Following is my summarized real estate market report for the 2nd quarter of 2012 for the Palos Verdes Peninsula and South Bay Los Angeles areas. I have been fortunate to sell or purchase 8 homes totaling $6.6 million on behalf of my clients through the first half of 2012, and I currently have 4 properties listed for sale or in escrow totaling $3.6 million in sales, all of which I am the listing agent. See http://www.palosverdesliving.com for my listings.
2012 Second Quarter Market Report Palos Verdes Peninsula and South Bay Single Family Homes
The real estate market sales activity for the Palos Verdes Peninsula continued to improve during the 2nd quarter 2012, with overall sales volume up about 18% and the inventory of homes for sale down 36% compared to the second quarter 2011 sales, which is equal to only about 3 months of inventory. Pricing have started to stabilize, and buyers who can get financing 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 continuing record low interest rates.
Properties, on average, on the Palos Verdes Peninsula are selling for approx. 94% of list price, an improvement from the 91% of original list price last quarter. The average price per sq. ft. for Palos Verdes homes sold in the second quarter 2012 of $481 compared to the second quarter 2011, decreased approx. 3% overall, but varied city by city. Prices per sq. ft. are down approx. 20% on the Palos Verdes Peninsula from their peak in 2007 of approx. $600 per sq. ft.. 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. This market is now considered a stabile market by loan underwriters.
The total inventory of single family homes for sale in the beach communities of the South Bay Los Angeles is down approx. 47% compared to the prior year, the sales activity is up 10%, and there is only 2 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 have also been selling faster than the higher priced homes. Average price per sq. ft. for homes sold in the 2nd quarter 2012 for the cities listed above is down approx. 7% overall compared to the 2nd quarter of 2011.
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. 3.5%, a significant decrease from 3.9% last quarter. Rates for 30 year loans between $417,000 and $625,500 (conforming jumbos) are approx. 3.9% , and 15 year loans are at approx. 3.0%.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 $625,500) have an average rate of approx. 4.4%. All of these rates are at or near record lows. The spread in interest rates between conforming loans and jumbo loans has narrowed considerably over the last year or so as more banks are participating in making jumbo loans. Jumbo loans require a higher down payment of 25 to 30%. All rates above are APR rates as of 7/31/2011, and assume a 20% down payment, no points and a FICO score of at least 740.
Second Quarter 2012 Market Analysis for Palos Verdes Peninsula Condos and Townhomes
The average price per sq. ft. for townhomes and condos on the Palos Verdes Peninsula has increased approx. 2% compared to the second quarter of last year, and averaged $332 per sq. ft. during the 2nd quarter 2012. Average monthly price per sq. ft. during the last 12 months for condos and townhomes has fluctuated widely, between $279 and $366 per sq. ft.
The inventory of condos and townhomes for sale of 41 units at the end of the 2nd quarter of 2012 continues to fall dramatically from its peak in March and April 2011 ( a 53% decrease) .Sales volume for the quarter was also 31% higher than last year, which has resulted in a reduction to only a 2 to 3 month inventory of condos and townhomes for sale.