If you ask a group of folks what is the most important factor in local real estate markets most would say price.. But what many are missing is that prices are often a direct result of inventory levels. Inventory or the lack of inventory plays a major part in our local Manhattan Beach, Hermosa Beach, Redondo Beach and El Segundo real estate markets.
As an example if you were to take a general look at the Manhattan Beach market your first impression is that prices are high.. and you would be correct. However if you look a little more closely you might see that while prices remain high, many properties are seeing price adjustments during the course of the listing and as well as a reduction in the final sale price from the final listed price. The reduction may be small.. often less than 2% but compared to previous years even a small price adjustment can make a difference to the market.
If you take an even closer look at the Manhattan Beach market you might notice that inventory levels are closer to levels in 2012 than 2015. Which brings us back to price levels which may finally be trending toward a more normal market. As an example from January 1, 2015-March 25, 2015 there were 66 closed sales in Manhattan Beach. 26 sold above the list price, 28 sold below list price and 12 sold at the listed price. Looking at this year during that same time frame.. between January 1, 2016- March 25, 2016 there were 62 properties sold. 21 sold over the listed price while 37 sold under the listed price and 4 sold at the listed price.
While rising prices are a major factor in home sale activity, another definite influence on prices is likely to be the increase in the number of homes for sale in Manhattan Beach. A quick scan of the graph below shows that inventory levels in Manhattan Beach are significantly higher this year than in in those of 2013, 2014 and 2015. .
Manhattan Beach: Listings January-March 2011-2016:
A quick look at the markets in Hermosa, Redondo and El Segundo tends to bear out this trend..just a bit differently.
In Hermosa Beach home inventory is up slightly over last year but still remains low. Prices however are moving upward as they remain low compared to Manhattan Beach home prices. . Hermosa has seen an uptick in home values in the last 6 months or so. There were 43 sold listings from January 1 to March 25, 2016. 18 were over the listed price, 10 were at the listed price and 18 were less than the listed price.. In 2015 during that same period there were 38 sales, 18 sold less than the listed price, 10 were over the listed price and 10 sold at the listed price.
Hermosa Beach: Listings January-March 2011-2016
In North and South Redondo you have two distinct markets. In North Redondo inventory is down over last year while in South Redondo inventory is up slightly over last year.. Less inventory means fewer sales but higher prices seem to be the rule in North Redondo at the moment. Last year between January 1 and March 25, 2015 there were 98 sales. 45 were sold below the listed price, 42 above the listed price and 11 at the listed price.. In 2016 80 homes closed escrow during the same period. 27 sold under the listed price, 36 above the listed price and 17 sold at the listed price..
North Redondo Beach: Listings January-March 2011-2016
In South Redondo we see a different market. Inventory is a bit higher than 2015 but lower than 2013 and 2014. 2016 saw more sales than in 2015 with fewer homes selling below the listed price and more selling above the listed price with about the same number selling at the listed price. Here is the breakdown.. From January 1 to March 25, 2015 59 homes closed escrow. 40 were less than the listed price, 11 were above the listed price and 8 sold at the ist price. During that sme period in 2016, 25 sold above the listed price, 35 sold under the list price and 9 sold at the list price..
South Redondo Beach: Listings January – March 2011-2016:
El Segundo continues to be a little different than the other Beach Cities. While the town is fairly large much of the land is devoted to commercial purposes. Home inventory has always been much smaller than Manhattan Beach, Hermosa Beach and Redondo. This year inventory has been significantly lower than in recent years.
In 2015 a large townhome development saw most of the units close escrow in the spring which was a boost to sales. This year with inventory much lower the number of sales has also declined.. It’s hard to sell what doesn’t exist. From January 1 to March 25, 2015 there were 43 homes sold. 24 were sold under the list price, 5 were sold above the list price and 14 sold at the asking price. During that same period in 2016 19 homes closed escrow. Of those 12 sold below the asking price, 3 sold above the list price and 4 sold at the list price.
What is really interesting is that the 2016 median sold price during the same time frame shot up significantly over the median price in 2015. In 2015 the median price from January 1 to March 25, 2015 was $805,000. In 2016 during the same time period the median home price shot up to $1,200,000. Local real estate markets are always full of surprises!
El Segundo: Listings January -March 2011-2016
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