Wednesday, April 22, 2015

Should You Accept a Contingent Offer?

North Redondo Beach drone shot
I was alternately considering calling this post "Buyer and Seller Contingencies" but more specifically wanted to answer the question of whether, in this unprecedented Seller's Market, a seller should consider a contingent offer. I'm not referring to the usual contingencies of appraisal, inspection, loan, etc. but more specifically to the sale of the Buyer's current property (in order to buy your houses).

The answer, as in most things real estate related, is "it depends".

I, or rather my seller, recently accepted a contingent offer on a very hot property. We did so primarily because it made very good business sense. First, the buyer was paying substantially over the asking price. Second, the contingency period for the sale was no longer than the normal contingency period for the loan would have been.

In fact, not only did we accept the contingent offer, the buyer of the contingent property was also selling a property so they were contingent. In other words, for the sale of my listing to go through, the buyer had to sell their house and their buyer was contingent also. 

As it turned out, everything went smoothly and we closed on time (more or less). Well about a day late which isn't out of the ordinary these days.

Saturday, April 18, 2015

Ellis Posner Sells Redondo Beach Real Estate

I had two escrows close this week in North Redondo Beach: 1748 Dixon St in the Golden Hills neighborhood and 2419 Grant Ave Unit C. Dixon is a "Tall and Skinny" single family house in the "Triangle" near Mira Costa High School in Manhattan Beach and Grant is a rear unit 3 on a lot attached townhouse built by Powers Development in 2003. Both properties sold in less than 7 days on the market with multiple offers over the asking price. 

Tall and Skinny for Sale Redondo Beach Golden Hills
It is very interesting, at least to me, as to what is going on in both of these market segments right now as to price and availability. In large part, the 3 on a lot prices are reflective of the price point of Tall & Skinny SFRs which also tend to move in lock step with detached 2 on a lots.

Many Tall and Skinny SFRs have the exact same reverse floorplan as the attached townhomes with 2 bedrooms on the lower level and the living room, master bedroom, kitchen and dining room upstairs. Often the living room or great room features high vaulted ceilings. The Tall and Skinny houses most typically are between 1700-2000 sq ft with 2-2.5 bathrooms. The attached townhomes are usually 1600-1800 sq ft although some of the much newer ones, particularly if they were built after around 2007, may have 4 bedrooms and be slightly over 2000 sq ft.

Tuesday, April 14, 2015

What is the Price Per Square Foot of Real Estate in Redondo Beach?

North Redondo Beach Price per Square Foot
I remember a number of years ago when in response to my "low ball" buyer's offer, a listing agent stated that me that "price per square foot" doesn't really matter. At the time I thought that was the most ridiculous thing I had ever heard. These days, maybe not so much any more.

For a long time, I put a lot of weight on how much a property was selling for based on the price per square foot but the way the market is moving today, that may not be as good of an indicator as it was previously.

There is still some value using this metric on like kind properties but they truly have to be almost identical in every way. And then it is still a better indicator of value than an absolute value.

Let's extrapolate from the chart at left to some real life examples. This is the average not median price per sq ft looking back over the last year or so during which time we've been above $400. Actually the results for March 2015 are pretty indicative across the board showing $425.

Redondo Beach Median Home Prices
Let's take that $425 and apply it to a few of my recent sales.

I just sold 1748 Dixon St, a Golden Hills "Tall and Skinny" SFR in North Redondo Beach for $920,000. The assessor lists the house at 1922 sq ft. So, based on this "average" number it should sell for $816,850. How could I sell it for $478 sq ft?

I also just sold 2417 Grant Ave Unit B for $725,000. That property is the middle unit townhouse of a 3 on a lot. It is approximately 1710 sq ft. Based on the average, it should pencil out at $726,750. So, pretty much in line with expectations. But then I sold an almost identical rear unit one lot east for almost $40K more putting us at $447 a sq ft. What's going on?

There are really two factors at play whenever you are looking at "medians", "averages" and other traditional real estate metrics.

Saturday, April 11, 2015

Redondo Beach Foreclosures and Short Sales

REO Townhouse Listing Redondo Beach CA
I just noticed that there are two, yes count them 2, Redondo Beach foreclosures (REOs) listed for sale right now. A few years ago, a large part of my business was foreclosures, short sales, and other distressed properties but not so much anymore. So, I couldn't help but wondering, "Where have all the foreclosures gone?" Even the (previously) popular website foreclosureradar.com seems to be gone or at least rebranded as something else.

