This Week's Column (June 18-19)

Saturday, June 18, 2011

Here's the South Bay Confidential column that appeared June 18, 2011, in the Daily Breeze.

Supply and demand out of balance, except at the beach


by Dave Fratello

Summer officially starts next week, so let's take another look at how housing inventory is developing around the South Bay.

I provided the first snapshots of current inventory of single-family homes in February, right after the Super Bowl, and at the end of March. You normally expect a pretty steady upswing in both listing and sales activity in spring. One question is how balanced the number of new offerings is against the number of purchases.

Every market now offers more inventory than in early February, but one - Hermosa Beach - actually has fewer listings than in late March. Two of the most solid market regions, Torrance and the Palos Verdes Peninsula, are getting out of balance. Let's take a look at developments, market by market.

Beach Cities

Of all the South Bay regions we'll look at, Manhattan Beach and Redondo Beach compare most impressively now to their respective market states in late March. Hermosa seems to be solid, too, making the coastal areas looking to be in good shape as summer approaches. (Ready to hit the sand?)

With 83 listings, Redondo's got just two more actives now than on March 30, but there's also been a two-thirds rise in the number of pending escrows to 36. This means demand has closely tracked supply so far this spring.

Another way you see that balance is by dividing the number of pending deals by the number of offerings – at 43 percent, Redondo's got the best active/pending ratio in the South Bay right now. Finally, one big new listing has raised the ceiling in Redondo: instead of a $3.9 million property being the priciest, now there's one just short of $7 million. 

Manhattan Beach has just seven more listings now than in late March, with 117, while seeing a near-doubling in pending deals to 42. The active/pending ratio is 36 percent, also a well-balanced figure. The town's priciest offering continues to be a $30 million double lot on The Strand.

Hermosa Beach inventory (49) is up by seven from early February, but down by five from late March, the only submarket with fewer single-family homes since that last update.

Torrance

In late March, I called Torrance "clearly the hottest" market in the area, but I can't say that now in mid-June.

At 227 single-family homes for sale, inventory is up 61 homes since February, and actually up more - by 73, or more than 36 percent - since late March. New escrows have not kept pace. There were seven more pending deals in mid-June than in late March, but the active/pending ratio was down to 40 percent from 51 percent previously. That's still a respectable rate, but not en fuego. 

Combine the swelling inventory, slower absorption rate and the other numbers I reported last week on sale prices - with the number of sales down and median sale prices down - and we're starting to see notable weakness in Torrance, which had been a stalwart for a few years running.

Palos Verdes Peninsula

The Hill has seen a second big increase in active inventory, up to 281 single-family homes, compared with 197 in early February. This 42 percent jump in inventory is the biggest in the South Bay.

The share of pending deals was already low in late March, just 20 percent of the total inventory, and it's down now, too, to 17 percent.

As I had to say with Torrance, the Peninsula is looking slower than might be expected of a resilient market. Both of these regions are hinting at a possible slowdown to come, especially when compared with the beaches, where demand has stayed on pace so far this spring.

We'll take another look at region-by-region inventory near Labor Day to see if the beaches have held their own, or if demand has come back in line in the other areas.

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Dave Fratello is a Manhattan Beach resident who writes the www.sbconfidential.com and www.mbconfidential.com real estate blogs. He can be reached at df90266@gmail.com.

This Week's Column and Links (April 16-17)

Saturday, April 16, 2011

Lots of grass on the blufftop lot at 511 Paseo De La Playa.
This week's edition of South Bay Confidential discusses extra-large lots in various listings around the South Bay. Here's the text of the Daily Breeze column, which appeared April 16, 2011.


Just How Much Dirt Do You Need?

I still get a little giggle each time I review a new home listing online, or on a flier, and see the data field labeled, "Horse Property."

The answer has been "no" about 95,000 times now. Often the question seems absurd. Horses? By the beach? In the city?

I'll grant you, here in the South Bay you will find a smattering of "horse properties" up on The Hill. That's great for the equestrian set, but the rest of us are expecting that our homes will be on fairly modest parcels of land. If you have space for a vegetable garden, you're lucky. If you can throw a baseball to a teenager in your yard, you're upper-echelon.

Lot size is relative. Let's see what you can do with more-than-the-average space in a few parts of the South Bay.

A half acre on the Riviera

The listing description for 511 Paseo De La Playa in Torrance's Hollywood Riviera memorably notes that there are "no buildings between you and Hawaii" from the home's blufftop perch.

Not only does the home boast spectacular ocean and coastline views, it's also got more land than you'd expect. The square footage totals more than a half acre (almost 22,400 square feet), though some of that consists of hillside that isn't of much use. What's great is the large, flat grassy patch - a yard that's uncommon among these beach-facing properties.

