We are just about to say goodbye to 2020 and start the new year. What an insane 12 months it has been.
Last year, for the conclusion of 2019, I wrote a blog titled, “The Best (and Worst) Performing South Bay Real Estate Markets of the Decade.” That sure was an interesting data-dive as we moved into the new decade.
With the unprecedented happenings this year, I thought we might as well look at how local submarkets performed amidst the Coronavirus pandemic.
As always, this weekly blog focuses on the Palos Verdes Peninsula and the beach cities of Manhattan, Redondo, and Hermosa Beach. There are 33 unique submarkets to be exact and I will breakdown the top five and bottom five performers.
Since December is not quite wrapped up, please note this is the rolling 12-month median price compared year-over-year ending in November of 2020.
Best Performing Submarkets of 2020
- Palos Verdes Country Club – Up 25.6%
- Manhattan Heights/Liberty Village – Up 24.8%
- Manhattan Beach Mira Costa – Up 24.5%
- Rolling Hills – Up 21.3%
- Palos Verdes La Cresta – Up 15.4%
P.V. Areas Shake Off a Decade of Underperformance
What a difference a year makes.
The Coronavirus had buyers flocking to homes with more space and privacy. After making the list for “worst performing market of the DECADE,” the Country Club submarket of Palos Verdes saw prices jump over 25% in 2020. What is even more shocking is that Country Club prices only grew 22% over the entire past decade if you read my post from last year.
Simple incredible.
You will also see that the La Cresta submarket on the P.V. Hill performed very well, with prices up over 15%. These two P.V. areas are rarely talked about and they had huge years thanks to the pandemic.
Affordable East Manhattan Beach Surges
Both submarkets of East Manhattan Beach surged over 24%.
“Affordable” is a relative term in Manhattan Beach, but both Manhattan Heights/Liberty Village and Mira Costa deliver on some of the most affordable homes in the entire city. Historically low interest rates paired with larger lots in this neck of the woods made for a perfect cocktail to send prices significantly higher.
Rolling Hills Prices Soar
Not so shockingly, “Behind the Gates” in Rolling Hills experienced climbing prices of over 21%.
This is the submarket within the South Bay that offers the largest lots by far, rural lifestyle, and the security of a gated city of only single-family residences and horse stables. It seems to be built for a pandemic getaway.
What’s more, Rolling Hills was the absolute worst performing submarket of the decade, only appreciating 8% from January 2010 to November 2019. And now a 21% yearly jump…wow.
To be fair, this is a small market where prices can be volatile during normal market cycles, but still, it shows you how the pandemic has thrown the real state market completely on its head.
Worst Performing Submarkets of 2020
- Redondo Beach South of Torrance Blvd. – Down 8.1%
- Manhattan Beach Manhattan Village – Down 7.2%
- Redondo Beach Mira Catalina – Down 6.9%
- Redondo Beach West of PCH – Down 5.4%
- Palos Verdes Malaga Cove – Down 3.99%
Malaga Cove a Surprising Underperformer
One of the most desirable areas of Palos Verdes Estates, Malaga Cove, quietly underperformed for the year down 3.99%. It is tough to explain this one especially with larger lots, views, and sizable homes found within this submarket. Nonetheless, the numbers do not lie.
Perhaps no one wanted to sell any of their prime properties? But I’d assume this is a short-term blip on the radar for the submarket.
In addition, the Rancho Palos Verdes Mira Catalina submarket struggled mightily, down almost 7%. Perhaps this is just too far for home buyers to drive during the pandemic? But if you know P.V., Mira Catalina is “far out there” compared to the rest of the South Bay and seems to have failed to attract buyers in 2020.
Manhattan Village Down
Manhattan Village down 7.2% seems to make sense. Much of the submarket is made up of PUDs and condos with attached walls and very small backyards.
Close quarters, tiny yards, and many units with little to no garage space…not to mention HOA amenities that were most likely unusable. Not a pandemic special and the numbers reflect that.
South Redondo Lags
Finally, South Redondo underperformed the most in 2020.
South of Torrance Blvd. and West of Pacific Coast Highway (PCH) submarkets were down 8.1% and 5.4% respectively.
Much like Manhattan Village, West of PCH just did not offer what buyers were looking for this year: expensive condos and townhomes. The same goes for South of Torrance Blvd., which would surprise you with how many townhomes are offered, as well as homes with smaller homes and lot sizes.
These two areas are priced at a premium compared to other markets, so the expensive price trade-off for a condo or home with a small backyard caused a pullback in values.
Maybe 2020 underperformance will lead to opportunity in these lagging submarkets as we head towards re-opening?
Only time will tell in 2021.
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]