Beach Cities Real Estate Update December 2020
As this strangest of years grinds to a halt and we hopefully turn the page into better times in 2021, demand for homes in the Beach Cities continues unabated. If you are a Seller, that’s a good thing, for Buyers possibly not.
The usual seasonal slowdown may well be on vacation this December as Buyers are out home shopping. Properties are still getting multiple offers and selling over the asking price in rather short order. But not every listing. Homes have to be presented properly and priced correctly or they will just sit until the price is reduced. Turnkey move in ready homes are still the most desirable particularly if they have the updates Buyers are looking for.
What’s driving all the activity? As I’ve been blogging about consistently, record low mortgage interest rates, record high stock market, a generational transfer of wealth and a rebalancing of housing needs. And much as I try to stay away from that phrase “housing needs”, we truly are in a time when the work from home, learn from home requirement for living is driving a great rebalancing.
Please note, you can click on the links below for market reports, homes for sale, or whatever else I’m talking about. Time sensitive material will update in real time whenever you are visiting this page.
MANHATTAN BEACH NOVEMBER 2020 SALES
During November there were 43 homes sold in Manhattan Beach. (My link only shows 42 because of an MLS reporting error.)
That’s almost identical to the prior year when 44 listings closed escrow during November 2019 pre-pandemic. It is down from the 51 sales in October of this year which is a longer sales month with no break for any national holiday or election distractions and uncertainty going on.
For November
Prices ranged from $910K up to $17,750,000 for a house on The Strand
4 homes sold in the Sand Section, 4 in Hermosa Valley, and 5 in the East Hermosa Hills
7 SFRs sold, 6 Townhome / Condo sales
Median Price $2,375,000
Median Days on Market 42
4 homes sold above the asking price, 2 at the asking price, and 37 below the list price.
As of this post almost midway through December, there are 18 closed sales and 44 properties in escrow. So I’m expecting December could wind up at 45+ sales.
Year to date through the end of November, there have been 384 closings in 90266. Last year during the first 11 months there were 356. So remarkably sales are up even during a pandemic. But not surprising based on the rebalancing in housing needs going on in all price ranges.
Regarding the 37 properties that sold below the initial MLS list price, if you’ve been following my “over-under” analysis on this site or elsewhere, you know that is a very high percentage selling with reductions. That just means that Sellers got ahead, maybe way ahead of where the market was. Let’s take a look at the 4 homes that sold for over the asking price.
November Manhattan Beach Sales Over List - Click to view the listings.
These properties sold by what I consider rather meaningful amounts over. Click on the links to view the listings or follow this link to view all 4 listings.
1456 21st St in the East Manhattan Beach neighborhood of Manhattan Heights (MLS Area 146) was listed for $1,850,000 and got bid up to $1,925,000.
2101 Chestnut Ave (also in Area 146) was listed for $1,985,000 and closed at $2,010,000.
1730 Voorhees Ave in the East Manhattan Mira Costa neighborhood (MLS Area 147) was listed for $2,850 and closed $150K higher.
204 N Poinsettia in the Manhattan Beach Hill Section (MLS Area 144) was listed for $4M and sold for $4,500,000.
I have some thoughts as to why these sold for over the asking price.
21st St more or less may have been land value and I wouldn’t be surprised to see it developed. Or possibly remodeled for a flip.
Chestnut was remodeled with all the updates buyers are looking for (click in the link above for the pictures).
Voorhees, considering the age and size was still a good price for East Manhattan all things considered.
And 204 Poinsettia, well Hill Section. Need I say anything more.
But the major point is that the market responded well to these listings and in no small part due to the price points. There are still too many Sellers getting ahead of the market and overpricing properties. I say Sellers rather than listing agents because in this time of low inventory, most agents will, unfortunately, oblige Sellers and put properties out at too high a price.
Which leads me to “what is too high a price?” these days and the Manhattan Beach Market Report.
Manhattan Beach December Market Snapshot
The graphic shows the currently active listings. Or as it should better be termed, the “unsold inventory”.
The first thing that jumps out to me is that 25% of the listings have had price decreases but compared to the actual sold homes, that is way too low.
Also the median listed price is $4.1M vs the median sold price in November of $2,375,000. That should tell you something. Same comment goes for the price per Square Foot of $1,344 for listed vs $1,099,000 for sold.
Also the days on market of 140 is in excess of how long it should take in what has been a Seller’s Market. As noted above, the median DOM for November sold listings was 42.