So not only do you have Torrance beach below for your sand- and water-based activities, you've got a yard for land sports - it might make a nice putting green, in fact.

There's also a house attached - a four-bedroom, three-bath, 3,100-square-foot home with an early-'60s build date and some updates since. The list price is $4 million, the highest price in Torrance and the surrounding area.

Note: The land is currently leased with an option to purchase in 2014.

NASCAR fans' dream home

You think big lot, you think grass and open space, right?

But some folks need a place to park vehicles. Lots of vehicles. And a professionally outfitted garage to work on them. And those folks have an option in north Redondo Beach.

2909 Spreckels Court is being pitched to "off-road enthusiasts with lots of toys." While the interior (three bedrooms, two baths, 1,150 square feet) is updated and upgraded, it's the exterior that makes the sale. The lot's quite nearly 10,000 square feet, at the end of a cul-de-sac with access to a fully paved play area where, the listing says, you could park "several RV's, a ski boat" or a few pickup trucks.

The home - and plus-size garage - are offered for $669,000.

Two are better than one

Among the priciest real estate in Los Angeles County, let alone the South Bay, are beachfront properties in Manhattan Beach. The most recent sale - a big '80s-built architectural modern at 1600 The Strand - was for $10.9 million.

It's the land value that's driving prices at the beach. Add something unique and scarce, a double-lot on The Strand, and you might see another record-breaking sale this year. Right now 2020 The Strand is offered jointly with 2016 The Strand for $30 million. Though you'll find some decently remodeled rentals on the land now, the market they're trying to find here is for buyers who just want the dirt. [UPDATE: By late June, the price was at $27 million.]

Two's the max in Manhattan Beach these days, by the way. After a triple-lot home went up on Manhattan Beach's Strand, the city changed its rules and now won't allow more than two Strand lots to be built up together.

Bring your horses

Of course, if you need a "horse property," they do exist. Up on The Hill right now there are 16 listings designated as "horse properties," ranging in size from a quarter acre to more than 6 1/2 acres. To hitch up and roam the wilds, expect to pay between $1.7 million and - gulp! - $12.8 million.

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Dave Fratello is a Manhattan Beach resident who writes the www.sbconfidential.com and www.mbconfidential.com real estate blogs.

This Week's Column (Apr. 2-3)

Saturday, April 2, 2011

How's inventory shaping up in the South Bay now that Spring has sprung?

Here's our discussion from the South Bay Confidential column appearing in the Daily Breeze on April 2, 2011.


Inventories increase ... for the most part

by Dave Fratello


Back in early February, I provided a snapshot of current inventory of single-family homes in several South Bay markets. The goal was to establish a baseline for watching the dance between supply and demand as it unfolds through the rest of the year.

So here's our first check-in, comparing inventory just after baseball's Opening Day versus a few days after the Super Bowl.

In four of the five markets, we see the expected inventory increases. The tiniest market, Hermosa Beach, had the greatest percentage increase (29 percent), but that just means 12 more listings than the 42 seen several weeks ago.

The least-pricey market, Torrance, actually has fewer homes on sale now than it did seven weeks ago. This qualifies as a pretty serious surprise. Let's take a look at some of the developments market by market.

Torrance

Torrance is the second-biggest market we're looking at, and clearly the hottest.

Last time we checked in February, Torrance had 178 active listings of single-family homes, but that's now down to 166.

Even more impressively, the number of pending sales (properties in escrow) totals 85, more than half the number of active offerings. By contrast, none of the other South Bay markets discussed here has pending sales of more than one-quarter the inventory. By this measure, Torrance is twice as busy as any other part of the region.

Pricing is clearly a factor. Most of the deals in Torrance are on properties priced below $600,000, and about half of all the available properties are under $625,000. (Last year's median price was $621,787.)

Once again, Torrance has the least expensive of all the lowest-priced listings ($190,000 for a short-sale fixer), while the highest-priced listing in the area is up to $4,000,000 (for a traditional 60s house on a big, ocean-view lot high above Torrance Beach).

The total number of sales in Torrance rose slightly in 2009 and 2010 over a trough hit in 2008, but now 2011 is off to a roaring start.

Palos Verdes Peninsula

The Hill has seen a big increase in active inventory, up to 241 single-family homes, compared with 197 just seven weeks ago. The pace is about six more homes hitting the market each week than are being absorbed by demand (i.e., purchase contracts).

The number of pending deals pales next to Torrance's figure - just 20 percent of the total inventory, a range that's fairly normal when compared to other South Bay areas.

