The real estate market has been on fire.
Pandemic-fueled demand for single-family homes, generationally low interest rates, and sparse supply have created the perfect storm in our local real estate market and across the nation.
Due to the mechanics of how the Coronavirus spreads, condos and townhomes were made less desirable in 2020 and were market laggards when compared to single-family home prices.
In my annual “Fearless Predictions” blog that I wrote the first week of January, I predicted that condos and townhomes would outperform the market in the second half of 2021 thanks to the vaccine, low interest rates, and affordability when compared to single-family homes.
If you would like to read all my predictions from eight months ago, you can find them here: “South Bay Real Estate: 2021 Fearless Predictions.”
If you follow my blog weekly or listen to my podcast, you would know that we began seeing a rebound in condo/townhome prices earlier in 2021, especially in prime areas. This week’s post is to show that those assets look like they are officially taking off.
Let’s explore two very affordable townhome sales in our local beach city markets, as recent examples that signal some very powerful price action.
Manhattan Beach Blvd Complex
The most expensive beach city in the South Bay by a long shot is Manhattan Beach.
If you look at the 2nd quarter median price of a single-family home in the city, it hit just over $2.9 million. Now look at this much more affordable Manhattan Beach Blvd. complex’s recent sale…
- 1140 Manhattan Beach Blvd. #C
- 2 beds, 3 baths, 1,200 sq. ft.
- 2021 Sold Price: $1,120,000
Now compare that to very similar units, one that sold in 2020 and another in 2019.
- 1140 Manhattan Beach Blvd. #E
- 2 beds, 2.5 baths, 1,197 sq. ft.
- 2020 Sold Price: $850,000
- 1140 Manhattan Beach Blvd. #A
- 2 beds, 2.5 baths, 1,197 sq. ft.
- 2019 Sold Price: $843,000
As you can see, the jump in price from 2019 to 2020 was a meager $7,000. That makes sense with the pandemic risks; however, it looks like current buyers today are ready to make up for lost time and take advantage of an affordable unit in the high-priced city.
The jump of $270,000 from 2020 to 2021 in the same complex is a whopping 31.7% increase in a little over a year.
It all makes sense in my mind.
No growth in the complex from 2019 to 2020, but today you throw in a vaccine, insanely low interest rates, and an acquisition price at a fraction of the median home cost in one of the most coveted beach towns in California, it is too compelling. No wonder it sold at a huge premium.
Look for more of these big price jumps in compelling condos/townhomes in Manhattan Beach.
North Redondo Villas Complex
You can see similar price movement upwards in the most affordable area of the most affordable beach town my blog covers – the Villas North submarket in North Redondo.
Below is another very recent sale to study…
- 2120 Dufour Avenue #10
- 2 beds, 2 baths, 1,227 sq. ft.
- 2021 Sold Price: $775,000
Now compare that to similar units in the complex, from 2020 and another in 2019.
- 2120 Dufour Avenue #16
- 2 beds, 2 baths, 1,227 sq. ft.
- 2020 Sold Price: $700,000
- 2120 Dufour Avenue #4
- 2 beds, 1.5 baths, 1,227 sq. ft.
- 2019 Sold Price: $650,000
This complex has a little more stable rise higher from 2019 to 2020 to 2021, but you can see how the $75,000 price jump is significant year-over year for such a low-priced housing option by the beach.
A 10.7% rise is certainly a strong indicator that more townhome sales in Redondo and throughout the beach cities/Palos Verdes could be forming.
With a 30% down payment, a buyer can own at a reasonable premium compared to what it would be to rent in the same complex. It is a tough option to pass up considering the price is far below the $1 million-mark, turnkey, and offers great schools/an easy commute.
All it takes is a few more complexes to see similar jumps in price and we are off to the races.
Conclusion and New Listing
Although condos/townhomes started rising a bit earlier in the year than I had originally predicted, it looks like the second half price surge is beginning to take effect.
There still needs to be more sales at higher numbers to confirm the run, and our public health needs to beat the Coronavirus Delta variant risk, but it sure looks like condos/townhomes will have their day in the sun to close out the year.
In other news, I have a brand-new listing in Rancho Palos Verdes at one of the most compelling PPSF offerings on the entire Palos Verdes hill.
Take a look…
- 49 1/2 Rockinghorse Road
- 3 beds, 2.5 baths, 2,816 sq. ft., 20,572 sq. ft. lot
- Asking Price: $1,599,000
This lovely canyon retreat is a fabulous option with breathtaking views tucked away at the bottom of a private cul-de-sac. I will be at the open house this Sunday if you would like to see the home (and me) in person.
Cheers.