Major land movement on the southeastern side of the Palos Verdes Peninsula has been a national news story for the better part of 2024.
In Rancho Palos Verdes specifically, the Portuguese Bend and Seaview communities, have seen heavy rains over the past two years re-trigger ancient landslides that brought major destruction to the area in 1956.
Most recently, there have been utility companies discontinuing service and residents dealing with land shifting up to 12 inches per week in some pockets.
With many requests to speak about the real estate market here, I am going to share the latest news and how real estate sales are playing out in the neighborhoods. Please note that the real estate markets in these communities are fluid, both literally and figuratively, and that buying/selling real estate in a landslide zone is incredibly speculative.
If you are considering a transaction in a Rancho Palos Verdes market affected by the landslides, be sure to hire the right experts (including but not limited to: soils/geotechnical engineers, structural engineers, real estate attorneys, and an experienced local agent). Both buyers and sellers must proceed with the utmost caution.
Latest News in Portuguese Bend
In heartbreaking news for residents in the Portuguese Bend community, SoCal Gas shut off service to 135 homes due to compromised gas line safety. They were given just a weekend’s notice and then poof – their gas service was gone.
Ending gas service may just be the beginning as SoCal Edison has already cut power to three homes and has told residents that if power line poles experience continued shifting, then power could be discontinued as well. Thankfully, California Water Service continues to operate.
Residents in the Seaview community have seen street closures due to massive land shifts, and both Seaview and Portuguese Bend have seen some homes red-tagged. The Portuguese Bend Club recently had their paddle tennis courts demolished thanks to major movements rendering the courts unusable.
It is truly a difficult situation until, hopefully, the land movement subsides due to natural causes, city-installed water pump extraction of groundwater, and/or a major drought to dry out the land.
If you would like to learn more, you can study the latest news via L.A. Times articles and city of Rancho Palos Verdes meetings.
So how does this affect their real estate markets?
Well, besides the fact that some properties may not qualify for financing or insurance, there are new dynamics and comparable sales that change the market in an instant.
I will share a couple examples below.
Portuguese Bend Home Market
Portuguese Bend is a community with a variety of homes, estate sizes, and windy roads that make for comparable sales a complex undertaking not always fit for a blog post.
That said, if I were to illustrate the landslide effects on the home market, I believe the case study is best told through sales along Cinnamon Lane.
Flashback to 2022 just as the first season of heavy rains were upon us and the Covid housing fever was at its peak – I want to share a datapoint comp below:
1 Figtree Road
3-beds, 2-baths, 1,945 sq. ft., 36,062 lot
SOLD: $1,875,000 (January 2022)
This sale, bordering Figtree, Cinnamon and Narcissa, was essentially the market comp for similar homes/properties before land movement began after two years of heavy rainstorms drenched southern California.
Fast-forward to 2024 after two years of land movement issues and there are a few examples worth sharing to illustrate the pricing effects.
11 Cinnamon Lane
3-beds, 2-baths, 1,824 sq. ft. 29,470 lot
SOLD: $1,310,000 (May 2024)
16 Cinnamon Lane
4-beds, 2-baths, 1,994 sq. ft., 51,986 lot
SOLD: $800,000 (July 2024)
The first listing initially started its asking at a $1,750,000 price but was forced to cut to $1,499,000 after a failed escrow and ultimately closed over half a million dollars lower than the 2022 comparable sale, per-land movement.
The second listing also started its sales journey at a $1,750,000 asking price, cut to $1,500,000, then to $999,000 until it finally closed at $800,000.
Without getting into details or speculation, the land movement was an obvious factor in these discounted homes sales…there is just no way around it.
For reference, what forced the hands of these two listings above was an interestingly played quick sale. See below:
80 Narcissa Drive
3-beds, 2-baths, 1,937 sq. ft., 36,914 lot
SOLD: $1,018,888
This listing, rather than slightly discount from 2022 comps, it completely undercut the market by listing at a shockingly low price of $895,000 in late December 2023 attracting multiple offers and going above $1 million in just three days.
While we will never know the details of which properties were affected by foundation damage, utility issues, etc., it is clear the market at this moment is down somewhere between 30% to 60% from its highs based on these examples 1,900 sq. ft. 3-bed home examples surrounding Cinnamon Lane.
Seaview Home Market
Shifting gears to the Seaview home market, just a short ride on P.V. Drive South, that is another community affected by land movement.
What sticks out here most was the rush of inventory this pocket experienced through spring and early summer. Essentially, nine or 10 listings came to the MLS with only two or three closings. And the current listings are lingering…
For instance, there are three listings jockeying for position to attract the next buyer…
• 4319 Admirable Drive asking $1,499,000
• 4217 Stalwart Drive asking $1,499,000
• 3913 Admirable Drive asking $1,699,000
These all are 1,800 sq. ft. 3-bed homes that have undercut each other on pricing, either when newly listed or with competitive price improvements. And in this moment, none have found a buyer just yet.
The comps they will be compared to are 4005 Exultant Drive for $1,550,000 (June 2024) and 4121 Dauntless Drive for $1,728,400 (July 2024).
With the three properties competing against one another, it certainly looks like the same story of a market going down in value thanks to the unfortunate land movement risks.
And whichever property sells first, that will set the new comp…and one has to wonder…will the other two listings be able to pull off higher or lower sales? It is anyone’s guess.
Final Thoughts
The land movement affecting communities in Rancho Palos Verdes is so unfortunate. Not only is it devasting for some financially, but losing one’s home takes a significant emotional toll. Our hearts go out to the residents and hope that the city actions installing new water pumps helps to mitigate the land movement issues.
When it comes to the home market, it is clear that home values are lower.
Much like the stock market, homeowners/buyers really dislike uncertainty. And what brings more uncertainty than a continuous landslide?
Buying or selling in these communities is not for the faint of heart, and until the land stabilizes to zero or minimal movement, it is purely speculation trying to time a sale or purchase.
In conclusion, the land movement and property values are in the hands of Mother Earth.
Only time will tell if we see a bounce higher in property values or a continued decline.
Photo credit Brian van der Brug/Los Angeles Times
Richard Haynes
DRE: 01779425
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The Richard Haynes Real Estate ShowA leader in South Bay real estate for the better part of a decade, Richard thrives as an advisor to his clients with over $248 million in sales as a broker or investment principal at his boutique agency, Haynes. Richard is known for his keen local market insights which have been featured in the L.A. Times, The Street, and Forbes, along with his weekly South Bay real estate blog. [read more]