Subscribe below to keep up with our latest updates

    Main Content

    South Bay Homes For Sale: August 2023 Inventory Check-in

    September 14, 2023

    By: Richard Haynes

    The number of homes for sale (or “inventory”) as real estate professionals call it, has been the topic du jour over the past few months.

    Thanks to golden handcuffs of low interest rates held by current property owners, too few housing units being added in southern California, and Millennials becoming the largest home buying cohort in the country, supply for homes to purchase is at an all-time squeeze in many local markets.

    Every few months, I like to cover home inventory metrics as this will likely give us clues into future market shifts.

    If you would like to read my past blog on inventory levels back in June 2023, you can read it here: “South Bay Home Inventory Squeeze

    In that post, I shared statistics on May inventory levels, while in this week’s post, I will focus specifically on August inventory. I think this is a nice data-dump before we explore Q3 numbers at the beginning of October.

    Demand is slowing due to sky-high interest rates. And, according to the Mortgage Bankers Association, mortgage applications fell to their lowest level since 1996 – nearly a three decade low!

    That said, low supply is offsetting low demand and plummeting affordability.

    It is an interesting supply/demand battle we have going on here in our local markets and across the state and country.

    Without further ado, let’s dive into the August inventory numbers in our local South Bay cities.

    Wide Net Data – The Entire MLS

    To start, we are going to cast a wide net and then slowly zero-in on the South Bay.

    Most professional agents here in the South Bay subscribe to the CRMLS, which also shares data with other MLS platforms throughout Los Angeles County and beyond. This allows for big, juicy datasets which are valuable to understand larger market trends.

    First, let’s explore active listings (inventory) in the month of May for the past five years in greater Los Angeles and beyond via the CRMLS data:

    • August 2019 – 101,979 listings
    • August 2020 – 76,485 listings
    • August 2021 – 61,509 listings
    • August 2022 – 55,812 listings
    • August 2023 – 43,019 listings

    Just as the May numbers illustrated, we are seeing the same incredible supply squeeze of homes for sale keep pace in August.

    Each year, over the past five years, we have seen inventory fall.

    Year-over-year, CRMLS has seen inventory drop by almost 23%.

    Just two years ago, we went from the white-hot market of 2021 with historically low interest rates, allowing many to afford homes, to inventory levels just two years later that are lower by 30%.

    We have seen the supply of homes for sale plummet in the past five years to a drop of over 57% from August 2019 to August 2023. What’s more, August 2014 through August 2019 saw higher inventory levels.

    These numbers are truly amazing to see such a massive supply squeeze considering interest rate headwinds.

    L.A. County Inventory – Remains Squeezed

    While the entire MLS is a huge dataset, it is not going to tell our local market story, and oftentimes has not had accurate or applicable numbers.

    The largest and best set of numbers in my opinion will come from refining inventory data to Los Angeles County. This gives us the big numbers in our local county, which will oftentimes mirror our South Bay markets much better.

    • August 2019 – 20,284 listings
    • August 2020 – 17,797 listings
    • August 2021 – 14,775 listings
    • August 2022 – 15,085 listings
    • August 2023 – 9,863 listings

    As you can see, inventory has been consistently squeezed over the past five years.

    Just like the CRMLS data as a whole, August 2019 to August 2023 has seen a drop of over 50% in homes for sale in Los Angeles County.

    There was also a large drop of 34% fewer homes year-over-year. In a nutshell, the L.A. County market is squeezed more than ever before.

    Let’s look at closed volume…

    • August 2021 – $15,628,021,928
    • August 2022 – $11,138,418,382
    • August 2023 – $10,641,172,760

    A total closed home volume of $15.6 billion is the third largest monthly closed home sale volume of all time in L.A. County.

    To see the huge drop off to $11.1 billion and $10.6 billion is significant, however, it is in line with previous L.A. home markets before the pandemic.

    Lastly, onto median price…

    • August 2021 – $827,000
    • August 2022 – $840,000
    • August 2023 – $865,000

    Despite high interest rates, the squeezed inventory levels have created upward pressure on prices. The above August median price numbers show nothing but rising median prices throughout the county.

