AUG 2023: Rancho Palos Verdes, 90275, real estate experienced a decrease in average home sale price (-$109,000), sold inventory (-3 units), and days on the market (-11) for August 2023. Let’s get into the details:
August’s average home sale price decreased by roughly $109,000, from $1.783M in July to $1.673M for August. The number of homes sold also decreased by 3 homes, down to 26. Despite this lower sale average, the housing market in Rancho Palos Verdes is still trending upwards. With home prices this high, it will be interesting to see if the fall will bring significant changes, as rates tend to be relatively lower during an election year, but rates are currently in the 7s!
How long does it take to sell a home in Rancho Palos Verdes? The average number of days on the market for August was 11, compared to 22 days in July. This was the first time in the last 12 that days on the market went below 20 days; potentially signaling the effects of low inventory. It will be interesting to see if prices bounce back once the inventory gets too low. Interest rates saw an increase this month as well, but overall are in the low to mid 7% range.
The red bars and left axis represent the average sale price for a home in that given month, which has hovered between $1.6M and a bit over $2M per home. The blue line and right axis represent the average mortgage payment with 20% down (does not include taxes, insurance, or HOA fees).
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.
Since peaking in May, prices have actually experienced a decrease, settling down near the $1.7M range. 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.
Let’s dive into the specific property types below.
Single-family homes for sale in Rancho Palos Verdes experienced a drop in average sale price, from $1.979M in July to $2.026M in August. Inventory continues to be an issue in Rancho Palos Verdes, and days on the market may be a clear indicator of that. Since the peak in May with 37 homes sold, inventory has dropped every month and is down to 17 sales in August compared to 23 in July.
Mortgage interest rates have entered the 7% range as of August. Even with the higher rates, days on market decreased by 12 days, down to 8 days on the market for the month of August.
Affordability for an average home in RPV has increased after experiencing price improvements for 2 months in a row. For August 2023, the average mortgage for a house in RPV is roughly $11,167.
The average sale price for a condo or townhome in Rancho Palos Verdes decreased this month (-$24k), going from $1,029k in July to $1,005K in August. Condo inventory in Rancho Palos Verdes has been very low since the start of the year. From January ’23 to June ’23, only 27 condo/townhouse units have been sold in RPV, which is half of what was sold in the same time frame last year (54 units). Only 9 condos sold in Rancho Palos Verdes in August.
Condo and townhouse prices tend to be a bit erratic, as a 2-bedroom condo in Rancho Palos Verdes can range from $500k to over $1M depending on its location and condition. However, since most first-time-home-buyers in Rancho Palos Verdes often buy a condo as a first home, this segment tends to be very competitive, 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 decreased to 17 days in August. Demand for entry-level housing appears to be strong, as days on market continue to fall despite rising rates, lower inventory, and higher housing prices.
The increase in the average sale price for condos this month caused the estimated mortgage payment to creep close to $5,550/month.
The Fall months tend to have less real estate activity, and we are anxiously waiting to see what will happen this year. We are expecting rates to stay consistent, likely in the 7% 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. Be ready to compete.
Sellers in this market should be doing everything they can to distinguish their homes from others on the market. Even though there is not as much competition, cutting corners when listing your home is never a good idea. 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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