The SoCal Real Estate Advisors, Inc. research team will begin publishing monthly real estate statistics for Southern California. Our first publication focuses on the coastal cities of the South Bay – Manhattan Beach, Hermosa Beach, and Redondo Beach. We will soon be incorporating the rest of the South Bay cities, Long Beach, and ultimately Orange County. We present to you our first update for the South Bay coastal cities:
The end of the year has seen a rebound in residential home sales volume and prices. Given continued decline in the overall market value of transactions it is still too early to determine whether or not we have seen a bottom to prices, or if this is merely a bear market rally.
Overall coastal cities South Bay real estate prices are down 6.3% year-over-year with the average number homes remain on market increasing to 76 from a historical average of 34. Transaction numbers are down 12.4%, and total market value of sales (average sales prices times monthly number of sales) is down 37% from historical monthly averages.
Trend lines drawn through 3-Month average sales prices and transaction market value graphs illustrate the deflationary characteristics of our local market. Despite the overall market trend to be down, there are pockets of strength in parts of the South Bay.
Manhattan Beach is the only city that has seen an increase in year-over-year prices with a modest gain of 4.4%. Despite sales price recovery, the Manhattan Beach real estate market remains troubled with significant increase in the number of days properties remain on the market (DOM)-88 DOM versus a long-term average of 39 DOM. Also troubling is the drastic reduction in final sales prices versus original list prices, which has dropped to 82.4% from a long-term average of 91.3%. An increase in sales volume due to marked price reductions from listing values does not a recovery make.
Hermosa Beach prices are deteriorating at an alarming rate (37.5%) with transactional volume moderately trailing its long-term average. Homes remain on the market for an average of 92 days, up from an historical average of 39 DOM. Despite falling prices and extended periods for properties remaining on the market, final sales prices are only modestly off from both original and final list values, 90.5% and 95.0%, respectively. Another positive sign for the Hermosa Beach real estate market is that the market value of transactions is well above the downward sloping regression trend line.
The Redondo Beach real estate market is the most vibrant of the coastal South Bay area, with 3-month average sales prices clearly trending upward from a low in March of this year. With overall market transactional values well above the regression line, persistently higher price movements could indicate we have seen the bottom in this market. It is still premature to declare such a condition, particularly as year-over-year sales prices are down 8.5% and average DOM is just over twice the historical average.
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