For this week’s blog I am getting back to sharing some intimate submarket happenings in our local South Bay home market.
Since most coverage the past few months has been bigger data, affordability reports, and interest rate hikes, I wanted to scan a few different submarkets to give you more breadth with depth this week.
I’ll dive into quarterly numbers next week and roll into more submarket info in the coming summer months.
Last week, I went through 15 days’ worth of closings to see if we could locate the “market shift” occurring in the numbers – to no avail: “What South Bay Home Closings are Saying about the ‘Market Shift”
From that post, you have seen that many escrows were made during a stronger time in the market so above asking at higher closing prices were still hitting the MLS. Today, however, we might be seeing some light softening…
Valmonte – Palos Verdes Estates
One city that accelerated with lightning speed during the pandemic real estate surge was Palos Verdes Estates.
Of Palos Verdes Estates’ four submarkets, Valmonte, most well-known for its proximity to the beach cities, trees-lined streets, and affordable pricing relative to the rest of the city was one of the hottest areas over the past two years.
Below, you will see that Valmonte may finally be slowing.
Seemingly every Valmonte property over the past 24 months had 5+ offers going hundreds of thousands over asking. The latest closings are showing it couldn’t last forever.
- 3315 Via Palomino, Palos Verdes Estates
- 3 beds, 2 baths, 1,823 sq. ft., 7,382 sq. ft. lot
- Sold Price: $2,000,000
Valmonte’s most prestigious street, in my opinion – Via Palomino, had a cute home that ultimately would be a covered land play to build something new came out asking $2.1 million. Six months ago it would have been a feeding frenzy. Instead, the listing took a $100,000 discount after a quick period on market.
- 4036 Via Opata, Palos Verdes Estates
- 4 beds, 4 baths, 2,465 sq. ft., 5,976 sq. ft. lot
- Sold Price: $2,350,000
The Via Opata/Pima/Cardelina blocks can offer some extra affordability due to its separation from the rest of the neighborhood due to Valmonte Canyon. A wonderfully-sized four bedroom home sold below $1,000 a square foot and took a few weeks on market to get into escrow – not to mention another $100,000 discount.
- 3101 Paseo Del Campo, Palos Verdes Estates
- 3 beds, 2 baths, 2,178 sq. ft., 12,204 sq. ft. lot
- Sold Price: $2,700,000
Another fast deal at just $1,000 over the asking price. This is a beautiful mid-century modern over-looking the Palos Verdes Golf Course, however, it is in a busy location sandwiched between Del Campo and The Drive.
- 4224 Via Pinzon, Palos Verdes Estates
- 5 beds, 3 baths, 3,362 sq. ft., 11,906 sq. ft. lot
- Sold Price: $3,750,000
A gorgeous remodel close to 3,400 square feet with five bedrooms is tough to find in Valmonte, let alone the whole Palos Verdes Estates. This one went “only” $51,000 above the asking price where we are used to seeing hundreds of thousands.
All in all, is Valmonte going down? Not really.
The two $100,000 lower deals feel like normal market dynamics and the other two $1,000 and $51,000 over asking are a muted compare to loads of offers and crazy high jumps in pricing, but solid results nonetheless.
We can call it softening because the market is not white hot anymore – Valmonte at worst is flatting out and perhaps heading back to normal.
What a nice change from the past two years!
North Manhattan Beach Sand Section
As mentioned in previous posts, Manhattan Beach is still very strong for “affordably priced homes,” which seem to be below $5 million and offer more room than a small bungalow.
There was quite a bullish sale in the 400-block of north Manhattan Beach.
- 469 30th Street, Manhattan Beach
- 4 beds, 4 baths, 2,834 sq. ft., 2,700 sq. ft. lot
- Sold Price: $4,200,000
Originally starting out asking $3.495 million, this adorable, designer-appointed home garnered multiple offers and went a whopping $700,000 over its asking price. This deal was made right on the cusp of the market turning, but regardless, this is quite a boon for the submarket.
Usually, we see big sales of new construction and close to land value sales, however, this sale may help lift all property values, both land and new construction.
- 420 31st Street, Manhattan Beach
- 5 beds, 6 baths, 4,502 sq. ft., 2,699 sq. ft. lot
- Sold Price: $5,856,550
This resale which was almost brand new sold in February 2022 for $5.85 million. If a 2,800 square foot home can get $4.7 million, should 50% more space and a newer build command more than a 25% premium?
- 440 31st Street, Manhattan Beach
- 5 beds, 4 baths, 3,600 sq. ft., 2,694 sq. ft. lot
- Sold Price: $3,700,000
This larger remodel sold for one million less than our subject but is larger by about 800 square feet. It will likely benefit from the 469 30th Street sale.
All in all, the 30th Street sale was a very special home with close attention paid to all of the details – it deserved to go over asking – but the premium pricing certainly shows there is demand left in Manhattan Beach for the right properties.
The summer months will be interesting to see if sales like this can continue.
Avenues – South Redondo Beach
Last on our submarket post today are The Avenues of South Redondo Beach.
Look at two new construction closings this year:
- 748 Avenue A, Redondo Beach
- 5 beds, 5 baths, 4,092 sq. ft., 6,106 sq. ft. lot
- Sold Price: $3,300,000
- 631 Avenue C, Redondo Beach
- 5 beds, 5 baths, 4,348 sq. ft., 6,081 sq. ft. lot
- Sold Price: $4,650,000
Both homes were 2022 new construction builds and about 250 square feet in difference on the same size lots. But that discrepancy in price…what gives?!
In the agent notes, you’ll find that the $3.3 million deal was made as a pre-completion sale back in January 2021 – talk about timing! The buyer likely saved themselves about $1 million during construction as they rode the market run.
So truly, the $4.65 million is the new construction comp on the MLS with multiple offers during its sales process and is the true market value for new homes on The Avenues.
But, how might that hold up with other sales? Well, a new off-market land sale offers some insight.
- 508 Avenue D, Redondo Beach
- 3 beds, 2 baths, 1,347 sq. ft., 5,008 sq. ft. lot
- Sold Price: $1,775,000
A 4,350 square foot home is going to cost most home buyers $500 a square foot to build and a total close to $2.2 million in costs. All-in, if the buyer chooses to build, it would be around $4 million with the above land costs.
That seems about right considering the holdings costs and two year or longer period of stress to get it out of the ground. The new owner would make a few hundred thousand in equity (and, a professional developer, much more).
Additionally, this land sale is smaller at 5,000 square feet compared to the 6,100 square foot lots on the new construction examples, which likely called for that discount/spread.
This land sale seems to suggest the Avenues market is on steady footing.
The submarket activity shows there is still strength in South Bay home pockets, but there may be some cooling.
Valmonte is leveling off and potentially returning to normal, while South Redondo seems to be holding up just fine. Manhattan Beach for well-priced, ”affordable” property that allows for more room than just a bungalow is in high demand.
Without question, our agents are feeling seasonality come back to normal – that means a slower paced summer. It will be interesting to see if inventory shifts and how prices might be affected in the summer season with both buyers and sellers leaving town in mass for the first time in two years.
Next week, I’ll report on South Bay second quarter home numbers which is always fun.
Have a safe and happy 4th of July weekend!