Redondo Beach 3 on a lot Townhomes for Sale: Comps, Trends, Market Update

If you are reading this post and asking "What's a 3 on a lot?", welcome to Redondo Beach. If you already own one, congratulations, prices have gone up substantially over the past 18 months. And if you are looking to buy a 3 on a lot, you've come to the right place.

Three on a lot townhomes are one of the most common forms of housing found in North Redondo Beach, 90278. There are over 1000 of these units primarily found south of Artesia Blvd on Vanderbilt, Carnegie, Rockefeller and Grant. You'll also find a them east of Rindge north of Artesia Blvd and up and down Mathews. In North Redondo Beach that basically means MLS Areas 151-152. There aren't any 3 on a lots in Golden Hills but you will find a few in El Nido. South Redondo has them as well but they are not as abundant.

While most are 3 bedroom reverse floorplans, there are a number of 2 and 4 bedroom units as well as some standard floorplan properties. Reverse floorplan refers to the kitchen, living room, dining room and one or two bedrooms upstairs. Standard floorplan means that all the bedrooms are upstairs and the living room, dining and kitchen are downstairs.

As close to 75% of the properties conform to the 3 bedroom reverse floor plan layout and the balance are close variations of that theme, these townhomes are usually very marketable.

In 2014 there were 74 sales of 3 on a lots out of a total of 487 Redondo Beach closed escrows. That's about 15% of the market.  Prices ranged from lows of $450K for 2 bedroom units up to $849,000 for 4 bedroom new construction on MacKay.
As might be expected, the newer and larger properties have been bringing higher prices. Surprisingly though, the most expensive units sold further east and closer to Inglewood Ave (as did the least expensive homes). The "no common driveway" variation found on the N-S streets are highly desirable and 4 bedroom units have been in high demand because often families with young children need to have at least 2 bedrooms on the same floor.

There were fifteen sales above $800K in 2014. All but one of those were 4 bedroom units and all were larger than 1800 sq ft with 11 being larger than 2000 sq ft. new construction accounted for 12 of the sales while high end newer resales (2004-2008) contributed the other three.

It's interesting to me and probably confusing to consumers as to how the builders and their listing agents market the new construction. It is not uncommon to see some sold listings with very high days on market and price reductions and other with "0" DOM sold at or above the list price. Typically here's what happens.

Possibly as early as 90 days before the project is expected to be completed, one of the 3 units may find its way into the MLS. Often at what I call a "test the market" price meaning too high. If there are no bites, the price gets lowered and the other 2 units priced accordingly.

On the other hand, it is also common for a builder to sell new construction before the property ever hits the MLS and we see the zero days sale. Which is why as a strategy its best not to just rely on your mobile app when you are house hunting. Get out in the neighborhood as well.

Just on the other side of $800K, there were 23 sales between $700-$800K with 7 falling above $750K and the balance below and 18 homes being built after 2000.  If you are thinking of buying or selling in 2015 and your home is less than 15 years old this is a good target price range. FYI, there were five 1980-1990's homes sold between $700-$800K but they had very strong "compensating factors".

For 3 on a lots built after 2000, as a general price guide, I would start at $750K and make adjustments based on size (sq ft), age, "A" or "C" unit (add), B unit (subtract), busy street  like Grant (subtract), backing to Artesia - north side of Vanderbilt, south side of Mathews (subtract), near the power lines, (subtract), no common driveway, finish work, builder all adds. It is somewhat more of an art than a science. If you want a quick automated home valuation try an online tool such as the one I offer at ellisposner.smarthomeprice.com. But that's just an estimate. If you want to know what any property will really sell for, best to contact me directly.

CASE STUDY: Using the above methodology here's a real life example of a property I listed and sold, 2411 Carnegie Ln Unit C. This rear unit 4 bedroom, 3 on a lot townhouse was built in 2005 by Casner Construction. It has amazing finish work including solid core 8 ft doors, triple crown molding, finished in place hardwood floors (that were recently refinished) a "to die for" gourmet cooks kitchen with high end cabinets, an oversize exclusive use backyard and more. The floorplan features 2 bedrooms up and 2 down and there were 3 full bathrooms making the 4th bedroom even more useful. At over 2000 sq ft it is larger than most other comparable townhomes so the 4th bedroom, kitchen and other rooms were larger than usual.

To the baseline of $750K, I added $10K each for size, rear unit, 4 bedroom, builder, finish work and priced it at $799K. It sold virtually immediately for $808,000. Considering that smaller new construction on Grant that backs to the power lines is priced at $829K just a few months later, this was a pretty solid deal for the buyer and at the time was a new current high for the seller. I have found that Casner resales in particular have been able to bring a market premium as along with Powers has been recognized as being a cut above some of the other builders. The " Amir Amiri" product built by E&S and listed by Merit also does reasonably well on resale.

Between $600K-$700K there were another 20 sales. Four of these properties were built after 2000 and to be fair, 2 were built in 1999. In general these units tended to be in the 1600 sq ft range and were 3 bedrooms. Actually the least expensive property sold for exactly $600K and was a 2 bedroom on Voorhees that was non conforming in other regards.

As a general price guide for 3 bedroom properties built prior to 2000 I would start at a baseline of $675K and make adjustments for age (in 5 year increments) bedrooms, and the other factors mentioned above. The one primary difference being that now we have to start to factor in upgrades. What I expect to see at the higher end of the $600's is either newer, 4 bedrooms, rear unit, or the kitchen and bathrooms has been updated, newer floor covering particularly wood, etc.

CASE STUDY: Here's an example of one I thought was a great deal and not only because I represented the buyer. 2514 Vanderbilt closed escrow literally on New Years's Eve for $665K. It is a 4 bedroom 1613 sq ft "C" unit built in 2000. It has a south and west exposure and was in move in condition (well I had to buy an extra garage door opener for my clients). So to my base line of $675K I would add $10K for "C" unit, $10K for 4th bedroom, and $10K for new compared to this price range and come up with a fair market price of $705K minimum. Why did it sell for so much less? Truthfully it was initially listed with a different agent who did not market it correctly. FYI, it was initially listed for $725K, pretty much in my range with adjustments.

There's a few other "lessons learned" here. The first time around the house was listed with an "out of area" agent. That rarely turns out well. For buyers, as I've mentioned previously, don't just chase after the newest listings that pop up on your mobile app. Everyone is doing that. Periodically go through the properties that have been on the market for a while and try to find ones you can make offers on before the price reduction comes.

So now we're looking at the sub $600K 3 on a lot market. Still a lot of money to invest by any normal measure. As I mentioned, the lowest price was $450K which was also one I sold (representing the buyer). Between $450K and $599K there were 15 sales. This is where you primarily find the older, smaller 2 bedroom units built in the '70s and '80s. As a price guide I would start at $550K and add if the property is newer than 1980, larger than 1400 sq ft, has two full baths or more, 3 bedrooms or more, is updated, has 3 bedrooms, etc. A good example would be the sale at 2520 Grant which sold for $599K. It is newer (1986), 3 bedrooms, updated, and an end unit. So maybe $589K would have been better but still a good deal at $599K.


FYI, this listing did start at $499K which was the right price making adjustments down for $550K for only one garage and not attached, very bad access, east side of Inglewood Ave, size, etc. I wasn't the listing agent and truthfully this property could have brought more if it was properly marketed meaning Supra lockbox, staging, better pictures and description in the MLS etc.

As for the sub $500K properties in North Redondo Beach, 3 on a lots or others, that train most likely will have left the station by the time you read this or certainly mid 2015 at the latest.