The South Bay real estate market continues its astounding run with low inventory and surging prices.
More than ever, sleepy suburban areas that offer affordability, space, and a backyard are the perfect example of what’s been in vogue in 2020 and has continued through 2021.
One of the clear South Bay pockets catching fire like never before is the Los Verdes submarket in Rancho Palos Verdes.
Before the pandemic, most South Bay residents (including some Palos Verdes residents) could not tell you where the Los Verdes housing submarket was located…and spoiler alert, Los Verdes Golf Course is NOT located in MLS area 173, aka “Los Verdes.”
When educating clients on homes in Los Verdes pre-2020, instantly I would get, “yeah, that is wayyyy too far,” or “we would never move to Palos Verdes.” Today, I am starting to get comments more like, “the backyards here are amazing,” “Hesse Park is so beautiful, and Los Verdes is right down the street, not to mention we are close proximity to Peninsula Shopping Center.”
Boy have things changed for buyers in just a year. The whole psyche of home shopping has been impacted by the Coronavirus pandemic and I think a lot of habits will stick around longer than one might think.
Los Verdes used to offer incredible value pre-2020 relative to the rest of The Hill and the beach cities. It has Palos Verdes schools, amazing parks, ocean views, and close proximity to Golden Cove and Peninsula Shopping Center. Sure, it was a sleepy place, but you could land a four bedroom home and close to 2,000 square feet in the low $1 millions.
That is no longer the case.
I want to explore two different streets to show you the incredible price growth in this once slow-moving real estate submarket.
Golden Meadow Drive Gapping Higher
If you have never visited the Los Verdes submarket, the best place to start is Golden Meadow. As you come in from Hawthorne Blvd., it can get confusing very quickly so the best move is to head all the way down to the western base until you hit Golden Meadow which borders Palos Verdes Estates.
Golden Meadow is a long straight street that eventually runs into Vista Grande Elementary. The homes here are very comparable, and the lots sizes are basically identical…not to mention the western side of the street often has decent views and great backyards.
I am going to run through a sale in each of the past three years (2019, 2020, 2021) to illustrate the rising demand for properties. Let’s start with 2019:
- 29318 Golden Meadow Drive, Rancho Palos Verdes
- 4 beds, 3 baths, 1,800 sq. ft., 9,048 sq. ft. lot
- 2019 Sold Price: $1,395,000
If you look at the pictures of this four bedroom sale, it is about as pandemic perfect as it gets. The backyard is immense, and the interior of the home is move-in ready.
Back in 2019, this home did receive multiple offers, but if you have been looking recently and see that a home with a space and lot like this go for only $1.365 million, it would blow your mind at the deals that could be had in Los Verdes just two years ago.
Next, I want to take a look at a 2020 sale:
- 28731 Golden Meadow Drive, Rancho Palos Verdes
- 4 beds, 2 baths, 2,016 sq. ft., 9,037 sq. ft. lot
- 2020 Sold Price: $1,230,000
In 2020, this “light fixer,” but move in ready property came to market. As you can see, there are parts of the home that need updating, however, many parts of the home had been refreshed over the past 10-20 years and the backyard/high ceilings were excellent amenities.
This one sold for $135,000 lower than the 2019 subject to an all-cash buyer…but there is no way $135,000 would get the home in comparable condition to the 2019 sale.
- 28711 Golden Meadow Drive, Rancho Palos Verdes
- 4 beds, 2 baths, 2,016 sq. ft., 8,977 sq. ft. lot
- Active Under Contract Price: $1,650,000
Finally, the big “wow” moment that we are seeing today is the latest listing on Golden Meadow that debuted last week and went to escrow shortly after. Again, it is a lovely home that is move in ready with past updates, but could still use some love. And, the backyard feels undersized compared to the comps above.
It received nine offers and the sellers decided to only counter the top three, which means it is easily going into the $1.7 millions and maybe even to $1.8 million if a buyer was extremely eager.
That will be a range of $350,000 to almost $600,000 jump in price against the two earlier sales above. Those numbers equate to price growth on Golden Meadow of roughly 28% to 38%.
That is simply incredible.
Lomo Drive Stunning Price Increases
While Golden Meadow is a prime street in Los Verdes, I would like to explore a more affordable option in the Los Verdes submarket – Lomo Drive.
This street is a little busier as a cut-through and offers more modest three bedroom homes on slightly smaller lots.
- 28015 Lomo Drive, Rancho Palos Verdes
- 3 beds, 2 baths, 1,607 sq. ft., 8,249 sq. ft. lot
- 2019 Sold Price: $1,143,000
This sale was a lovely three bedroom home that was move in ready and had an adorable little backyard. In 2019, it sold efficiently, but was unable to attract a full price offer. Looking back, to secure this home in the $1.1 millions seems to be an amazing buy thanks to low interest rates and the pandemic.
- 28040 Lomo Drive, Rancho Palos Verdes
- 3 beds, 2 baths, 1,894 sq. ft., 8,248 sq. ft. lot
- 2020 Sold Price: $1,180,000
A year later, another move-in ready home that could use a little more love came to market and sold for just $37,000 higher. Sure, it needed more updates, but it was a huge three bedroom home that offered 300 additional square feet of living space and sported a built-in jacuzzi in the backyard.
This was another option that sold efficiently but was unable to land full price, ultimately taking a discount to close the deal.
- 28103 Lomo Drive, Rancho Palos Verdes
- 3 beds, 2 baths, 1,334 sq. ft., 7,091 sq. ft. lot
- Pending Price: $1,179,000
Fast-forward to today, this small Lomo trust sale is blowing the two above comps away.
Although the property had fabulous landscaping, fruit trees, and a perfectly manicured lawn, this home needed to be rehabbed (or remodeled) in almost every aspect. It had not been updated in many decades. Not to mention, of the three example homes in this post, it was a much smaller home on a smaller lot.
The comps be damned…even if you offered in the low $1.2 millions (far above the comps), you would not receive a counter offer from the sellers on this one. This listing will eventually close in the high $1.2 millions or even $1.3 millions and still need loads of investment dollars to get it in comparable condition to the other sales on Lomo Drive.
If you were to include another $150,000 to get this home right, we could see a total investment here exceeding $1.4 million, and maybe even closer to $1.5 million.
That buyer would be willing to shell out nearly 30% more in price/investment for a home that is 300 to 600 square feet smaller than its counterparts that were move in ready just a year or two ago. That is wild.
South Bay real estate, California real estate, and real estate nationally have all been on a tear.
Sleepy suburban markets with affordable prices, space, and backyards continue to surge and don’t expect the market to slow down any time soon.
If you were to buy just a year or two ago in Los Verdes, you have likely more than doubled your down payment. That is an incredible thing to do in such a short period holding a single-family home.
While Los Verdes has surged higher, in some cases it is still a deal relative to other areas of the Hill and Beach.
Be sure to study the area to see if it is right for you and be prepared to compete, just like anywhere else.
Have a great weekend.