AUGUST 2023: Real estate in San Pedro, 90731 & 90732, experienced a decrease in average home sale prices (-$50k) and days on market (-21) while seeing increases in interest rates (+.40%) and number of homes sold (+10) compared to July. Let’s get into the details:
August’s average home sale price dropped by approximately $50,000, from $925k in July to $874k while the number of homes sold increased by 10 to 42 properties. Sold Inventory had stayed consistent since February, averaging about 38 home sales per month. August went over the average, but we are not expecting the trend to continue into the Fall.
The time it takes to sell a home in San Pedro has decreased for the first time in three months, from 42 days in July to 22 days for August. Interest rates saw an increase this month as well, and are now well into the 7% range, possibly approaching 7.5%.
Looking at the chart above, the red bars and left axis represent the average sale price for housing for the given month, which has hovered between $700k and $950k per unit, but that was up until May when the average was approaching $1M. August saw the average sale price for a home in San Pedro drop from $925k in July to over $874k.
The blue line and right axis represent the average mortgage payment with 20% down (does not include HOA fees, taxes & insurance). With the massive increase in average home sale prices, the average monthly mortgage for August decreased slightly to $4,822/month.
With limited inventory on the market, we are seeing more homes sell for OVER ASKING since MULTIPLE buyers are competing for the few homes available. 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 specifics below.
Single-family homes in San Pedro experienced a decrease in average sale price, down to $1,038,000 compared to $1,118,000 in June. Similar to last month, this average is beginning to push the trend line into a neutral position, meaning prices in San Pedro may be leveling off. Recent sales on our team have resulted in multiple offers, especially starter properties so if inventory remains low, we expect prices to increase further.
Although interest rates increased compared to last month, the time it takes to sell a house in San Pedro could be falling. July came in at 45 days due to a number of new construction homes that were on the market for a very long time. Ignoring those, the average would have been 25 days, which shows that inventory is selling. August home sales averaged 25 days on the market, which is the second-lowest average this year.
The average price for a house in San Pedro has stayed consistent from June to August, ranging from $1.15M – $1.03M. The estimated mortgage for a house sold in August is roughly $5,720/month.
The average sale price for a condo or townhouse in San Pedro increased by approximately $78,000 in August compared to July, going from $557k to $635k.
Condo sold inventory also increased in August, going from 11 units in July to 19 units sold. Condo pricing in Rancho Palos Verdes looks to be neutral, but could go either way in the coming months.
The time it takes to sell a condo in San Pedro has decreased for the second month in a row, from 38 days in July to 19 in August. This average is significantly lower than the 12-month moving average for days on the market for San Pedro condos, which is currently at 32 days. Keep an eye on days on market; the lower the number of days it takes to sell a property, the higher the demand for property.
Since Condos & Townhomes are typically the most affordable properties, there is often more demand for them from buyers. Although July saw the average mortgage for a condo/townhouse fall below $3,000/month, August experienced a rebound in prices and pushed the estimated mortage to over $3,500/month. We expect demand for condos and townhouses to remain competitive since the inventory is still low, countering the effect of higher interest rates.
Moving forward, we are expecting interest rates to stay somewhat consistent, which should help gain some confidence in the housing market. We are already in the 7% range, but perhaps the upcoming election will cause them to decrease. Keep a close eye on inventory, as that will likely determine which way the market goes; regardless of rates!
Buyers in this market should be ready to compete, especially if you’re a first-time home buyer. Sellers have gained much of their leverage because there plenty of qualified buyers and just not enough inventory. 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 but you will need to compete.
Sellers in this market should be doing everything they can to distinguish their homes from others on the market. Cutting corner when selling your home is not advised, no matter what kind of market we are in. 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. 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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