As we discussed in this column last month, comparative analysis of real estate between “the year of Covid” and any other year will be relatively meaningless. Starting in August we may have something approaching useful data in the year-over-year category. Until then, the best guidance will come from the month-to-month numbers and paying close attention to buyers and sellers.
The Beach cities is a great example. A 2020-to-2021 comparison of March sales shows an increase of 136%. Compare that to the March-to-April decrease of 2% and we immediately see the dramatic difference. The table below shows how huge the difference is. The year-0ver-year statistics are all skewed way to the high side because there were significantly fewer sales in 2020 than in a normal year.
Moving on to the monthly statistics, let’s look at how the year is shaping up. There was a minor decrease of-2% in the quantity sold at the Beach last month. The rest of the South Bay showed increased sales, with the inland cities showing a big bump up, in addition to a lower median sales price.
Entry level buyers who can now afford to become home owners, due to pandemic stimulus interest rates, make up a big part of those added sales. Another sizable component is made up of investors who can make cash offers, then leverage their investment to do it again.
Slowdown in Volume of Sales
The chart below shows steep growth in the number of homes sold in all areas for March. Sales in the Harbor cities were especially strong. It looked like the bright light at the end of the Covid tunnel. But, in April we see sales level off everywhere except the inland cities. The pent up demand we spoke of last month seems to be easing already.
When the volume of sales drops off, there is typically a decline in the price point, too. So far prices have been on the ascendant. The low interest rates kept buyers in the market, and the shortage of homes drove the prices up.
Home buyers are typically most active in the months surrounding school vacation for students. No parent wants to change schools during a regular session. We’re in the month of May, and the sales stats coming out next month will give us a better picture of how much recovery we will see this summer.
Prices Level Out Across South Bay
Like the number of sales, the median prices have flattened and in some cases turned down this month. Palos Verdes homes seem to have taken a strong upward trend with a 14% jump in price. However, looking a little deeper we find there were two exceptionally large sales which combined to create an illusion in the charts. That yellow line should drop back down around $1.6M next month.
Considering the rate at which prices have been increasing over the 2020 prices, leveling off is a necessary thing. In each of the first four months of this year, home prices have escalated as much as they would in a normal year. Continuing at this rate threatens us with another “bubble” coming on the tail of Covid-19.
Total Sales Dollars Still Climbing
Elevated prices combined with increased sales last month to push total monthly sales dollars way up. The chart looks like everything is hunky-dory. If only we didn’t know this is growing out of the disaster we lived through in 2020.
Actually, we’ll be quite lucky if some excessive price increases are the only fallout from the pandemic. We’ve written a number of articles recently on the probability for a rash of foreclosures coming after June 30, when the prohibition of eviction and foreclosure come to an end. Stay tuned and we’ll keep you abreast of the situation as it develops.
From the Beach to the Harbor, from Inland to the Hill, the month of March brought an average of 57% more home sales than February! This, after February fell 10% from January, and January was down 30% from December! It’s almost as though spring’s sunlight is breaking through a crack in the Covid wall.
Last March we were seeing healthy spring growth ranging from 8% to 29% in sales volume over the prior month. By comparison this March is in a range of from 42% to 69%. That’s a tremendous jump in sales, and it corresponds nicely with the 35% to 70% annual increase in sales over March of 2020. Rarely do we see year over year sales growth above 35% in any given area, so that level of growth across the South Bay is a strong indicator that we are coming out of the erratic market of the past year.
We need to remember that home sales recorded in March of last year were transactions initiated in February for a Close of Escrow 30 days later. The comparison we’re looking at is the last normal March sales, pre-pandemic, compared to the most recent March sales as we roll into vaccinations en masse. That means they were the final set of “normal” transactions before the Covid pandemic was declared. It also means comparing statistics for this April to last April won’t be terribly useful.
That spike in sales is the “pent up demand” we’ve been hearing about. Circumstances that create a need for people to relocate have continued throughout the pandemic. Simultaneously, sellers have been very reluctant to put their homes on the market and take a chance on contracting Covid-19 from a visiting buyer. Now that threat has diminished, so buyers and sellers are making up for lost time.
We anticipate continued froth in the form of increased prices and bidding wars for the balance of 2021. Gradually everyone will catch up with their real estate goals and things will settle down. There is a good chance most of the price increases will stay with us. That’s a plus for sellers, while buyers will only be hurt by the higher prices.
Prices Skyrocket with Pent-Up Demand
Switching our attention from sales volume to median value, let’s look at how prices have been changing. Year-over-year, the median price came in above last March in the range of 8% to 18%. This is stubbornly high compared to the Consumer Price Index (CPI) of 4.7% for increased housing costs in the Greater LA area during 2020. The last time annual price increases were this dramatic was just before the Great Recession.
When we look a little closer, we’re seeing some weakness in the more current sales prices. Beach and Inland areas both showed big month-to-month improvement over February of this year. The Hill had a more modest 2% increase. The single negative showing in the first quarter, Harbor prices are down -5% for March, despite rising 1% in January and another 9% in February.
As the pandemic ends, we’re seeing a lot of people trying to escape the lease trap (rental prices are going up even faster than sales prices) by taking advantage of historically low interest rates. However, rising sales prices are meeting resistance on the part of some buyers. Possibly because interest rates have starting climbing again. Possibly because the employment picture is still untenable for many.
As the chart above shows, prices for the first quarter are wobbly–a little up and a little down. The Fed is trying to stimulate financial activity to pull our nation through the pandemic by keeping the overnight bank loan rate at near zero. Meantime, the investor market is smelling money and gradually hiking mortgage rates. As the mortgage interest rate edges up, more and more potential buyers are priced out of the market. The first place this shows up is in the entry level market, which is predominately found in the Harbor and Inland areas.
Real Estate for Spring / Summer??
So what’s the forecast for the hottest selling months of the year? The pundits are split about 50/50 on whether the stimulus funding will turn this into a booming economy, or when we emerge from the pandemic, we’ll run smack into a wall of recession.
There is definitely money flowing. The Beach and the Harbor areas show the steepest growth, both adding about $135M in overall sales from February to March.
Anecdotally, there’s a significant percentage of first-time buyers who are now able to qualify for a loan, because of the interest rate. That group is looking at entry level homes throughout the area. Another set of buyers is now able to buy an additional investment property to rent out, because of the interest rate. First time buyers and investors are looking at the same properties and bidding against each other.
As mentioned earlier, April 2020 is when the pandemic blew holes in the economy. Whatever April brings this year, we’ll have to find a new way of looking at it. April and May last year plummeted with drops ranging from 25% to over 50%. Comparisons to last year could be interesting, but most likely uninformative.
Covid-19 has kept the South Bay real estate market in disarray for a solid year now. So when we try to compare sales activity from 2020 to 2021 we find huge swings in the data that only tell us we’ve been living in a pandemic. We’re here to try to tease some intelligence out of that data and to guide our clients through buying and selling in these tempestuous times.
