Palos Verdes Source

Statistics for single family homes for the month of May for Palos Verdes real estate are now available.   May 2009 had 5 less closed sales and 19 less pending sales than April 2009.  Inventory of active listings/homes for sale fell to 281 in May.  The average price for homes that closed in May fell 5.7% and the average days on market also decreased.

For the month of May, there were 24 closed sales (29 in April) and 22 pending sales (a restated 41 pending sales in April).  Active single family homes for sale in Palos Verdes fell to 281 (from 291 in March).  Average price for homes that closed in May decreased to $1,356,000 from $$1,438,000 in April.  Average days on market in May decreased to 86 (from 102 in April).  Months of inventory (months it would take to sell existing inventory at the current rate of sale) increased to 11.7 (from 10 in April).  Entire charts can be accessed by clicking here or on the “Statistics” tab above.

Currently, there are 296 single family homes for sale on the Palos Verdes Peninsula.  Additionally, 47 homes have pending sales, 45 homes are in escrow accepting backup offers and 19 homes have sold/closed escrow in the first 15 days of June.  We have almost met the total number of sold/closed escrow for all of last month and we are only half way through June!

Statistics for single family homes for the month of April for Palos Verdes Real Estate are now available.  April 2009 had 3 less closed sales and 5 less pending sales than March 2009.  Inventory of active listings/homes for sale rose again slightly for the fourth consecutive month which is great for buyers.  The average price for homes that closed in April increased 20%.

For the month of April, there were 26 closed sales (29 in March) and 26 pending sales (31 in March).  Active single family homes for sale rose to 291 (from 284 in March).  Average price for homes that closed in April increased to $1,513,000 from $1,259,000 in March.  Average days on market in April increased to 108 (from 68 in March).  Months of inventory (months it would take to sell existing inventory at the current rate of sale) increased to 11.2 months (from 9.8 in March).  Entire charts can be accessed by clicking here or on the “Statistics” tab above.

Currently, there are 295 single family homes for sale on the Palos Verdes Peninsula.  Additionally, 41 homes have pending sales, 46 homes are in esrow accepting backup offers and 7 homes have sold/closed escrow in the first 11 days of May.  The homes in escrow in pending and backup have increased nearly 70% since this time last month!

Prices for Palos Verdes real estate have not been fluctuating as much as other areas.   However, when one looks at the average price for single family residences at the end of March 2009 (1,259,000) compared to March 2008 ($1,608,000) there is a 27% decrease but what those numbers do not show is that the number of sales under $1,000,000 are currently the bulk of sales (40 out of total sales of 82 since 1/1/09) which lowers the average price as the number of high end sales is at historic lows.  Since the first of the year, out of 82 sales, only 8 were over $2,000,000; that’s 8% of sales.  In 2008, 16% of sales were over $2,000,000.  The difficulty in getting jumbo loans is definitely affecting that segment of the market.  As a point of reference, in 2008 sales under $1,000,000 were only 25% of total sales.

What this means to buyers is that they will not be getting a huge discount when buying property on the Peninsula.  We certainly have had a decrease in market price but no where near the numbers that are indicated when one looks strictly at average price.  This was discussed in a lengthly article in the Los Angeles Times entitled, “Not that cheap”.   The chart above shows how the increased sales in the under $300,000 market have skewed the median price in Los Angeles County.  There were several stories about disappointed buyers losing out in multiple offer situations.  There was even a story about a  “frustrated” couple who made an offer for $1,000,000 on a home that was listed for $1,700,000 and the seller said no thanks.   

The media has been giving buyers straight sales statistics without explanation for months and now that buyers are back in the market with great low interest rates loans, they are surprised to find sellers who are not willing to severely discount the price on their homes.  It’s best to look at the recent sales comparables for the particular area of your interest, keeping in mind location and condition of the home.

What is the outlook for Palos Verdes real estate?  I attended a forecast meeting presented by Robert A. Kleinhenz, Ph.D., Deputy Chief Economist for the California Association of Realtors.  There was good news and “other” news.

