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Prices are up, Inventory is down, but the Summer Selling Season Gives Buyers Hope

Let’s face it, if you are a buyer looking to move to Palos Verdes Estates, and you don’t have over $2 million, it’s a tough market out there.  The same goes for buyers in Manhattan Beach, Hermosa Beach, and increasingly Redondo Beach.  As for the beach cities, there are at least several lower priced options including condos and town homes that will get you location, views, and that coveted beach zip code many buyers are looking for (may I recommend 446 Palos Verdes Blvd) But if you don’t want to hear your neighbor’s toilet flush or their phone ring, buyers looking to “the Hill” are facing steep competition at the lower entry points to each neighborhood.

Taken as a whole, inventory is down compared to a year ago throughout the South Bay and Palos Verdes.  On the other hand prices are up over 4% in the general area and over 10% in the most popular neighborhoods.  If you are shopping at the entry point to any neighborhood, the competition is stiff, especially under $1.5m. However, there is an interesting trend recently reported by CoreLogic that we are seeing – rising inventory and fewer sales in the higher price ranges.  To illustrate this, look at Manhattan Beach where list prices are averaging $4.3m.  Compared to a year ago, available inventory (and months supply) has nearly doubled from 61 homes to 115 homes.  On the other hand, the number of closed sales remains steady around 31/month.  In Valmonte, where sold homes averaged $1.67m (3 month rolling average), inventory is down over 40% from a year ago and closed sales are up on a monthly basis.  Hmmnnn, are we starting to see signs of a bubble on the high end?

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2517 Via la Selva in Valmonte – ask $1,999,000, SOLD $2,067,000

Fortunately there is some hope on the horizon for those eager buyers as summer approaches.  In the past Valmonte has averaged around 12-13 available homes during the summer months . This summer bump is true for the beach cities as well.  But as prices climb, the buyer pool tends to shrink and homes sit on the market longer.  As a result, prices drop, typically as we head into the holidays and unsold inventory sits.  Is this what we have in store for our market?  Only time will tell, but for now, my buyers are still looking for that perfect Valmonte home for their family and there isn’t much available for them.

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101 Via Colusa – ask $1,250,000; SOLD $1,352,500!

If you are thinking of buying or selling a home, please contact Kyle Daniels, Ericson Beach Real Estate, 310.483.3998 or kyle@kyledanielsrealestate.com for a confidential consultation.

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Did the top end of the market peak?

Warning, if you don’t like charts and numbers, you might not like this post. . . . my apologies.  As a trained accountant, I like numbers.  I like charts even more.  Recently, I’ve been reading about and starting to notice a little change in the real estate market.  While the entry level price point in most neighborhoods is still white-hot with busy open houses and multiple bids, the top end of the market is not nearly as crazy.  In fact, there are signs that prices may have hit their peak.

With all the data available, how can we measure craziness?  I like to look at absorption rate, measured as months supply, to gauge the temperature of the market.  In the chart below, I assumed $2 million and above represents the top of the market.  Now this may be more mid-market in Manhattan Beach, but in Palos Verdes Estates, Redondo Beach, and Hermosa Beach, this is somewhat of a dividing line in the single-family real estate market.   The chart below shows that compared to a year earlier, the months supply has increased by at least 30%.  In the 4 cities in the chart, this is a direct result of inventories in the $2m plus price range nearly doubling, while the number of closed sales remains mostly flat.

Using the same examples as above, but looking at the price range of $1.5-1.999 million, it’s a different story.  Month’s supply in this price range has dropped, year-over-year, to 2 months supply or less.  Certainly, rising prices hasn’t helped categorically, but I think the reality of there being more buyers than supply of homes is a better explanation for the drop.  The other thing to consider is that in this price range, many homeowners are more likely to be longer term owners and less likely to be looking to move, therefore supply is restricted in this category.

The same goes for the $1.2m to $1.499m price range.  Like its cousin above, month’s supply hasn’t changed much on a year-over-year basis.  Again, this suggests there are far more buyers in this price category relative to the current supply.  I suspect that the multiple bids and heavy competition will continue in this price range until there is a significant change in the market or interest rates jump significantly.