Month to Month
Let’s start by looking at the number of homes sold in the South Bay for February 2021. At the macro level sales volume is down -10% below January. Of course, that ignores the fact the number of sales last month (January) was down -30% compared to December, the prior month.
That’s the macro level. We start to see the range in sales volume when we step down to an area level. Looking more closely, the number of homes closing escrow in February versus January sales ranged from a decline of -18% in the Harbor area to an increase of 10% on the Palos Verdes peninsula. Comparing sales volume for the first two months of the year very much demonstrated the old maxim about the importance of location .
February against January for median price: Dollar-wise, the Beach dropped again, but by only 1% of the median price paid in January. However, note that this follows a 12% monthly drop in January from December 2020. From that scenario we can’t tell if prices are heading up, or still coming down. In other areas, the prices increased a robust 9% each for the Harbor and PV areas. Inland cities were down by -2%.
In total dollar sales, the South Bay was off by -1% from January activity. Once again, the detail was scattered with the high at 14% for Palos Verdes and the low -16% for the Harbor.
Compared to pre-Covid, these numbers are simply freakish.
Outrageously high! Compared to pre-Covid, these numbers are simply freakish. Back in 2019 any of the percentage statistics we look at on a monthly basis would have been in the range of +/-1%, occasionally a tad more. So, instead of Harbor area prices going up 9% in a month, we would normally be talking about .9%, one tenth the amount of increase.
Year to Year
Clearly the pent up demand from the past 12 months has had some impact. That, combined with the limited supply because so few people want to move during the pandemic. There’s always the question of what percentage of the buyers are home owners as opposed to investors. From speaking to other brokers in the area, we find a large number of the transactions are all cash.”
As always, one should note that ultra-local sales numbers are small in terms of mathematical models. As such, a single sale, high or low dollar, may make percentile statistics jump into outlier ranges. Similarly, a seasonal burst, or dearth of sales can seriously skew the numbers. Based on 25+ years of local real estate experience, I can assure you this is closer to a bubble than to a season burst.
Looking at it on a year over year basis doesn’t improve the image. Still the increases in every corner of South Bay, both in the number of sales and the median price increases, are beyond rational.
The year 2020 was very nearly the least predictable time in local real estate history. Seriously, what other time have we experienced massive unemployment and rising home prices simultaneously? All indications suggest 2021 will be a tad more conventional.
Home Values Grew in 2020
Despite “turmoil” being the watchword of 2020, the year produced some remarkable results in the Los Angeles South Bay. The Beach cities recorded a 28% increase in median price for December compared to December 2019. The cost of building didn’t rise at that rate, so clearly there was a heavy investment in anticipated value. As the chart below shows, Even with all the up and down motion, during the final half of the year buyers & investors were betting heavily that things were headed for calmer, more profitable waters.
That activity was spread across the spectrum of prices, as you can see tracing the community lines shown above.
Note that May reflects the sudden market contraction from the Covid announcement the beginning of March. This is a rare moment when the chart shows how much delay there is between signing a purchase agreement, and closing escrow. In April, 30 days after the announcement of a Covid pandemic, escrows were starting to drop off and were at or slightly down from March closings. By May, 60 days later, the number of closed sales had fallen by ~50K units in each of the four market areas. It took the classic 45 day escrow period to show that the pandemic took away nearly 30% of the business in the local real estate market.
How Many Sales? Where? Why?
While the Beach and the Harbor areas fought it out for the highest total sales dollars throughout the year, the Harbor clearly enjoyed the highest number of units sold every month as we see in the chart below. While the number of sales climbed across the South Bay, at the end of the year it was the Harbor with the largest increase in sales. Starting 2020 with 315 sales in January, the number climbed consistently through the year to a strong finish with 476 in December.
Two factors play into the volume of Harbor area sales. Part is the sheer number of homes in what is physically a larger area. The more interesting aspect of Harbor area sales increasing while the rest are relatively flat is the reason.
Homes in the Harbor cities are lowest priced in the South Bay by about $100K. Interest rates are currently running below 3%, and it’s in the lowest price points of the market where low interest rates are most effective. The low rates mean more buyers can afford to purchase at the same price point, on the same income stream. The larger number of buyers competing creates multiple offers and drives the price higher, which is a major factor pushing the market today. If we are to believe the Federal Reserve Bank, current interest rates are expected to remain historically low for the foreseeable future. The demand should hang around for just about as long.
Different Strokes for Different Folks
In the chart below, it’s interesting to note that the Inland and Harbor cities progress across the months with stability and only a slight change from beginning to end. At the same time, the Beach and PV cities gyrate through the year, sometimes with $200K jumps from one month to the next. One is tempted to say it’s the comparative size of the market area, but the Inland cities have very nearly the same number of homes as the Beach cities.
This difference is often thought of as reflecting the nature of the home buyer in these communities. Looking at stereotypes, it’s easy to imagine an owner in Torrance or Long Beach, for example, who buys in their early twenties and doesn’t move again until retirement–very stable. In the Beach and PV price ranges, where a home is often considered more as an investment vehicle than a residence, it’s easy to see where market forces can result in sudden changes to where one lives.
Moving From 2020 to 2021
The beginning of 2021 marked the end of some of the more impactful aspects of 2020. A ferocious political battle is ended, and a new Federal administration looks inclined to use “all the available tools” to bring our collapsed economy back on line quickly. Time will tell how much that helps us here in the South Bay.
The ever-changing story of the international pandemic may be coming to an end with the approval of multiple vaccines for Covid-19. Rumors still abound as to the actual efficacy of the drugs, and rates of infection are still climbing dramatically, especially here in Los Angeles county. It will end, whether sooner or later. The big question today is if the price increases we’ve seen as a result of bidding wars will sustain as the pandemic eases and government assistance is strengthened.
Looking at December activity, we see big increases in sales volume for Month over Month (M-M) and Year over Year (Y-Y) statistics. A continuance of this trend could make 2021 an exceptional year for real estate in the South Bay.
Median prices show a large variation from area to area, and importantly show a slowdown in the climbing prices. Y-Y price growth was strong in December, reflecting the high demand at current interest rates. However, M-M prices predominantly showed a reversal in price growth. Some of the slowdown could be seasonal, but if you’ve been reading our blog posts you already know there’s a growing backlog of homes poised on the edge of foreclosure. The only thing preventing a mass of short sale and foreclosure properties on the market is the forbearance rules put in place to prevent a sudden jump in homelessness during the pandemic.
Beach
December activity in Beach cities showed insane growth for M-M and Y-Y sales, both in the the number of sales, and especially in the prices of sold homes.
As if annual growth of 28% in median price wasn’t crazy enough, look at that monthly increase of 18.2%! Annualized, that would be over 114% growth! Statistics with this much reach can only be attributed to a profound belief that prices will continue to increase at a similar rate. Or, continue until the property can be flipped, that is.
