Palos Verdes Peninsula and South Bay Los Angeles Real Estate Market Report

Following is my 2010 Fourth Quarter Market Report for the Palos Verdes Peninsula and South Bay Los Angeles Single Family Homes 

The real estate market activity for the Palos Verdes Peninsula continued to slow in the fourth quarter 2010, with sales volume down approx. 25% compared to the prior year. Only Palos Verdes Estates had a sale volume gain over the prior year´s quarter. All of the other South Bay Beach cities had significant sales volume drops compared to the prior year´s quarter. This decrease is generally attributed to the expiration of Federal and California tax incentives to purchase homes as well as ongoing consumer concerns about the economy. Buyers who can get financing, however, are actively looking and aggressively offering where they see a deal. Sellers who are motivated to move are pricing their homes to sell. Buyers are taking advantage of significant discounts and record low interest rates.

PRICE CHANGES:

Properties, on average, on the Palos Verdes Peninsula are selling for approx. 97% of list price. The average price per sq. ft. for Palos Verdes homes sold in the fourth quarter 2010 compared to the fourth quarter 2009, decreased approx. 2% overall, but varied city by city. Prices per sq. ft. are down approx. 18% on the Palos Verdes Peninsula from their peak in 2006. The median price of homes in Los Angeles County also decreased 2.7% over the prior year´s quarter. Prices in the South Bay, however, have decreased much less than other areas in Southern California due to the relative few number of foreclosures compared to other inland areas.
The following is a chart of the sales price per sq. ft. for homes on the Palos Verdes Peninsula:

  Curnt vs. Prev Month Curnt vs. Same Month 1 Yr Ago Curnt vs. Same Qtr 1 Yr Ago
  Dec. 10 Nov. 10 % Change Dec. 10 Dec. 09 % Change Oct. 10 to Dec. 10 Oct. 09 to Dec. 09 % Change
Avg. Sq. Ft. Price 497 472 5.3% 497 517 -3.8% 483 493 -2%

The following is a chart of the number of homes for sale, sold, and currently in escrow ( Pended)  on the Palos Verdes Peninsula:

  Curnt vs. Prev Month Curnt vs. Same Month 1 Yr Ago Curnt vs. Same Qtr 1 Yr Ago
  Dec. 10 Nov. 10 % Change Dec. 10 Dec. 09 % Change Oct. 10 to Dec. 10 Oct. 09 to Dec. 09 % Change
For Sale 185 217 -14.7% 185 182 1.6% 217 208 4.3%
Sold 45 18 150% 45 45 0%     36 48 -24.5%
Pended 45 40 12.5% 45 28 60.7% 43 41 4.9%

 

INVENTORY – The total inventory of single family homes for sale in the cities listed above is significantly higher compared to the prior year but still averages only 4 months of inventory. For most of the last two decades, L.A. County has averaged an 8 month inventory. Homes in the lower end of the price range in the higher priced markets have also been selling faster than the higher priced homes.

The figures included in the table below are only for the three months in the 4th Quarter for each year:

                            
  Location 2010 4th Qt Sales Price Per Sq.Ft. 2010 4th Qt # of Houses Sold % Change from 4th Qtr. 2009  Sales Price Per Sq. Ft. % Change from 4th Qtr. 2009  Sales Volume   Months  Inventory
Palos Verdes Estates               $563      34        ( 4%)        17%           6
RPV, RHE & PVP                 431      70        ( 5%)      ( 44%)           5
Rolling Hills                 618        4           —            —          10
Manhattan Beach/Hermosa                 675      85           5%       ( 21%)           4
Redondo Beach                 423      91         ( 1%)       ( 23%)           3
Torrance                 376    173         ( 5%)       ( 13%)           4
San Pedro                 307      67         ( 1%)       ( 17%)           5

FINANCING   (See our web blog at http://mmegowan.activerain.com/ for rate updates):