The Palos Verdes area's least expensive offering at this time can be had for $569,900, while the priciest remains at $12,800,000.

Even if inventory is swelling and sales aren't at the torrid pace of Torrance, we're not going to bet against the Palos Verdes area. As I've noted before, The Hill has only had one bad year recently, 2008, and 2010 saw a 16 percent rise in the number of sales over 2009. Even flat sales this year would be solid.

Beach Cities

Hermosa Beach, Redondo Beach and Manhattan Beach are up, inventory-wise, by 12, 13 and 17 listings, respectively. That's about a one-fifth jump in seven weeks, nothing very surprising, though. As previously noted, Hermosa's up the most, percentage-wise.

Once again, none of these markets matches up to Torrance in terms of the number of pending deals divided by inventory - each market is at about 20 percent, like the Palos Verdes area. No one is overheating by the beach.

The very, very high ends remain about the same this time, with one big home near $19,000,000 on Hermosa's Strand and a $30,000,000 double-lot offering - and that's all it is, the dirt - on Manhattan's Strand. Redondo's still got a $3,900,000 top-priced listing - one that's been around for roughly five years - but there's a new entry at $3,500,000 that may be compelling, a big and newer (2002) home just east of Pacific Coast Highway on a fairly big 9,600-square-foot lot.

At this moment, Hermosa's got the priciest of all the entry-level properties in the South Bay, a little 1,100-square-foot cottage on a 2,100-square-foot lot near PCH and 190th Street, asking $669,000.

We'll take another look at area-by-area inventory near the start of summer, and see whether these trends hold up.

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Dave Fratello is a Manhattan Beach resident who writes the www.sbconfidential.com and www.mbconfidential.com real estate blogs.

This Week's Column (Feb. 12-13)

Saturday, February 12, 2011

I've found that it's difficult to monitor inventory trends unless you take a snapshot in time and then compare later results to that prior snapshot.

So in this week's South Bay Confidential column, I laid out a "baseline" for inventory in major regions of the South Bay. We'll come back to these later.

The graph here shows the number of single-family homes listed for sale as of February 9, 2011.

To read the complete column discussing these data, click here.

This Week's Column and Links (Jan. 15-16)

Saturday, January 15, 2011

Bizarre MLS Photos Can Really Get You Noticed

By Dave Fratello


If you scan a lot of property listings online, you’ve probably seen your share of poor MLS photos.

You’ve probably also seen some goofy ones. (A daily selection of silly pics can be found at www.lovelylisting.com)

One dreadful photo I came across recently was from a listing for a 2010 sale in Redondo Beach. As you see here, the pic shows only some stray trash that’s been swept up into a pile in a vacant room.

Amazingly, it was the only photo in the listing. Not much of a flavor for the house, is it?

The listing agent told me that the property had sold off-market, meaning he was not obligated to input anything about the property into the MLS database. The sale was for a good price, though, and he wanted others to see it, so he made an entry.

The MLS required him to input a photo, and this was all he had. The agent stressed to me that in a normal listing, he’d have a pro come in and shoot the place with an HD camera and would carefully choose photos for the listing.

Fair enough, but the trash pile is still going down as one of the worst MLS photos I saw in 2010.

And then there’s the Bride of Chucky.

Late last year I was alerted to a Hermosa Beach listing that was packed with property photos featuring a life-size doll of a young girl. The doll was posed in various ways throughout the home, even lounging on the deck sipping a cold drink. After the third or fourth doll pic, the listing seemed to go from whimsical to mildly disturbing. After a dozen, it got icky.

I wrote up the listing in my real estate blog, generating a few chuckles along the way. A few weeks later, Ellen DeGeneres featured the property and its doll photos in one of her “Really Real Real Estate” segments.

Ellen said amidst audience laughter: “The house, it says, has three bedrooms. But it doesn’t matter, ‘cause you’re never going to be able to sleep.” (To view the clip, go to: http://bit.ly/dbaGmm) Piling on, Ellen moved to a graphic featuring the “Chucky” doll, of horror movie fame, as the listing agent.

By now you may think the actual listing agent was crazy to drop these pics into the listing. But maybe we should say “crazy like a fox.”

The listing has been passed around all over the internet (more than 20,000 YouTube viewings), was featured on national television and now is finding its way into this newspaper.

The agent told me she came to the property last year and found all sorts of whimsical items, including a much larger full-size mannequin. Upon seeing the little girl doll, she thought, “Let’s make it fun.” So she carried the doll from room to room and posed it. One little snap decision, and many snapshots later, and she had a mild sensation on her hands.