5% of the listings have been re-listed meaning the actual DOM is most likely greater.
And lastly, none have had price increases.
This data is for SFRs. If you go to the report you can toggle to Townhomes / Condos.
So about that median price point…..
It should come as no surprise that the lower 2 market segments show fewer days on market while the upper segments take longer to sell.
Also please note that as the top 25% dips it price it does compress the next layer but that does not trickle down to the segment below.
HERMOSA BEACH NOVEMBER 2020 SALES
During November 2020 there were 13 closed sales in Hermosa Beach. That is a substantial decline from 20 the previous year as well as the 17 during October of this year. What we might be seeing is that as Manhattan Beach has somewhat softened - based on the number of properties that sold below asking and that currently have reductions, Buyers are foregoing Hermosa and focusing on Manhattan.
For November:
Prices ranged from $638K up to $14,250,000 for a house on The Strand
4 homes sold in the Sand Section, 4 in Hermosa Valley, and 5 in the East Hermosa Hills
7 SFRs sold, 6 Townhome / Condo sales
Median Price $2,050,000
Median Days on Market 14
4 homes sold above the asking price, 2 at the asking price, and 7 below the list price.
A few things jump out to me. First, less than 50% of the listings selling at or above asking and second, the same number of properties sold over the asking price as in Manhattan Beach which had far more sales overall. So, to be consistent, let’s look at the four that sold over the asking price.
November Hermosa Beach Sales Over List - Click to view the listings.
The first thing that jumps out to me about these sales is that they all were in escrow in 3-4 days. I guess that’s a tell.
There were 2 properties sold at 501 Herondo St, The Moorings, which is a 75 unit Townhome complex I feel is a very good value at current price. Unit 17 was listed for $995K and sold for $1.1M. Unit 72 which is on the Valley-Ardmore Greenbelt was listed for $1,099,000 and sold for $1,185,000.
647 7th St was listed for $1,890,000 and sold for $1,960,000 which seems like a very good price to me for an over 2000 Sq Ft house west of PCH.
Lastly, 956 14th St in the Hermosa Hills north of Aviation Blvd was listed for $2,190,000 and sold for $2,220,000.
I have some thoughts as to why these sold for over the asking price.
To location, location, location you can add condition, condition, condition. These 4 listings all had desirable locations or were in turnkey condition or both.
Three of the 4 were below the median price and the ones at the Moorings were way 2-3 least expensive in Hermosa and much further west than more expensive properties.
The median price for currently listed properties is well above the median sales price properties are selling for as is the price per Sq Ft. That’s why the Market Profile indicates 84 DOM and 29% of the properties have had reductions with 6% re-listed.
While you can definitely get more for your money at the lower and mid market level in Hermosa than in Manhattan Beach, the upper end, i.e. Strand, pricing is just not that much different.
So about that Median Price…
The upper end of the Hermosa market seems to have a mind of its own and an interesting trend line for sure.
The low end of the market is best described as flat lined (but not dead) while the middle two tiers are moving more in lockstep - unlike Manhattan Beach where the two upper most tiers seem somewhat tethered.
REDONDO BEACH NOVEMBER 2020 SALES
During November 2020 there were 87 closed sales in Redondo Beach. That’s a very healthy increase from 72 the previous year and on par with the 88 during October of this year. Redondo Beach continues to represent one of the best values in coastal LA County all things considered: lifestyle, schools, proximity to jobs, amenities and more.
For November:
Prices ranged from $454K up to $2.995M
49 homes sold in North Redondo Beach 90278 and 38 in South Redondo Beach 90277
30 SFRs, 56 Townhomes / Condos and 1 Triplex sold
Median Price $1,175,000
Median Days on Market 10
42 homes sold above the asking price, 11 at the asking price, and 34 below the list price.
Of the 3 Beach Cities, Redondo Beach was the only one where more homes sold above the list price than under.
What we are seeing in Redondo Beach mirrors the data in the other Beach Cities. That is, properties priced above the median are sitting for longer and have price reductions.
In this case 45% of the homes have had reductions and 5% have been re-listed. And the 91 days on market may become troubling if inventory piles up too much.
The mixed message in the data is what is confusing Sellers.
We keep saying that this is a string Seller’s Market, and it is. But only for properties that are priced correctly and are in turn key condition or have some other desirable amenities.
Here’s what’s really going on.
New hot properties are going under contract rather quickly while over priced properties or those needing a lot of work are just sitting.
This is kind of interesting because once again the top tier is somewhat untethered to the bottom three.