San Pedro real estate experienced an increase in home sale prices (+$30k), inventory (+4 units), time on the market (+1 week), and interest rates (+.1%) compared to last month. Let’s get into the details:
May’s average sale price increased by approximately $30,000, from $779k in April to $809k in May. Inventory increased by roughly 10%, from 36 homes sold in April to 40 in May. Although rates have dramatically increased, prices are nearing the same levels as 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 first time in three months, increasing by a week to a full month, 30 days, compared to 23 days in April. 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 graph, 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 $700k and $950k per unit. The red columns and right axis represent the average mortgage payment with 20% down (does not include HOA fees, taxes & insurance).
Technically speaking, 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. It is pretty astonishing to think that 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 beginning to see 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 slight increase in sale price, up to $930,000 compared to $921,000 in April. This average is still pushing the trend line negative, meaning prices in San Pedro may be leveling off. However, 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 and days on the market increased compared to last month, the time it takes to sell a home is still relatively short, coming in at just 28 days.
The average sale price for a condominium or townhouse in San Pedro increased by approximately $22,000 compared to last month, going from $638k to $661k. Condo sold inventory was identical to last month with 18 units sold.
With this higher average, our trendline is now even, and will likely continue to trend upward as we predicted last month.
The time it takes to sell a home in san pedro increased slightly for condos and townhomes, going from 24 days in April to 33 in May, which can be considered significant since rates increased.
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 rates to stay somewhat consistent which should help gain some confidence in the housing market. 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 negotiating deals, but if you’re a first time home buyer, expect competition. 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. 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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