For the purpose of this post I am referring to actual REOs (bank terminology for "Real Estate Owned") listed for sale that the public can buy. There's been quite a bit of confusion because Zillow and others display "pre-foreclosure" properties along with actual listed REOs that you can see.

What many of the public portals, and some brokerage websites, consider to be "pre-foreclosure" homes are actually properties that have had "NODs", a Notice of Default, filed. A notice of default is the first step in the foreclosure process. What the public doesn't really understand, and what is creating a lot of confusion, is that in most instances these "pre-foreclosure" properties are NOT available listings that they can see, make offers on and actually buy. In fact, often these home owners have no intention of selling and may even be downright belligerent when approached. And I can't say I blame them because even though NODs are considered public knowledge, let's face it, it is also somewhat of an invasion of privacy to some extent.

Tuesday, April 7, 2015

Why Aren't There More Listings in Redondo Beach?

Why is housing inventory so low in Redondo Beach? Great question and one I address often with buyers. In fact, the same issue exists throughout the South Bay and LA County so whether you are looking in Redondo Beach, Hermosa Beach, Manhattan Beach etc, the same story seems to be playing out which is that there just isn't that much to look at. And, based on what I am reading you can extrapolate the same conclusions to be true in many markets throughout the US.

The factors at play driving this are a) many homeowners have refinanced and have very low interest rates b) many current owners bought during the last downturn at prices up to 20% below today's values c) more and more seniors are "retiring in place" d) approximately 15% of homeowners do not have enough equity to sell even if they aren't technically underwater and e) California just hasn't built enough new homes over the past 5 years to absorb the growth.

On the opposite side of the equation 1) rents continue to go up creating more demand for home ownership and 2) buyers want to lock in today's low rates while they can. (ironically, raising rates may be one of the few factors that can create some lid on price acceleration.)

Let's take a look at some actual "numbers".

Saturday, April 4, 2015

Rent vs Buy Break Even Analysis

Zillow pegs the "break even" at 2.3 years nationally.
Escalating rents and low interest rates are two contributing factors to the crush of new buyers we see entering the real estate market right now. The common refrain heard from many renters is that for what they are paying in rent they can afford to buy a comparable or even better home.

Let's look at one of my favorite examples, the North Redondo Beach 3 on a lot townhouse.

Assuming a hypothetical sales price of $725,000, well that's not so hypothetical considering that I recently sold 2417 Grant Unit B for exactly that price, here's an example of 20% down since it is the most straight forward.

At 20% down, the mortgage amount is $580,000. At a 4% interest rate that is a principle and interest payment of $2770 per month. Add to that $125 a month for HOA dues and approximately $750 for property taxes and we're at $3645 before any tax deductions. The same unit might rent for $3200-$3500 per month so without purporting to be an accountant I think I can go out on a limb and state that this is at least a break even proposition with an upside.

Thursday, April 2, 2015

Redondo Beach Inventory Low and Prices are Up

Redondo Beach Contemporary in Golden Hills
Remember that B. B. King song, "The Thrill is Gone"? Buyers may soon be singing it. In unison. Redondo Beach housing inventory remains low and most of what does come on the market just isn't very exciting. Or interesting. Or a good deal even though these days for buyers a good deal quite possibly can be redefined as finding a property you want to buy and actually closing escrow.

As of this blog post there are 39 active North Redondo Beach listings (of which 1 is a mobile home and 5 are senior housing) and 47 in South Redondo Beach. If there were 85 in either zip code it would still be a seller's market.

I just did the rounds on Broker's Open (Thursdays from 12-2) as I do most every Thursday. To say I was singularly unimpressed by any new listings would be a massive understatement. And I wanted to come away being impressed and loving some of these. Here's why.

I've been clamoring for "contemporary", "modern", "architectural" homes in the South Bay for quite a while and I know I'm not the only one who really likes the Dwell design look and feel. Well we're finally getting some product and that's a good thing. As for price and what we're getting, that's something else all together.

Like many of you, I've been keeping an eye on the new construction on Reed in the Redondo Beach Golden Hills. The west side of Reed is one of my favorite streets because a) a number of houses are street to street lots meaning there is not a house behind you and b) some of the lots are larger than the usual 2500 sq ft lots found in Golden Hills.

