There are nine new construction townhomes listed by Merit Real Estate on Irena in South Redondo Beach that have been on the market since last spring with what appears to be little activity either in terms of sales or price reductions. Curiously, there are 3 detached units on each lot which is a configuration we haven't seen often in the South Bay.
As the units appear to be well built and are in a desirable location, we wonder if there isn't a general backlash against anything that may come off as opulent - particularly in the current economic environment. These units are very Euro formal and it would be fair to say do not have a "beachy" feel whatsoever.
The other resitance the seller may be facing is price which ranges from the mid $900's to over $1M. At that price point, most buyers would need conventional 20% down or greater financing to qualify and the number of townhome buyers with $200K PLUS closing costs who may want to be in that location and style of home has to be fairly limited.
Recently, FHA has allowed 3.5% down financing on detached units if each unit pays their own fire insurance. (Basically, the 2 on a lot market.) As those units are selling in the $750-850K price range and often offer 4 bedrooms plus a small backyard, we believe that the builder/seller of this project on Irena will carefully have to weigh how long it makes sense to maintain the current pricing versus rent or significantly reduce the price.