405 S Gertruda Ave, Redondo Beach – Real Estate Analysis

405 S Gertruda Avenue in South Redondo Beach has been on and off the market over the past few years. It’s a lovely home with a lot to offer. And yet it hasn’t had an offer that has sealed the deal. This gives us an opportunity to look at one property over 3 distinct time periods in the South Redondo Beach real estate market.

Here’s the history: The home was purchased in September 2005 for $1,480,000. As we all know, this was a market on an upswing. Sellers could do no wrong. Homes sold themselves and prices climbed quickly. Then in January 2010, the homeowner put the home on the market for $1,765,000. It was on the market for approximately 3 months. It didn’t sell, and not surprisingly. The market had pretty much come to a stand still, and in many cases prices had dropped back down to 2005 levels. There was no way this home would sell for $300,000 more than what it sold for in 2005 – not in this market. And it wasn’t going to sell at $1,685,000 later in the year when it was put back on the market again.

Fast forward three years, and the home was listed for sale in July 2013 for $1,875,000. This was in the middle of a very hot market. But it’s also been a fickle market. Buyers have gone gangbusters on many properties and activity is rather subdued on others. And South Redondo seemed to languish behind North Redondo, Manhattan Beach and Hermosa Beach. After four months the listing was canceled. And now, in March 2014, it’s back on the market for the same price.

Is there going to be anything different this time? One of its neighbors, 413 S Gertruda, sold in October 2013 for $1,700,000. It’s newer but smaller by about 500 sq feet. If 405 S Gertruda ultimately sells close to its asking price, then we are still in a very upward mobile market. But based on this recent comp, I would deduce that the value is below the $1.8 mark and not above it.

405 S Gertruda shows very well. The views are gorgeous and the roof top deck is extremely usable. I’m not a fan of all the spiral staircases. (Loved them when I was a kid… could run up and down them all day long. But now I just get an awesome case of vertigo.) The neighborhood views are also picturesque. The kitchen is beautifully updated. The master bathroom is lovely. This house gives you a lot of space on a great street with great views. But it’s my feeling that it’s going to need to come down in price before someone is ready to step up to the plate. With that being said, there have been plenty of people stepping up this past year, setting new benchmarks. Only time will tell.

Draft Reports Released regarding Oil Drilling in Hermosa Beach

Three reports were just released regarding the impact of oil drilling in Hermosa Beach. These reports are:

Draft Environmental Impact Report
Health Impact Assessment Draft
Cost Benefit Analysis Draft

You can download these reports at:
http://stophermosabeachoil.com/?page_id=9500&utm_source=Stop+Hermosa+Beach+Oil+News&utm_campaign=91bf23744c-Important_Dates_regarding_the_DEIR&utm_medium=email&utm_term=0_c5aa2158cf-91bf23744c-73119065

There will also be two informational meetings this week sponsored by the city of Hermosa Beach to help you navigate these reports at the Hermosa Beach Community Theater at 710 Pier Avenue.

Feb 24 (today) 6:30 pm
Feb 26 (Wednesday) 6:30 pm

Tonight – Hermosa Beach Community Dialogue regarding oil drilling

There’s a meeting tonight at Hermosa Beach City Council Chambers at 6pm. It’s a “community dialogue”. The Community Dialogue team members are presenting their findings on what Hermosa residents’ values are and how to apply those values as a community. This decision-making tool will help guide city council to make decisions compatible with community values. Come and show your support by attending tonight. The findings are open to comments. Come and make your voice heard. #stophermosabeachoil #keephermosahermosa

Determining Your Home’s Value

Have you seen the commercials where the kids are handing in homework assignments with ridiculous facts about saber tooth tigers and World War II to illustrate the undependability of information on the Internet? We all get it… the web is chock full of information that is not fact checked or properly sourced, and down right not credible. Then how is it that when they go online to look at home values, they believe everything they read? Web sites like Zillow and Redfin tell you how much a home is worth, but how do they do it? They’ve never been in the home. They may never have even been in that neighborhood before. But they publish home values like they’re the experts. Well, if you look closely they do put a disclaimer in there. For my area, Los Angeles, Zillow discloses a median error of 8.2%. Eight percent is a huge difference in pricing. It’s a home that’s worth either $540,000 or $500,000; $918,000 or $850,000; $1,620,000 or $1,500,000; $2,700,000 or $2,500,000. So now they’re not looking quite so expert-like, am I right?

If you want to determine your home’s value, call a Realtor; call me if you’re in Los Angeles county. Call someone who is knowledgeable about the area, who can come to see your home, who has been in other similar homes, who can give you an educated, expert evaluation.