Palos Verdes
Palos Verdes in December was almost a reverse image of the Beach cities. The explosive growth in PV came in the number of home sales which shot up 18%, bringing the annual number to a phenomenal 42% growth in volume for the year.
Median prices in PV showed modest increases, ending the year only slightly higher than the Fed’s target growth rate. The shift from positive growth to shrinkage in December hints at an overall market trending toward lower median sales prices.
A side note: Homes on the hill have not maintained the “investment quality” image of those on the Beach. PV was once considered the place to buy a home from a prestige angle and from an investment perspective. New money moving into the Beach cities has diminished that role in recent years. I predict a rebirth of property values in the Palos Verdes cities over the next few years, which will make having a home on the peninsula key in local business and society.
Inland
For the most part, Inland homes are family homes. They are the places with hoops in the driveway and lemonade stands at the sidewalk. Investment here is a long term concept.
So, when we see over 20% M-M growth in number of homes sold accompanied by nearly 30% Y-Y, we’re seeing market movement rather than shifts in investment strategy. As it is throughout South Bay, the cause of that movement appears to be the sub-3% interest rate which enlarged the entry level market segment. More buyers flooding in created bidding wars and drove sales and prices higher.
Compared to last December, median prices in the Inland cities were up 5.5%, peaking at $733K. That’s a good healthy increase, only slightly above the expected Consumer Price Index (CPI) numbers. Caution though–the M-M median is down 2.3%. It could be a momentary blip; a result of the holiday season, or the Covid surge. That year end drop may also indicate that the $750K median from November is the market ceiling.
Harbor
In addition to the largest home sales volume in the South Bay, the Harbor area boasts the most entry level homes. There’s a good deal of lifestyle overlap with the Inland cities, to be sure. The Harbor dramatically displays the same message we see across most of the South Bay. Everything was going strong until December, then buyers put the brakes on.
Today’s environment in the Harbor points the direction to the future. Sales here had a stronger growth than the Inland cities over the months leading up to December, and show a more pronounced decline in December.
Some of the slowdown will ultimately prove to be driven by the holiday, and some the election, and some by the pandemic. Even then, it’s hard to avoid the feeling that some of the decline is a recession held back by a thin wall of regulations temporarily preventing foreclosure and eviction.
We can certainly hope for better news from the new year, but as of the end of 2020 many of our indicators are calling for a deeper recession in coming months. It’s possible. Somewhere in the range of 20%-40% of homeowners are in forbearance now, and a roughly equivalent number of tenants are building up deferred rent payments. If adequate measures are taken to protect both sides of the debt, all of this will amount to footnote in history. Otherwise, it’ll be the second worldwide recession in this generation.
These delicious holiday muffins are quick and easy to prepare, thanks to your trusty blender. Added bonus: they also happen to be low carb!
Yields 12 muffins
4 large eggs
1/2 cup sour cream or Greek yogurt
1 teaspoon vanilla extract
3/4 cup brown sugar
3 cups almond flour
1 tbsp cocoa powder
2 teaspoons baking powder
1/4 teaspoon salt
2 teaspoons ground ginger
1 teaspoon ground cinnamon
1/4 teaspoon ground cloves
Preheat oven to 325˚ F.
Line a muffin pan with liners.
In large blender jar, combine eggs, sour cream and vanilla extract. Blend approximately 30 seconds.
Add sugar, almond flour, cocoa powder, baking powder, salt and spices. Blend until well combined. If batter is too thick, thin out by adding 1/4 cup water.
Pour the mixture evenly among the prepared muffin cups. Bake 25–30 minutes until golden brown and firm to the touch.
Quite a year! Soon we’ll have to do a wrap-up on 2020. But, for today it’s going to be November 2020 versus last year, (November 2019) and versus last month (September 2020).
Let’s start with the big numbers. Over all, total sales in the Los Angeles South Bay for November came in at just shy of $880M, 9% off from September. One could easily consider that drop a seasonal variation as we move into the cold months.
Compared to November 2019, total sales dollars for the combined areas of the South Bay were up 25%. Much of that is making up for sales that didn’t happen during the confusion of the first shutdown this year. Now that things are more stable, we’re seeing a lot more come on the market. Nearly everything coming on the market is selling, and at good prices.
Harbor
The star of the month is the Harbor area with a 42% year over year improvement in sales dollars. Units sold were up 26% Y-Y and median sales price was up 13%. This is a big boost for the San Pedro-Carson-Long Beach area. The increased action and the increased price, outpaced the rest of the South Bay by huge margins.
Generally speaking, the Harbor cities have entry level homes. Those are being bid up dramatically by buyers who newly qualify for purchase loans because mortgage interest rates are now down in the 2-3% range. I suspect there are more than a couple of investors are mixed in there, too.
Palos Verdes
The Palos Verdes peninsula presents an anomaly this month. November compared to October universally shows a seasonal decline in the 1-10% range, but PV dropped 27% in dollar volume. Looking deeper we see the M-M median sales price has dropped by 13%, while neighboring areas have remained within 1-2% of last month’s median price. Monthly sales volume also plummeted by 15% versus an average of 4% down for other areas.
Year over year values are all in line with the rest of the South Bay, by PV seems to be taking a beating from the pandemic.
Beaches
The Beach, by comparison to PV and the Harbor, had a boring November. Volume was down from October by 9% and median price off by 2%. Total dollar sales fell from October by 9%. The numbers are within seasonal expectations, but any time Beach prices fall off more than neighboring areas, it’s a cause of concern. The Beach tends to be a precursor to future changes in the South Bay.
Looking at 2020 over 2019, the number of sales was up 1% and median price was up 3%, leaving a tidy 11% increase in Y-Y total dollars sold. Despite the Covid-19 pandemic, those rock-bottom interest rates are making sales happen faster than last year.
Inland
Inland cities sales volume for November dropped off from last month by 3%. Median sales price declined a mere 1%, while total sales dollars were off by 3%. These are minor drops in light of seasonal impact, showing a strong market even as we go into the winter months.
Looking back to last year, the Torrance-Gardena-Lomita area showed more than respectable growth. Sales volume was up 12% over 2019. Median price was up 10%. Those increases created a total sales dollar increase of 25% above last year.
Not bad for being in a pandemic. Existence of a vaccine should relieve the fear keeping many people away from buying and selling during the coming months. The Federal Reserve Bank has indicated that interest rates will stay down for another 12-24 months. Everything points to a growing confidence over the winter and a booming market in the spring.
The High and the Low
The Los Angeles South Bay is a very diverse set of communities. To show you the breadth of that diversity, let’s take a quick look at the highest priced sale for November, versus the lowest priced sale.
On The Strand in Manhattan Beach a 6025 sq ft house on a double width lot of 6927sf sold for $17,750,000. The listing agent bills this property as a perfect opportunity to build a world class home of over 11,500sf of living space. The sold price per square foot of residence is $2,946.