But here’s a surprising ending to the story. The MLS authorities recently stripped out the doll pics. Not because of matters of taste, but because the doll violated an arcane provision barring “objects” in listing photos. The photo cops were “really upset,” the agent tells me, about a photo of the doll standing atop a shoe tree. (Why is anyone’s guess – maybe it’s two “objects”?)

Alas, the doll photos are gone, but you can still see the little one in person. (941 13th in Hermosa Beach is a 3 bedroom, 3 bath, 2300 square foot house with ocean views, offered at $1,125,000, and open Saturday and Sunday from 1-4pm.)

Oh, and the listing agent is not named “Chucky,” though the owner, oddly enough, is named Chuck. 

[UPDATE: 941 13th sold in June 2011 for $900,000.]
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Dave Fratello is a Manhattan Beach resident who writes the www.sbconfidential.com and www.mbconfidential.com real estate blogs.


This Week's Column and Links (Jan. 8-9)

Saturday, January 8, 2011

Here's the South Bay Confidential column that appeared in the Daily Breeze on January 8, 2011.


Comparing beach cities 2010 prices

by Dave Fratello

I’ve discussed the improving sales pace in the South Bay in 2010 in a few recent columns. Now that the year has closed out, we can start looking at how prices performed.

We’ll look at the three beach cities this week, then return to other parts of the South Bay in upcoming columns.

Keep in mind, I’m looking only at single-family residences (SFRs) in these analyses. You’ll see that all the beach cities saw some improvement in sales totals over last year, though only one saw an increase in median price. For each town, I’ll give an example of what you would have gotten by paying
the area’s median price.

Hermosa Beach - Down on Higher Volume

This year, Hermosa Beach saw more SFR sales (99) than either 2008 or 2009, and was just shy of the 102 seen in 2007. Like a lot of areas in the South Bay, this was a modest pickup in sales. That was the good news.
 

The median price, however, at $995,000, was down 7 percent from 2009, and now stands 19 percent below the recent peak hit in 2008.

Some people will be skeptical of any fluctuation in median price numbers with a sample size this small. You can argue that there’s little real difference between 2009 and 2010 in either the number of sales or prices.


Median House: 1030 8th Place is a fairly good-size custom contemporary (four bedrooms, three baths, 2,625 square feet) with a need for some cosmetic fixes. Nice ocean views, though, from a location east of PCH. Sold for $995,000.

Redondo Beach - Stable on Higher Sales


Like Hermosa, Redondo Beach saw a nice uptick in sales in 2010. With 268 closed transactions, the number of SFR sales exceeded both the 2008 and 2009 totals, though this was still well short of 2006-07. Overall this was a nice 11 percent annual increase in the number of sales.


The median price also declined a bit, from $705,000 in 2009 to $692,500 in 2010. That’s a modest drop of 2 percent. Unlike with the Hermosa data, these medians are somewhat more reliable with the higher sales volume that the area generates.


With this little drop, the Redondo Beach median price is down 14 percent from the recent peak in 2006.


Median House:
1718 Wollacott St. (three bedrooms, two baths, 1,700 square feet) is a remodeled “tall and skinny” in North Redondo by Mira Costa High School. It sold for $690,000.

Manhattan Beach - Up with Lots More Sales


Of the three beach cities, Manhattan Beach saw the greatest increase in sales volume, both in terms of raw numbers (41 sales) and in the percentage change above 2009’s totals (15 percent).


This is the market I cover most closely, and I can say this has definitely been a good year for Manhattan. The city was recently called “the most stable housing market in the Los Angeles metro area” by Forbes magazine, on the strength of three quarters of increasing prices and a very low
foreclosure rate. (Foreclosures and REOs exist in town, to be sure, but just not nearly at the rate seen around L.A. or around California.)


At $1,525,000, Manhattan’s got the highest median price at the beach, and it’s the only one of the three markets we’re looking at here to see an increase over 2009. It’s a modest 4 percent bump over last year’s total, but that’s still something. Overall, Manhattan, just like Redondo, is down 14
percent from a recent peak in 2006.
 

Median Houses: 2513 Elm Ave. and 1404 Lynngrove Drive
each sold for $1,525,000. Both are on the newer side (1996 and 2000 builds,
respectively) and offer four or five bedrooms and more than 3,000 square
feet.




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Dave Fratello is a Manhattan Beach resident who writes the
www.sbconfidential.com and www.mbconfidential.com real estate blogs.

This Week's Column & Links (Jan. 1-2)

Saturday, January 1, 2011

This week's edition of South Bay Confidential looks at the top asking and sales prices in the South Bay of 2010. 

To view the column online, click here.

Here are links to each of the individual properties mentioned:

Highest Sale Prices

Highest Asking Prices

Real Time Web Analytics