There are some obvious things to point out in all of the charts above.  First, there is market seasonality.  As we are currently starting to see, there is typically more inventory in the spring and summer months compared to winter and fall, usually dropping to a low around the holidays.  I expect that trend to continue this spring and summer; however, it will be interesting to see what happens.  For now, interest rates are low so that should continue to motivate active buyers.  But what I am really curious to see is if the high end market plateaus, and if it will it spread to the lower price categories?  It’s anyone’s guess, and at some point, it’s going to happen.  When is the big question. . . .

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Where did all the sellers go?

So we’re flying out of winter and into spring, and by now we should be watching home listings rise like Daffodils with thoughts of new neighbors and summer barbeques lifting our spirits.  The part about Daffodils and BBQ’s is on target, but the part about homes for sale – nope.  Currently there are only 5 homes on the market in Valmonte – Lunada Bay, Hollywood Riviera, and other parts of the hill aren’t much different.  2 of the current homes are perched above the canyon on Via Alondra and aren’t the most kid friendly homes, and the other 3 require a small mountain of cash to call your own – although they are quite nice homes worth every penny.  So why isn’t anyone else selling?

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3716 Via la Selva recently listed for $2.45m – former residence of Joey Buss of Lakers ownership fame (maybe there were too many Lakers fans in the neighborhood asking him why the team is in the tank?)

If you’ve been following along with my posts, 2015 was a great year, and I would normally expect that to trigger new sellers looking to take advantage of the higher prices.  For the last 2 years inventory of homes for sale has been hovering around 8-13 homes with a high of 18 in the fall of 2014.  But inventory has been in a steady decline, both here in Palos Verdes Estates and the surrounding communities since September of 2015.  That’s not slowing buyer demand.  Interest rates are at or below 4%, and people are out looking for homes.

Why isn’t anyone selling?  That answer to that question is like the snake eating it’s tail.  Without new inventory, would be sellers don’t have a place to go.  In turn, the homes that are for sale are being being driven up to valuations that make it hard for people to make the jump to a new home.  As a result we’re seeing homeowners staying put, choosing to remodel and upgrade their existing homes instead of moving.  I don’t blame anyone for staying.  I’m not planning on leaving anytime soon – we love it here and the kids are not too far off from being immersed in school.  For those that are considering downsizing, the process is a bit easier, but lower priced homes have even more competition and in most cases are seeing multiple offer situations.

Now maybe this is all for naught and there are actually lots of sellers in the shadows waiting until summer to sell?  I personally know of a couple people holding off until school’s out, but that won’t make up for all the demand.   As for the rest of our Valmonte neighbors, please let me know if you are thinking of selling – I have several families that want in on our great little neighborhood.

See you in the neighborhood – KD

 

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3411 la Selva Place – my personal favorite.  Asking $2.75m for a 17,000 foot double lot with pool, guest house, and lots of charm – but you need to bring your hammer for this one – it needs some work.

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Mid February Valmonte update: New listing, closed sale, accepted offer, and price drops

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4208 Via Valmonte – Asking $1,140,000

We’re over halfway through February and Valmonte is slowly waking from a winter slumber.  This past week one new listing came on the market – 4208 Via Valmonte, a 3 bedroom, 2 bath, in 1625 square feet and priced at $1,140,000 ($702/foot).  This is a well kept house with pleasant low maintenance landscaping. The house sits back from the street and once inside offers a welcoming floorplan.  The house is mostly original so a new buyer would likely want to spend some money on updates, but the house is move-in ready as it stands.  I expect this to sell quickly and at or over the asking price.

Price drops – Of the remaining 5 homes still on the market (and 2 accepting back-up offers), 2 recently saw price drops.  4240 Via Alondra dropped $100k to $1.399m.  This is a nice home with beautiful canyon views and 2,700 square feet.  4256 Via Alondra, an updated home a few doors away dropped to $1,715,000.  This too features a peaceful setting on the canyon and is updated throughout.  Why aren’t these selling?  Homes on Via Alondra, particularly on the canyon side of the street, don’t have backyards.  With the large number of families looking to move to Valmonte, these homes are at a serious disadvantage.  However, the views and price per foot are attractive and I’m sure a buyer will eventually step forward.

