to be precise. That is why you hear definitions of areas like “the Sand Section,” “Monte Malaga,” and “Golden Hills,” to name a few.
Best Performing Markets of the Decade
Below is the list of the best performing markets of the decade based on a rolling 12-month average comparing median prices of November 2019 versus January 2010.
- East Hermosa Beach – Up 48%
- Palos Verdes (P.V.) Drive South – Up 48%
- Manhattan Beach Tree Section – Up 47%
- South Redondo South of Torrance Boulevard – Up 46%
- Manhattan Beach Sand Section – Up 45%
East Hermosa Shines
The combination of beach location, views, convenient commutes, affordability (compared to other beach sub-markets), and some major new developments, East Hermosa Beach took the top spot with prices growing 48.21% over the last decade.
P.V. Drive South Surprises
Likely the surprise market of the decade, the sleepier P.V. Drive South submarket saw its prices surge. Although “far away” from freeways and the beach cities, the P.V. Drive South area benefited from the growth and popularity of Terrenea Resort, as well as its amazing views and schools for a darn good price relative to the rest of the South Bay.
Manhattan Tree Section Comes of Age
The Tree Section in Manhattan Beach had quite a run over the last decade as the epicenter of brand new home development and construction drove prices significantly higher. This neighborhood offers proximity to the beach, while offering a quiet suburban feel which is the best of both worlds for some of Los Angeles’ most elite homes buyers at a median price of $2.585 million.
South Redondo South of Torrance Boulevard Outperforms
Going from a median price of $740,000 to $1.2 million in just one decade, this South Redondo neighborhood far outperformed much of the city. With the panache of a South Redondo address, the affordability of being east of Pacific Coast Highway, and fantastic schools, this submarket experienced big demand from buyers throughout much of the decade.
Manhattan Sand Section Delivers
The area you would expect to be on the list, the famous Manhattan Beach Sand Section delivered on the growth that many people expect from this highly coveted area. Home to athletes and celebrities, wealthy home buyers have continued to migrate here and pushed prices higher over the decade drawn in by one of the top beach locations in all of California.
It is interesting to see the best performing markets equally distributed between the cities/areas I cover in this blog. Conversely, the worst performing markets of the decade had a clear theme when coming to lagging real estate areas.
Worst Performing Markets of the Decade
Below is the list of the worst performing markets of the decade based on a rolling 12-month average comparing median prices of November 2019 versus January 2010.
- Rolling Hills (Behind the Gates) – Up 8%
- Palos Verdes Crest – Up 18%
- Palos Verdes Monte Malaga – Up 21%
- Palos Verdes Country Club – Up 22%
- Palos Verdes Eastview/Rancho Palos Verdes – Up 22%
Rolling Hills Disappoints
One of the most exclusive addresses in Los Angeles, Rolling Hills aka “Behind the Gates” prices disappointed greatly over the past decade. Up only 8%, not only has Rolling Hills not recovered its prices since the Great Recession, but it has had multiple years where prices slipped while other areas were booming. Long commutes, huge lots to maintain, and restrictive building codes have really held back this South Bay area.
The P.V. Hill Experiencing a Recession Hangover
The next four bottom spots all belong to Palos Verdes neighborhoods as well. All of these neighborhoods area perceived to be farther from business centers and the beach. With growth of about 2% per year, these neighborhoods have barely kept up with inflation and have had trouble recovering losses from the Great Recession.
What does this all mean? Who knows!
The best performing markets may continue their amazing march higher. Or perhaps, the underperforming markets could be the best value and primed for growth over the next decade. I thought that this would be a fun exercise to close out the year and interesting data to consider for long-term investments.
Look out for my annual predictions blog next week.
Wishing you and yours a prosperous 2020 and decade to come! Cheers.