Inventory in Redondo Beacn (as in all the Beach Cities) is still low. Multiple offers are running rampid. Prices are being pushed up. The question is how high will they go – or in other words, how desperate are buyers? There are certain properties that test the waters for us – that show that buyers have gone a little crazy, and the market is getting over-inflated. One of those properties is 2500 Ruhland. It’s a beautifully remodeled town home. It has 2800 sq feet with 4 bedrooms and 3.5 baths. With these stats alone, I absolutely agree with the price point of $899,000 in our current market with the most recent sales as comps. But the location is two doors away from the high tension power lines, locating it in the eastern most part of North Redondo. If this town home sells close to or above asking, I believe we’re experiencing an inflated market that will later be referred to as another bubble, albeit, a smaller one. Another town home that’s pushing the envelope is 2204 Plant Ave, #A. It’s an attached town home built in 2007. With 2500 sq feet and 4 beds, 2.5 baths, it’s a nice property that shows well. It’s potential downside is that it’s located across from Lincoln Elementary. The street gets congested with the loading and unloading of kids every day. Again, I like this property; It shows wells. But keep in mind, it sold in May 2008 for $830,000 and now they’re asking for almost a $100,000 more at $924,500. We’ll see if they get it, and if it is, this market may really be out of wack. There is always the possbility of sustainability in the market, but I think that the current pressure buyers are feeling right now are and the low supply is propelling the market at a much faster rate than what the industry experts were expecting for the next several years. One last property to earmark is 1933 Gates Ave, #B with the asking price of $949,000. I will keep you posted as additional data becomes available and I can further analyze which way this market is trending.
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In this graph you can see that inventory continues to dwindle. And in the past few months, the number of transactions that have closed actually out numbers the number of homes for sale. Buyers are desperate for properties. This could be a great time to put your home on the market, if you have been considering it. As I stated in an earlier post today, many properties are get multiple offers and the prices are being pushed up.
Prices continue to go up in Redondo Beach. Case in point, 1625 Morgan Lane came on the market last week (brokered by KW). This is a 3 bedroom Tall & Skinny in the Golden Hills, close to Jefferson Elementary. It has been nicely remodeled. The kitchen has been redone, There are hardwood floors downstaris. And unlike most Tall & Skinnys, all the bedrooms are upstairs which is a huge selling point. The bathrooms were not remodeled, but are very clean. The biggest down side, in my opinion is that the living space (on the first floor) does not get much light. Anyway, it was priced at $759,000. In a few days, the seller had amassed 16 offers, going well over asking. I can reveal the final price once the property closes. This home is ultimately going to sell for more than it may even appraise at. However, the winning bidder may have removed the appraisal contingecny, eliminating this issue altogether.
A few more examples are:
1641 Ford Ave: Listed at $699,000. Sold at $720,000
1517 Stanford Ave: Listed at $739,000. Sold at $769,000. This was my listing. I had 4 offers and the winning bidder was all cash, no appraisal contingency.
1503 Stanford Ave: Listed at $759,000. Sold at $7990,000
1610 Van Horne Lane: Listed at $825,000. Sold at $840,000.
Buyers are being aggressive. If inventory continues to remain low, this marke could continue to rise. The question is are we creating another bubble?
Here’s some interesting stats for you (MLS-reported): So far in 2012 the highest sold single family in North Redondo was 2012 Robinson Street fro $1,230,000. It’s a 5 bedroom new construction with 3,300 + sq. feet. 1915 Graham, also new construction, sold for $1,200,000. 2525 Ralston, a 2006 build (4 bedroom with 3,400 sq. feet), sold for $1,140,000.
For 4 bedroom town homes, the top seller new construction is 1914 Graham Ave, #A for $874,000. The rest of the new construction 4 bedroom town homes sold from $840,000-$866,000. A 2005 build at 2417 Marshallfield Lane, #A and a 1993 build at 1922 Havemeyer Lane are the only 4 bedroom town homes to exceed the $800,000 mark so far this year, selling at $835,000 and $812,000 respectively. The rest of the 4 bedrooms sold in the $700,000-$800,000 range with some exceptions in the high $600,000s. The 3 bedroom townhomes are predominantly in the $600,000-$700,000 with a few exceptions above $700,000.
We’re hearing it in the news: new construction is up. Home Builder Stocks and REITS are performing well on Wall Street. And we can see it with our own eyes. There has been a plethora of new town homes and single families being built in North Redondo. Some locations include 1903 Plant Ave, and the 1900 block of Robinson. An older home at 1906 Ernest was recently leveled and construction has started. Four new town homes were completed and sold recently at 1912 & 1914 Graham. New town homes on Rindge and Nelson are moving along. Builders and buyers are back in the market, and they’re both desperately looking for inventory. The one stumbling block could be the dismal unemployment numbers that just came out. We’ll soon see if fear of job loss grips buyers and slows down the market’s rebound.
Everybody is hearing stories of listings selling in days, even before they hit the market. There are multiple offers, reminiscent of the good old days. “There’s no inventory,” is the common cry lately. Then why are there still properties sitting on the market for 4 months and longer, much longer? Well, I’ll tell you… they are overpriced. This is a strong indicator that although we have a ton of buyers out there, and there are feeding frenzies on some properties, buyers are sill resistant to over pay. It may feel like we are back to 2005 in many ways, but buyers have more self control. They are not throwing money blindly at a home just to get in the market. (This is what helped inflate the market so quickly last time.) No this time, we are going to see slow growth. And while inventory is “soooo” low, buyers are not going to throw caution to the wind. Good!
There has been a recent increase in prices for 4 bedrooms in North Redondo. Two-on-a-lot town homes built within the last 6 years have returned to prices in the mid to low $800,000s. However, 3 bedrooms in the same market have continued to languish in the mid $600,000s. Their climb has been much slower with more stumbling blocks. But in general, there are plenty of buyers out there who are ready to buy. When the right inventory comes along, we are seeing multiple offers.
When people ask me how the market is doing, I can honestly answer that it’s not bad. Let me clarify, markets are local. There are definitely some bad markets out there. But if I’m speaking specifically about my local markets, i.e. Hermosa Beach, Manhattan Beach, Redondo Beach, and other South Bay cities, the market really isn’t that bad. There are plenty of buyers out there. There have been multiple offers on some properties. Qualified buyers do get financing. Interest rates are phenomenally low. But one of the biggest differences I do see is a buyer’s attitude toward real estate. What I mean by that is when the real estate market was exploding and everyone was rushing to get into the game, buyers were somewhat careless about what they bought. They overlooked negative features. If the house was located on a busy intersection, they thought that the noise wasn’t that bad (once the TV was on, the windows were shut and they spoke really loud). If the 4th bedroom was more reminiscent of a modest walk-in closet, they called it an office and threw their old sleeper sofa in there. If the home inspection report provided a laundry list of problems, buyers refrained from asking the seller to do any repairs for fear that they would lose out on another property to another buyer who was a lot less concerned about dry rot, electrical problems, plumbing issues or any other number of red flags. But today, in this current market, buyers have changed their tune. Their threshold for problems or quirks is much lower. They won’t settle for a house just for the sake of becoming a homeowner. They will look and they will move on if they don’t feel the house will properly meet their needs. It’s definitely a buyer’s market and the buyers can afford to be selective.