If you read news headlines about statewide and national real estate, then you have certainly encountered articles with opinions and data regarding the following.
- Low inventory of homes for sale in many areas.
- Buyer fatigue and some markets seeing slowing sales.
So, what do we make of it here specifically in our local South Bay markets?
Anecdotally, yes, we are seeing buyer fatigue and buyers becoming more patient.
And statistically, we have seen signs of sales slowing, but not because of weakness or less demand, but because there is just low levels of inventory and a dearth of new listings.
The lack of new listings the past two weeks made a lot of us here at Manhattan Pacific say: “Where the heck is the new inventory?”
I do not believe our local markets are slowing significantly like some claim in other areas of the country, but it is shocking to see the powerful supply/demand imbalances here locally.
Buyers are fatigued, and buyers are patient, but when inventory is low and continues to drop precipitously, prices continue to go up in a seller’s market.
Today, I pulled active inventory (before the closing of October) to show you just how squeezed home inventory is throughout the South Bay.
It is quite astonishing.
Palos Verdes Estates
- Today’s Active Listings: 24
- Lowest All-Time (January 2013): 29
The Palos Verdes Estates market is seeing huge demand and record low supply. As you can see from the numbers, it is at record low levels today, which has not been seen since January of 2013. It is truly a historic inventory squeeze in Palos Verdes Estates.
Rolling Hills
- Today’s Active Listings: 8
- Lowest All-Time (September 2021): 6
Behind the Gates has hit its record lows throughout 2021, and today, we are about as low as it gets. Typically, we will see inventory levels in the teens or 20s in Rolling Hills, but this is far from your normal market, and active homes on the MLS are few and far between.
Rolling Hills Estates
- Today’s Active Listings: 7
- Lowest All-Time (February/March 2021): 7
The Rolling Hills Estates market hit record lows this year and is currently sitting at all-time lows. We did see a squeeze close to today’s lows a few years back, but outside of that, Rolling Hills Estates inventory is normally much, much higher.
Rancho Palos Verdes
- Today’s Active Listings: 52
- Lowest All-Time (May 2021): 64
Currently in Rancho Palos Verdes, this month is expected to close and break the record low inventory level by a dozen homes. Before the May 2021 low (and some records set throughout 2020 too), Rancho Palos Verdes is used to its lowest level sitting at 94. That is amazing!
In the past, Rancho Palos Verdes almost always sat at least 100 homes on the market. Instead, we are around half of that.
Manhattan Beach
- Today’s Active Listings: 32
- Lowest All-Time (December 2014): 27
Manhattan Beach has seen its fair share of inventory squeezes. Recovering from the Great Recession, Manhattan Beach saw a time where it had one if its greatest price runs higher and an incredible home inventory squeeze.
Today, Manhattan Beach is approaching record low levels seen during the recovery, and we are only in October. The squeeze could break records as we approach the holidays.
Hermosa Beach
- Today’s Active Listings: 24
- Lowest All-Time (December 2014): 27
Hermosa Beach, similar to its neighbor Manhattan Beach, has seen times of tight inventory squeezes as well. Only this time, Hermosa is set to break its records in October.
To give you an idea of how fast some of these drops are happening, just last month Hermosa had inventory of 48 homes…and we have now been cut in half to 24.
South Redondo (90277)
- Today’s Active Listings: 21
- Lowest All-Time (December 2020): 42
South Redondo hit its all-time record low in December of 2020, and today, it is beating that record by 50%. Again, we are seeing inventory fall off a cliff in South Redondo compared to last month.
North Redondo (90278)
- Today’s Active Listings: 30
- Lowest All-Time (January 2018): 28
North Redondo has been in high demand for almost a decade as the most affordable pocket of all the Beach Cities by a long shot. It is not quite at a record low, but if you took out January of 2018, then this would be a record.
Conclusion
All in all, we are seeing an incredible time in our local real estate markets when it comes to inventory.
In many cases, low inventory records are made during the holiday season (November & December). Right now, we are breaking those records and about to head into the holiday season. The inventory squeeze, I fear, is likely to get worse.
My hope is last week was a slow time for new listings and this week is a respite due to the Halloween weekend festivities. Unfortunately, that might be overly optimistic.
With inventory as scarce as it has been in a generation, we might see slower sales, but prices likely still have nowhere to go but up.
Happy Halloween!
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]