The spring selling season is in full swing.
While the market is active and agents are busy, there still seems to be a shortage of homes for sale. Just when one week has a nice flow of homes, the next week fails to continue that trend.
Although the South Bay market could really use some spring inventory, there are still transactions happening that make noteworthy impacts on valuation.
On today’s blog I am going to cast a wide net on our South Bay submarkets yet again, to show how a recent closing affects current listings in the market today. Hope you enjoy the breakdown.
North Redondo Beach New Construction
I am due for a sole blog on North Redondo new construction townhomes, but today I want to highlight two recent closings which are good for sellers and spec developers.
- 4-beds/4-baths, 2,508 sq. ft., two-on-a-lot
- Closed: $2,050,000 (April 21st)
- 4-beds/4-baths, 2,540 sq. ft., two-on-a-lot
- Closed: $2,060,000 (April 17th)
These two closings show that two-on-a-lot spec townhomes can still sell for above $2 million. Recent comps like these will likely help buoy most of the market through the spring and early summer.
That bodes well for newer resales, recent new construction purchasers, and of course the many spec developers that fuel this North Redondo pocket.
There are two new over-sized spec listings that are taking those recent $2+ million sales and pushing the envelope on asking prices thanks to an added 500 sq. ft. and extra bed/bath.
- 5-beds/5-baths, 3,033 sq. ft., two-on-a-lot
- Asking: $2,395,000
- 5-beds/5-baths, 3,033 sq. ft., two-on-a-lot
- Asking: $2,410,000
From a price per square foot standpoint, these larger models are more affordable. But are buyers willing to spend another $350,000 for an extra bed and bath?
Only time will tell but these fresh comps certainly add confidence to the developers listing these new, over-sized options.
Valmonte Happenings
The belle of the ball in Valmonte to kick-off the start of April was an adorable one-level home in need of a little TLC in the heart of the neighborhood.
- 3-beds/3-baths, 2,189 sq. ft., 8,749 sq. ft. lot
- Closed: $2,405,000 (April 21st)
Thanks to its undeniable charm and potential, and of course the incredible squeeze of supply in Valmonte, this listing received multiple offers and went for $106,000 over asking to an all-cash buyer.
This home was in dire need of a new kitchen, bathrooms, and roof (and even moving walls to accommodate a 4th bedroom), however, this listing earned almost $1,100 per sq. ft.
Below is another example of a quick escrow and coming comparable:
- 4-beds/4-baths, 3,020 sq. ft., 7,405 sq. ft. lot
- Pending: $3,299,000
While this home sold just 18 months ago for $3 million even, it made a deal in under a week with an asking price just under that similar $1,100 per sq. ft. tag as the above Via Colorin example. And judging by the speed of the deal, it could go higher.
This brings me to two current listings. Obviously they are not apples to apples comparisons as the above sales, but they do hold weight from a valuation perspective.
- 3-beds/2-baths, 1,584 sq. ft.
- Asking: $2,120,000
4025 Via Solano
- 3-beds/2-baths, 1,510 sq. ft.
- Asking: $2,100,000
Both examples are asking in the mid to high $1,300 per sq. ft. range. La Selva has now been on the market for two weeks and Solano has been marketed for two weeks but cannot be shown.
That said, the market may push back on these asking prices since they are at such a major premiums to $1,100 per sq. ft. options, that they may not make sense.
All in all, these listings will sell higher than $1,100 per sq. ft. because of the inherent land value that will prop up their prices, however, these expensive price per sq. ft. asking prices could warrant price reductions thanks to the most recent comps discussed in the first section above.
Good Comp in the Tree Section
Last up is the hyper competitive Manhattan Beach Tree Section.
This will be a little easier for comparison since it is more apple to apples than the Valmonte example. Let’s look at a fresh closing.
- 5-beds/6-baths, 5,077 sq. ft., 4,804 sq. ft. lot
- Closed: $6,325,000 (April 21st)
This brand-new construction took a reduction of $174,000 from $6.499 million.
A $1,245 per sq. ft. price tag is an exceptional sign of strength for Tree Section valuation and a vote of confidence from Manhattan Beach buyers – or at least from this home buyer.
Clearly, the MB Trees are not slowing down which leads me to a current listing with a similar offering.
- 6-beds/7-baths, 4,835 sq. ft., 4,803 sq. ft. lot
- Asking $6,199,000
I have written about this listing in past blogs, but it was purchased as brand new construction 11 months ago for $5.985 million.
It was re-listed about seven months later at $6.299 million and remains on the market as you see today.
This listing now has a comp on the same street – it is just one-year used, a couple hundred sq. ft. smaller, and slightly more expensive – at $1,282 per sq. ft.
If buyers were not sure of its valuation with the competing new construction, they now have a pretty true comp just a block away.
If inventory stays low this spring, surely there will be a buyer that finds this pricing somewhat reasonable with few options and a fresh comp.
Time will tell if a buyer steps up soon and if it will eventually sell for above or below that $1,245 per sq. ft. comp.
Final Thoughts
All in all, be sure to study your most recent comparable sales (duh). As you can see from the above information, the market moves in real time and new comps can help or hurt any current listing on the market.
Study the market every week and you will be a successful home seller or buyer in this ever-changing South Bay home landscape. Good luck out there!