On Ackerfield Ave in Long Beach a one bedroom one bathroom condo of 641sf sold for $205,000. Per the listing agent the home boasts a community pool and laundry facility, with one carport plus storage. The sold price represents a rate of $319 per square foot.
Cold weather is coming and with Covid still keeping us more or less restricted to the house, it’s time for comfort food. What could be more comforting than your own personal hot savory pie?
One thing I really like about this recipe is the absence of a bottom crust. You know–the one that never quite cooks properly and then is thoroughly soggy by the time you reach it. This is adapted from a recipe by Deb Pearlman of Smitten Kitchen. You can find the original here: https://smittenkitchen.com/2014/10/better-chicken-pot-pies/
Makes 4 2-cup pot pies
Pastry Lid
2 cups all purpose flour 1/2 teaspoon salt 13 tablespoons cold unsalted butter, diced 6 tablespoons sour cream or Greek-style yogurt 1 tablespoon cider vinegar 1/4 cup very cold water 1 egg, beaten with 1 teaspoon water, for egg wash
In a large, wide bowl, combine the flour and salt. Add the cold butter. Working quickly so the butter doesn’t melt, use a pastry blender or a couple of table knives held side-by-side to cut the butter into the flour mixture. The result should be coarse texture with no visible butter. In a small dish, whisk together the sour cream, vinegar, and water, and combine it with the butter & flour mixture. Using a flexible spatula, stir the wet and the dry together. Knead the dough mixture into one big ball. Wrap it in plastic wrap, and chill it in the fridge for 1 hour or up to 2 days.
Filling
Salt and freshly ground black pepper 3 1/2 to 4 pounds bone-in, skin-on chicken parts (breasts, thighs and drumsticks are ideal) 3 to 4 tablespoons olive oil 2 medium leeks, white and light green parts only, cut in half lengthwise and then into 1/2-inch slices 1 large onion, diced small 1/4 cup dry sherry (optional) 3 cups low-sodium chicken broth 1/4 cup milk or heavy cream 1 bay leaf 1 teaspoon minced fresh thyme 3 tablespoons unsalted butter, at room temperature 4 1/2 tablespoons all-purpose flour 1 cup fresh or frozen green peas (no need to defrost) 2 large carrots, diced small (about 1 cup carrots) 2 tablespoons chopped flat-leaf parsley
Make filling: Generously season all sides of the chicken parts with salt and freshly ground black pepper. If your chicken breasts are particularly large, halving them can ensure they cook at the same pace at the other parts. Heat half the olive oil over medium-high heat in the bottom of a large Dutch oven (minimum of 4 quarts; mine is 5). Brown chicken in two parts, cooking until golden on both sides. Transfer to a plate and repeat with second half of chicken. Set aside.
Heat the second half of olive oil in the same pot. Add onions and leeks, season with salt and pepper, and saute them until softened, about 7 minutes. If using, pour in sherry and use it to scrape up any bits stuck to the bottom of the pan. Simmer until mostly cooked off. Add milk or cream, chicken broth, thyme and bay leaf and bring to a simmer. Nestle the browned chicken and any accumulated juices into the pot. Cover and gently simmer for 30 minutes, after which the chicken should be fully cooked and tender.
Transfer the chicken to a cutting board to cool slightly. Discard the bay leaves. Allow the sauce to settle for a few minutes, then skim the fat from the surface.
In a medium bowl, mash butter and flour together with a fork until a paste forms and no flour is still visibly dry. Pour one ladle of filling over it, and whisk until smooth. Add a second ladle, whisking again. Return this butter-flour-filling mixture to the larger pot, stir to combine, and bring mixture back to a simmer for 10 minutes. The broth should thicken to a gravy-like consistency. Adjust seasonings to taste.
Add carrots and peas to stew and simmer for 3 minutes, until firm-tender. Shred or dice the chicken, discarding the bones and skin. Add the shredded chicken to stew and re-simmer for 1 minute. Stir in parsley.
Assemble and bake pies: Heat your oven to 375 degrees F.
Divide chilled dough into quarters. Roll each quarter out into rounds that will cover 4 2-cup ovenproof bowls or baking dishes with a 1-inch overhang. Cut vents into rounds. Ladle filling into four bowls, filling only to 1 to 1 1/2 inches below the rim to leave room for simmering. Whisk egg with water to make an egg wash. Brush edges of bowls with egg wash. Place a lid over each bowl, pressing gently to adhere it to the outer sides of the bowl. Brush the lids with egg wash. Bake until crust is bronzed and filling is bubbling, 30 to 35 minutes.
Do ahead: The dough for the lids can be made up to 3 days in advance and chilled. The filling can be made up to a day in advance and re-warmed before assembling and baking the pot pies.
We’re looking at sales in the South Bay area of Los Angeles a little differently than usual this month. Typically we analyze the area as a single entity. This month we’ll divide the South Bay into four parts, allowing you to see a greater level of precision about those four areas.
Within each area the homes will be more similar, both in style and in pricing. We started by combining the four beach cities, El Segundo, Manhattan Beach, Hermosa Beach and Redondo Beach. Each of the cities has it’s own unique character, but they share many common traits. (If your home is in Hollywood Riviera, you can consider yourself one with the beach cities.)
The cities on the Palos Verdes Peninsula come together naturally, so we’ve combined Palos Verdes Estates, Rolling Hills Estates, Rolling Hills and Rancho Palos Verdes.
While Torrance does have it’s own beach, most of the city has more of an inland character, so we’ve combined it with Lomita and Gardena. One immediate benefit is the median prices are more representative of actual prices in those three communities.
Finally, we conjoined San Pedro, Long Beach, Harbor City, Wilmington and Carson, collecting the harbor area cities together.
Beach Cities
Prices have been trending up at a pretty rapid pace for most of the year, so it was a real surprise to find the median price in the Beach Cities had dropped by 6% from the September numbers. Last month the median price was $1.5M, while October only came in at $1.41M. Likewise, the number of sales dropped by a surprising 20%, from 209 sales in September, to 167 in October.
Year over year, beach prices increased by an impressive 17%, from $1.2M last October to $1.4M this October. Over the same time frame, sales volume went up by 45%, climbing from 115 units in October 2019, to 167 units in October of 2020.
On the Peninsula is where you really want to be in 2020. Prices and sales volume increased month to month and year to year. From last month to this month was on par with most of the South Bay, with the October median price of $1.68M coming in 5% above September’s median of $1.6M. The sales volume increase was a modest 3%, going from 95 units to 98.
The real treat for the PV cities is the 2020 over 2019 sales prices. October of last year showed a median price of $1.2M versus $1.68M this year. That’s a whopping 36% median price increase in 12 months. At the same time, October unit sales jumped 51% from 65 homes sold in 2019 to 98 sold in 2020.
