Real estate in San Pedro, 90731 & 90732, experienced a significant increase in average home sale prices (+$179k) and interest rates (+.11%) compared to last month. Let’s get into the details:
June’s average sale price increased by approximately $179,640, from $800k in May to $981k for June while maintaining the same number of homes sold. Of the 39 homes that sold, 13 (33%) sold for $1,000,000 or more. Sold Inventory has stayed consistent since February, averaging about 38 home sales per month. Although rates have dramatically increased, have not fallen. In fact, current home prices have now surpassed prices when rates were still under 4% back in March ’22.
The time it takes to sell a home in San Pedro has increased for the third month in a row, increasing by 5 days to 36 days for June ’23 compared to 31 days in May. 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. Note that July is looking like it will have rates in much closer, if not in the 7% range.
One new metric I am sharing is the Affordability graph, which can tell us a bit about how affordable housing is (or isn’t).
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. June saw the average sale price for a home in San Pedro skyrocket from $800k in May to over $980k.
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 June increased to over $5,000/month, surpassing the previous high from November ’22 when interest rates approached 7%.
Technically speaking, home prices have come down since interest rates started increasing last year, going from a high of $950,000 in June ’22 to just over $800,000 as we enter the summer this year. However, if two buyers purchased at each of these times, they would likely have identical mortgage payments due to the difference in interest rates. So a difference of roughly $150,000 in the sale price can be the same as a rate change of 1.5% (5% to 6.5%).
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 big increase in the sale price, up to $1,143,000 compared to $921,000 in June. This average is beginning to push the trend line into a neutral position, meaning prices in San Pedro may be leveling off. Recent sales on our team have resulted in multiple offers, especially starter properties so if inventory continues to remain low, we expect prices to increase further.
Though interest rates increased compared to last month, the time it takes to sell a house in San Pedro actually decreased, coming in at just 27 days.
The average price for a house in San Pedro jumped significantly from May ($.921M) to June ($1.143M). This was one of the biggest jumps in price over the last 18 months, but it is worth noting that there were some very large/desirable homes sold in June. More than half of the 25 homes that sold in June closed for a million dollars or more.
The average sale price for a condominium or townhouse in San Pedro increased by approximately $29,000 in June compared to May, going from $661k to $690k. Condo sold inventory was slightly less in June as well, with 14 units sold compared to 18 units sold in May.
With this higher average, our trendline is now trending upward, and will likely continue to trend upward as we predicted previously.
The time it takes to sell a condo in San Pedro looks to have increased substantially, but a closer look showed us that ONE unit closed that was on the market for close to 10 months. Removing that sole unit would have brought the average down to 33 days for June, matching May.
Since Condos & Townhomes are typically the most affordable properties, there is often more demand for them from buyers. 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, though July is not looking so good. 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 in 2023. 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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