Sunday, March 29, 2015

Redondo Beach Luxury Homes Defined

Luxury Real Estate Redondo Beach CA
I'm often asked for a definition of what Realtors mean when we refer to "luxury" homes. Great question and surprisingly there are no clear cut definition anywhere. For many people what immediately comes to mind is the waterfront house (or at least an ocean, lake, or river view). For others its the country estate, horse property, mountain ski chalet, city penthouse, golf course adjacent, or trophy house. So the definition very much is also a function of location.

In Southern CA often generic MacMansions get thrown into the bucket of luxury homes. But does size alone matter? And then there's my favorite, the ones real estate agents describe as "Executive" homes. Does that mean a Doctor or small business owner can;t live there? Who knows what that one means.

By definition, you can assume that luxury homes are not cheap.  (I meant inexpensive.) But they may not be large either or expensive relative to other properties in the area. For example, $1,000,000 in Manhattan Beach will get you a lot less than in Redondo Beach or Hermosa. I don't think anyone would consider the 2/1 East Manhattan Beach "starter" listed for $1.2M to be a luxury property. On the other hand for $1.2M in North Redondo you most likely are in a property I would consider to be in the luxury category.

Here's how I define luxury homes.

Saturday, March 28, 2015

Zillow Top Picks for Redondo Beach Realtors

Ellis Posner - ZIllow Top Rated Agent Redondo Beach
There's a tab on the Zillow website called "Agent Finder" where they rank the Top Agents for each city based on metrics that Zillow measures (not necessarily MLS data). They are looking at listings, reviews, sales, and other metrics as reported on their site. I was very flattered and honored to recently see that I was number one in 3 out of six categories and in the top 3 the other times. Well at least for today because these rankings can change anytime. I should have 3 more Redondo Beach transactions closing before April 15th and that may boost me into the top spot in a few other categories. (Please note - Zillow also reports on "Teams", these rankings are for individual producers.) It also looks like Zillow has now made a very smart improvement in that they break out local activity compared to overall activity in Agent Finder if you are looking at Realtor profiles. (Graphic left.)

Here's what they measured and my rankings:

1) Most Active - Number One
2) Most Recent Sales - Number Three
3) Best Local Reviews - Number One
4) Most Listings - Number Four
5) Top Buyer's Agent - Number One
6) Top Listing Agent - Number Two


I work with Buyers and Sellers - contact me for a confidential no obligation meeting.

Monday, March 23, 2015

North Redondo Beach Market Trends and Home Price Index

The story in North Redondo Beach remains very low inventory and from my perspective this is not likely to change anytime soon for a number of reasons. Let's look at those first, then some market trends and data.

The two biggest factors suppressing new listings coming on the market are that a) many home owners have refinanced and are now paying either less than they could rent their current home for or so little that they have no incentive to move and b) if they were to relocate in the area they are faced with the same lack of inventory problem as everyone else. As a result most are just not about to jump into that quagmire.

An increasingly smaller subgroup may still be underwater or not have enough equity to either sell or refinance. As prices continue to increase, that will change but not bey enough to sway the market.

Remember that we consider a "Seller's Market" to be less than 3 months of inventory on hand. As of this blog post there are 38 active listings in 90278 (not including senior housing or mobile homes). Over the first 2 months of 2015 there were 49 closed sales and so far in March 37 sales putting us on pace for 48 sales in March (although that number may be higher when all is said and done).

If we are averaging about 32 sales per month during Q1 then we have about 1 month and a few days of inventory on hand. Truthfully it feels more like 30 days to me but whatever.

Thursday, March 19, 2015

Redondo Beach Golden Hills Homes for Sale: Rapidly Increasing SFR Prices

Ellis Posner Golden Hills Listing on Dixon St
It seems that almost every week we are setting a new high for home prices in the Redondo Beach Golden Hills with increases happening faster than in other surrounding neighborhoods. That's of course great if you are a seller but can be discouraging if you are a buyer. Unless a) you are one of the fortunate few who can secure a property and b) these runaway prices continue unabated.

