Prices Rise Despite Pandemic

Quite a year! Soon we’ll have to do a wrap-up on 2020. But, for today it’s going to be November 2020 versus last year, (November 2019) and versus last month (September 2020).

Let’s start with the big numbers. Over all, total sales in the Los Angeles South Bay for November came in at just shy of $880M, 9% off from September. One could easily consider that drop a seasonal variation as we move into the cold months.

Compared to November 2019, total sales dollars for the combined areas of the South Bay were up 25%. Much of that is making up for sales that didn’t happen during the confusion of the first shutdown this year. Now that things are more stable, we’re seeing a lot more come on the market. Nearly everything coming on the market is selling, and at good prices.

Harbor

The star of the month is the Harbor area with a 42% year over year improvement in sales dollars. Units sold were up 26% Y-Y and median sales price was up 13%. This is a big boost for the San Pedro-Carson-Long Beach area. The increased action and the increased price, outpaced the rest of the South Bay by huge margins.

Generally speaking, the Harbor cities have entry level homes. Those are being bid up dramatically by buyers who newly qualify for purchase loans because mortgage interest rates are now down in the 2-3% range. I suspect there are more than a couple of investors are mixed in there, too.

Palos Verdes

The Palos Verdes peninsula presents an anomaly this month. November compared to October universally shows a seasonal decline in the 1-10% range, but PV dropped 27% in dollar volume. Looking deeper we see the M-M median sales price has dropped by 13%, while neighboring areas have remained within 1-2% of last month’s median price. Monthly sales volume also plummeted by 15% versus an average of 4% down for other areas. Year over year values are all in line with the rest of the South Bay, by PV seems to be taking a beating from the pandemic.

Beaches

The Beach, by comparison to PV and the Harbor, had a boring November. Volume was down from October by 9% and median price off by 2%. Total dollar sales fell from October by 9%. All was well within seasonal expectations. Looking at 2020 over 2019, the number of sales was up 1% and median price was up 3%, leaving a tidy 11% increase in Y-Y total dollars sold.

Inland

Inland cities sales volume for November dropped off from last month by 3%. It should be noted that October volume was already down by 10% from September. Median sales price declined a mere 1%, while total sales dollars were off by 3%. Minor drops given seasonal impact. Looking back to last year, the Torrance-Gardena-Lomita area showed respectable middle-of-the-road growth. Sales volume was up 12% over 2019. Median price was up 10%. Those increases created a total sales dollar increase of 25% above last year.

Not bad for being in a pandemic. We’re left with two questions to look closely at for the year end report in January: “What’s happening with values on the Hill?” and “What and who is driving the 42% annual increase in sales dollars for the Harbor?” We’ll be back with more on that in our next post.

Not bad for being in a pandemic. Existence of a vaccine should relieve the fear keeping many people away from buying and selling during the coming months. The Federal Reserve Bank has indicated that interest rates will stay down for another 12-24 months. Everything points to a growing confidence over the winter and a booming market in the spring.

The High and the Low

The Los Angeles South Bay is a very diverse set of communities. To show you the breadth of that diversity, let’s take a quick look at the highest priced sale for November, versus the lowest priced sale.

On The Strand in Manhattan Beach a 6025 sq ft house on a double width lot of 6927sf sold for $17,750,000. The listing agent bills this property as a perfect opportunity to build a world class home of over 11,500sf of living space. The sold price per square foot of residence is $2,946.

On Ackerfield Ave in Long Beach a one bedroom one bathroom condo of 641sf sold for $205,000. Per the listing agent the home boasts a community pool and laundry facility, with one carport plus storage. The sold price represents a rate of $319 per square foot.