If you scroll news stories, Instagram Reels, or listen to podcasts – it is hard to not get buried in the shifting home market reports across the country.
Without question there is a market shift occurring just by feeling out demand for listings if you are a full-time agent. That said, typically, residential real estate changes very slowly, especially to the downside.
Due to the emotions experienced by both buyers and sellers, the residential real estate market moves in mysterious ways.
A rising market, in my humble opinion, can accelerate faster than a slower market.
Why?
Buyers are willing to pay more due to lack of inventory, etc. while sellers are glad to accept an all-time high price. Both parties are happy, so deals are made quickly, and prices can move swiftly higher.
When it comes to the shift we are experiencing, seeing lower prices might take longer than some are expecting (or not at all) – unless rising interest rates truly crush affordability, among other factors.
While buyers seem to be more selective and patient for the right home at the right price, sellers still want to land that all-time high price. Many sellers are reluctant to take a lower sales price and are willing to wait for their price thanks to an emotional attachment to a home, or lack of sophistication since many individuals do not have the experience of buying/selling that often during their lifetime.
If you want to see better deals, at a lower price, it is typically a slower burn that takes time for sellers to wake up. This “stickiness” is why I believe shifting power to buyers will take longer than some people think.
Please read my June 9th post, “Hot Topics: South Bay Home Market Shifting & Rising Mortgage Rates,” where I cover Manhattan Beach, Palos Verdes Estates, Redondo Beach, and Rancho Palos Verdes inventory levels. This article demonstrates that inventory is still extremely low relative to historic levels.
That of course can change; however, we are not seeing it in the numbers just yet.
In fact, due to the shift occurring recently (as recent as late April / early May) there are still many escrows that are closing when deals were made during stronger market dynamics where sellers had all of the leverage.
The point I am trying to make is that many recent closings are hitting the MLS this week at high prices. That will embolden sellers to wait and create an uphill battle for buyers that do not have the benefit of time to wait out sellers.
This week, I am going to share closings over the past 15 days (as of writing this post) in Manhattan Beach, Palos Verdes Estates, Redondo Beach, and Rancho Palos Verdes markets to show what I mean.
Let’s get to it…
Manhattan Beach Recent Sales
In the 15-day trailing period, Manhattan Beach saw 11 homes close escrow.
- Five homes sold for above its asking price.
- Five homes sold for below its asking price.
- One home sold for its exact asking price.
All of the listings were on the market for less than two weeks – except for two over-priced listings that took 76 and 108 days on market and were the main discount takers to match market value.
There were a few six figure price jumps, but nothing too stunning. And, there was one luxury listing that took a $650,000 reduction (about a 10% discount) after coming out way too hot.
Palos Verdes Estates Recent Sales
In the 15-day trailing period, Palos Verdes Estates saw 10 homes close escrow.
- Five homes sold for above its asking price.
- Four homes sold for below its asking price.
- One home sold for its exact asking price.
All of the listings were on the market for less than two weeks – except for two, with one taking 16 days and still selling for over asking, while a luxury listing took a $2 million discount after being on the market for close to a year.
While a $2 million reduction on one luxury listing is important to take note, there were two examples of similar luxury homes selling quickly for a fraction of a discount. Additionally, the above-asking sales moved quickly with one going $500,000 over asking.
Redondo Beach Recent Sales
In the 15-day trailing period, Redondo Beach saw 27 homes close escrow.
- 18 homes sold for above its asking price.
- Five homes sold for below its asking price.
- Four homes sold for its exact asking price.
All of the listings were on the market for two weeks or less – except for three with each taking 16, 23, and 39 days to find a buyer.
Loads and loads of over asking closings in Redondo – this was truly the dominant force. Even the under asking sales were ever so slight and obviously rarer.
Rancho Palos Verdes Recent Sales
In the 15-day trailing period, Rancho Palos Verdes saw 21 homes close escrow.
- 17 homes sold for above its asking price.
- Three homes sold for below its asking price.
- One home sold for its exact asking price.
All of the listings were on the market for two weeks or less – except for five listings, with four of those five selling under 50 days.
This is the same story with over asking closings far outpacing lower than asking.
Conclusion
So, what do the past 15 days of closed sales tell us?
In my opinion, not much.
We must keep in mind that many of these deals were inked six to eight weeks ago. The shifting winds in national real estate and our local South Bay market is relatively recent development and these recent closings were deals made in a more confident market.
That said, you can see the uphill battle buyers will have to fight with recent over-asking comps on the MLS amid still historically low inventory in the South Bay.
If we fast forward another six to eight weeks, those newer closed sales will be more telling if a market shift is happening at an accelerated rate. If not, then you can expect the shift to move slowly thanks to the “stickiness” we see in a softer residential marketplace.
Happy Summer!