Local Market Update for Single-Family Homes in Palos Verdes:
Palos Verdes starts the New Year of 2017 with 120 single family homes on the active market. I know it sounds like a broken record, but the inventory is extremely low, and it as been for the past several years.
67 Palos Verdes single family homes are in escrow with accepted offers. The existing inventory remains in a constant state of depletion due to the ongoing demand for Palos Verdes real estate.
2016 recorded 698 single family residential sales in Palos Verdes.
Palos Verdes Luxury Home Market Update:
The Palos Verdes luxury home market begins the year with thirty-nine single-family homes for sale priced over $3,000,000. Sixteen of those luxury residences are located in Palos Verdes Estates. Rolling Hills has twelve high-end properties on the market, Rancho Palos Verdes has nine single-family properties in the category, and Rolling Hills Estates has two luxury homes for sale over $3,000,000.
Eleven Palos Verdes luxury homes are currently in escrow with accepted offers.
56 Palos Verdes luxury properties sold during 2016.
Given the number of high-end homes on the active market and the rate of absorption, there is a four-month supply of luxury homes for sale in Palos Verdes. It will be interesting to see if the uptick in interest rates affect luxury home sales. My prediction is we will see a flurry of buyer activity in all price ranges during the first quarter of 2017 as they attempt to “beat” any additional planned rate hikes.
With nearly forty homes to choose from, higher prices, and an interest rate hike, sellers can expect buyers to be selective and exhibit high expectations when purchasing a luxury home in the $3,000,000 and up price range. The well-prepared home, priced right and presented in its best light will win buyers’ hearts when they are in the market to purchase a Palos Verdes luxury home.
Trends and Statistics for California Housing Market:
“Everything is up in the air for 2017.” Those were the opening remarks of Leslie Appleton-Young, an economist with the California Association of Realtors, when she addressed the Palos Verdes Board of Realtors’ breakfast meeting January 5, 2017. She touched on several key factors that will impact housing during the upcoming year.
- Home prices are high in California and pricing many buyers out of the market.
- Residents are leaving the State due to the high cost of housing (and the long commute if they purchase affordable homes in neighboring counties).
- More parents are helping (or buying) homes for their children. This is particularly the case in the high-priced coastal regions such as Palos Verdes.
- 5-6% for 2016 and expected to be similar for 2017.
- The upper end of market flattened out.
- San Francisco area (Silicon Valley) saw a nearly 40% increase in home values. Will Silicon Beach have a similar impact on local home values in years to come?
- 3-4 Months of inventory is the new normal.
- Today’s inventory turns over 3% to 4% annually; in the 1970s it was 7% to 8%.
- More single-family homes are rentals–purchased by investors during the housing recession.
- There are multiple offers on properties, but not as many.
- Investors (including foreign investors) are still a factor, but not as many as in years past.
- 4.25% is the new norm, still low from a historical point of reference.
- More interest rate highs likely in the works for 2017.
- It’s easier to obtain a loan, but many first-time home buyers are unaware of low down payment options available.
- Housing is a very “rate sensitive” industry.
- Palos Verdes Estates: The median value of a single-family home is $1,700,000.
- Rancho Palos Verdes: The median value is $1,400,000.
More Points to Ponder:
If you purchased a property in 2011 or 2012, congratulate yourself and thank your real estate agent. You bought in the “sweet spot” of the market low.
Real Estate is still one of the best long-term investments.
California leads the nation in job growth. This is bound to put pressure on the housing supply.
If it’s time to tweak your real estate portfolio, let me know how I can help you achieve your 2017 real estate goals. 310.493.8333 or Norma@CharlemagneProperties.com