Palos Verdes Source

In 2009, Palos Verdes homes sales increased 19% with 462 single family home sales compared to 388 in 2008.  Palos Verdes homes experienced a 16% decline in 2009 average sales prices compared to 2008.  It did not feel like double digits so I researched further. 

The sales mix changed significantly which is reflected in the lower average sales price.  In 2009, 38% of Palos Verdes homes sold were under $1,000,000 compared to only 28% in 2008.  In addition, in 2009 the high end, over $2,000,000, fell to 10% from 16% in 2008.  The very high end, over $5,000,000, was only 1% of Palos Verdes home sales compared to 2.5% in 2008.  In other words, we had more low end homes sell in 2009 and less high end sales which contributed to the overall decline in average sales price.

Did the entire Palos Verdes Peninsula which is comprised of 4 different cities (Palos Verdes Estates 90274, Rancho Palos Verdes 90275, Rolling Hills and Rolling Hills Estates) experience a 16% decline in price?  Absolutely not.  As a matter of fact, 2 neighborhoods actually showed an increase in average sales price – Monte Malaga in Palos Verdes Estates with an average sales price of $2,247,246 ($2,067,647 in 2008) and the city of Rolling Hills with an average sales price of $2,600,412 ($2,515,752 in 2008).  Pricing is really determined by the neighborhood, location and condition of the home.

My next article will be on the sales statistics for the month of December 2009.  Entire charts can be accessed by clicking here or on the “Statistics” tab above.

As I did last year, I thought it would be fun to go through 2009’s Top Tuesday Tour Tips for Palos Verdes homes and pick my favorites, tell you why and give you an update on those properties.

My favorite listing is Chris Adlam’s (Remax Palos Verdes Realty) 2775 Via Oleadas, Palos Verdes Estates, 90274, (above left) is a 4 bedroom, 4 bath, 3,568 square foot home that was originally listed for $4,999,000 and sold in August for $5,000,000.  This Lunada Bay ocean front estate has breathtaking ocean/bay views upon entry through the front door and from nearly every room in the house; it also had a tennis court right next to the ocean bluff and a pool!    Morena Cohen’s (Shorewood Realtors) 1633 Via Arriba, Palos Verdes Estates, 90274, (above right) is a 4 bedroom, 5 bath, 4600 square foot home that was originally listed for $3,995,000 and sold in August for $3,199,900.  This fabulous custom-built single-level Malaga Cove home is one of my favorites because it has panoramic ocean and queen’s necklace views, a wine cellar, 4 car garage and is on an exceptional double lot (20,717 sq ft).

Pamela Lieb’s (Remax Palos Verdes Realty) 32 Strawberry Lane, Rolling Hills Estates, 90274, (above left) is a 3 bedroom, 3 bath, 3,246 square foot home that was originally listed for $1,899,000 and sold in December for $1,875,000.  This Equestrian Estate is located on a magnificently level 50.090 square foot level lot and features a solar heated pool and a rare 20×50 meter Dressage Riding Arena (photo above left); there are only 2 such dressage arenas on the entire Palos Verdes Peninsula.  Sue Murphy and Marie Hoffman’s (Keller Williams Beach Cities) 30581 Rue Langlois, Rancho Palos Verdes, 90275, (above right) is a 4 bedroom, 2 bath, 1,670 square foot home that was originally listed for $1,050,000 and sold in June for $975,000.  This comfortable West Palos Verdes home has fabulous ocean views, remodeled bathrooms and was freshly painted inside and out.  This is one of my favorite areas in Palos Verdes as it has unobstructed panoramic views for under a million dollars.

Photos courtesy of MRMLS

I wish I had a crystal ball to tell sellers of real estate in Palos Verdes what price their home will sell for. There are the obvious variables – location, condition, amenities like views, etc. and the “forgotten” variables like the market perception of the buyers. As we have experienced, the media also plays a large part in the buyer’s mood.

As more and more buyers begin their home search on the Internet, they identify quickly a well priced home. Wouldn’t the seller want to be perceived as well priced when they first put their home on the market as statistics show that a home gets the largest audience/views within the first two weeks of being placed on the market. Otherwise, they risk becoming a stale listing, whittling away at their “high” price and losing potential buyers.

In this market, pricing is key and Realtors and sellers both need to “be brave” and price a home the same or less than the last comparable home that sold. The buyers ultimately set the price (not the seller or Realtor). The failsafe for a price that may be too low is that buyers will recognize the low price and multiple offers will result.

Lew Sichelman in a LA Times article, “To sell home, make sure the pricing is right” has several suggestions for sellers including “sellers need to know how fast properties in their specific market segment ae being sold…how much competition…and market statistics such as absorption rates…inventory…and days on market.” If you want your your home sold quickly, put on a buyer’s hat for a bit when pricing your home. Or you could, in effect, be “buying back” your home for yourself.

The self-fulfilling prophecies are right again according to the LA Times article “At the luxury end, home prices are falling.” The upper end of the market is feeling some pain. It appears misery loves company. Statistics are in for the month April and indicate some exclusive neighborhoods show decreased sales prices compared to April 2007. Palos Verdes real estate had mixed reviews.

