Redondo Beach Home Price Index


Recently I listed and sold a few properties in North Redondo Beach that I had just sold barely two years ago (plus or minus). Why would someone sell in such a short time frame? One of the most reasons home owners are selling in general: job relocation.

In each instance fortunately my seller clients were able to sell at a nice tax free profit even after paying transaction costs. These sales, more than anything else you might see on Zillow or elsewhere really provide some great insight into recent market appreciation because they are about as real world as you can get with very controlled matched pairs.

2411 Carnegie Lane Unit C

This is a rear unit 3 on a lot 4 bedroom Townhome. Here's the description from the most recent sale which closed escrow 3/28/2017:

"This is by far one of the nicest and largest 4 bedroom 3 on a lot rear unit townhomes you will find in North Redondo Beach. Built in 2005 by Casner Construction everything about this rear end unit on a quiet section of Carnegie Lane is exceptional. Downstairs are two bedrooms both of which have wood frame doors leading to the oversize backyard. There is also a full bath and direct access to the 2 car garage. Upstairs are 2 more bedrooms and 2 full baths, one ensuite in the master bedroom and the other in the hall. The great room is much larger than typically found in 4 bedroom 3 on a lot floor plans as is the "to die for" kitchen with double ovens and gorgeous counters and cabinets. There are also real hardwood floors upstairs. Tons of detail through out including high ceilings, wood doors, 8 foot doors, coffered ceilings, crown molding. There is a large private backyard accessed through doors in both downstairs bedrooms and 3 FULL baths. Wow. Conveniently located near shopping, freeways, restaurants, malls, and only 15 minutes to the beach, don't miss out on this one! Put it on your list to see because you will want it to be your new home."

Pretty descriptive, right? Depending on who measured it, figure around 2000 Sq Ft.

This time around it sold for $910,000. When I sold it previously in late October of 2014, it closed for $808,000. In 29 months thats a net gain on $102,000 (12.6%). That's about 5.25% per year which or $3,517 per month.

2411 Carnegie Lane Unit C

Let's look at another one.

2117 Huntington Lane Unit A

This is a front unit attached 2 on a lot that I also previously sold in October of 2014. At that time it closed escrow for $1,079,000. This time around how does $1,275,500 sound? Closed on June 16, 2017. That's $196,500 over the previous sales price in 32 months for a gain of $6140 per month. That equates to 18.2% gain or 7% per year.

Here's what I can tell you about this property:

"Built in 2007 by Casner Construction, this over size Mediterranean Townhome has a unique 2750 square foot floor plan, an enclosed front yard with turf, A/C and Solar Panels. Downstairs is an open great room facing south and west for natural light. The open cook's kitchen has Viking stainless steel appliances, granite countertops, a pantry, and gorgeous cabinets. There's also a formal dining room. Upstairs you'll find 4 bedrooms including an amazing master suite with double door entry, walk in closet, and room for a sitting area in front of a dual sided fireplace that also opens into a master bathroom that features custom tile work and a separate large frameless shower. One of the other bedrooms has its own attached bathroom and a terrace perfect for relaxing. There's also a second living room area upstairs with cathedral ceilings and skylights for just hanging out. The laundry room is on the second level with it's own sink. There's exquisite finish work usually found in much more expensive houses such as 10 foot high ceilings with 8 foot doors, wainscoting, coffered, and vaulted ceilings, and beautiful engineered hardwood downstairs, on the stairway and upstairs in the second living area. There's are just too many features to list. One of the largest North Redondo Beach Townhomes on the market with a very unique floor plan and layout."

2117 Huntington Lane Unit A

Important note. The property on Carnegie had no improvements of any sort over the previous sale. Huntington had the addition of air conditioning and the front yard was enclosed.

So if I take my two examples of 5.25% and 7% and we are at a 2+ year aggregate of 6.125% which tracks just slightly above Zillow's published stat of 5.8% for Redondo Beach.

Let's stop there for a second. Assuming a 6% rate of appreciation, your $1M Redondo Beach home is going up $60K per year. Almost pays you to own it, right?

Let's do some more reality checking and compare some other 2014 Q4 sales to current homes sold. These won't be matched pairs but I'll try to keep them as close as possible.

October 2014 Compared to May-June 2017

1114 Harper sold for $950,000 in October 2014. This is your standard 3/2 reverse floor plan Golden Hills Tall & Skinny. Nothing special about it except a great location on the Hermosa Beach border.

1129 Stanford, also in a great location, same size and floor plan sold for $1,198,000 in June of 2017. That's an appreciation of 26% overall or 10% per year. Not an exact comparison but a great indication of how hot Golden Hills has become.

1129 Stanford Ave Redondo Beach Golden Hills

Let's keep going on this. What are we seeing for new construction?

In December of 2014, 2202 Voorhees Unit B sold for $990,000 (listed for $1,029,000). This property was built in 2013 and is a rear unit standard (although nicer than usual) detached two on a lot with 4 bedrooms and 3.5 baths that was listed as 2500 Sq Ft by the builder. It then sold again in August of 2016 for $1,165,000. That's a gain of $175,000 (17.6%) over 16 months.

Even more remarkably, Unit A sold barely a year later for $1,220,000. Even discounting somewhat that someone may have preferred the front unit to the rear, that's about 5% higher year over year.

Let's take a deeper dive.

Price Comparisons 2006 and 2017

During 2006 there were 564 sales in North Redondo Beach. The most expensive property sold was $1,540,000 and the least expensive $395,000. The average sales price was $771,884 and the median was $749,500 with forty one homes selling above $999K.

For 2017 there have been 227 closed escrows so far with the highest price being $1,725,000 and the lowest $399,000. Ninety one sales have been above $999K. The average price is 958,792 and the median is $927,500.

So, Where's the Market Going?

In June of 2006, right before the previous high, interest rates were around mid 6's having come up from low 6's earlier in the year. Today on most products interest rates is still low 4's.

A million dollar mortgage at 4% is $4774 principle and interest. At 6.5% the same million dollar loan is $6,321.

Let's look at a purchase of $1,250,000 in 2006 with 20% down. That's your million dollar mortgage. Today your loan amount of $1,250,000 at 4.25% would be $6,149. So the buyer could afford a property of $1,562,000 and with 20% down have the same payment. So basically we may wind up 25% over 2006 prices as long as rates stay low.

Are We There Yet?

This depends on exactly what you are looking at. Let's take 2301 Pullman as an example.

This detached corner unit Townhome has sold three times since it was built. As new construction in 2006 it went for $1,265,000. It then sold as a short sale in 2010 for $865K and recently sold in April for $1,340,000. Wow. By my calculation as to affordability, until this unit can trade at over $1,581,250 we are not quite "there" yet as far as being in unchartered territory. But keep watching interest rates!