The holidays are behind us now. So too, is another year. For many people, the end couldn’t come quick enough. The South Bay real estate market continued being pulled down by what seemed to be an unrelenting gravity. As difficult as it was though, there are, thankfully, signs of life in a number of the neighborhoods. The tightening of credit since late 2007 definitely shook up the market as manifested in far fewer sales and reduced sales prices. Nonetheless, some areas are rebounding and may portend a sign of renewed life.
For starters, the number of homes sold increased in a significant number of the areas within the South Bay. In fact, 28 of the 34 sub-areas within the beach cities and in the Palos Verdes cities had the same number of sales or more. Many local industry experts expressed initial concerns that the sales were all at discount prices. As the year was kicking off, this seemed to be the case. Fortunately, as the year came to a close, roughly a quarter of the areas had median home prices about the same or higher than in 2008. Specifically, eight of the areas have rebounded from the depths of last year and the beginning of this year.
As encouraging as this is, every single area remains shackled with prices well below their peaks of just a few years ago. The vast majority of areas have current median sales prices that are commensurate with 2003 to 2004 prices. A few areas may have 2004 to 2005 prices, but it is clear that the market adjustment triggered by the credit crunch of late 2007 dealt a blow to home values. When looking at the fall from the heights of the pre-crash years, one can see that over half of the 34 sub-areas of the South Bay have seen median sales prices drop by 20 percent or more.
The areas that have recovered the quickest thus far, perhaps not surprisingly, are the Manhattan Beach Sand and Hill sections. Both have median sales prices within 10 percent of their peaks. The two most challenged areas are West Palos Verdes and the area in Redondo Beach west of PCH.
Tony Cordi is the owner of Beachtime Realty, serving the South Bay since 2007. He specializes in beach properties across the South Bay and Palos Verdes. Tony has helped several clients identify properties where they can add value by remodeling or developing the property.