We've been running along with around 40 active listings (+/-) at any given point in North Redondo Beach for a number of months now. Annualized that's fairly close to the usual run rate of around approximately 500 sales in 90278.
The anomaly I have been noticing though is that new construction listings have been over 33% and often over 40% of the market. Not quite the same penetration as South Redondo, Manhattan or Hermosa Beach and also this distorts the true picture of what is going on in North Redondo in any number of ways.
To start with the new construction is always priced the highest. Well almost always. (More on that later). But compared to "hot" listings that stay on the market for less than a week and then sell with multiple offers over the asking price, the newly built homes linger for months and then sell for less. sometimes as much as $100K less than the initial list price.
In fact, if I look back over the past six months of closed sales activity, with the exception of the homes that sold off market before completion, which wasn't that many, 100% of the newly built properties sold lower than initially offered, sometimes as much as $100K less.
This has to be very confusing for the home buying public because resales are going for $10K, $20K, $50K or more over the asking price and new, never lived in homes are selling for less than the MLS price.
To further compound matters, we are starting to see resales that are priced the same as or higher than new construction.
Sometimes this makes sense as in the case of 2301 Pullman Lane (pictured above) which is a gorgeous detached corner lot Townhome built in 2006 and over 3000 SqFt. Priced at $1,299,000 I would not be surprised if it sold for a higher price with multiple offers.
Not only is it larger than the 2600-2700 SqFt two on a lots being built today, because it is a corner lot there is not a common driveway so this one really does, dare I say it, feel like a "single family residence".
It has a unique floor plan and is in great condition. Quite simply, to use another over used phrase, there is nothing else like it on the market. MLS SB17047063.
On the other hand there is 1807 Huntington Lane A (pictured right) which is a very nice Amir Amiri resale. But priced at $1,329,000 when 2002 Pullman Unit A, virtually identical sold for under $1.3M and Unit B is currently on the market for $1,265,000 just doesn't make a whole lot of sense to me even if it is 2 blocks further west. Of course I hope the Sellers get their price or close to it as I also have a few listings coming out that will be resales priced similar to new construction. MLS SB17030098.
But back to my basic point, in addition to the absorption rate, the over hang of new construction also distorts the days on market calculation. To best understand the market dynamics it is almost as if you would gave to analyze resale inventory metrics separately from new homes to come to any useful statistics.
Well over more than half of new home listings are selling at a discount to initial listing price.