First the good news.  Affordability for California is now at 60%; it was 23% in 2007.  Interest rates are at historic lows and probably will remain at these levels through the beginning of next year.  CAR’s California Housing Market Summary below indicates a forecast for 2009 of a 25% increase in number of sales and a 28% decrease in the median price.

Kleinhenz reminded us that the median price is directly affected (and skewed) by the number of low-end homes that have sold vs. the midrange and above (see chart below) that are lingering on the market as lenders continue to withhold jumbo loans from the market.  The actual decrease in sales price in Palos Verdes is nowhere near the numbers above.  Unfortunately, Kleinhenz did not have any numbers specific to the Palos Verdes Peninsula as they only report on cities with 30 or more sales per period.  The best statistics for Palos Verdes are coming from TrendGraphics which can be accessed by clicking here or on the “Statistics” tab above.

Kleinhenz finished with the chart at the top indicating Callifornia real estate had a 11.3% annual rate of return when a home is sold after 5 years.  “The buy and hold strategy does work in California,” he said.  Entire presentation can be accessed by clicking here.

Yesterday, both the Daily Breeze and Los Angeles Times had housing reports.  The Daily Breeze headlined with ”County home prices look to be stabilizing.”  Los Angeles County home sales made its third consecutive gain while prices remained stable leading some to believe that the market has “finally hit bottom.”  The lower end of the market is moving and the upper end is slower.  For Palos Verdes real estate, that translates to homes under $1,000,000 being an active market as buyers take this opportunity to buy into the Peninsula with its fabulous schools, weather and beautiful location.

Here are the statistics since the beginning of the year.  74 single family homes in Palos Verdes sold.  Almost half of those sales were homes under $1,000,000.  Another 28% sold in the $1,000,000 to $1,500,000 range.  And 8% sold for over $2,000,000.  The higher end should start moving when the banks start lending for jumbo loans again.

Statistics for single family homes for the month of March for Palos Verdes Real Estate are now available.  March 2009 had more than twice as many sold/close escrows and slightly more pending sales than February 2009; the sold/pending numbers are down, however, when compared to March 2008.  Inventory of active listings/homes for sale rose again for the third consecutive month which is great for buyers. 

For the month of March, there were 29 closed escrows (12 in February) and 23 pending sales (21 in February).  Active single family homes for sale rose to 284 (from 263 in February).  Average price for homes that closed in March increased to $1,259,000 from $1,110,000 in February.  Average days on market in March decreased to 68 (from 99 in February).  Months of inventory (how many months it would take to sell existing inventory at the current rate of sale) decreased to 9.8 months (from 21.9 in February).  Entire charts can be accessed by clicking here or on the “Statistics” tab above.

Currently, there are 325 single family homes for sale on the Palos Verdes Peninsula.  Additionally, 30 homes have pending sales, 22 homes are in escrow accepting backup offers and 11 homes have sold/closed escrow in the first 11 days of April. 

Statistics for single family homes for the month of February for Palos Verdes Real Estate are now available.  February 2009 had less sold/closed escrows and less pending sales than January 2009 and had increased inventory of active listings/homes for sale.  Additionally, February 2009 had half the number of sold/closed escrows and 70% less pending sales when compared to February 2008.

For the month of February, there were 12 closed escrows (16 in January) and 14 pending sales (19 in January).  Active single family homes for sale have risen to 263 (from 247 in January).  Average price for homes that closed in February decreased to $1,110,000 from $1,169,000 in January.  You can see from the “Average Price” chart, available by clicking on the “Statistics” tab above, that the lower end of our market has been selling for the past several months.  There is quite a disparity between the average sold price of $1,110,000 and the average list price of $2,365,000.  Average days on market in February increased to 99 (from 74 in January).  Months of inventory (how many months it would take to sell existing inventory at the current rate of sale) increased to 21.9 months (from 15.4 in January).  Entire charts can be accessed by clicking here or on the “Statistics” tab above.

Currently, there are 284 single family homes for sale on the Palos Verdes Peninsula.  Additionally, 29 homes have pending sales, 25 homes are in escrow accepting backup offers and 7 homes have sold/closed escrow in the first 10 days of March.

