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    North Redondo Two-on-a-Lot Prices Are Resilient Despite High Interest Rates

    August 11, 2023

    By: Richard Haynes

    It has been a long time since I have covered new construction townhomes in North Redondo Beach.

    There are typically two types of new construction we see in the northern part of the city: 1) three-on-a-lot, and 2) two-on-a-lot developments.

    I like to focus on full-size 7,500 sq. ft. lots in the “Villas North” and “Villas South” submarkets of our local MLS.

    There are many variations to these new construction offerings. For example, there are smaller 6,000 sq. ft. lots that can produce two townhomes, or corner lots that yield units 20% larger than the average.

    I am going to zero in on two-on-a-lot new construction townhomes and share some comparable sale examples from the past 12 months.

    New Construction Comps – Six to 12 Months Ago

    Let’s start looking back six to 12 months ago.

    Remember, real estate began to slow in the second half of 2022 due to The Fed raising interest rates the fastest in the last 20 years.

    It is great to see the baseline. From there, prices are higher or lower when compared to our last six months.

    Below are the comparable sales…

    2314 Huntington Lane #B: $1,900,000 (Closed – 10/22)
    2314 Huntington Lane #A: $1,930,000 (Closed – 11/22)
    2117 Marshallfield Lane #B: $1,950,000 (Closed – 11/22)
    2117 Marshallfield Lane #A: $1,960,000 (Closed – 11/22)
    2117 Voorhees Avenue #A: $1,978,000 (Closed – 10/22)
    2117 Voorhees Avenue #B: $2,010,000 (Closed – 10/22)
    1911 Marshallfield Lane #B: $2,025,000 (Closed – 12/22)
    1710 Clark Lane #A: $2,255,000 (Closed – 8/22)

    I listed it out this way for an “eyeball test” so to speak.

    What’s clear from this list is that the high comp occurred closer to when rates were lower, while the rest of the comps ranged from $1.9M to about $2M. It’s simple.

    The median from the above list is $1,969,000.

    That’s what two-on-a-lots looked like from 8/2022 to 1/2023.

    New Construction Comps – Past Six Months

    Now let’s look at the eyeball test for the most recent six months of comparable sales.

    2016 Clark Lane #A: $2,020,000 (Closed – 02/23)
    2016 Clark Lane #B: $2,025,000 (Closed – 02/23)
    1911 Marshallfield Lane #A: $2,035,000 (Closed – 04/23)
    1723 Clark Lane #A: $2,050,000 (Closed – 04/23)
    2405 Pullman Lane #B: $2,060,000 (Closed – 05/23)
    2405 Pullman Lane #A: $2,060,000 (Closed – 04/23)
    2221 Gates Avenue #A: $2,100,000 (Closed – 07/203)
    2221 Gates Avenue #B: $2,103,000 (Closed – 06/203)

    You can see the earlier part of 2023 yielded lower prices, while spring and summer closings are higher.

    If you click some of the links, you will see that depending on certain tastes (unique to every buyer), some of the lower priced sales on Clark Lane could be argued as more desirable aesthetic and location.

    But as a result, there is a $75,000 up tick when looking at 2016 Clark vs. 2221 Gates.

    All in all, the median value comes in at $2,055,000.

    That’s an increase of $86,000 from the previous six months.

    Historical Information / Charts

    Since we are currently working on the transition of our new website, I cannot share past blog posts for you to see the growth.

    That said, as many longtime readers know, North Redondo has had a smooth march upwards in price appreciation for more than a decade.

    This holds true for new construction of two-on-a-lot townhomes, which have more than doubled in the past 10 years.

    With the exception of a few overpayments by eager buyers in 2021 – 2022, prices are generally higher today for new construction development despite the major headwinds of 7% mortgage rates.

    The North Redondo new construction 2-on-a-lot market is simply… Resilient.

    Final Thoughts

    North Redondo Beach is oftentimes the most affordable area of the beach cities.

    One might think 7% interest rates would hit buyers looking to this affordable pocket. However with limited inventory, developers continue to attract demand and hold pricing power on these desirable two-on-a-lot developments.

    While larger, poorly located, or three-on-a-lot projects are lingering, the coveted 2,500 sq. ft. detached new homes are still growing in price.

    Can anything stop the growth of North Redondo?

    It certainly is possible, but long-term, it is tough to bet against it.

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