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.

First is that unless you are comparing properties in a master planned community or tract with very similar floor plans (or urban high rise), there is a lot of "distortion" at play.

Second, and this is one of the most fundamental yet confounding real estate principles, is that each and every property is totally unique.

Typical Golden Hills "Tall and Skinny" House
Let's start with "distortion" and I'm not referring to the Steve Jobs version of "reality field distortion" although you could make an excellent case that applies to a number of real estate agents too!

Comparing the price per sq ft of a 2200 4 bedroom 2 on a lot townhouse to a 894 sq ft 2/1 SFR on a 7500 sq ft R2 lot is simply preposterous. Why does anyone even do that. The value of the 2/1 SFR is clearly in the land which can be developed to it "highest and best" use.

Therefore the smaller SFR distorts the actual price per square foot of other non comparable "comps" thrown into the mix.  This can become even more exaggerated in let's say Manhattan Beach where you may have a tear down sitting on a highly desirable Sand Section or Tree Section lot and the dirt is worth over $2M.

Looking at the second factor is where many Byers, Sellers, and Agents really stumble. Each and every parcel of real estate is unique almost by definition. Right now, age, condition, amenities and, of course location is the greatest determining factors as to value.

I've written extensively about the price acceleration in Golden Hills. There are some elements of Golden Hills homes that serve this example well. That is, it is almost ALL Single Family Residences and primarily on 2500 sq ft lots. Many have almost identical floor plans and there are ample "comps" even though the sales velocity tends to be low.

So let's say that there are two "Tall and Skinny" SFRs with the same (reverse) floor plan and about the same age. Why would the price vary by tens of thousands of dollars for homes that are the same size (square feet).

First is location of course.  Historically homes closer to Jefferson Elementary have commanded a premium. But with the recent higher rankings of Birney Elementary, houses on the other side of Aviation Blvd are now commanding very strong prices as well.
Original Wood Ceiling in Golden Hills Great Room

Next is location. Updated or remodeled kitchens and bathrooms are demanding a premium over original condition homes. Amenities count as well. Because many of the homes are on "hills" and/or have views, a house of the same size with a view and an updated kitchen will sell for more.

Then there are other subtle factors. Many of the 1980's homes are 3 bedrooms and 2 baths with slightly smaller kitchens. The smaller kitchen can be manageable but the lack of the 1/2 bath, powder room, is a non starter for many people who do not want their guests using "their" bathroom. Fair enough. But there is definitely a price differential no matter which one has the larger square foot measurement.

This discrepancy has been even more pronounced in recent 3 on a lot sales. I just sold 2417 Grant Unit B and 2419 Grant Unit C as mentioned above. Both homes showed very well and sold at the top of the range for similar properties. But Unit C sold for substantially more. Why is that?

Very simple, as an end unit with an exclusive use backyard (plus central A/C) it offered better amenities albeit at 5.5% higher price. 'Nuf said on the square footage.

To sum it up, when considering price per sq ft there's a few things to consider:

  • Single Family Houses are measured on the outside of the property while Condo and Townhome measurement are done inside the walls. So a 1500 sq ft SFR may feel smaller than a 1500 sq ft condo (or not).
  • Often appraisers overlook discrepancies of 50-100 sq ft.
  • The source of the sq ft measurement in the MLS can be based on the assessor's records, an appraiser, the seller,, the builder or be taped.
  • It is not uncommon at all in Redondo Beach to have a different size of the home on the Building Report and tax records and maybe even see another size on the appraisal report.

Leading me to conclude that if you look at 3 different sources you'll get four different square foot measurements.

North Redondo beach Townhouse for Sale