|Redondo Beach 3 on a lot Townhouse|
We've had a huge run up in real estate values in Redondo Beach over the last 18 months with many properties now selling at or above the previous highs. There's two questions I commonly get from buyers. The first is relative to whether this is a bubble and the second is how high can we go.
Not a bubble, and I'll discuss why later but how high? We are nowhere near the top yet. Redondo Beach home prices will continue to rise. Here's why.
Because of record high rental rates and persistently low interest rates, there are far more buyers than available properties for sale right now. With many listings getting multiple offers and inventory of homes for sale remaining low it will take years to satisfy the current backlog of buyers to say nothing of new buyers who may enter the market.
Recently there was a listing of a 3 on a lot "C" (rear unit) townhouse that was admittedly one of the nicer ones I've seen. The listing agent told me that he got 14 offers and the property went for $50K over the MLS list price which itself was in line with recent sales. So are those other 13 buyers going away? Not at all. While some will substitute neighborhood, property size etc I'm going to speculate that at least 50% will just offer more the next time around.
Curiously, what I am seeing right now is that potential buyers who have been priced out of Golden Hills Tall and Skinnies are instead looking at newer and sometimes larger 3 on a lots and particularly the rear units which in many instances have larger exclusive use backyards than in Golden Hills or 2 on a lot townhomes.
So, point number one is that as long as there are multiple buyers across the board for a variety of products and price ranges, this market has long legs. There may be adjustments along the way and some listings are over priced or not desirable. But if it is priced right and the listing shows well, watch out.
In answer to the other common question these days relative to market highs, yes there are always adjustments along the way. But, I think now even for someone who purchased on the hypothetical highest day in the previous market, they are most likely in the black.
There are a few reasons we won't see anything like the previous collapse. The first is the with prices rising, even if someone bought last year and had to sell, today most likely they can at least recoup their down payment and costs. And, this time around buyers have put down substantially more than previously.
Additionally for those who can't or don't want to sell, they can most likely rent their home out and of not make money at least break even. Which is why there are so many buyers in the market.