Interest rates for Conforming Loans ($417,000 and below) are at approx. 4.9 %, up from approx 3.9 % at the end of last quarter.  Rates for loans between $417,000 and $729,750 (conforming jumbos) are approx. 5.0%. Conforming loans generally require a 20% down payment (less for FHA or VA loans). Interest rates on Jumbo 30 year fixed rate mortgages (loans in excess of $729,750) have an average rate of approx. 5.5-5.75%. Jumbo loans require a higher down payment of 25 to 30%. All rates above are as of 2/3/2011, and assume a 20% down payment, a 1 point fee and a FICO score of at least 700.hange
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The average price per sq. ft. for townhomes and condos on the Palos Verdes Peninsula has fallen about 8-9% the last few years,  Prices in a few projects , such as the Palos Verdes Bay Club have fallen more than this, but generally prices for condos and townhomes are now relatively stable. The Price per sq. ft. for condos and townhomes sold over the last nine months has held relatively steady, and showing no signs of additional declines.

  Curnt vs. Prev Month Curnt vs. Same Month 1 Yr Ago Curnt vs. Same Qtr 1 Yr Ago
  Dec. 10 Nov. 10 % Change Dec. 10 Dec. 09 % Change Oct. 10 to Dec. 10 Oct. 09 to Dec. 09 % Change
Avg. Sq. Ft. Price 340 340 -0.1% 340 375 -9.5% 342 369 -7.1%

 

As far as picking up condos in this market for less than construction costs,  the average price per sq. ft. paid recently for condos and townhomes in Palos Verdes has been approx. $340 per sq. ft.  I would not consider this price to be significantly less than replacement cost including the cost of the land. Homes in this area have fallen much less than other areas because there has been so little new construction here,  and much fewer foreclosures than in many other areas.  This market is now considered a stable market by loan underwriters.

The following is a chart of condos and townhomes for sale and sold the last two years:

 

  Curnt vs. Prev Month Curnt vs. Same Month 1 Yr Ago Curnt vs. Same Qtr 1 Yr Ago
  Dec. 10 Nov. 10 % Change Dec. 10 Dec. 09 % Change Oct. 10 to Dec. 10 Oct. 09 to Dec. 09 % Change
For Sale 52 55 -5.5% 52 42 23.8% 53 43 24%
Sold 8 8 0%     8 5 60% 9 8 8%
Pended 11 11 0%     11 11 0%     11 11 0%    

 

Over the last 3 months,  an average of 9 condo and townhome units have sold each month and as of 12/31/2010 there were 52 units for sale, which is only a 6 month inventory . The number of units for sale is actually down significantly over the last two years from it’s peak of 82 homes for sale in October 2008, but is up compared to this time last year.  Because of this, I do not believe that there will be any significant, if any, drop in prices over the near term.  With record low interest rates I believe that now is an incredible opportunity to buy in this market.

I have been very involved in the condo and townhome market on the Palos Verdes Peninsula. You can see that by “Googling” the search term ” Palos Verdes Condos”  and you will see that my website is the first listing on page one of the search results. To check out the various condo and townhome projects on the Palos Verdes Peninsula, see the following link on my website: PV Condos & Townhomes / Townhouses.  Each of these project descriptions have an analysis of recent prices paid for sales in each project.  You can also see the latest listings for condos and townhomes in Palos Verdes on my website at the following link:  MLS Listings – South Bay and PV

I hope that this Quarterly Real Estate Market update for the South Bay and Palos Verdes Peninsula has been useful. If I can be of service , please give me a call.

For more information about Palos Verdes and South Bay Real Estate and buying and selling a home on the Palos Verdes Peninsula, visit my website at http://www.maureenmegowan.com . I try to make this the best real estate web blog in the South Bay Los Angeles and the Palos Verdes Peninsula. I would love to hear your comments or suggestions.

 

 

About mmegowan

I am a realtor with Remax Estate Properties in Palos Verdes Estates. Visit my website at http://www.maureenmegowan.com
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