South Bay home buyers are grappling with the challenges of high mortgage rates and tightening affordability. While these national trends have made homebuying more difficult across the country (and here, locally), the South Bay’s ongoing inventory shortage has supported strong pricing despite purchase challenges.
Fewer South Bay buyers run into fewer South Bay listings, and high-net-worth competitors.
This year, the market has been influenced by both expected and unforeseen factors, including the recent L.A. wildfires, which have added additional complexity to our market dynamics.
Now that we’re in March, it’s time to take a closer look at how the market is shaping up in 2025 with two months in the rear view mirror.
Let’s dive into the latest data, with a focus on active and pending listings and how they’re affecting home prices in key South Bay cities.
South Bay Active Sales and Pending Listings
The number of active and pending listings is a crucial indicator of the market’s current health. Active listings represent the homes available for sale, while pending sales reflect properties under contract (i.e., in escrow), signaling strong buyer interest and the potential for future closings. Together, these numbers provide insight into inventory levels and market activity.
By comparing the 2025 rolling three months MLS data (Feb-Jan-Dec) to the same period one year ago, we can gain insight into how demand is evolving in our local market.
Manhattan Beach
Active Listings: DOWN 13.9%
- Feb 2025: 68
- Feb 2024: 79
Pending Sales: UP 50.0%
- Feb 2025: 84
- Feb 2024: 56
Manhattan Beach continues to be one of the most desirable areas in the South Bay. The 13.9% decrease in active listings indicates tightening inventory, which is increasing competition among buyers. This scarcity is likely contributing to the sharp 50% rise in pending sales, signaling strong demand. Many of these buyers may have relocated early this year (as opposed to 2024) due to recent wildfires. As inventory remains low and competition intensifies, it’s clear that the Manhattan Beach real estate market is experiencing both high demand and limited availability, making it a challenging environment for prospective buyers.
Hermosa Beach
Active Listings: DOWN 11.1%
- Feb 2025: 40
- Feb 2024: 45
Pending Sales: DOWN 6.1%
- Feb 2025: 31
- Feb 2024: 33
Hermosa Beach, while sharing similar appeal as its neighboring Manhattan Beach (with a little less panache), has seen a slightly slower pace of pending sales. Despite this, the 11.1% decline in active listings signals that homes in the area are still moving quickly, pointing to continued demand. Although pending sales have decreased by 6.1%, Hermosa’s proximity to Manhattan Beach continues to drive interest, keeping inventory tight. Overall, while the market may be experiencing a slight cooling in activity, Hermosa Beach remains a desirable and competitive place to buy.
Palos Verdes Estates
Active Listings: UP 7.5%
- Feb 2025: 43
- Feb 2024: 40
Pending Sales: DOWN 26.5%
- Feb 2025: 25
- Feb 2024: 34
Palos Verdes Estates has seen a subtle shift in its real estate market, with a modest increase in active listings. While this uptick may offer some breathing room for prospective buyers, the decline in pending sales suggests a dip in immediate demand. The combination of higher inventory and lower pending sales points to a more measured pace in this area compared to the faster-moving Beach Cities. While Palos Verdes Estates remains an attractive option in the South Bay, its market activity is starting the year more subdued, reflecting a different dynamic than the surrounding coastal communities.
Rancho Palos Verdes
Active Listings: UP 70.4%
- Feb 2025: 121
- Feb 2024: 71
Pending Sales: DOWN 13.6%
- Feb 2025: 57
- Feb 2024: 66
Rancho Palos Verdes has seen a notable increase in active listings to start the year, with inventory rising by 70%. This surge in available homes hints at a BIG shift in the market, and a decline in pending sales suggests that demand isn’t keeping pace. This could reflect a more cautious buyer sentiment, possibly influenced by local factors such as land stability issues. While the area is far from inactive, the market appears to be moving at a slower pace compared to other parts of the South Bay, setting the tone for a more measured start to 2025.
The South Bay real estate market is off to a mixed start in 2025. Manhattan Beach is experiencing a fervent pace with strong demand and limited inventory. Hermosa Beach is seeing tight inventory and moderate pending sales, signaling Hermosa and Manhattan should continue to have solid-to-strong demand in 2025. Meanwhile, Palos Verdes Estates and Rancho Palos Verdes are experiencing increased inventory and drops in pending sales, suggesting a slower 2025 market pace in those areas.
South Bay Median Home Prices
The past three months have already shown some changes in median home prices across the South Bay. The four city datasets in this post are seeing strong price growth, with the exception of one city struggling significantly. Read below to find out which one.
Manhattan Beach
Median Price: UP 26.4%
- Feb 2025: $3,505,625
- Feb 2024: $2,772,500
Manhattan Beach continues to shine in the South Bay, with a notable 26.4% increase in median prices in the past three months. This sharp rise reflects strong demand, especially from buyers relocating from nearby areas like Pacific Palisades. The limited inventory is creating a seller’s market, where buyers are willing to pay a premium to secure a home in this highly desirable location.
Hermosa Beach
Median Price: UP 34.4%
- Feb 2025: $2,930,000
- Feb 2024: $2,180,000
Hermosa Beach saw the most dramatic price surge, with a 34.4% increase. This rise in prices reflects Hermosa’s growing appeal, fueled in part by the overflow of demand from Manhattan Beach. With its easy access location, tight inventory, and now record-high sale prices, Hermosa Beach has emerged strong to kick off 2025.
Palos Verdes Estates
Median Price: DOWN 20.7%
- Feb 2025: $2,220,000
- Feb 2024: $2,800,000
Palos Verdes Estates is experiencing a downturn, with a 20.7% drop in median prices. This decrease suggests that high-priced demand has softened in this area, and buyers may be more hesitant as interest rates remain elevated. The market cooling in Palos Verdes Estates indicates that it is currently less competitive compared to the Beach Cities, which have seen strong price increases.
Rancho Palos Verdes
Median Price: UP 13.0%
- Feb 2025: $1,784,000
- Feb 2024: $1,578,500
Rancho Palos Verdes saw a modest 13.0% increase in sale prices, reflecting a more stable and balanced market. This gradual price growth is surprising considering the rapid rise of inventory and slowing pending sales, in part to landslides and lower Covid demand from years past.
Conclusion
These first few months of 2025 provide a nice snapshot of the South Bay market’s start to the new year. The Beach Cities are experiencing strong demand, with limited inventory pushing prices higher and creating competition among buyers, with Manhattan Beach and Hermosa Beach benefiting from surge pricing. On the other hand, Palos Verdes Estates and Rancho Palos Verdes are showing signs of cooling, despite the positive, albeit surprising, median price data in RPV.
For both buyers and sellers, understanding these local market nuances will be key to making the best decisions in this fluid 2025 real estate market.
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]