Inland Cities
Going just a short distance away from the sandy shores of the beach, or from the bluffs of Palos Verdes, makes a huge difference in property prices. Like the coastal cities, the inland cities showed a 6% increase in prices from September to October. In contrast to the beach and the hill, the median price only went up $40K, from $719K to $759K. Like the beach cities, fewer inland homes were sold in October falling 11% from September. The drop wasn’t as great, going from 183 units in September to 163 in October of 2020.
October of 2020 versus October of 2019, the inland cities had median prices go up by 9%, from $600K to $656K. At the same time, the number of sales dropped by unit, from 164 homes sold, to 163 homes sold this October.
Median price in the harbor cities is typically lower than anywhere else in the South Bay. Similarly, price increases are slower. For example, while the rest of the areas saw 5-6% increases in month to month sales prices, the harbor came in at 3%. From September to October, the median increased from $636K to $656K. During the same time frame, the number of homes sold climbed 5%, from 435 to 457 units.
Comparing last October to this October, homes in the harbor area enjoyed a slightly more sustainable 9% rise in median price. The median for October 2019 was $600K compared to $656K this October. Sales volume jumped by 15%, from 397 units last year to 457 this year.
Why These Crazy Numbers?!
They are crazy, you know. There is no way prices can continue to climb at 5-6% per month. That’s more like what we would expect on a year over year increase.
October
2020
September
2020
Change
M-M
Med Sales $
Sales #
Med Sales $
Sales #
Med Sales $
Sales #
Beach
1,407,500
167
1,500,000
209
-6%
-2%
PV
1,682,750
98
1,600,000
95
+5%
+3%
Inland
759,000
163
719,000
183
+6%
-11%
Harbor
656,000
457
636,000
435
+3%
+5%
So Bay
820,000
885
799,500
922
+3%
-4%
It’s been a long time since we’ve seen Beach Cities prices decline. We’ll be watching November closely.
The answer lies in the interest rates. One the borrowing side, mortgage interest rates have been under 3% for some time now. With rates that low, many people who couldn’t afford to buy a home before, now qualify for a loan. Those who are still employed despite Covid-19 are buying homes if at all possible.
The demand created by that phenomenon has created a plethora of bidding wars. Homes with 20 offers on them are not uncommon. All those offers are pushing prices up at clearly unsustainable rates.
October
2020
October
2019
Change %
Y-Y
Med Sales $
Sales #
Med Sales $
Sales #
Med Sales $
Sales #
Beach
1,407,500
167
1,202,000
115
17%
45%
PV
1,682,750
98
1,233,000
65
36%
51%
Inland
759,000
163
680,000
164
12%
-1%
Harbor
656,000
457
600,000
397
9%
15%
So Bay
820,000
885
699,000
741
17%
19%
Adding to the entry level buyers who are driving the market at the low end, there is another group who have cash in the bank. Unfortunately, that cash is only earning 1%, or less. Those buyers are watching the price of real estate climb astronomically, and are hoping to cash in on a windfall profit. Some of them will.
The Crystal Ball
Watching the median price drop at the beach by 6% is a hint at what’s coming next. We can’t be sure when it will happen, but steeply escalating prices inevitably plummet in a subsequent correction. Current increases are reminiscent of the rapid run-up of prices in 2006-2007 which resulted in the Great Recession.
Further complicating matters, today we have government and consumer response to Covid-19 as a uncontrollable factor. The third quarter of 2020 looked really good compared to the second quarter, until we remember the coronavirus struck in March. Business during the second quarter was essentially nil.
We can’t forget the election. Fallout from the presidential election could push the economy in any one of several directions depending on who the President is, and the degree of polarization in the Federal government.
One would need a crystal ball to forecast this winter, but I predict a volatile ride for the real estate market.
The traditional dinner salad is most often an unexciting food. Ditch that classic iceberg lettuce studded with cherry tomatoes in favor of this taste treat. These flavors will burst in your mouth from the first bite to the last. Whether you serve it in the heat of summer, or as a year-round starter, this dish is a treat for the eyes and the taste buds.
Serves 6
Ingredients
2 (6-oz.) bags baby spinach 1 (16-oz.) container strawberries, quartered 1 (4-oz.) package crumbled blue cheese, feta cheese, or goat cheese 1/4 medium red onion, thinly sliced 1/2 cup sliced toasted almonds or halved candied pecans Balsamic vinaigrette (recipe follows or use bottled vinaigrette)*
Directions
Toss all the salad ingredients together and drizzle with dressing.
*Easy Balsamic Vinaigrette
1/4 cup balsamic vinegar 1 tsp prepared mustard 1/2 tsp salt 1/2 tsp freshly ground black pepper 3/4 cup olive oil
Directions
Place the vinegar and seasonings in a bowl and whisk to combine. Slowly add the olive oil and whisk until the dressing is emulsified.
It’s October 1, so it’s time to look at the changes in the local real estate market, both for the month and for the third quarter.
2020 has been a year for making and breaking records. Most of them have been records we truly didn’t want to even consider, like the number of pandemic deaths, and the number of unemployed. Until now, we had little reason to believe the real estate market might bring better news.
Through the first half of the year, the number of homes available on the market just kept climbing. At the same time, the number of homes selling remained stubbornly flat. Despite interest rates hovering just above zero, it seemed buyers had other things on their mind. Then in July the number of closed sales jumped 41%, while available inventory came up a tiny 7%.
Sales continued to climb in August and September, though nothing as dramatic as July. Overall, for the third quarter, unit sales were nearly double those of both, the first quarter of the year (+79%) and the second quarter (+76%).
For the first time this year, the inventory has dropped appreciably.
Comparing to last year, that huge spike in sales brought September in at 47% more sales than in September of 2019. On a quarter over quarter basis, Sales are up 23% over 2019. The red bars in the “Sold vs Available” chart above shows the climbing number of sales, with the blue bars showing the sudden drop of available inventory in September.
Not only were the number of sales climbing, but prices have continued to escalate year over year. September of 2020 showed median prices had increased 23% over September of 2019. Median prices rose 15% for the third quarter of 2020 versus the same time period in 2019.
Combined, the impact of the increased sales and increased prices brought the total dollar value of sales for September 2020 up 89% over that of September 2019. Quarter to quarter, the annual increase was 40%.
“South Bay residential sales for the third quarter of 2020 exceeded two billion dollars.”
How do we explain record sales and prices during a pandemic, with sky-high unemployment, and the threat of a recession coming from behind? It’ll be weeks before the pundits have sorted it all out. In the meantime, here are a couple of possible explanations.
Third quarter sales range from $285K to $10.5, so we know some of these have been entry level homes. Folks who have been priced out of the area, and because of the lower interest rate could suddenly qualify to purchase here, have jumped at it. Sales under $1M comprise 42% of the total.
