The Redondo Beach Pier



After I posted about  down payments on  home sales in Manhattan Beach,   a reader asked if I would do a similar post on Redondo Beach home sales. I apologize for taking so long but I've been out of town packing up my Mom's home so she can move back to the mainland... but that's another story.

Reviewing the  percentage of cash used for down payments on recent home sales has pointed out the difference in Manhattan Beach home buyers and Redondo Beach home buyers.  I was so intrigued that I'm going to post for Hermosa Beach  and El Segundo in a few days to complete the comparison for all the Beach Cities. 

North Redondo and Manhattan Beach are opposites in the Beach Cities real estate markets.   Manhattan Beach is of course the high end with North Redondo being the entry level.  In Manhattan Beach all cash sales made up over 20% of the market.  In North Redondo they were less then 10% and in South Redondo they were  slightly above 10% of closed sales.

 In North Redondo 80 single family homes closed escrow from October 1, 2009-March 7, 2010.  Of those 80 homes 6 were cash sales,  50 buyers put 20%  or more down while 18 buyers used either  VA or FHA funding less then 10% down.  In South Redondo 37 homes closed escrow during the same period.  4 were cash sales, 21 were purchased with 20% or more down and 10 were purchased using FHA loans.  In Manhattan Beach, of the 119 homes sold,  only one property sold using FHA financing, and 115 sold with more then 20% down.   




North Redondo:  Down payment %  for single family homes
















South Redondo: Down payment  % for single family homes


















**As with Manhattan Beach the figures are based on  single family homes...

Last week was supposed to be the official opening for 360 South Bay... but they weren't quite ready.  The pool and gym were open for viewing but not any of the units. 

The grounds looked great. The pool area is set up like a resort with  little cabanas in addition to lots of lounge furniture.  The gym had a number of  machines and was fairly good size.  The clubhouse is lovely.  As nice as the amenities are what will sell the complex is the units and the prices.

This weekend the Flats will open and next week the Courts will be open for inspection.  Last weekend there were not  large crowds.  In fact when I went over around 1:00 there were  not as many people as I had expected.  I expect there will be more lookers once the Flats and the Courts finally open.

Recently there has been  a lot of  speculation at our local consumer blog,  MBC  about where  the Manhattan Beach and the Beach Cities real estate market is headed.   While we have seen prices decline in the last year we still don't have a large number of foreclosure or short sale properties in either Manhattan Beach or the Beach Cities.   As we haven't experienced that perfect storm of massive  numbers of foreclosures along with high numbers of short sales,  property values are still higher then many expected. 

From September 2009 to today ( February 19, 2010) there have been 119 single family homes close escrow.   Of the 119 closed home sales 24 (20%) were all cash. 4 sales had less then 20% down,  26 sales had 20% down and the other 65 sales saw down payments in excess of 20%.  What was interesting is that not all the cash sales were upscale homes.  Cash sales were across the spectrum on price.  By the same token a number of Luxury  homes buyers leveraged their purchases with loans above the $1,000,000 maxi mun mortgage interest deduction figure.   There were 15 home sales over $3,000,000.  Of those 15 homes  4 sold all cash, 5 had down payments of 40% or more and the other 6 buyers put down  between 20%-30%.   A few of these folks may have been reaching on price but I'm guessing a number of these buyers were taking advantage of very low interest rates and are keeping their cash for future investments.

 Another interesting factor was the number of  buyers who got  a first  loan of  $729,750 and a second loan to make the total loan amount about  $1,000,000 to take advantage of the mortgage deduction limit.  A year ago lenders were not making second loans no matter how much money a buyer had as a down payment.  There were also a few folks who obtained new secondary financing  a few months after the close of escrow. 


I don't know about  the percentage of down payments in other zip codes but I would think that a market where the median price is well over $1,000,000 and  20% of all sales are cash sales is a market where most owners and buyers  are  financially savvy.  The bad news is that  I expect to see more foreclosures and short sales in the coming months as the California economy continues to be in trouble and mortgage rates get ready to move higher.   The good news  is that our local real estate market looks as if it will continue to weather the storm better then expected.

Hermosa Strand... old and new


After a very slow first half of the year Hermosa saw the number of home and townhome sales almost double in the second half of 2009.  There were 64 homes and 53 townhomes that closed escrow from July-December 2009.    Hermosa hasn't seen that many 3rd and 4th quarter sales since 2005. 

The Hermosa Beach real estate market has been a bit different then the other Beach Cities.  Prices continued  on the high side  for most of the year and inventory didn't move.  Most sellers were not lowering prices and   properties would  re-list over and over at the same price.  After July  changes in the real estate market forced sellers to adjust prices as more short sales and REO's began to sell at prices well under where competing properties were listed.   Units in the Moorings are a good example of how changes in the market  forced many sellers to rethink their pricing strategy. 


Hermosa has a number of Strand properties on the market.  There are currently 7 Strand homes for sale in Hermosa. Prices range from just under $4,000,000 to almost $16,000,000.   Over the last year 4 have closed escrow and 2 are pending.  While asking prices are similar to those in Manhattan Beach the final sold prices this year have been  lower then the prices on similar homes in Manhattan Beach.    This will be an interesting segment of the market to watch as some pricey new homes hit the market.


Hermosa Beach, like Manhattan Beach has little in the way single family homes that are new construction .  While there is  new construction most of the new homes have been built by private parties and are not going on the market.  There are few homes available that were built after 2006  which means that buyers will have to either build themselves  if they want new or buy an older home that has been extensively remodeled.  Even the townhome market is not seeing much in the way of new construction other then the project on 21st street. 


As the new year opens there are 48 homes and 32 townhomes/condos for sale.  There are 20 homes and 19 townhomes in escrow.  As of February 15, 2010 18 homes and 7 townhomes have closed escrow.  It's  looking like a better year for home sales in Hermosa Beach.


Hermosa Beach:  Sold July-December 2000-2009(click on graph to enlarge)


















Hermosa Beach: Sand Sold July-December 2000-2009














 

 

Hermosa Beach:  Valley Sold July-December 2000-2009

Hermosa Beach: Hills Sold July-December 2000-2009

For those of you who have been waiting to check out what 360 South Bay is offering keep next Saturday open.  The Grand Opening is planned for Saturday February 20, 2010 from 10:00 a.m.-5:00 p.m.  

The good news is that prices are lower then the projected prices I posted a few weeks ago.... although I suspect they may need to drop a bit more especially on the Plan 1 Sudios in The Flats.  Most folks are going to want a bedroom is they are going to spend almost $400,000 for a unit.    Location and price are  definitely going to be  issues for the development.  As Renee Moilanen pointed out in her column in the Daily Breeze last week  most of us know that there is a big difference between  living  in a beach community and Hawthorne.