    South Bay Inventory – City by City

    My advice to readers is to really study the L.A. County numbers to fully grasp this supply issue in our great L.A. area markets.

    From there, use that information in the South Bay section to study how your favorite Beach City or Palos Verdes Hill city is performing. I will briefly touch on each city, but won’t overdo it since I merely want to provide data to allow readers to come to their own conclusions.

    To give you the bigger picture, I am going to highlight the main markers of 2019 (pre-pandemic), 2021 (real estate craze & low rates during the pandemic), and 2023 (high rates & post-pandemic).

    Palos Verdes Estates Inventory

    The Palos Verdes Estates inventory levels continue to get smaller.

    • August 2019 – 98 listings
    • August 2021 – 54 listings
    • August 2023 – 44 listings

    Homes for sale in August 2023 are fewer than 50% of what is considered “normal” back in 2019.

    And, as you can see, supply is still constrained considering Palos Verdes Estates really benefited from trends to suburban neighborhoods. It is tough out there for buyers.

    Manhattan Beach Inventory

    Manhattan Beach Inventory is getting smaller as well when looking at the 2019, 2021, and 2023 numbers.

    • August 2019 – 158 listings
    • August 2021 – 81 listings
    • August 2023 – 72 listings

    Here we see another more than 50% drop in homes for sale in Manhattan Beach, as well as when comparing inventory in August of 2019 to August of 2023.

    And, supply today versus two years ago is even more constrained despite high rates. Manhattan Beach buyers have a tough environment just like those in the Palos Verdes Estates market.

    Rolling Hills Estates Inventory

    Rolling Hills Estates is a unique market. You have an array of home options, ranging from $6 million estates in Rolling Hills Country Club to condos under $600k in The Estates, so inventory movement can be tricky to capture at times.

    • August 2019 – 45 listings
    • August 2021 – 10 listings
    • August 2023 – 17 listings

    From the numbers, you can see that supply plummeted from August 2019 to August 2021 around 78%. Wow!

    So, it makes sense to see inventory climb a bit in 2023, but Rolling Hills Estates is still constrained to extremely low levels of homes for sale.

    Redondo Beach Inventory

    Redondo Beach is also continuing to demonstrate its inventory squeeze.

    • August 2019 – 185 listings
    • August 2021 – 118 listings
    • August 2023 – 103 listings

    There is not much more to say here other than it looks similar to Palos Verdes Estates and Manhattan Beach.

    That said, the drop in inventory is not over 50%, so there are a few more options in Redondo Beach compared to other areas, but make no mistake, the city is still short on homes for buyers to purchase.

    Rancho Palos Verdes Inventory

    The Hill’s most affordable city saw its inventory crash during the pandemic, and today, it is lower still.

    • August 2019 – 173 listings
    • August 2021 – 78 listings
    • August 2023 – 70 listings

    A drop, again, of over 50% from 2019 to 2021.

    Just this past month in August 2023 and Rancho Palos Verdes is squeezed even more so.

    Hermosa Beach Inventory

    Lastly, Hermosa Beach is the same story still – supply contains every way you look at it. The supply constraints are not as significant as PVE/MB, but it mirrors supply trends more of Redondo Beach’s action.

    • August 2019 – 75 listings
    • August 2021 – 50 listings
    • August 2023 – 39 listings

    Hermosa Beach is still close to 50% lower over the past five years. It is truly incredible to see all of these cities generally mirror one another in supply issues.

    Final Thoughts

    The numbers do not lie!

    Inventory (or the supply of homes for sale) is historically low. Despite surging interest rates crushing affordability for home buyers, the lack of supply is still winning out and pushing up home prices.

    While mortgage application suggest that demand is near three-decade-lows and affordability is at it lowest point since the bubble burst during the Great Recession, median price continues to go higher due to supply imbalance.

    There are just too few homes for sale. It is that simple.

    Skip to content