Statistics for single family homes for the month of January for Palos Verdes Real Estate are now available.  January 2009 compared to January 2008 has the same number of sold/closed escrows, 1 additional pending escrow, and 46 more active listings/home for sale.   Average price per square foot for homes that sold January 2009  is $494 compared to $545 last January. 

For the month of January, there were 15 closed escrows (23 in December) and 12 pending sales (14 in December).  Active single family homes for sale have risen to 247 (from 222 in December).  Average price for homes that closed in January decreased to $1,194,000 from $1,248,000 in December.  Average days on market in January decreased to 70 (from 87 in December).  Months of inventory (how many months it would take to sell existing inventory at the current rate of sale) increased to 16.5 months (from 9.7 in December).  Entire charts can be accessed by clicking here or on the “Statistics” tab above.

Currently, there are 262 single family homes for sale on the Palos Verdes Peninsula.  Additionally,  23 homes have pending sales, 23 homes are in escrow accepting backup offers and 5 homes have sold/closed escrow in the first 13 days of January.

Everyone wants to know how the Palos Verdes real estate market is doing.  I am an optimist by nature so I have to check for facts before I give my opinion.  Currently we have 32 properties that have sold/closed escrow since the first of the year compared to 23 properties this same time period in 2008.  Additionally, there are currently 42 properties in escrow.  So the Palos Verdes real estate market is moving forward.   Prices are definitely down though compared to 2008.

How will our market fare in 2009?  Leslie Appleton Young, Chief Economist for California Association of Realtors, gave her forecast last week (can be accessed by clicking here).  Bottom line is that she thinks number of sales will go up and prices will go down.  In high end markets (like Palos Verdes), she is forecasting a double digit decline based on the economy, financial markets and decrease in trickle-up buyers from low-end properties (with high foreclosure rates) to mid-range properties to high-end properties.

For Sellers, this means pricing is key to getting your home sold.  Accurately pricing a home continues to be the number one factor to conclude a successful sale.  67% of all buyers in 2008 stated that “price decreases motivated us” to purchase a home according to the above referenced Market Forecast.  If the forecast is correct, now is a good time to sell before further price decreases.

For Buyers, this means that your time is now.  When you sell your existing home and receive less,  it will be more than offset by the savings on your up-leg property when you buy.  Interests rates are at historic lows - less than 5% for conforming loans and 6.25% for jumbo loans.  If you purchase before the Spring, you will experience less competition from other buyers when negotiating price on your new home.  Part of the Stimulus Plan if passed by Congress includes a tax credit for buyers (stay tuned for those results). 

The numbers are in and owners of Palos Verdes Real Estate single family residences experienced a 6.2% decline in 2008 average sales price compared to 2007.   That is actually not bad compared to the rest of Los Angeles County which was down about 28%.   Home values on the Palos Verdes Peninsula have held fairly steady: 2008 was the first year of declines in recent memory.  Palos Verdes homeowners enjoyed an average of 12% annual appreciation for the prior 5 years - 2007 was 2.1%,  2006 was 2.5%, 2005 was 19.2%, 2004 was 20.2% and 2003 was 16.7%.  Number of sales were down from 2007 sales of 533 to 380 for 2008.  The highest priced property sold for $7,750,000 in Rancho Palos Verdes and the lowest priced property sold for $600,000 in the unincorporated area of Palos Verdes Peninsula ($450,000 in Eastview).

For the month of December, there were 23 closed escrows (23 also in November) and 14 pending sales (18 in November).  Active homes for sale have ben reduced to 222 (239 in November).  Average price for homes that closed in December decreased to $1,248,000 from $1,434,000 in November. Average days on market in December increased to 87 from 61 in November.  Months of inventory (how many months it would take to sell existing inventory at the current rate of sale) decreased to 9.7 (from 10.4 in November).  Entire charts can be accessed by clicking here or on the “Statistics” tab above.

Currently, there are 230 single family homes for sale on the Palos Verdes Peninsula.  Additionally, 19 homes have pending sales, 12 homes are in escrow accepting backup offers and 6 homes have sold/closed escrow in the first 12 days of January.