At the opposite end, sales over $3M made up 9%. Once again, the interest rate makes it possible to leverage a mansion at a relatively affordable monthly payment. A lot has been said about the future worth of property compared to today’s dollar. Investing at a reduced interest rate usually contributes to a sizable profit at some future sale date.
In between, from $1M to $3M, we have 49% of the third quarter sales. That’s roughly the number of people we would expect to sell for one or another of the typical reasons people move. In fact it corresponds nicely with the rate of market activity for the first half of the year.
In summary, if the thought of making a move in the near future has crossed your mind, this may be the best moment to do so. Call and we’ll put together some numbers specific to your property and your situation. No problem–no obligation!
It’s September already! That means it’s time to look at a summary of real estate activity for LA’s South Bay neighborhoods over the past month. Our data is ultra-local which means you get to see the market conditions almost immediately after the month ends.
This summer we’ve been enjoying a relatively busy real estate market with a big jump in sales and mixed results in prices. August 2020 weighed in with the median price nearly 6.8% higher than August of 2019. However, it wasn’t enough to beat the median for this July. August median prices were down by 1.8% from last month. In the first eight months of the year, we’ve seen two months where the median increased, versus six months when it decreased.
Median Prices
August
July
2020
$1.10M
$1.12M
2019
$1.03M
—
We saw 450 homes sold in August, up by 10% from July of this year. Compared to August of 2019, sales this year were up 13%. July and August were exceptional sales months compared to January through June. Both months had sales in excess of 400 units, while the first six months of the year were less than 300. March of 2020 made it all the way to 291 sales despite pandemic activity kicking into high gear that month.
Closed Sales
August
July
2020
450
408
2019
398
—
July & August sales were up nearly double the sales numbers from the first half of the year. Why the jump in summer? Anecdotally, we’re hearing interest rates being at or below 3% brought those buyers not financially impacted by Covid-19 to the table. That huge savings in interest helped drive prices, as well. To buy now and take advantage of the interest rates, many buyers have been willing to offer slightly above asking price, to lock the deal in.
August brought a significant increase in the number of homes available for sale. At the end of August total available counts stood at 3.68 months of inventory, compared to 2.17 months at the end of July. In raw numbers, that’s an 18% increase in homes available for sale. More sellers put their homes on the market, and there weren’t enough buyers to absorb the increase. As Covid-19 moves to a back burner, we expect the inventory to return to higher numbers comparable to the beginning of the year.
A rising inventory indicates downward pressure on prices.
With subsidies and protective government programs closing, we anticipate fewer buyers will be able to purchase. At the same time, we expect the continuing stress will create more defaults and short sales. Forced sales, also known as ‘distress sales’ tend to push prices down.
Combined, a growing inventory and economic stress are precursors of a shift to a buyers’ market. Several noted commentators are predicting a recessionary market lasting through 2021 and possibly into 2022. Like so many things in today’s world, no one is sure of where we’ll end up. But it’s pretty much guaranteed to be different than we had planned.
This is more than a tuna salad. This is a meal in a tortilla, a salad on greens to linger over with wine, hors d’oeuvre on chips, or an ultra tasty wrap in a swirl of your favorite cheese!
Albacore as everyone likes it. My general sizing recommendations are: use one if it’s on the large end of the size spectrum, use two if it’s on the small end, etc.
12 to 15 ounces (approximately) of cooked, flaked tuna 2-3 stalks of celery, in a fine dice 1-2 carrots, shredded 1-2 pickled cucumbers (dill pickles are my favorite) red pepper flakes (optional) 1 large dollop of Dijon mustard 3-4 large dollops of mayonnaise 1 teaspoon rubbed sage 1 teaspoon dried dill salt and pepper to taste.
Process
Let’s start by saying that I really don’t measure anything. If it looks like enough, it’s enough. If it doesn’t, add more. By the same token, if there’s something in the refrigerator that looks like it belongs, put it in! This is one of those “family” recipes where the cook adds and subtracts “to taste.”
First step is to get out a large mixing bowl, a cutting board and your favorite knife.
Flake the tuna into the bowl. I generally use canned albacore tuna, solid, white, in water. Albacore is mild and suits most taste buds. Actually, any tuna will do. Fluffed up, it should be in the neighborhood of 1.5 to 2 cups of tuna.
Wash the celery and carrots. I never bother to peel, but feel free to do so, if you like. Cut both lengthwise, into long, thin slivers. Then turn sideways and cut into a fine dice, approximately ¼ inch square, or less. Add to the bowl. There is a tool, photo here, that will do a very creditable job of creating long, skinny slivers without using a knife. Personally, I love my chef’s knife! I even use it for things it wasn’t designed to do.
Moving on, rinse the pickled cucumber. Using the same process, cut it into a small dice, and add to the bowl. If you’re pressed for time, or prefer the taste, there are commercially available pickle relishes, or spreads, that can serve the same purpose. I think Trader Joe still carries one called “sweet pickle relish” that serves nicely and saves a lot of time.
Sprinkle the sage, dill, salt and pepper over the top. At first, it’ll look like too much, but once mixed, it’ll be fine.
Now, add a dollop (I use a tablespoon, heaped to the point of dripping off) of mustard and most of the mayonnaise. Mix thoroughly. The mixture should hold together nicely, without being crumbly, or drippy. If I plan to use it on bread, I like it a bit more moist. If it’s added to lettuce, more dry. Add more mayonnaise as required to reach a suitable consistency.
For a tasty tuna sandwich, try preparing it open face, covered with a thick layer of tuna salad. Top with a generous amount of shredded or sliced cheddar, and toast until cheese is melted. If your taste buds lean to the spicy side, try a liberal sprinkle of red chile flakes before the toaster.
Be expressive with this dish! Use it as an appetizer, with a dollop of tuna on a tortilla chip and a dusting of chopped cilantro. Or top a plate of mixed greens with three good sized scoops of tuna salad and add the fruit of your choice.
Though tradition calls for an earthy white wine, I’ve often paired a spicy tuna mix with a strong red and had a wonderful repast. Enjoy your meal!
This is not intended to be an exhaustive list of 55+ housing choices, but a reference point for the more commonly known, age-restricted accommodations available in the Los Angeles South Bay. We welcome your input, but cannot guarantee inclusion.
