In last week’s blog (Big Price Jump in Hermosa Beach Condos) I wrote about how the market has become so pricey that home buyers are now willing to move on homes that offer “value” relative to the surrounding area. Basically, buyers are willing to sacrifice a single-family home for a town home or condo, sacrifice a view to get into a school district, take a 1-car garage to obtain that third bedroom. The more affordable homes that offer more bang for your buck are still strong in the South Bay and should continue to stay strong.
As promised, I will be sharing a “value area” for each Manhattan, Hermosa, and Redondo Beach. The South Bay has had quite a run up over the past few years so it is tough to say if these hot spots will continue to rise, but we think the best bet in the beach cities is to go for affordable homes that stretch your dollar. Let’s get started…
Manhattan Beach/Liberty Village Starter Homes
Although Liberty Village in Manhattan Beach has been on a tear the past couple years, we still think there is value in certain types of homes in the area. If you want to break into Manhattan Beach and own a single-family home, Liberty Village will most likely offer the lowest price. I would recommend focusing on starter homes that you can score under $1.3 million.
There has been only one sale in 2016 under $1.3 million (1641 23rd Street), and currently there are only two single-family homes on the market under $1.3 million. Sure these homes need some refreshing, but it gets you into Manhattan Beach. And the real reason is value here people! There are new builds that have been sold, pending in escrow, and currently on the market for between $2.2 and $2.6 million. According to builders we work with, you could very easily recreate these homes for $1 million. If you were to spend $1.3 million and build later down the road, you would have equity or break even. Essentially, these starter homes at $1.3 million are trading for land value. We like that a lot.
Condos at 446 Monterey Blvd in Hermosa Beach
Generally we are not thrilled about condo complexes as long term investments, but being west of Valley in the Hermosa sand with peak-a-boo ocean views is pretty darn nice. There are a mix of 2-beds and 3-beds in this 34-unit complex…we would recommend trying to snag a 3-bed as it would appeal to more buyers in the future.
These condos are not cheap, but again, they offer VALUE. We believe that although these condos are trading in the low $1 million range, they can easily be rented to help offset costs and what they offer for the price is fantastic. A large majority of Hermosa Beach sand section homes are trading over $1,000 per square foot. The four Monterey condo sales this year have traded between $688 and $895 per square foot. Real estate condos regularly trade at a discount to single-family homes for obvious reasons, but when it comes down to the location of these condos to the beach, restaurants on the pier, and overall beach lifestyle…if you want the full southern California beach home experience, you can get that on the cheap with these condos.
Specific Areas of El Nido in Redondo Beach
Our favorite value spot in Redondo Beach is El Nido. More specifically, I love the area in the elbow of 190th and Inglewood Avenue, and the borders of Pruitt Drive to the west and 182nd to the north. This micro area offers amazing value for single-family homes on nicely sized lots, and is probably on the top of my list for value and fantastic future growth over the long term.
There have been five homes sales in this area between $670,000 and $792,000. The fact that you can obtain a 3-bedroom home in Redondo Beach at those prices is a screaming deal relative to most home offerings around the South Bay. Many buyers and real estate professionals pass over this neighborhood due to the location to 190th and Inglewood Avenue, but if you take the time to drive a few blocks there are many cute homes that will charm the heck out of you. Additionally, there are homes ripe for updating that will raise value as they get remodeled down the road. The price and value here simply can’t be beat!
It’s Your South Bay. Own It.