After recapping the 2016 value areas in last week’s blog, I would like to point out some areas in the South Bay that I believe present solid value for 2017. If you are shopping in the below mentioned areas, then have no fear as they will have upside potential.
Redondo Beach El Nido east of Inglewood Avenue
Just like the 2016 value areas El Nido makes the list again! This time it is homes east of Inglewood Avenue. Now that west of Inglewood Avenue has had a nice run, buyers will sacrifice and jump to the other side of the street. It is already happening, but has potential to run even more in the next 12 months.
Just be careful and check the zoning and city! Some parts of El Nido east of Inglewood are in the city of Torrance but have a Redondo Beach mailing address. You want to make sure you are not paying beach prices for a Redondo PO that is really in Torrance.
South Hermosa Sand Section Property
The Sand Section in south Hermosa (south of Pier Avenue) is completely undervalued. North of the pier you can find Hermosa sales at over $1,000 per sq. ft. with regularity and prices much much higher to boot. Manhattan Beach is on another planet in terms of pricing and the gold standard for most wealthy beach home buyers. Some have warmed up to north Hermosa Beach, but very few wealthy buyers have been able to stomach Hermosa sand property south of the pier.
801 Hermosa Avenue was a wow sale back in 2015 for $4,015,000. Just recently, 322 Manhattan Avenue blew that out of the water with a sale price of $4,800,000 only two years later at close to $1,100 per sq. ft. A rising tide lifts all boats, especially when it is on the high end of the market. I believe homes, townhomes, and well, pretty much everything trading in south Hermosa these days could be a compelling buy at current comps since most sales are in the $800 per sq. ft. range ($700 per sq. ft. to $900 per sq. ft. covers almost everything). At some point, people will start rushing to this area since it offers so much bang for your buck relative to beach farther north.
Palos Verdes Estates Condos
It is hard to get a livable home for under $1,500,000 in PVE these days. Yes, single-family homes are much more desirable with big lots on the P.V. Hill, but there are some two and three bedroom condos in Lunada Bay and Malaga Cove that sell from $600,000 to $750,000. Landing a condo priced more than 50% off the lowest priced neighboring home while still being able to enjoy Malaga Cove Plaza or Lunada Bay’s quaint downtown, walk to the beach or bluffs, and still reap the benefits of the Palos Verdes school system is just too good of a deal. How can you beat that? You cannot, so get after the condos.
Perhaps these condos will never surge due most demand being from younger buyers and sleepy Palos Verdes is not a draw. They may, in fact, only slowly rise with inflation. But honestly, any type of buyer willing to “sacrifice” for a condo over a single-family will boost their cash flow immensely. If you can afford an entry level SFR, think about buying a condo and hanging tight for a few years. The saved expenses will grow your next down payment at hyper-speed (for a move-up home) while still living in the 90274.
Wishing you happy hunting and hoping to report good news next year that these areas grew nicely!