If you read my Q2 South Bay home market blog earlier this month, then you know lower home prices are not showing up in the South Bay data just yet.
I made a point in that post that a slow rise in inventory, higher interest rates, and tough comps might take a few quarters to reflect in prices – it is still early for the South Bay.
This week, I wanted to review the results of some quick deals at lower prices in our local home markets.
You might ask, how do you define a quick deal? In the second half of 2020 through early 2022, a quick deal meant hundreds of buyers through a home, multiple offers, and prices strongly over asking. Now, we are not seeing this trend happening as frequently.
I reviewed closed sales over the past 10 days from Manhattan Beach to Palos Verdes to see what was happening with the newest numbers.
This data is a small sample-size, but I believe it demonstrates what many real estate professionals are beginning to see as the often talked about shift in real estate markets across the country.
Are sellers in distress? No. Are buyers getting deals of a lifetime? Absolutely not.
The market is just different. Let’s jump into these quick sales so you can see what I mean.
Quick Home Deals
The Hill Section of Manhattan Beach is one of the most desirable neighborhoods in all the South Bay. During the pandemic, you could not purchase a home here for a reasonable price and countless deals occurred off-market.
That brings me to the property below – a quick Hill Section deal at a discount.
- 1026 1st Street, Manhattan Beach
- 4 beds, 6 baths, 3,868 sq. ft., 4,806 sq. ft. lot
- Asking Price: $5,250,000
- Closing Price: $5,150,000
After just nine days on the market, this 1st Street property made a quick deal. Last year, we could assume it would go higher…not anymore – this listing took a $100,000 discount fast.
Sure, this is not prime Hill Section real estate or completely updated, but those factors didn’t matter the past couple of years. Now they matter.
The property below is an ultra-cool mid-century modern home and expansive estate atop the east side of the Palos Verdes hill. At the height of the pandemic real estate rush in 2021, this is everything buyers would want – privacy, land, and an oversized home.
- 6110 Via Subida, Rancho Palos Verdes
- 6 beds, 7 baths, 6,646 sq. ft., 89,519 sq. ft. lot
- Asking Price: $4,999,000
- Closing Price: $4,675,000
After just 12 days on market, a quick deal was made at a $324,000 discount instead of multiple offers above asking price.
You can even see some quick deals in Hermosa Beach.
- 446 Bayview Drive, Unit 2, Hermosa Beach
- 3 beds, 4 baths, 2,199 sq. ft., 3,108 sq. ft. lot
- Asking Price: $2,825,000
- Closing Price: $2,750,000
An interesting note here: The listing agent included “OFFERS DUE FRIDAY 6/17 5:00PM” in the listing description as if there was a wild bidding war on this home. Perhaps there was a bidding war, but everyone was bidding at a lower price…or maybe there was only one buyer. This home made a deal after just two weeks on market with a $75,000 discount.
While last week’s blog featured the strength of North Redondo’s “tall & skinny” home marketplace over the past decade, it is not exempt from quick deals at lower prices.
- 1730 Morgan Lane, Redondo Beach
- 3 beds, 3 baths, 1,805 sq. ft., 2,509 sq. ft. lot
- Asking Price: $1,695,000
- Closing Price: $1,645,000
After just four days on market, a quick deal was made at a $50,000 discount. In my opinion, with a deal like this, the seller/agent likely felt slower demand and decided to roll with a quick offer – where the buyer was thrilled to get a discount off any asking price after the past two years of strong markets.
Closings in the Past 10 Days
What did the 57 new closings between Manhattan Beach and Palos Verdes reflect over that 10-day period? Take a look:
- Over-asking: 26 sales
- Under-asking: 24 sales
- At-asking: 7 sales
These numbers tell us there are still more over-asking deals being made than under which suggests our local home market still on sound footing – and remember, this is just over 10 days.
I hand-picked a few quick, but lower South Bay deals because that simply did not happen in 2021. Not to mention, none of these 57 sales were analyzed as a deep dive which is incredibly important.
Were the houses that went under-asking overpriced? Did over-asking sales intentionally list well below comps? These questions can only be answered in a deep dive for a specific client’s home search or sale.
Sales are now happening differently, but the data is still sound. It will take a few quarters to show up in the data.
Anecdotally, agents and news sources are talking about the shifting real estate market with fewer offers and sellers willing to take discounts.
We are now seeing some of those discounted closed sales in the South Bay – just not in mass.
Will we see more of these discounts? What will the inventory numbers, deals made, and median prices say at the end of the month? I will answer those questions next week and share my opinion.
Keep crushing summer and see you next month (a.k.a. next week) to share official July numbers to see if/where we are shifts in our South Bay real estate market.