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    South Bay Homes under $1 Million? Look to Redondo’s El Nido Pocket

    March 3, 2023

    By: Richard Haynes

    In a home market like California where affordability is at its second-lowest level in 15 years, you know that the South Bay is going to be even more expensive.

    Currently, the median home price across the state is $671,520.

    So if you can find a single-family home in the Beach Cities or Palos Verdes Peninsula for under $1 million, then for many, that feels like a huge score.

    It may seem impossible to find a home in that price range, but they do exist.

    I am going to share a submarket that still can deliver homes under $1 million, and then run some comparable sales to see if the investment might make sense for you.

    Redondo Beach’s El Nido Submarket

    First and foremost, I want to describe where the El Nido submarket lives on a map and then the pocket where we see homes going for below $1 million.

    The submarket in question lies in the 90278 zip code in North Redondo and the sub-area is essentially a triangle with 190th Street to the south, train tracks to the east, and Ripley Avenue as the hypotenuse to the northwest.

    This week’s blog will focus on Lilienthal Lane to the west all the way east to the train tacks with Inglewood Avenue cutting through this pocket. Here, you will find smaller post-war home on lots that total 5,000 to 6,000 sq. ft.

    Fixer 3-bed options, small 2-beds, and properties in close proximity to Inglewood Avenue are where you can still find single-family home under $1 million.

    Home Listing Below $1 Million

    I want to show you three home listings in the last six months that could have been scooped up for under $1 million.

    The first sale closed in November of 2022:

    2710 182nd Place

    • 3-beds, 1-bath, 1,034 sq. ft. 5,725 sq. ft. lot
    • Sold: $950,000

    This listing came to market in June asking $1,025,000 and made a deal in just three days. Strangely, it took three and a half months to close and at a discount of $75,000 to an all-cash investor.

    The property was in obvious need of repairs with a tenant in place – a tough sell to an owner-occupied buyer with financing.

    The second sale closed a day after Valentine’s Day of this year:

    2518 Spreckels Lane

    • 3-beds, 1-bath, 914 sq. ft., 5,254 sq. ft. lot
    • Sold: $950,000

    Yet again, we have a listing in June that was gobbled up very quickly at its $950k asking price. It took seven months to fall out of escrow and then found another buyer two weeks later to close all cash.

    The same drill here: a dated home with needed backyard work going for $950k yet again.

    Finally, the third option that is in escrow:

    2617 Fisk Lane

    • 3-beds, 1-bath, 918 sq. ft., 5,564 sq. ft. lot
    • In Escrow: $925k

    Another quick deal in just eight days. The house is darn clean, but just extremely close to Inglewood Avenue if you can handle the car noise.

    All in all, the options aren’t much, but they are something.

    If you can land in Redondo Beach, on a 5,500 sq. ft. lot and a 3-bed home for under a million, then as I mentioned it is quite a score. Good luck fighting off the all-cash investors.

    Do the Comps Make Sense?

    Now to the important part – do one of these homes make sense for you?

    Everyone is different.

    Know thyself is of the utmost importance. Investors will think differently than first-time home buyers, and all different types of prospective purchasing parties with crunch their numbers uniquely.

    Let’s explore bigger homes that are improved to compare beyond just sub $1 million options.

    There were two interesting sales that closed in 2022 that were in the 1,600 sq. ft. range:

    2712 185th Street

    • 4-beds, 3-baths, 1,677 sq. ft., 5,505 sq. ft. lot
    • Sold: $1,450,000

    2706 Fisk Lane

    • 3-beds, 2-baths, 1,640 sq. ft., 5,568 sq. ft. lot
    • Sold: $1,225,000

    Another 600 to 700 sq. ft. of added space compared to our below $1 million sales, which is a huge chunk of living area.

    Obviously, the 4-bedroom flip was most desirable at an almost $500k premium to our example homes. The home missing the that valuable 4th bedroom and updated from a couple of decades ago lost out on another $225k despite being the same size.

    All in all, a flipper is likely excited about the $500k margin to expand a $950k home by 600 sq. ft. and adding a 4th bedroom, but of course, that does not come without risk in this shifting market.

    A first-time home buyer might actually feel more comfortable spending another $275k to move right into the 3-bed $1.225 million sale over spending a lot of time and extra money on a rehab.

    And finally, the most recent sale that occurred this year:

    2703 185th Street

    • 3-beds, 3-baths, 1,410 sq. ft., 5,433 sq. ft. lot
    • Sold: $1,170,000

    This updated flip started its journey asking $1.349 million and took close to six months to close at a $180,000 discount.

    Without question, this sale shows the risks to flippers buying at $950k and leaves retail buyers wondering whether they should wait for lower fixer prices (below $950k) or gladly gobble up new homes/flips at lower prices.

    It is an interesting new comp that could be a one-time event or a sign of things to come.

    Final Thoughts

    First and foremost, you now know that single-family homes in a South Bay beach city neighborhood – that being North Redondo’s El Nido pocket – can be had for under $1 million.

    They are not easily acquired without cash and a fix-up plan, but they do exist.

    As a first-time home buyer, or any retail buyer for that matter, you have to look at the larger comps that are already rehabbed.

    Does it make more sense to avoid the headaches and purchase a more expensive option with financing? Or, do you have the dry powder, expertise, and time to remodel and expand?

    As an investor, any single-family residence around $1 million is going to be in high demand due to the lack of affordability, but are the margins big enough to cushion the risks of a shifting market?

    There are plenty of questions for the above buyers, including others with specifics like 1031 exchanges, real estate-only investors, and anyone else with specific purchase requirements.

    If you want some of the most affordable single-family homes in all of the South Bay, then El Nido is the pocket for you.

    And to conclude, I have a newly listed duplex. This is an amazing opportunity for a starter as an owner/user or investment property! Buy and fix it up for an amazing upside and let a tenant supplement your mortgage payment or as an investor you can get great cash flow with built-in equity. Priced well below $1 million – it is almost impossible to find a duplex at this price in the South Bay. Check it out this weekend!

    4621 W. 168th Street, Lawndale

    • 4-beds, 2-baths, 1,836 sq. ft., 5,800 sq. ft. lot
    • Asking Price: $749,000

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