Median Redondo Beach Sales Price Increases for 5th Year in a Row
It may seem to the casual observer that home prices in Redondo Beach have doubled over the last five years or so. Well in 90277 while that is not quite the case, but we are getting close and many are asking if we are in a bubble, is this sustainable, and whether this is a good time to but or sell.
With 2017 firmly in the rear view mirror, let's take a look back at the year that was and see if we get a better idea of where we might be headed.
South Redondo Beach recorded 412 closed transactions during 2017 which was a decline from both the 448 the previous year and the 421 during 2015. But prices were way up.
By comparison, North Redondo Beach finished the year with a total of 519 sales, up from 491 in 2016 and 533 in 2015.
By comparison, Manhattan Beach saw 423 closed sales during 2017 and Hermosa 206. For Manhattan Beach that was an increase from 391 during 2016 and Hermosa Beach a slight decrease from 226 the prior year.
The biggest news though is the staggering rise in Redondo Beach median prices with South Redondo outstripping North Redondo by a wide margin.
The median price in South Redondo Beach for 2017 was $1,222,500 which was up from $1,060,00 the prior year (+/- 15%) and $950,000 during 2015.
The median price in North Redondo Beach for the full year was $950,000 up from $875,000 during 2017 and $825,000 during 2015. That's an increase of just over 15% in 2 years with almost the same number of units sold.
So basically two years ago South Redondo Beach had a median price of $950,000 which is where North Redondo ended up in 2017. South Redondo showed a price increase of about 29% in two years.
Why the difference?
Location, location, location.
South Redondo has ocean view properties, (almost) beach front on the Esplanade, and homes situated west of PCH.
This pushes the high end, or as Brokerages like to term it "the luxury market" to a much higher price point in South Redondo Beach than North Redondo. How high? We'll get into that as we take a deeper dive into the 2017 review.
Here's the distribution of sales by price ranges:
It should be no surprise that the bulk of the sales were under $2M with most of the activity being between $1M and $2M. Over $3M in S Redondo you are definitely into the luxury market which I personally define as the top 10% of any market.
By comparison in Manhattan Beach during 2017 there were 264 sales over $2M out of 423 total and in Hermosa Beach 68 out of 206.
The highest priced sale in North Redondo Beach during 2017 was $1,890,000 with 219 out of 519 sales over $1M.
REDONDO BEACH SFR VS CONDO/TOWNHOME SALES
In North Redondo Beach there were 197 Single Family Residences sold and 322 Condos/Townhomes of which 118 were "detached" as in no common walls. Almost all of those would be 2 on a lots.
In South Redondo Beach 187 SFRs sold and 225 Condos/Townhomes. Of the latter, 58 were detached units.
This compares to the prior years as follows:
S Redondo 2016 266 Condos/Townhomes
S Redondo 2016 179 Single Family Residences
S Redondo 2015 254 Condos/Townhomes
S Redondo 2015 167 Single Family Residences
N Redondo 2016 294 Condos/Townhomes
N Redondo 2016 195 Single Family Residences
N Redondo 2015 318 Condos/Townhomes
N Redondo 2015 214 Single Family Residences
(Please note, mobile homes not included above or Riviera homes with Torrance mailing address.)
For 2015-2016 we saw roughly 90-100 more Condo/Townhomes sold than SFRs but that trend changed in 2017 with the gulf between SFRs and Condo/Townhomes narrowing in South Redondo Beach but widening in North Redondo. What's going on?
To start with, as a function of density, there will almost always be more Condo/Townhomes sold than SFRs simply because you can fit more units into the same space. Additionally the price point should be more attractive.
So why would the difference is unit sales change in 2017 from previous years?
In North Redondo Beach, there was a lot of 2 and 3 on a lot construction, arguably more than in South Redondo so there are simply more units. In South Redondo, with the upper price point increasing, fewer buyers are available.
REDONDO BEACH NEW CONSTRUCTION HOMES
New construction remains the driver of price acceleration because presumably no one will pay more for a resale than a new home if all the other factors are the same (which they never are).
The initial list pricing for much new construction is simply staggering. I emphasize initial because many of these properties are selling at a discount to where the builders initially list them. Which is quite often, high. And new construction is selling - in many instances even before the homes are completed.
During 2017 in North Redondo Beach there were 76 newly built homes sold. That's 14.6% of the total sales. Prices ranged from $950,0000 on the low end for a 3 on a lot on Mathews up to $1,890,000 for a new construction Golden Hills traditional floorplan SFR on a 5215 Sq Ft lot.
Of the new homes built, only 10 were SFRs and the balance were townhomes with most of them being detached 2 on a lots. The median price of N Redondo new homes was $1,260,000.
If you will be shopping for new construction in North Redondo in 2018, expect to pay upwards of $1.1M for a three on a lot and over $1.4M for a two on a lot. New Tall & Skinny properties sell for $1.4M plus and traditional SFRS $1.8M up.
In South Redondo Beach there were 42 new homes sold (just over 10% of sales) ranging in price from $1,260,000 up to $4,550,000 for a condo on the Esplanade. Well that one was kind of an outlier, the next highest sale was $3,250,000.
The median price of South Redondo Beach new construction was $1,582,500. Eleven of the properties were SFRs and the balance either 2 on a lot townhomes or condos.