Rancho Palos Verdes real estate experienced an increase in home sale prices (+$105,0000), inventory (+20 units), and interest rates, while days on the market decreased (-17 days) to 33 days. Let’s get into the details:
May’s average home sale price increased by roughly $105,000, from $2.072M in April to $2.177M for May. Sold homes inventory also increased by nearly 50%, from 22 homes sold in April to 42 in May. With this new average, the housing market in Rancho Palos Verdes is reaching new highs, blowing past the previous highs in late 2021 through June 2022, before rates began to increase. With home prices this high it will be interesting to see what the summer months will bring, as it tends to be the busiest time of the year.
How long does it take to sell a home in Rancho Palos Verdes? Last month, the average days on the market dropped from 50 days in April to 33 days in May; a significant drop given that rates and the number of homes sold increased. Interest rates saw a slight increase this month as well, but overall have remained below 7%, as can be seen in the red line above.
One new metric I wanted to share this month is the estimated monthly mortgage payment chart, which can tell us a bit about how affordable housing is (or isn’t).
The blue line and left axis represents the average sale price for housing for the given month, which has hovered between $1.7M and a bit over $2M per home. The red columns and right axis represent the average mortgage payment with 20% down (does not include HOA fees, taxes or insurance).
Prices in Rancho Palos Verdes began to drop about a year ago, in June of ’22, reaching their lowest point this past November with an average home price of $1,570,577. Back then, the average mortgage for a home in the area would have been just over $8,300/month. That is approximately the same mortgage payment for a $1,900,000 home in May ’22, just six months prior. The difference? Interest rates in November ’22 were 6.95% and 5.10% in May.
The last three months have experienced significant increases in housing prices, going from $1.7M in February to over $2.1M in May. We believe the increase is largely due to the lack of inventory in the real estate market not only in Rancho Palos Verdes, but the entire Los Angeles area. With limited inventory on the market, we are beginning to see homes sell for OVER ASKING since MULTIPLE buyers are competing for the few homes available. A 2 bedroom condo we listed at a fair market price (based on comparable sales) just went into escrow for 10% over asking. Not $10,000 over asking, 10%! For sellers, this is definitely a positive! For buyers, things are getting more competitive in the market, so be prepared to compete!
Let’s dive into the specific property types below.
Single-family homes for sale in Rancho Palos Verdes experienced another bump in average price, from $2.214M in April to $2.288 in May, the second straight month single-family homes experience an increase in sale price. Even with sold inventory doubling, prices continue to climb and apparently nothing can stop them, not even high 6% interest rates.
Rates have heald steadily in the mid to high 6% range since peaking in November. Although the steep rates caused days on the market to approach 60 days, buyers are finding themselves competing over very little inventory, which caused prices to go up and days on the market to decrease, down to 31 days for May ’23.
The average sale price for a condo or townhome in Rancho Palos Verdes increased this month (+$89k), going from $649K in April to $738k in May. Condo inventory in Rancho Palos Verdes has been very low since the start of the year. From January ’23 to May ’23, only 21 condo/townhouse units have been sold in RPV, which is less than half of what was sold in the same time frame last year (48 units).
Condo and townhouse prices tend to be a bit erratic, as a 2-bedroom condo can range from $500k to over $1M depending on its location. However, since most first-time-home-buyers in Rancho Palos Verdes will often consider a condo, this segment tends to be very competitive for buyers, especially when there are only 3 – 9 homes sold in the entire month!
The average time it takes to sell a condo or townhouse in Rancho Palos Verdes increased on paper, but is a bit misleading. Only 3 condos sold in May, 2 were not properly presented and sat on the market for 3+ months, and the third was prepared for the market well enough that it was only on the market for 4 days. That is a microcosm of the condo real estate market in RPV; well-presented units that are move-in ready and priced right will sell! Sellers usually run into issues when they are overpricing their listings and/or not preparing them for the market adequately. We ensure our listings are always properly presented with our concierge services, which is standard on all listing agreements with The Prestige Team.
Moving forward, we are expecting rates to stay consistent, likely in the 6% range. If rates can stay consistent, buyers and sellers should gain confidence in the market, and hopefully, that will lead to more inventory on the market.
Buyers in this market should be prepared to compete, especially if you’re a first-time home buyer. Sellers have gained much of their leverage over the past 3 months. 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 still a phenomenal time to be a buyer. 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. Some homes are still selling fast, but buyers are pickier than they’ve been in the last 5 years. And yes, we can help with all of this, all included in our standard commission! Learn more by visiting our Concierge Real Estate Services page.
If you’re ready to start your real estate journey, contact us today!
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