Palos Verdes and South Bay Los Angeles Real Estate Market Update

The media has been pounding us over the head with doom and gloom reports of the real estate market. It is true that most of the markets nationally, and many in Southern California, have been significantly impacted, however the story in the South Bay of Los Angeles is much different. Although sales volume has plummeted, home prices in the South Bay, particularly the more expensive markets of the Palos Verdes Peninsula and Manhattan Beach/Hermosa Beach, have not been nearly as severely affected. For instance, it was widely reported that the Median Sales price of homes sold in Southern California plunged 27% compared to a year ago. The median price, which means that half of the homes sold for more than this price, and half for less, can be extremely distorted based on the mix of homes sold. For instance, if more smaller homes are sold than larger/more improved homes, the median price will be distorted downward. Average price per square foot tends to be less affected by the mix of homes sold. The average price per sq. ft. for homes sold in the second quarter 2008 compared to the 2007 second quarter has only fallen modestly in the South Bay beach cities.

Inventory – The average number of days on the market for properties sold in the second quarter of 2008 in the South Bay has increased to approx. 65 days, an increase from approx. 50 days a year ago. We have about a 7 month inventory at this time for the Palos Verdes Peninsula. For most of the last 2 decades, Los Angeles County has averaged an 8 month inventory.

123 single family residences were sold during the second quarter of 2008 on the Palos Verdes Peninsula, compared to 158 during 2007 ( a 22% decrease). The inventory of homes as of 6/30/08 has increased 34% from this time last year on the Palos Verdes Peninsula to 270 homes. This equates to a little more than a 7 month supply.

Palos Verdes Peninsula- During the second Quarter of 2008 the average price per sq. ft. of homes sold showed a decrease of approx. 5% over the comparable period of 2007 (to an average price per sq. ft. of $571), but a decrease of approx. 7% from the peak during the third and fourth quarters of 2007.

Home prices for sold properties, on average in the South Bay, have been approx. 95% of the list price during the 2nd quarter of 2008.

For a complete market report on the Palos Verdes Peninsula and the South Bay of Los Angeles, go to my website at https://www.maureenmegowan.com/Nav.aspx/Page=/PageManager/Default.aspx/PageID=987437%20