There were two recent closings in north Redondo that grabbed my attention this past week: 2119 Huntington Lane #B and 2413 Clark Lane #B. Both are new construction town homes, located in the “South Villas” and closed for $1,240,000 and $1,250,000 respectively….
These two closings are the perfect demonstration of what developers build in this area for two-on-a-lot town homes. Most of the new construction town home product delivered is 4-bed/3.5 baths comprised of 2,400 to 2,600 sq ft. That is the profitable sweet spot for home developers in this location known as the “South Villas”. After investigating that newer construction buildings (2009 construction and on), it showed these sales were records for the area.
So I decided to take this town home model favored by developers in the “South Villas” and see how the market has moved since 2013. The results showed that prices are up impressively.
Let’s take a look at some examples from the past few years:
2013 CLOSINGS
2607 Huntington Lane #A – $900,000
1910 Marshallfield #A– $938,000
2014 CLOSING
2115 Clark Lane #A– $1,019,000
2015 CLOSINGS
1810 Harriman Lane #A – $1,150,000
2313 Clark Lane #B – $1,200,000
2016 CLOSINGS
2119 Huntington Lane #B– $1,240,000
2413 Clark Lane #B – $1.250,000
After reviewing the statistics, one can see that a $900,000 sale in mid-2013 compared to a $1.25 million sale in early 2016 is a huge jump for resale state prices. And most importantly, it is supported by steady, rising sales. If you compare the first sale on Huntington from 2013 to the last sale on Clark from 2016, you can see there is a simple annualized ROI of 13% each year or a total ROI of 38.9% in just a three year time span. Assuming most buyers put down around 20%, you can bet that the owner on 2607 Huntington Lane has almost earned their down payment back twice (aka 200%)!
With land prices high and developable lots few and far between, I expect to see continued growth in this area and product type. With that said…outside of a major macro economic event, the rise of north Redondo town homes will not be slowing any time soon.