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.
Here's the more important metric. Desirable listings that are priced right are getting multiple offers over the asking price in the first week. I recently wrote about a property in the Golden Hills that had over a dozen hills and sold for $100K over the MLS list price. The buyers who didn't get that one also didn't go away. They are very much still in the market. And, considering that there have only been 13 sales so far this year in Golden Hills, it would take another 3 months at this rate for all those buyers to find homes assuming no other buyers entered the market.
As a side note, many buyers are expecting to see more listings as we get further into the traditional Spring selling season. Possibly. But there will also be more buyers so that strategy only goes so far.
Zillow pegs the median home price in North Redondo Beach right now at almost $800,000. Well $797,400 to be exact. That pretty much echoes what I heard a buyer state at an open house recently which was something to the effect if "I thought I could get what I wanted for $800K but now realize I will have to go higher." Sounds about right to me.
If you are looking for a nice, newer detached 2 on a lot best to budget around $950K. New construction is north of $1M. Way north, like about $1.15-$1.2M.
Newer Tall and Skinny Golden Hills SFRs are selling well into the mid $900's and higher. In fact, it seems that these move somewhat in lockstep with similar age 2 on a lots and the choice boils down to personal preference.
As a result, newer attached 3 on a lots have come up quite a but in price as well with post 2000 move in ready units likely to fetch mid to high $700's and new construction going in the $800's.
If there's any inefficiency in the market place right now it would be some of the attached 3 and 4 bedroom 2 on a lot townhomes. because many of these might be older with no updates or the (currently) less desirable 3 bedroom models, I do see some sales closing escrow at more attractive and affordable prices.
A last note until I return to this topic later this week.
While Zillow predicts a leveling off and in fact a slight drop in Redondo Beach home prices, I really don't buy it. They may be baking some high end analytics into the formula and anticipating a mortgage rate hike but this is where the automated valuation models fall short. They have no way of measuring pent up market demand. I do.