JULY 2023: Real estate in San Pedro, 90731 & 90732, experienced a decrease in average home sale prices (-55k), but an increase in days on market (+7) and interest rates (+.24%) compared to June. Let’s get into the details:
July’s average sale price dropped by approximately $55,000, from $981k in Juneto $925k for July while the number of homes sold dropped by 7 to 32 properties for July. Of the 32 homes that sold, 6 (19%) sold for $1,000,000 or more, 10 (32%) sold $600,000 or less. Sold Inventory had stayed consistent since February, averaging about 38 home sales per month, but have now dropped to their lowest figure since January.
The time it takes to sell a home in San Pedro has increased for the fourth month in a row, increasing by 7 days to 42 days for July ’23. Interest rates saw an increase this month as well, but overall have remained around 7%, as can be seen in the red line above.
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. July saw the average sale price for a home in San Pedro drop from $980k to over $925k for July.
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 July decrease slightly to $4,800/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 $1,118,000 compared to $1,143,000 in June. 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 continues to remain low, we expect prices to increase further.
Though interest rates increased compared to last month, the time it takes to sell a house in San Pedro has stayed between 27 – 38 days. July came in at 45 days due to a nuber 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 still moving.
The average price for a house in San Pedro saw little changes from June to July. Average estimated mortgage was also relatively the same.
The average sale price for a condo or townhouse in San Pedro decreased by approximately $133,000 in July compared to June, going from $690k to $557k. Condo sold inventory was slightly less in July as well, with 11 units sold compared to 14 units sold in June, marking the third straight month of decreased inventory. It is also worth noting that of the 11 units sold, only two were 3 bedrooms or bigger, meaning a lot of smaller units sold in July, which could explain the drastic drop in average price.
With this lower average, our trendline is now declining, but will likely reverse direction in August.
The time it takes to sell a condo in San Pedro looks to have decreased from 51 days in June to 38 in July. This average is closer to the true average days on market for San Pedro condos, which is currently at 32 days for 2023.
Since Condos & Townhomes are typically the most affordable properties, there is often more demand for them from buyers. As mentioned previously, July sold mostly 1 and 2 bedroom condos, which is the likely cause for the lower average sale price and monthly payment estimate. 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. Inventory will be key in determining what direction the market will head. 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 just isnt 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. 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. 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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