Redondo Beach Real Estate Predictions for 2018

While in many ways we are still in unchartered territory and faced with a number of unknowns, the greatest of which is any changes to the tax code, there's still some things we may can look expect to see as 2018 unfolds even though the real estate market looks quite different than it did 5 years ago. For one thing we are now well on the other side of a housing recovery with prices in many markets hitting new highs. We also have a huge generation (millennials) entering the market. They really want to be homeowners, and they’re faced with an inventory crisis that leaves them with few options.

On the other side of the coin many baby boomers are staying put and not downsizing as they retire. Because of the challenges facing move up buyers many are doing remodels to their current homes and not going anywhere.

While the stock market keeps setting new records highs, wages haven't kept pace with increases in home prices and many potential buyers find themselves priced out of buying where they want to live and paying higher and higher rents.

Lastly it is inevitable that mortgage interest rates do go up. Yes, we've been saying this for a long time but at some point it will come true.

So with that background, here's my 2018 Redondo Beach Real Estate predictions based on what we know today inclusive of potential changes to the tax code.


Low inventory has been the market driver for the last few years and in my opinion will continue unabated. North Redondo Beach has been running at about one month of inventory and South Redondo at about two. The calculations are relatively consistent whether we use the sold or under contract calculation. The absorption rate is also quite high. So expect the Seller's Market to continue to run for quite a while mitigated by some of the trends I will discuss below.

Potentially further impacting inventory flow will be changes to the tax laws regarding gains on a sale. Currently, people can skirt taxes on up to $250,000 of gains (singles) or $500,000 of gains (married couples) if they both own and use a residence for at least two of the prior five years.

The new plan would require homeowners to own and use a personal residence for five of the previous eight years. Also, this break would phase out for singles earning above $250,000 and couples making in excess of $500,000. As a result, people may stay in their homes longer


Because of the low inventory and generally lower price points than the other Beach Cities of Hermosa Beach and Manhattan Beach, prices will increase albeit at a slower pace and lower rate meaning taking a longer period of time to go up less.

We may see a dual edge sword in that lower inventory will offset the loss of some currently favorable tax treatment allowing the law of supply and demand to work its magic and for current prices to hold and increase.

Alternately if the net effect of the tax reform isn't what is anticipated and/or inventory gets even more constrained, expect to see somewhat stronger price appreciation.


If the tax reforms have the effect that NAR and CAR are anticipating, we may see Buyers adjusting their price points downward to mitigate the effect of the loss of the tax write offs. In that case, Redondo Beach will be a big winner as Hermosa and Manhattan Buyers migrate to a lower price point.


With the number of lots available to build on drying up - at least at prices that developers find acceptable, and the expectation of buyers as to fit, finish and quality at the new higher price points, you can expect those price points to only go in one direction: up.

It is common in North Redondo Beach to see new construction three on a lots listed for $1.1-$1.2M, detached two on a lots for $1.4M+, Golden Hills Tall & Skinnies for $1.5-$1.6M and SFRs on 5000 Sq Ft lots ofr $1.8M and up.

In South Redondo new two on a lots are being priced at $1.5M-$1.6M+ and SFRs are listed for $2.1M to $3.5M.


While timeless in some regards, the Mediterranean-Spanish stucco homes with dark woods and floors are becoming somewhat less desirable than the coastal or contemporary properties being built today.

The same holds true for other design trends that were popular as recently as five years ago.


The current crop of Redondo Beach buyers doesn't seem too inclined to do much work beyond maybe some painting and maybe floors. Sure, everyone's busy and many families are dual income with kids so I get it.

If your home needs a bathroom or kitchen remodel, new roof or other extensive work, you will have to price it accordingly so that in the Buyer's mind it is still a great deal or you will spend a long time on the market and wind up reducing your price.

Conversely, if your home has been updated in a currently desirable style (see my article on design trends) you will be rewarded as most Buyers are placing a premium on homes that they can move into without doing any work.

On a related topic, what I am also seeing is that certain features, i.e. A/C are definitely more highly sought after than they were just a few years ago. Whether that is a function of the warmer weather we've been experiencing in Redondo Beach recently or that more homes have them is hard to tell.


Accessory Dwelling Units (ADUs) are known by many names: granny flats, in-law units, backyard cottages, secondary units and more. No matter what you call them, ADUs are an innovative, affordable, effective option for adding much-needed housing in California.

What are the benefits of ADUs?

  • ADUs are an affordable type of home to construct in California because they do not require paying for land, major new infrastructure, structured parking, or elevators.
  • ADUs can provide a source of income for homeowners.
  • ADUs are built with cost-effective wood frame construction, which is significantly less costly than homes in new multifamily infill buildings.
  • ADUs allow extended families to be near one another while maintaining privacy.
  • ADUs can provide as much living space as many newly-built apartments and condominiums, and they’re suited well for couples, small families, friends, young people, and seniors.
  • ADUs give homeowners the flexibility to share independent living areas with family members and others, allowing seniors to age in place as they require more care.


For many years, South Bay Real Estate was dominated by two very successful local brokerages: Shorewood Realtors and South Bay Brokers. Those are both gone in their previous incarnations and replaced with national "franchise" brands such as Sotheby's and Christies.

The onrush of the westside brokers such as Teles has been replaced with an onrush of well funded NYC based brokers such as Douglas Elliman and Compass.

There's a lot of venture capital currently going into attempting to disrupt the market. So whether it is lower listing commission, buyer rebates or a sleeker app, expect to see alternative options to the traditional Brokers.

The only true changes we may see are the Brokers who offer to buy your home, at a discount and totally short circuit the standard sales practice. You may have seen some of these advertising on TV.


At the end of the day people need a place to live and location, location, location will continue to be the gold standard.

Redondo Beach is uniquely poised no matter what direction the market goes in. Eventually, the Galleria mall will be redone and more desirable; the waterfront will be revitalized, and the fate of the AES site will be decided.

Call Ellis Posner to Buy or Sell Beach Cities Real Estate: 310 975 5139.