Have you noticed all the "For Sale" signs and open houses recently? Yeah, me too. The market has shifted again and it happened quite abruptly.
Earlier in 2016, the inventory was extremely tight and it was not uncommon to see around 30 properties listed in North Redondo Beach at any given point. Because the market is driven by supply and demand this pushed prices up rather quickly. If you look back to some of the posts on this blog you'll see that starting in mid July we were noting increases in inventory. Then, in what seemed like the blink of an eye, inventory jumped from the 30-40 active listings at any given point up to 65-75 which is where we are at today. Actually as of this blog post, there are 79 active MLS listing in 90278 North Redondo Beach. While technically this is still a "Seller's Market", it doesn't necessarily feel like it. While the numbers are different, the same story has been unfolding in South Redondo Beach, Hermosa Beach, and Manhattan Beach CA. Here's why.
Year to date, there have been 311 closed sales in North Redondo Beach. That's an average of around 41 properties sold per month so far. So with 79 properties with "For Sale" signs in the yard, that's almost 2 months of inventory based on the closed sales calculation. Compared to less than 1 month of inventory earlier in the year, it is emboldening to many buyers. So, after a slow start we're now just under last year's pace of 44 properties sold per month on average.
|North Redondo Beach Market Trends|
Of the properties on the market, the average DOM is 37 and the median is 28 days. That means there are 38 properties on the market over 30 days which is more listings than we saw in total at various points Q1-2 2016. What should be of more concern to some sellers is that 33 properties currently listed have had price reductions. Totally coincidentally, there have been exactly 79 sales closed since July 1st and of those 22 sold under the asking price.
If you can decipher the trends in the chart (lagging current data through June), it is apparent that the median sales price is down while the list price is up and the list to sales is down.
So, what's going on and how does this all play out?
As prices have gone up, more homeowner's got to their "make me move" price, the number that they had in their head that gets them packing. Then as buyers had more options to choose from, the negotiations became more balanced with not every property (obviously) selling at or over the asking price.
The current risk for sellers is that there may be more inventory hitting the market and price erosion as some start to become concerned and cut prices. The risk for buyers is that interest rates go up and they can't afford the current or slightly reduced prices.
We are also heading into the downside of the selling season. By that I mean that there will be a pickup in activity after Labor Day weekend up to around a week or so before Thanksgiving and then things will drop off and the cycle start again sometime in 2017. (Did I just write 2017?) At that point when the market starts to gain steam again we a) will have a new President for sure and b) interest rates will most likely be higher.
So whether you are thinking of buying or selling, the conditions are great right now. The future? We'll see what that holds.