Condominiums
Breakwater Village, 2750 Artesia Blvd, Redondo Beach, CA 90278 Courtyard Villas Estates, 3970 Sepulveda Blvd, Torrance, CA 90505 Gables, 3550 Torrance Blvd, Torrance, CA 90503 Meridian, 2742 Cabrillo Ave, Torrance, CA 90501 Montecito, 2001 Artesia Blvd, Redondo Beach, CA 90278 New Horizons, 22603-23047 Maple Ave and 22601-23071 Nadine Circle, Torrance, CA 90505 Pacific Village, 3120 Pacific Blvd, Torrance, CA 90505 Parkview Court, 2367 Jefferson St, Torrance, CA 90501 Rolling Hills Villas, 901 Deep Valley Dr, Rolling Hills Estates, CA 90274 Sol y Mar, 5601 Crestridge Road, Rancho Palos Verdes, CA 90275 Sunset Gardens, 24410 Crenshaw Blvd, Torrance, CA 90505 Tradewinds, 2605 Sepulveda Blvd, Torrance, CA 90505 Village Court, 21345 Hawthorne Blvd, Torrance, CA 90503
Independent/Assisted Living/Memory Care Facilities
Belmont Village, 5701 Crestridge Road, Rancho Palos Verdes, CA 90275; 310-377-9977 Brookdale Senior Living, 5481 W Torrance Blvd, Torrance, CA 90503; 310-543-1174 Canterbury, 5801 West Crestridge Road, Rancho Palos Verdes, CA 90275; (877) 727-3213 Clearwater at South Bay, 3210 Sepulveda Blvd,Torrance, CA 90505; 424-250-8492; (previously Wellbrook) Kensington, 320 Knob Hill Ave, Redondo Beach, 90277; (424) 210-8041 Manhattan Village Senior Villas, 1300 Parkview Ave, Manhattan Beach, CA 90266; (310) 546-4062 Silverado Senior Living, 514 N. Prospect Avenue, Redondo Beach, CA 90277; (310) 896-3100 Sunrise of Hermosa Beach, 1837 Pacific Coast Hwy Hermosa Beach CA 90254; 310-937-0959 Sunrise of Palos Verdes, 25535 Hawthorne Blvd, Torrance, CA 90505; 408-215-9608
Independent Living Only
Casa De Los Amigos, 123 S Catalina Ave, Redondo Beach, CA 90277; 310 376 3457 Heritage Pointe Senior Apartments, 1801 Aviation Way, Redondo Beach, CA 90278; (844) 220-4169 Seasons at Redondo Beach, 109 S Francisca Ave, Redondo Beach, CA 90277; (310) 374-6664
Mobile Home Parks
Skyline, 2550 Pacific Coast Hwy, Torrance South Bay Estates, 18801 Hawthorne Blvd, Torrance South Shores, 2275 25th St, San Pedro
We monitor local South Bay real estate activity daily. The data is charted to show the direction of the market in terms of tendency to favor Sellers versus Buyers. Ideal market conditions are in the the center band where both have roughly equal market strength. As you can see, South Bay activity was right down the middle for July. The daily market trend has been more or less level since the beginning of the year, with only a slight upward movement each month.
Cumulatively, since the beginning of the year, the market has shifted from almost being a Buyers’ Market to being almost dead center on the chart. What that means in terms of value can be seen by looking at the most recent three months sales. The list below represents only houses, and only those sold in two neighborhoods. If you’re interested in real time information about homes like yours, or near yours, call and ask about our Neighborhood Notice service.
These sales are for a select period and a select area. If you have interest in similar data for your neighborhood, we can provide you with our instant Neighborhood Notice. Call us for details.
Faced with the Covid-19 pandemic, a particularly contentious national election, and weeks of nation-wide civil rights protests, It looked like there was no way 2020 could ever be called a normal year. Then we learned about a growing recession. So halfway through the year, what do we see?
Prices – Up and Down
The South Bay is a nice place to live. Here, the real estate market is frequently shielded from the vagaries of the nation at large. And it’s no different this year. In this chart we compare the average sales prices during the first six months of 2019 versus 2020, by zip code. In nearly all cases the average property price is still going up. Torrance was very nearly flat and 90274 actually dropped slightly. (If your zip code or city is not included here, and you would like statistics, give us a call.)
Volume – Mostly down
With prices are still climbing, albeit slower than they were, what about sales volume. Here we see some negative impact. Hermosa Beach is the only local city not experiencing a drop off in sales. In Manhattan Beach, for example, sales are off by 38% for the first six months of this year. South Redondo is off by 35%. Torrance and the peninsula cities are all down by roughly 5-10% from the number of homes sold in the same period of 2019.
My Crystal Ball
Our Market Trend chart is designed to show whether market conditions generally favorable for sellers or buyers. The year started as a buyers’ market and moved even further toward buyers in February. Since then we have been seeing a slow, but steady movement toward a sellers’ market. Things could change dramatically before the year is out, but right now the red trend line indicates the probability the South Bay will be in a sellers’ market before the end of 2020.
The
Federal Reserve Bank (the Fed) moved to lower the federal funds rate
by a half-point to a range of 1% to 1.25% March 3 in response to the
“evolving risks” of the COVID-19 corona virus outbreak. The Fed
doesn’t directly impact housing loans, but they generally move in
tandem.
Mortgage
rates in the U.S. roughly track the yield on the 10-year Treasury
note which has been dropping as the corona virus epidemic expanded.
As the yield on the 10-year note drops, there is typically a drop in
mortgage interest rates.
Yesterday,
purchasers and refinance borrowers were looking at rates of about
3.7%. Today that’s about 3.5%. Some lenders are forecasting that
rates could drop as low as 3% before COVID-19 is controlled.
Some
analysts report that the stock market anticipates a least a
quarter-point rate cut at the Fed’s meeting in April.
Around
the world some other central banks have dropped rates as well. Since
consumer spending is a large measure of our economys, there is reason
to press for more cuts.
In
the words of the President, @realDonaldTrump, “The Federal Reserve
is cutting but … more easing and cutting!”
My favorite meal is a fresh salad, transformed to a main course with the addition of a grilled, or roasted, or sauteed piece of meat or seafood. This recipe is a more sophisticated version, with colorful and tasty endive taking the place of standard greens.
Salmon is a great go-to for this dish. If you’re not fond of the taste, or it isn’t readily available, there are several delicious options. Mahi-mahi or rockfish work well, as will chicken breast, or even scallops. The goal is the freshness of the salad combined with the hearty flavor of your meat, poultry or seafood.
Ingredients
3 heads red Belgian endive 3 heads Belgian endive 2 crisp and juicy apples Juice of 1/2 Meyer lemon 2 cups (2-3 oz.) of frisée and/or arugula greens, torn to bite-size 1/2 cup walnut halves or pieces, toasted 6 tbsp. white vinaigrette dressing (recipe below) 1 tsp. finely cut chives 4 fillets of a firm fish, e.g., salmon, mahi mahi, or rockfish
White vinaigrette dressing 1/4 cup white balsamic vinegar or fresh lemon juice 1 tbsp Dijon mustard 1/4 shallot, peeled and minced 2 tsp. honey (optional) 1 pinch finely chopped garlic 3/4 cup extra virgin olive oil Salt and pepper, to taste
Instructions
Salad Wash and dry endive and apples. Cut endives lengthwise into julienne strips. Slice apples and cut into julienne strips. (If made in advance, you can preserve the color of the apple with a spritz of lemon juice.) Tear the frisée and/or arugula greens into bite-size pieces. Set aside.
