This article reviews home sales trends in the South Bay area of Los Angeles for the months of July and August. Specifically, the cities of Manhattan Beach, Hermosa Beach, and Redondo Beach are explored.

Back in 2002, there were a total of 250 single family homes sold in these three cities in the months of July and August. Interestingly, this number of sales for those two months has not been achieved since. In fact, the number of sales has pretty much dropped every year until this year. Last year the number of units sold bottomed out (or at least we hope it has) at 117 units sold in July and August. This year the number was 128, about half of the action of seven years ago.

The more telling story may very well be in the average sales price data. In 2002, the average single family home sold for just over $800 K. The average sales price rose steadily until it hit a peak in 2006 of $1.6 M per home. In other words, the average price doubled in just four years. In 2007 the price dropped to $1.43 M and then it dropped again to $1.31 M last year. This year the number appears to be turning upwards again with an average sales price of $1.39 M. The good news is that the number of units sold and the average sales price both rose this year. This may be an indication that the overall market is turning around.

One possible explanation for the price increase in 2006 is the relatively easy availability of lower rate money from 2003 through 2006. There was a surge in the number of homes selling for over $2 M and even over $5 M. Given that about a quarter of the homes sold in 2006 were over $2 M, it is possible that a big chunk of the average sales price increase from the prior years is attributable to this trend of an increase in the number of premium home sales due, in part, to the availability of lower interest rate money back then.

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Tony Cordi is the owner of Beachtime Realty, serving the South Bay since 2007. He specializes in beach properties across the South Bay and Palos Verdes. Tony has helped several clients identify properties where they can add value by remodeling or developing the property.