November Real Estate Market Update : North Redondo Beach CA




Not only has the weather, a blistering October heat wave which brought a few weeks of plus 90 degree weather to the Beach Cities, cooled off - looks like the local housing market may be moving into the fall cooling season as well.

After an extremely strong summer selling season, sales in October fell substantially with only 37 homes in North Redondo Beach closing escrow. That is quite a falloff from the 53 units in September and the best month of the year in August. Some of this may simply be timing issues or the by product of the heat wave. Or it may be that buyers are saying no to the price point and condition of the properties being offered. There's no doubt that properties needing updates, with deferred maintenance, and not properly marketed or priced are just not getting the response they were earlier in the year. Inventory continues to remain persistently low and don't expect that to change anytime soon. I'm not saying that I think there will be a price reversal anytime soon but changes in the tax code and higher interest rates may cause many potential sellers to regret "waiting until next spring".

YEAR TO DATE AND YEAR OVER YEAR TRENDS

Through the first 10 months of 2017, 447 properties have closed escrow in 90278 averaging just under 45 per month. During the same period in 2016, there were 408 closed sales and in 2015 there were 458.

Calendar year 2016 finished with 491 sales and there were 533 homes sold in 2015. With 44 homes currently under contract 2017 will almost certainly surpass 2016 and there is still a possibility of meeting or exceeding 2015 sales numbers.

Where this gets interesting, at least for me, is looking at the overall sales in relation to the sales prices  overall in different segments and categories.

For the first 10 months of 2017 the average sales price in Redondo Beach was $972,324 and the median was $950,250. The same time period in 2016 had a median price of $877,500 and an average price of $901,493. In 2015 the median through 10 months was $825,000 and the average sales price was $838,679.

So, to recap looking at the first 10 months in 90278:
  • 2015 Median Sales $825,000
  • 2016 Median Sales $877,500
  • 2017 Median Sales $950,000
The related unit sales were:
  • 2015 Closed Escrows 458
  • 2016 Closed Escrows 408
  • 2017 Closed Escrows 447
90278 Sales Comparisons Units, Median, Average

What really jumps out to me looking at the numbers above is that at +/- the same sales as 2 years ago the median sales price has jumped from $825,000 to $950,000 a gain of $125,000 or about 15%. (I also really like the trend line of median property values going up $50K per year or higher.) 

While on the surface some of this may seem counterintuitive, not really. The declining inventory and sales last year plus the ongoing low interest rates pushed prices higher. As prices increased more home owners decided to sell and with less competition prices continued to trend upward. But as I will discuss below we are now seeing resistance at higher price points.

October Sales Overview : North Redondo Beach

Halloween brought some scary results but maybe with a change to Daylight Saving Time we'll see some more daylight.
  • 37 Sales Closed Escrow 
  • Median sales price $1,050,313
  • Average Sales Price $981,561
  • Average Days on Market 20
  • 29 Listings in Escrow 30 Days or Less
  • 23 Homes Sold At or Over the List Price
  • Highest Priced Sale $1,730,000
  • 14 Single Family Residences Sold
  • 23 Condos / Townhomes Sold
  • 5 New Construction Homes Sold
Area 152 (South of Artesia Blvd) saw the most sales, 19, and remains extremely hot. Area 151 (North of Artesia Blvd was lighter than usual with only 9 sales and Golden Hills had 8. There was only one sale in "El Nido" Area 153 but that is not unusual. (For a deep dive into the area by area sales scroll down further.)



What's Hot and What's Not?

With so many sales going into escrow in 30 days or less while other homes sit on the market and very little inventory to choose from, what is selling and what's not?
  • Price
  • Condition
  • New Construction

Entry Level Price Points

Simply put, the further under the median price a listing is right now, the quicker it will sell almost irrespective of condition or location. In other words, at $750K, buyers are willing to accept a lot more deferred maintenance and needed updates than at $950K (or higher). The one thing buyers don't seem to be too keen on right now is functional or economic obsolescence. Floor plan doesn't work or not enough bathrooms, just very difficult to sell at almost any price.

Condition vs Location

In many instances, buyers will accept a property in better condition although in a worse location. Not having to do updates - particularly to bathrooms and kitchens, is a big selling point. Most buyers are ok with paint and possibly floors, but that may be as far as they'll go.

We see this mostly in the falloff of post 2000 vs pre 2000 built homes with many 1990's properties suffering the most. The 1990's properties are just old enough to be dated although not needing updates to major systems or the roof compared to many post 2000 homes. What you still find in 1990's properties are things like gold - brass hardware, non stainless appliances, drop ceilings, and other finish work which hasn't worn well.

New Construction


Have you noticed the selling price of recent new construction? Whether a 2 or 3 on a lot townhome or SFR, new properties are setting new highs. And bringing the rest of the market right along behind it.

Recent 3 on a lot new construction has sold, often very quickly in the high $1.1M range. Examples would be 2415 Carnegie Ln Units A-C. Currently 3 on a lot new homes were listed for $1,019,000 for units under 2000 Sq Ft up to $1,289,000 for properties that are closer to 2400 Sq Ft.

And that price isn't much behind the price of new construction detached 2 on a lots, many of which are coming out at $1.4M or more.

REDONDO BEACH OCTOBER 2017 SALES BY AREA

MLS AREA 151 : VILLAS NORTH

Possibly the reason this neighborhood had lower sales than usual, and a case can be made for if 151 performed as usual the monthly sales would be looking stronger, is simply that the entry price point has become $800K plus. Prices ranged from $810K up to $1,675,000. Five homes sold at or over the last MLS asking price and 4 sold under. The median sales price happened to have been $900K which was coincidentally my listing at 2004 Farrell Unit B. This property is also a great case study of much of what I wrote about above. It was built in 1988 and had a ton of deferred maintenance. It had been a rental unit for many years and had old mismatched carpet that needed to be thrown out and the interior was badly in need of a paint job. Great location though, just 1.5 blocks to the Manhattan Beach border. It did sell for under the asking price for the reasons noted above.

Here's a list of the sales in MLS Area 151 for October:


MLS AREA 152 : VILLAS SOUTH

Here's where we saw the most activity with sold prices ranging from $452,500 for a 2 bedroom condo in an age restricted building up to $1,399,000 for a new construction two on a lot. There were 19 sales in all accounting for just over 50% of the sales for the month. Median price was $1,012,050. Please note that without the "senior" housing units sold and the distressed REO sale, the median for the area and N Redondo as an entirety would have been higher.


In this first group the REO which was just in horrible condition but none the less got bid up from $610K to $691,044. Even considering the work the unit needs it will still come in as a value buy once the work is done.


The new construction topped out the pricing and as mentioned above the going rate for 2017 built detached 2 on a lots is now at $1.4M.

MLS AREA 153 : EL NIDO


This 4 bedroom has an interesting add on to create an unusual property. SFR sold for about the same as a townhome.

MLS AREA 154 : GOLDEN HILLS


The exhilarating pace of Golden Hills price increases seems to be taking a slight pause with many Tall & Skinny SFRs not being able to bring $1.2M offers in the current market. What is selling at a premium are homes on larger lots and larger homes.

WANT MORE REDONDO BEACH?

If you like this sort of analysis and want to track some of the source data check out the following links:

North Redondo Beach MLS Search       90278MLS.com
North Redondo Beach Daily Updates    90278MarketReport.com
North Redondo Beach Home Values      90278HomeValues.com 
South Redondo Beach Real Estate         90277RealEstate.com

Enjoy!