White balsamic vinaigrette dressing In a bowl or large measuring cup, whisk together all the vinaigrette ingredients and set aside.
Salmon: Heat olive oil in a sauté pan over medium-high heat. Score skin and season fish with salt and pepper. Place skin-side down in hot oil. Cook until skin is crispy, shaking pan to prevent fish from sticking. Turn fish over and continue cooking until medium rare. Remove and keep warm. (Alternatively, salmon may be grilled or baked.)
In a large bowl, combine endives, apples, greens, walnuts and vinaigrette, tossing gently. Season to taste and center on plate. Top the salad serving with one fillet each and sprinkle with chopped chives.
Usually this time of year I stick my neck out and make some forecasts about the local market in the coming year. What I’ve discovered is my quotes are boring by comparison to those made by the pundits. So, this year I decided to publish some of the more exciting projections by people who claim to know what’s going on.
Let’s set the stage by noting that the real estate market has been notoriously stable for the past few years. Stable, and on a very slight decline. The charts have shown volume and prices all within the normal range, with tiny losses increasing as time goes on. Several pundits have pointed to these stats and projected a recession on the horizon.
At the same time, as I point out in another article, this is a presidential election year. Can anyone remember an election year when the economy failed? It doesn’t happen very often. Let’s look at some quotes.
“Were we to have a recession, I’d argue housing would provide a cushion because the shortage of supply at the entry-level suggests builders could actually continue to build.”
Doug Duncan, Fannie Mae’s chief economist
Well now, I know quite a few builders and developers. But, I don’t know any who will start a project when prices start dropping. As a theory it sounds great, but I think it needs further study.
“While the housing crisis is still fresh on the minds of many, and was the catalyst of the Great Recession, the U.S. housing market has weathered all other recessions since 1980.”
Odeta Kushi, deputy chief economist at First American
Kushi says, “…since 1980.” So he had to look back 40 years to find good news?!?!
“Housing people are the most optimistic people, but it takes a lot of optimism to buy a house and tie up your income for 30 years.”
Nela Richardson, investment strategist at Edward Jones.
He’s right, at least as far as purchasers would go. Most tenants wouldn’t be very optimistic after renting for 30 years.
“The vast majority of housing economists project that mortgage rates will remain below 4% in 2020.”
Jacob Passy, personal-finance reporter for MarketWatch
Ha! Like we’re going to see the Fed argue with President Trump! He tweeted and they gave. It’s an election year!
“In the Los Angeles metropolitan area (which includes Orange County), the share of homes that sold for more than the listed price dropped from nearly 35 percent in 2018 to 28 percent in 2019.”
Elijah Chiland, reporter for Curbed, Los Angeles
There is a large difference between our little corner of the world here in 90277 and Los Angeles County in general, and it extends to the LA Metro and to California and to the nation as a whole. In 2019 only 17% of homes sold in 90277 sold for over asking. It is different here. Many brokers/agents have found that the statistics generated by state and national pundits are simply not applicable in the Beach Cities.
Here’s CAR betting on a positive market for the year! It’s an election year, and I can see this happening!
Last year saw property prices in 90277 drift down a little. Looking at a five year picture of shifting prices we see that from 2014 to 2018 there was a clear upward trajectory. By the end of 2019 the average price had dropped and the median price followed.
The final numbers for 2019 show the decline continuing and even growing. The median was only down .4%, but the average was down 7.1%, an even larger drop than projected for the fourth quarter of the year.
On a
more positive note, 2019 showed a 16% increase in sales volume for
90277.
The
downward shift in prices and upward trend in volume of sales are
consistent with the overall greater South Bay area. The upper end of
the local market is showing signs of having reached an apex in
prices, which has stimulated more listings and more sales.
At the same time, the moderate and lower priced neighborhoods have maintained price increases. Prices of lower priced homes are still climbing, but at a slower rate. Sales on the other hand, declined from 2018, or were unchanged.
So
what’s the outlook for 2020? To get an early look, we compared
January 2019 to January 2020. The statistics show both prices and
sales climbing. Sales for the month were 22% greater than January
last year. Average prices increased by 14.7%, while median prices
were up 5.9%.
All right, so things are looking pretty good, at least in the Beach Cities/South Bay area. But, let’s face it. This is an election year. The status of everything is subject to change in mere seconds, based on the latest poll/post/tweet hitting the internet. There’s not much we can do about the politics, but if you’re looking for a quick update on the real estate market, give us a call. Better yet, take out a free subscription to BeachChatter and we’ll send you a note to keep you abreast of the latest news. There should be a subscription form in the side column. And, we don’t sell your data!
As if there has ever been a doubt, surveys clearly demonstrate that those of us in the Baby Boomer generation want to maintain our independence and remain in our family homes as long as possible. The older we get, the more adamantly we pursue that goal. Along with us getting older, our homes are also aging. Things we loved about the house when we were younger are not so lovable now that we’re less agile and adaptable than we were those many years ago.
That upstairs kitchen, with the tremendous views–getting up those stairs becomes a dreaded task when joints become creaky and complaining. Likewise, getting down on hands and knees to reach into the back of a corner cabinet can make one curse the arthritis creeping in on us.
In some cases the solution is medical. Doctors can literally rebuild a body today, replacing old, failing parts with new technological wonders. On a more practical level, rebuilding our homes to meet our changing needs can be easier and less expensive. Depending on the structure and your needs, you may be able to adapt the family home to your new lifestyle demands more readily than you can change residences.
Photo by Martin Péchy on Unsplash
In our experience, inability to climb stairs is the most expensive and challenging difficulty to remedy. In multi-story homes, options include installing an elevator or adding a chair lift, while in single story homes, it may be as simple as adding a ramp at the exterior entrances.
Elevators may add up to tens of thousands of dollars, but don’t let that deter you from investigating. Sometimes the architect has designed in a space that’s just waiting to be used. Besides, it’s probably less expensive than moving the kitchen downstairs. Though not as aesthetically appealing, a chair lift can be a relatively inexpensive solution, costing only a few thousand dollars.
In terms of cost and difficulty, bathrooms and kitchens come right behind stairs. The key problems are usually related to getting in and out of bathtubs, and manipulating faucet knobs. Whether the result of declining strength, arthritis, or another aspect of aging, these are literally pains we can avoid.
Walk-in bathtubs are available, but very expensive, and most of us haven’t been in a tub since we were children. The most common solution is a “curbless” shower which eliminates the pain and the trip hazard. Adding a seat to your shower is a minor effort for the contractor and a major plus for you. Any update of your faucets will probably solve the knob issue, since nearly all manufacturers have shifted from knobs to levers to meet the needs of the disabled.
Many of the complaints we have as aging boomers have been addressed by manufacturers of “add-on” or “after market” products. Roll out drawers, pull out shelves, lazy susan corner units and similar tools can be wonderful. For the most part these fixes are inexpensive and easy to install. None of them will make us any younger, but with them we can all feel better about growing older.