Accepted offer – after less than 2 weeks on the market 2544 Via Anita has an accepted offer.  It’s still contingent on inspections, but it shows a nicely updated home with over 2,700′ with 4 bedrooms on a nice lot has wide appeal at $1.795m. Assuming this closes at or near asking, this represents a nice ROI since this house last sold in November 2013 for $1.399.  After selling costs, that’s over a $200k return for a little less than 2 1/2 years.  Not bad!

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300 Via Alcance – Sold $1,609,000

What sold?  300 Via Alcance, after 208 days on the market, finally has a new family.  Originally sold in September of 2014 for $1.1m, the home was thoroughly updated, the master bedroom enlarged, and came back on the market at $1.899m in June 2015.  While the updates were high end, the $1.899m for 2300′ square feet was pushing the upper limits for a 3 bedroom house in Valmonte on an average sized lot.  After lots of patience and several significant price drops, it finally sold for $1.609m last week.

What’s Next?  We should see another cluster of Via la Selva homes close in the next month or so with 3025 PV Drive North and 2544 Via Anita closing soon after.  This should give us enough data to get an idea of how prices are looking, but so far 2016 is looking to be another good year for Valmonte real estate.  Now if we can just get a few more on the market . . . call me!

 Just for fun – It’s interesting to note the unusual groupings of homes on the market.  Currently, there are 3 homes on Via Anita, 2 on Via Alondra, and 1 on Via Valmonte.  (Via la Selva is so long, there always seems to be a couple there).  While mostly circumstantial, I have noticed a common occurrence that homes sell in bunches on the same street in a short period of time.  In late 2014, 6 came on the market on Via Solano.  In 2015, there was only one new listing.  I wonder what street will be the busy one this year?

SOLD: Second all-time highest sales price in Valmonte

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The pool at 2921 Via la Selva

I’m not sure if it’s just the weather, but things have been heating up in the Valmonte real estate market, and elsewhere for that matter.  In the last week, we have seen several good signs that will hopefully continue into the spring.  First, 2921 Via la Selva sold for $3,050,000 ($909/foot down from from $3,295,000 on February 9th).  This was the second highest sales price in Valmonte, ever.  The home is a Santa Barbara style Spanish ranch home on one level on nearly a half-acre.  The home was built in 2007 and features 4 bedrooms, 6 baths with entertaining space that opens to a stone patio and outdoor dining area, guest house, pool (you actually walk on stepping stones across the pool to get to the guest house and rest of the yard), and a rare 3 car garage.  All of this backs up to the Valmonte trail and is on one of the best streets in all of Palos Verdes Estates.  Pretty much a one of a kind Valmonte dream house.

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2544 Via Anita – 4 bedrooms/3 baths – $1,795,000

As for the rest of the recent activity, across the street from the dream house, 2928 Via la Selva, priced at $2,899,000 ($610/foot) is in escrow, and further east near the school, 3728 Via la Selva closed at $1,403,000 ($737/foot) on February 1.  If you are a buyer, inventory is still lean with only 6 homes on the market (3108 Via la Selva fell out of escrow and is back on), and 2544 Via Anita is the only new home to see.  As for 2544 Via Anita, it’s a nicely finished two story home with the living space and two bedrooms upstairs, with two more bedrooms and a family room downstairs that opens to a deck and nice yard.  It’s priced slightly below last year’s average price/foot at $1.795m ($650/foot) which is fair considering the recent updates and spacious living spaces.

I anticipate an improvement in inventory as we move closer to Spring, but for now, it’s slim pickin’s for the buyers out there and prime time to be a seller in Valmonte.

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The tree lined streets of the grove in Valmonte – a nice place to be when the sun is shining and the wind isn’t blowing!

