Redondo Beach Market Update July 2019

A client asked me the other day whether the Real Estate market is in “unchartered territory, a phrase I often use. I had to say yes and here’s why I’m answering in the affirmative.

What should be happening in the timeline of the current cycle real Estate we’re in, is not happening. In fact, sometimes the reverse is happening. Throw into that a fair measure of unpredictability on the parts of Buyers and Sellers and you have, well, “unchartered territory”.

Rolling the clock back a bit to the end of last year mortgage interest rates were higher than today and approaching 5% for some borrowers. Now we seem to be a point lower with 30 year fixed rate jumbo loans with 20% down being priced in the mid to high 3’s and the ARMs even lower. depending on FICO score and other factors that a lender can best advise you about. If you are willing to go to an ARM and / or pay points, even lower.

As a result, Buyers have jumped back into the market seemingly en masse. There are still properties selling with multiple offers at a huge premium over the asking prices. And new high sales prices are being set.

But other properties are sitting on the market with the only thing going on “crickets”.

As of this writing, looking at the combined data for North and South Redondo Beach, it is definitely a string “Seller’s Market” even though 46% of the listings have had price reductions and the average days on market is 71. Huh? Makes no sense on the surface.

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The above data is for “Houses” as in SFRs. If I look at condos the Market Action Index is 52 instead of 54, the price decreases are the same and the days on market is 63 so not really materially different.

If you want to look at the source data, go to 90278MarketReport.com and type in Redondo Beach in the “Search Anywhere” bar.

Part of the “unchartered territory” I’m seeing is that in most statistical categories, the market segments are acting untethered to each other or their historical norms.

But that’s the blended data and as I’ve said often, Redondo Beach is a “tale of two cities” with North Redondo and South Redondo being almost separate markets and that’s before you even get into the micro markets.

Let’s take a look at 90278 and 90277 separately.

NORTH REDONDO BEACH JAN - JUNE SALES

Through the first 6 months of 2019, there have been 232 closed escrows in 90278. This is actually slightly more than the 223 sales during the same period in 2018.

The median price during this time frame for 2019 was $968,590 compared to $1,065,000 in 2018. So median down and sales slightly up.

The highest priced sale through the first six months of 2019 was $2,020,000. During 2018 it was $1,950,000. In 2019 there have been 3 closed sales over $2M in N Redondo and one at $1,999,000. There have also been 20 sales over $1.5M compared to only 6 during 2018.

Of the 2019 sales over $1.5M, 5 were detached Townhomes. And get this, the highest priced sale was NOT new construction. It was a resale of a 2016 built SFR.

So while the lower end activity may artificially pull the median (not my favorite stat) down, there is clearly an appetite for much higher end in North Redondo than we have ever seen before.

Here’s the sales by month:

  • January 16

  • February 28

  • March 44

  • April 50

  • May 45

  • June 49

Sales Price Brackets

123 sales were $1M (53%) and under. That is pretty consistent with the YTD trend. It also explains why the median is moving down while the high end is moving up.

Between $1M and $1.5M there were 91 sales. That’s just a little over 39%.

Over $1.5M there were 18 sales.

Single Family Residence vs Townhouse / Condominium

In North Redondo Beach SFRs were 83 of the sales (36%). Condominiums (flat apartment style) and Townhouses were the balance of the properties sold contributing 148 units. If you are wondering why those are one shy of 232, there was a duplex reported with the regular residential properties.

For the uninitiated, North Redondo has a much higher condo - townhouse contribution factor than Manhattan Beach or S Redondo.

North Redondo Beach Sales by Micro Market

  • MLS Area 154 Golden Hills 38 sales, median price $1,160,000.

  • MLS Area 153 El Nido 33 sales, median price $860,000.

  • MLS Area 151 N Artesia Blvd 73 sales, median price $910,000.

  • MLS Area 151 S Artesia Blvd 86 sales, median price $968,590.

New Construction

I track new construction because historically it will set the pace for price appreciation even though we have seen some unchartered territory there as well.

Eighteen of the properties sold were new construction. As a result some recent builds, 2016-2018, have sold for almost as much in order to fill the demand gap.

Median price on new construction was $1,485,000.

SOUTH REDONDO BEACH JAN - JUNE SALES

Through the first 6 months of 2019, there have been 217 closed escrows in 90277. This is a significant increase from the 189 sales during the same period in 2018 and I have some theories as to why.

The median price during this time frame for 2019 was $1,175,000 compared to $1,265,000 in 2018. So median down and sales way up. Funny how that works.

The highest priced sale through the first six months of 2019 was $4,200,000 which is almost double the highest sale in N Redondo for the same time period. During 2018 it was $22,650,000 but that sale was such an extreme outlier that we are better served looking at the more normalized highest sale of $3.5M.

In 2019 there have been 3 closed sales over $3M in S Redondo compared to six the prior year. There have also been 23 sales over $2 compared to only 29 during the same period of 2018.

So overall sales are up because South Redondo is most likely being considered more “affordable” than the year before and that is a direct function of interest rates.

Here’s the sales by month:

  • January 28

  • February 29

  • March 36

  • April 42

  • May 41

  • June 41

Sales Price Brackets

76 sales were $1M and under. Actually less than in N Redondo even though the lower end is lower.

Between $1M and $2M there were 118 sales which is a little over 54% of the sales.

Over $2M there were 23 sales.

Single Family Residence vs Townhouse / Condominium

In South Redondo Beach SFRs were 83 of the sales - exactly the same as North Redondo. Condominiums (flat apartment style) and Townhouses were the balance of the properties sold contributing 133 units. If you are wondering why those are one shy of 217 yes there was a duplex reported with the regular residential sales. Again.

South Redondo Beach Sales by Micro Market

  • MLS Area 128 Hollywood Riviera 27 sales, median price $1,450,000.

  • MLS Area 155 N of Torrance Blvd 51 sales, median price $1,165,000..

  • MLS Area 156 S of Torrance Blvd 79 sales, median price $1,220,000.

  • MLS Area 158 W of PCH 58 sales, median price $1,190,000.

New Construction

Only 4 of the properties sold were new construction. Lagging North Redondo by quite a lot.

GALLERY OF HOMES SOLD IN REDONDO BEACH BY ELLIS POSNER JAN-JUN 2019