Palos Verdes Estates (zip code 90274 which includes the cities of Palos Verdes Estates, Rolling Hills Estates and Rolling Hills real estate) showed an increase of 18% and Rancho Palos Verdes real estate (zip code 90275) showed a decrease of 18%. If you average those numbers, it shows the entire Peninsula holding. Remember, these are median prices for the month. The statistics for the past 15 months through April are available by clicking here.

Results to date for May show 262 Active listings (254 in April), 71 Pending (31 in April) and 27 Sold (39 for the month of April). Compared to last year, there are fewer number of homes sold but the prices in Palos Verdes continue to be holding (see the Average Price graph in the above link). And Days on Market for the month of April 2008 fell to 6.5% – 6% is considered to be a normal market.

This is still a buyer’s market with a great selection of homes and interest rates for a 30 year fixed jumbo loan at 6.75% and a 5 year fixed interest only loan at 6.125%. We never know when real estate prices have hit the bottom until the market is on the way back up. John Juarez, a realtor in the East Bay asks buyers, “What are you waiting for?…if you buy and hold your house for a few years (either live in it or rent it out), it is very likely that you will experience appreciation in the value of the house. It is highly likely that your real estate will go up in value if you pay attention to the basics of price, location and condition when you make the purchase”.

More good news is the LA Times ‘ article entitled, “Report finds weak economy but no recession” citing a Conference Board report released Monday showing that for the second month in a row, their leading economic indicators index rose 0.1%. “So far it seems as if the recession will be short and shallow” says Harm Bankdholz, economist with Unicredit Markets & Investment Banking in New York. I like that!

Today’s Los Angeles Times Real Estate Section reported the ten Southern California cities with the highest increase in sales prices for single family residences for the first quarter of 2008 compared with the same period last year. Both zip codes on the Palos Verdes Peninsula were on this list.

Palos Verdes Estates, Rolling Hills and Rolling Hills Estates (zip 90274) showed an increase in median sales price of 16.5% compared to the first quarter of 2007. Rancho Palos Verdes (zip 90275) showed an increase of 17.6% in median sales price compared to the first quarter of 2007.

Additional statistics for the Palos Verdes Peninsula can be accessed by clicking on the Statistics tab above. The first quarter of 2008 compared to first quarter of 2007 shows an increase in sales prices, more inventory and fewer homes sold.

The complete LA Times chart which includes cities with the “Biggest Losses” can be accessed by clicking here.

I can only imagine how the public feels regarding real estate in the Palos Verdes and South Bay areas with the news media’s seemingly conflicting reporting . Yesterday’s LA Times Business section headline, “March a cruel month – Foreclosures take over…” is only 8 days after the LA Times Business section headline, “Home prices staying afloat at the beach” (see my post “Now You’re Talking” April 8, 2008).

Let’s look at the new 5-page Facts and Trends reports (click here or go to the Statistics tab above)for the Palos Verdes Peninsula with data from January 2007 through March 2008. The number of homes sold 49 (Mar ‘07) vs. 33 (Mar ‘08), number of homes for sale 157 (Mar ‘07) vs. 235 (Mar ‘08), number of homes pending 37 (Mar ‘07) vs. 33 (Mar ‘08). It definitely shows a slowing compared to March 2007, but look at the months in between. March 2008 had more homes sold six out of the last seven months (November 2007 was higher with 35 homes sold).

What does it all mean? Real estate in the Palos Verdes-South Bay area is softer than last year but better than most of Los Angeles County. We are not seeing as many foreclosures as the rest of the County (which is driving the prices downward in those communities). Average sold price on the Palos Verdes Peninsula (as shown on the Average Price For Sale & Sold graph at Statistics tab) for March ‘08 was $1,608,000 vs. $1,390,000 for March ‘07. Of the 11 months in between, 6 months had average sold prices less than March ‘08 and 5 months had average sold prices higher than March ‘o8.

For Sellers – Price your property realistically with no padding; look at the sales prices of the most recently closed escrows not prices of homes currently on the market. Robin and Eric Fenchel in their post “Ask Less and Get More: A House Priced Well Will Sell!” reiterate the dangers of overpricing.

For Buyers- This is your time. There is a lot of inventory and interest rates are at historic lows. Lending rules have changed so it is imperative that you speak to a lender for a prequalification and lock in a 30-day rate (many lenders believe that rates will be going up before the end of the year). An increase of 1% in interest rates decreases affordability by 10%.

Many Multiple Listing Services allow the agent to cancel/withdraw a listing and then relist it (even moments later) to make it appear as a new listing. I think this is a great marketing ploy but wrong. It then gives a skewed look at buyers’ reaction to that particular property. Kelly and Laura of Remax Palos Verdes call this “Churning and Burning”.

If a property sits on the market for over 30 days, it is overpriced for market conditions. The agent would better serve the Seller if they reduced the price of the property to reflect market conditions or withdraw it from the market. That may sound harsh but the purpose of listing a property is to sell it.

As an agent, we look at sales statistics, current inventory, conditions of home, etc. and give the Seller our estimated sales price. This is not an exact science as it cannot take into consideration a buyer’s emotional connnection to a particular piece of property which can favorably change the outcome of a sales price.

This ploy to relist a property as a new listing only “fools” the public. Most agents will search the History on a property that their client is interested in and will see it as a relist/reduction of an old listing.