I recently listed 1748 Dixon St for sale. It is your standard Tall & Skinny 3 bedroom 2.5 bath reverse floorplan house built in 1984 with 2 bedrooms downstairs and the master bedroom, living room, dining room and kitchen upstairs. As you can see from the picture to the left, this house has very high vaulted ceilings with the wood in its original condition. The property faces west and has a great open feel with a little but of a neighborhood view (and sunsets). Its not that far from the beach, Manhattan Beach adjacent (location, location, location) and is close enough to Artesia Blvd to take advantage of some extra parking but not close enough for the traffic and noise to really be a factor. Cute, typical Golden Hills Cape Cod curb appeal and all in all a nice property. I listed it for $879K and an offer was accepted over $900K. And it appraised (no simple feat these days). I'm speaking with some other homeowners in the area and the next similar property I list most likely will be at $929,000 or higher if it is newer. And I'm guessing that one will sell for over that amount as well because there is currently huge pent up demand for homes in the Golden Hills.

Friday, March 13, 2015

Redondo Beach Townhouse for Sale: 3 on a lot "C" Unit

No sooner had my listing at 2417 Grant Ave Unit B in Redondo Beach sold than another homeowner on the adjoining lot also wanted to list their home. 2419 Grant Ave Unit C is a rear unit (with yard) 3 on a lot townhome with only one common wall. You can check out the property website at 2419GrantC.com.

Right now, demand is very high for both 3 bedroom and 4 bedroom attached townhomes. Pricing is all over the place but for anything newer larger or with special features expect to pay over $700K. (2417 Grant sold for $725,000 after 5 days on the market.) 2419 Grant is listed for $749,000 and I guarantee it will sell for higher when all is said and done. Some new construction on Rockefeller sold well into the high $8's (almost $900K) and I have sold Casner resales for over $800K.


At the other end of the spectrum, older more worn out (tired) units may sell in the $6's. FYI, if you have one of those, call me. I can help you prepare and stage even older homes to sell for top dollar. Whether you are buying or selling, the general rule of thumb (all else being equal) is that the end units sell for more with most likely a higher value on the rear end townhouse in most instances. 4 bedroom units, of which there are fewer, have come roaring back into popularity as many buyers, particularly first time buyers, have been priced out of 2 on a lots. I'm seeing some overlap, or as I like to say, "inversion" in pricing with older 2 on a lots selling for less than newer 3's.

Wednesday, March 4, 2015

Golden Hills New Listing on Lomax Lane

I just listed 1705 Lomax Lane for $979,000. This Golden Hills "Tall & Skinny" features all 3 bedrooms upstairs instead of the more typical reverse floorplan with 2 bedrooms down and the living room, dining room, etc upstairs. It is also slightly over 2000 sq ft rather than the typical 1885 sq ft floorplan you are more likely to find.

You can easily walk to Jefferson Elementary School from this location or bike to the Strand in Hermosa Beach. There are numerous updates such as cherry wood floors throughout, double pane vinyl windows, plantation shutters, new stainless steel appliances in the kitchen, a frameless shower enclosure and rain shower head in the master bathroom, custom closet fittings, granite countertops, and a high end gas barbecue in the backyard.

The master bedroom is huge with high vaulted ceilings and faces south for some views of Palos Verdes. It has two ample walk in closets. The other 2 bedrooms also share a bathroom.

There's direct access to the 2 car attached garage which also has some nice built ins for storage. If you like granite, wood and travertine, you will love this house. Great location for anything the South Bay has to offer and conveniently located near restaurants, parks, shopping and more. MLS SB15045104. Open house Sat-Sun March 6-7th from 1-4PM. More photos at 1705lomaxlane.com.


Friday, February 20, 2015

Real Estate Listings in North Redondo Beach

Redondo Beach Golden Hills Tall & Skinny SFR
As we get into the traditional buying season I'm starting to see a steady flow of new listings. I was very pleasantly surprised by what has come on the market this week and want to share some thoughts on properties I viewed this week at the Broker's Open house tour on Thursday.

Before I do that, here's where I'm seeing deals really priced at right now. I'm emphasizing really priced at because many agents are still substantially under pricing new listings in order to get multiple offers over the list price. The new agent game seems to be how much over they can drive the final sales price which they then turn around and use to secure their next listing. The danger of this ploy is that in the 30 days or so it takes the sale to close the public becomes very confused as buyers new to the market don't get what's going on. So. as always, buyer beware.

Whether you are buying or selling right now, here's some broad pricing guidelines.