849 Avenue C Redondo Beach

On Brokers this week (listed by South Bay Brokers) was a 849 Avenue C. Completed a few months ago, this 4000 sq foot home is a work of art. Designed by Michael Lee, a local Manhattan Beach architect who is deft in modern/contemporary architecture, this home has beautiful indoor/outdoor space. The photos I’ve posted are taken from outside by the pool which does or does not have to be separated from the living area by fully retractable floor to ceiling sliding glass doors.  There is a dedicated viewing room downstairs with large theater style seating. The home is stunning.

North Redondo Area 151 Wrap Up for 2013

2013 proved to be a good year for real estate. Listings received multiple offers, prices increased rapidly, buyers got historically low interest rates.

Here are some specifics for the North Redondo Beach Area 151:

A total of 184 homes sold this year.

176 of the sales were on the MLS.

8 of the sales were off market and/or pocket listings.

The average Days on Market was 51.

The average List Price was $725,000.

The average Sold Price was $722,150.

There were a total of 14 short sales and 2 REOs.

2013 was a strong market. Many homeowners gained equity in their homes due to rising prices. The number of distressed sales decreased immensely from the two years prior when they represented approximately 15% of the market. Prices continued to climb and buyers continued to pay those prices.

 

Highest Priced Single Family Residence
2210 Robinson Street: 5 bedroom new construction with 3,078 sq. feet.

Sold $1,325,000.

The record is still held by 2615 160th Street which sold for $1,500,000 in 2011. This was an off-market sale which may not accurately represent market value at that time. The next highest sale was 2110 Ruhland Ave which sold for $1,450,000 in 2008. 

Highest Priced Townhome

1931 Nelson Ave, #B: 4 bedroom with 3,580 sq. feet. Built in 2005.

Sold $1,079,000

The record is held by 2023 Dufour Ave which sold for $1,275,000 in 2007.

 

The pace at which prices are climbing has slowed down, but inventory is still low. For the most part, sellers are getting their asking prices and a little more. As homeowners gain equity, we may see more inventory hit the market in 2014. But until then, there’s enough demand to continue to bolster prices.

If you’re a seller, the lack of competition makes this a great time to sell. With few choices, you can garner more money for your property.

As a buyer, you should be as aggressive as possible. Buyers are competing with each other because inventory is low, making it very easy to chase the market up. For example, if you were buying a 4 bedroom town home built in the 90s in North Redondo in the beginning of 2013, you would pay approximately $775,000. Now, a similar town home would sell in the mid $800s. A newer townhome typically sold for mid to high $800s a year ago. Now, they are selling for low to mid $900s and closer to $1,oo0,000 for the larger ones.

 

I sold this home for $26,000 over asking for $775,000. It received three offers in three days.

 

Two North Redondo Town Homes Coming Back on the Market

There’s not much inventory in the high end of North Redondo Beach right now. But two listings are coming back on the market for a second chance. 2211 Warfield Ave, #B is a 4 bedroom townhome built in 2005 by E&S Builders. It will be priced in the mid $800s and is a great value. Then there is 2215 Ruhland Ave, #A. It’s a 5 bedroom townhome priced at $899,000 and built by Rich VR.

Both town homes have high end finishes. Warfield offers an upstairs loft/family room and Ruhland has a 5th bedroom which is unusual for the area. Let me know if you would like to see either of these properties before they are snapped up.

Year over Year Price increase in Home Sales in the Beach Cities

If you’re interested in seeing the general trend in prices, here’s the latest from DQ News, comparing prices from October 2013 to October 2012 in the South Bay:

Average Sales Price

City                                         October 2013             October 2012                      Increase

Hermosa Beach                  $1,399,000                 $835,000                             67.54%
Manhattan Beach               $1,386,000                 $1,137,500                            21.85%
Redondo Beach                   $747,500                    $700,000                              6.79%

Redondo Beach had 70 transactions in October, the highest number of the three Beach Cities. Manhattan Beach had 40 and Hermosa had 24.

The trend appears to still be going up. Inventory is still low, and there’s enough demand to continue to push prices up. I don’t think we’re going to see the frenzied pace that we saw in the beginning of 2013, but there will be plenty of activity.

The real estate industry could be tapered by the new Qualified Mortgage standards (effective as of January 10th) which require a borrower’s debt to income ratio to be no more than 43%. Of course, this could just mean that the big lenders are going to continue to grab the lion share of the business since they are less impacted by the QM guidelines; they can hold on to their loans rather than selling them on the secondary market which is dictated by Fannie and Freddie.