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“40% of Crimes are Preventable”

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Chief of Police, Jeff Kepley, addresses over 100 PVE residents on crime and safety in Palos Verdes Estates

Thank you to our great Neighborhood Watch organizers who put together a very organized and informative meeting with Police Chief Jeff Kepley at the Valmonte School on Thursday evening.  For those who were there, I’m sure you agree that while it was a bit unnerving to learn about the recent burglary crime spree in Palos Verdes Estates, it was also a great opportunity to learn how we can help keep these scumbags out of our homes and beloved neighborhoods.  I will highlight some of the key points discussed during the meeting below, but in general the Chief shared facts about who has been committing these burglaries, how they are finding their targets, and what can be done to help deter crime at your house and in your neighborhood.  Chief Kepley was also very clear about one thing “if you are a burglar, we will hunt you down like a dog and put you in jail.”  Apparently the message has gotten out, as burglaries have declined significantly since the spike in December.  Kudos to the PVE Police Department!

Summary of the topics discussed:

  • Recent wind storms – use this as a reminder to get prepared for the next natural disaster.  Have a plan in place, with emergency food and water so the next time you are ready.
  • Bay Boys – the Chief made it clear that illegal activity will not be tolerated along our coastline and in the surf
  • Helicopter manhunt – RPV incident – helicopter was useful in helping locate 3 burglars using infrared heat sensing detectors
  • Communication – the PVE Police department is trying to quickly communicate useful information to residents using Nixle and Nextdoor (join now)
  • Burglaries increased from an average of 35-50 each year to over 80 in 2015, but it’s already on the decline for 2016
  • The criminals are operating like an organized cartel with 3-4 burglars to a team, being dispatched from a central crime boss.  They are driving nice cars and doing quite well stealing from our hardworking neighbors.  They must and will be stopped.
  • 40% of burglaries are preventable – lock your doors, keep valuables out of sight in your vehicles, and see more of the tips below.

How to prevent burglaries and crime at your home and in your neighborhood

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Mrs. Kravitz – we all need one!

Larry Manth, PVE Neighborhood Watch President, shared a great acronym to help us remember what we can do to keep our neighborhoods safe: LOCKLook, Observe, Call, and we all need a Mrs. Kravitz in our neighborhoods to keep an eye on things.  Chief Kepley reminded us that all these criminals have a map to your home on their cell phones – they will come to our neighborhoods, our job is to make it hard for them to succeed.  He suggested the following tips to keep burglars out of your home

Prevention Tips

  • Call 310-378-4211 to report crimes or suspicious behavior
  • Fortify your home – lock side gates, install better deadbolts, install exterior lighting with motion sensors
  • If you are away, make your home look occupied with lights on timers, leave a TV on, turn on a radio, have a neighbor check on your home
  • Close your garage doors and lock your doors
  • Install alarm systems with glass break sensors and infrared night vision cameras (if you have a camera system, you can register it will the PVEPD for help in providing information in the event there is a break-in in your neighborhood)
  • If you are on vacation, fill out a vacation alert with the PVEPD
  • Perform a home security assessment to see where your home is vulnerable
  • Hide your jewelry before the crooks steal it and melt it down never to be recovered (most break-ins only take 3 minutes)
  • Don’t leave packages on your front porch, make other arrangements
  • Install anti-theft dots (a personal microscopic id tag for your belongings) on your valuables
  • Cars: keep them locked and keep valuables out of sight, including your garage door opener

Audience Questions

  • Do we have sufficient staffing for the increase in crime?  Chief Kepley – the department relies on mutual aid from surrounding agencies and officers are on overtime for burglary suppression and surf spot checks
  • Are safes a good thing to have? CK – burglars have been known to steal 300 pound gun safes or rip wall safes out of the wall.  Good hiding spots are better than safes.
  • How can I get more involved? Join neighborhood watch, become a block captain; you can become a volunteer police officer; or volunteer in many other ways through the city.

In general, it’s important to appreciate that we live in a very safe neighborhood.  But don’t take our security for granted.  Take the necessary steps to ensure the safety of your family and your home.  Be prepared.  And if you have some extra time or energy, help a neighbor out, especially our older Valmonte neighbors who live alone and don’t have family nearby to look after them.

See you in the neighborhood!