North Redondo Beach Market Report - October 2008

For Sale Vs. Sold

You know all the media focus on how badly the real estate market is doing? Well the graph above is a reason why you have to take everything that they say with a grain of salt. North Redondo - and other South Bay areas - have been faring not too badly, when it comes to several key measures.

A steady continuation of the inventory reduction is occurring, along with a continuation of swift sales into the fall. Typically, we see a seasonal reduction in the number of sales starting around September. But that has not been the case. Even more promising is that the number of pending sales in October is still rather high, at 13. That means that we can logically anticipate that November will have at least 13 sales.

A personal observation is that Redondo Beach seems to be a favorite for first time homebuyers. Many first time homebuyers are looking to make Redondo Beach the location of their first home. As can be expected, it is due to the proximity to the beach, jobs, an excellent school district, the low crime rate, and of course, the reasonable home prices.

Days on Market - Sold Vs List Price (as a Percentage)

The average days on market indicates how long listings are remaining on the market before they are sold. One important point to note is that these numbers do not take into account those listings that do not end up selling, and instead indicate how long fairly priced homes will take to sell.

This is a perfect example as to why it is so important to price a home well when listing it on the market. Pricing a home too high can result in it sitting on the market for far longer than it should, costing the seller time and money.

The trend of Selling Price versus Listing Price in North Redondo Beach is following suit with what we are seeing in the Greater South Bay - selling prices below the listing price. Well into the fall, it looks like sellers are willing to accept larger discounts off of their asking price, probably because they realize that it will be more difficult to sell their home during the holidays.

Average Price - Sale Vs. Sold

In October, we see a jump from September in the Average Sold Price. However, October's Average Sold Price is still less than August's, demonstrating the continuation of the downward trend.

October's Average Listing Price is also on a downward trend, consistent with the expectations for the season. I think it is fair to say that we will continue to observe this trend, at least for the rest of the year.

Months of Inventory

Anytime inventory is more than 6 months, it is considered to be a buyer's market. 3-6 months, a neutral market. Below 3 months, a seller's market.

Even though the majority of the past 14 months have not technically been in a buyer's market in Redondo Beach, the state of the finance crisis weighs in on the situation when buyers and sellers come to the table. That is especially true for the fall and winter months, when there are fewer sales.

Summary

Last month, in my summary I stated that the North Redondo Beach market is showing indications of recovery. I still believe that, but let me clarify that statement: I believe we are seeing very preliminary signs of recovery. The inventory is steadily reducing through swift sales and a reduction in the number of homes hitting the market. Of course, the entire real estate market is affected by the financial crisis, which has looked more dire this past month.

But the reduction of inventory in the North Redondo market is significant. I believe that in 2009, this will help home values in the North Redondo Beach area to stabilize. It's simple supply and demand. Of course, before this can happen, consumer confidence needs to be bolstered.

Let me remind you that if you are currently able ready and able to buy a home, there is no need to wait for home values to drop further. Statistically speaking, if you plan on living in a home for more than 3 years, the value of your home should not decrease, and should in fact increase. Interest rates are very low right now, but you don't know where they will be in a few months. A 0.5% change in interest rate can equate to a 5% change in buying power. That is like money in your pocket!

If you are even considering a home purchase or sale, I would love to earn your business. My team and I have the knowledge and expertise needed to help you make an educated and comfortable real estate decision. We would be happy to arrange a no-obligation consultation with you.

Tiffany Wilson has lived in the South Bay of Los Angeles County for almost 10 years. She and her family enjoy the safety and rich family features that the beach communities of the South Bay have to offer, including a close and neighborly community. Also, having experienced an out-of-country move to California over 10 years ago, she is perfectly positioned to assist out-of-state and foreign buyers in their search for real estate in the South Bay and the additional surrounding communities of Los Angeles and Orange County. She can be reached directly at tiffany.wilson@shorewood.com or 310-503-0557.