The Rancho Palos Verdes housing experienced slightly lower rates for January compared to December. However, the average sale price dipped slightly from December’s average. See below for all the details, including single-family homes and condos!
January experienced a decrease in the average sale price from $1,840,826 in December to $1,783,990.
Although the average sale price decreased by almost $60,000 compared to December, it is worth noting that the number of homes sold also decreased, with only 20 homes sold. In fact, January ’23 had the fewest homes sold in the last 12 months; the next closest was November ’22, with 25 homes sold. This is definitely something to keep a close eye on as we move further into 2023, as it could indicate a softening market.
Interest rates, shown in red, have started the year lower than December 2022. Despite the slight decrease in interest rates, January saw days on the market increase slightly to 52 days, up from 51 in December. We are expecting days on market to decrease when/if rates drop or stay consistent. Next, let’s take a look at single-family homes.
The average price for a single-family home in Rancho Palos Verdes has been on a downward trend over the last 12 months, peaking in August ’22.
With January’s average, we can see the 12-month trend line continues to decrease. It is also worth noting that only 18 houses sold in January, which is the fewest in the last 12 months. February should be an interesting month, as it will likely indicate how we will start Spring.
The time it takes to sell a house in Rancho Palos Verdes has been steadily increasing since May ’22, going from just 10 days to under 50 days in January ’23. With the exception of the summer months (June – August), days on market and interest rates have had an almost direct correlation, seeming to only decrease when rates go down or stay somewhat consistent.
The cross-over event between the bars (days on market) and the red line (interest rates) in the graph above may be a sign of market resistance, where buyers decide rates are just too much to justify home prices causing homes to stay on the market. Homes that sit on the market typically start reducing their prices, unless the seller decides to not sell. It seems as though the residential market is starting to become seriously affected by interest rates and the industry’s economic outlook. Next month should be very telling.
Next up, condominiums and townhouses!
The average sale price for a condo or townhouse in Rancho Palos Verdes increased compared to December ’22. However, only two condos were sold in January, and they were both over $1.1 million, which has skewed the averages slightly.
January’s sale price average for condos and townhouses reversed the downward trend we mentioned in our 2022 Real Estate Market Recap: RPV post. We are expecting the average price to drop next month.
Given that only two high-dollar luxury condos sold, days on market shot up drastically compared to December. However, this will very likely change next month and we expect the average to settle around 40-50 days on the market.
Moving forward, we are expecting rates to stay somewhat consistent which should help gain some confidence in the housing market. Keep a close eye on sharp increases in interest rates, as more are scheduled to happen this year according to the FED.
Buyers in this market should be negotiating deals, as sellers have lost much of their leverage over the past 12 months. But keep in mind that inventory remains low for ALL of Los Angeles and much of the state. If buying real estate is one of your goals and you were a buyer in the market over the last 2 years but ultimately gave up because of stiff competition from conventional buyers, now is a phenomenal time to be a buyer because of the leverage you have on sellers. In this market, sellers will welcome FHA offers, VA offers, seller credits, repairs, and loan buy-down programs in order to sell you their home.
Sellers in this market should be doing everything they can to distinguish their homes from others on the market. Presentation and condition are extremely important, so preparing your home for sale and making sure it looks and functions as best as it can is of vital importance if you want a successful sale. Doing so may result in multiple offers on your property, which would significantly boost your leverage with buyers.
If you’re ready to start your real estate journey, contact us today!
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