Hollywood Riviera & South Bay Real Estate Blog

First of all, here in the South Bay you have to ask yourself, “Who doesn’t want to live here?”   There are many other reasons to buy a home - here are 6 good ones!

Pride of Ownership - One of the main reasons people buy and always have bought homes is pride of ownership.  Part of the “American dream is owning your own home.”  Making it yours - decorating it your way, landscaping w/ your favorite plants,  painting it your favorite colors, etc.  Most of us grew up with our families in our “family home.” 

Good Investment - Although home prices are cyclical, sometimes up, sometimes down, overall they appreciate or go up.   For example, if you use the Office of Federal Housing Enterprise Oversight’s “house price calculator,” a home purchased in California in the 1st quarter of 1975 for $75,000 is worth approximately $1,017,400 in the 1st quarter of 2008.  That’s not a bad savings plan since you had to live somewhere!

Tax Benefits - owning a home in the United States is looked upon favorably by our Federal government.  With that said the government offers quite nice tax benefits to those who also own a mortgage.  The mortgage interest you pay each month is deductible and typically the interest is the largest part of your mortgage payment - especially in the early years….when you need the most help.

Capital Gains Exclusions - (another tax benefit) - As long as you have lived in your home for two of the past five years, you can exclude up to $250,000 for an individual or $500,000 for a married couple of profit from capital gains. You do not have to buy a replacement home or move up. There is no age restriction, and the “over-55″ rule does not apply. You can exclude the above thresholds from taxes every 24 months, which means you could sell every two years and pocket your profit–subject to limitation–free from taxation.

 Equity Building - As you pay your mortgage, an amortizing mortgage, slowly you pay more and more of the principle off.  The beginning years of an amortizing mortgage are mostly interest, as noted above, but the last part of the term is mostly principle.  You are basically paying into your own bank account as every time you pay your mortgage the principle gets reduced….you can’t do that with rent.  (You are helping pay down someone else’s mortgage then.)

Equity Loans - Consumers can borrow against a home’s equity for a variety of reasons such as home improvement, college, medical or starting a new business.

The ultimate question “What is my home worth in today’s real estate market?”  I hear it all the time and the short answer that is always true is that “Your home is worth the dollar amount equal to what someone is willing to pay for it and what you are willing to sell it for.”  That number is very hard to arrive at sometimes.

Here in the South Bay we have seen a softening of the real estate market…properties taking longer to sell, prices needing to be reduced, homes needing to be staged and then kept in “showing” condition for the duration of the “marketing period.”  This is no easy task. 

The hardest part of this softening market is finding a price that will attract a buyer.  Sellers that are looking back at what homes sold for a few months ago are looking the wrong direction.  Sellers need to look forward to what will make someone pull the trigger and write that offer.  We need to start seeing what Just Sold or Just went into escrow and then adjust accordingly and not equal to or above those prices…but slightly under those prices.  Properties not aggressively priced are not even getting showings - so those perfectly “staged” houses are not even making a dent.  This is why pricing is the number one key to getting people in your home.  Of course, after they are there it must show better than the house they just saw around the corner.  Buyers are looking at everything right now - they are looking for a deal. They hear words like “foreclosure, bank-owned, short sale” and think they want one of these deals.   They want to be able to tell their co-workers and friends what a great deal they got.

So, you still don’t know what your home is worth - we hope we will all find out soon!

Here were are and it’s already June 4th.  Summer is a few weeks away and many buyers are getting itchy in today’s market to make a play.  But is there anything “affordable” out there right now?  Let’s take a look at what’s for sale in the general Riviera/South Torrance/South Redondo Beach areas?

Hollywood Riviera  (Area 128) - Under $700,000

The Riviera boasts 5 properties under the $700K mark - one single family home located on Pacific Coast Highway (the service street) and it’s listed for $689K and has 1132 sq ft, 3 beds/3 baths.  There is one townhouse in the Village Palos Verdes complex (AKA - the “Brown Townhouses”.)  It’s a nice looking, clean, end unit w/ a view too - for $699K.  And last but not least, there are 3 condos - all located in the “Cote D’Azur” complex which is located right on the border between Palos Verdes and the Riviera.  They range in price from $540K - $599K (there are other units for sale in that complex as well that are more expensive - typically those units are completely remodeled and/or have terrific views!)  The complex itself offers a large pool, putting green area, underground parking areas, a private walk down to the Torrance…R.A.T. Beach.   It sits on the bluff above the beach there..it’s quite a lovely location.

South Torrance/Seaside Ranchos Areas (Area 129)  -under $700,000

In the Seaside Ranchos neighborhood there are 10 single family homes for sale under the $700K mark - a few of them are on Anza, a cute small one on Linda Drive and a few others.  2 townhouses - one for only $519,000 and has 3 bedrooms & 3 bathrooms.   The other is newer construction - 1999 - and is listed for $670K.  There are 5 condos in the South Torrance/Seaside area for sale all under $599,000. 

South Redondo Beach  (Areas 155-157) - Under $700,000

South Redondo Beach holds quite a bit of inventory under $700,000 - a total of 42 properties: 4 single family homes: $579K for a 1 bedroom/1 bathroom to a $699,000 2/1 on Sierra Vista.  6 townhouses range from $615K - $679K for a cute remodeled unit off of Opal.  The condo market holds quite a bit to choose from - 32 condos that range from $329K for a 1 bedroom/1 bathroom over in Brookside Village to a nicely updated 2 bedroom condo at Catalina & Torrance Blvd for $685,000. 

In spite of fluctuations in the real estate market, home ownership has proved over time to be a good long-term investment, say financial advisors.

It’s the largest investment most people will ever make, say advisors at WithumSmith+Brown. It brings financial obligations and helps people save by paying down the mortgage and building equity.

People who bought houses some 20 or 30 years ago have reaped big gains. Though prices may be lower in some areas now, they are still far greater than the original price of the home. Selling at retirement time has become a pivotal move for many in financing a more generous lifestyle at retirement.

Many buyers today are looking for a nice place to live rather than an investment that will pay big returns within a few years. Even with that plan, however, working for a debt-free home is an important step. Further, no one can predict the rate of appreciation in years to come.

Real estate agents say downturns in home prices are not something new in real estate. Over time, however, home prices will rise and continue to rise.

The Graph Above says a lot about what the real estate trends are here in the Greater South Bay of Los Angeles.  April 2007 showed there were a total of 2095 homes for sale with 322 homes in escrow and 402 sold.  Fast forward to April 2008 and see that the number of homes for sale is up to 2498 - a 16% increase.  The number of homes in escrow is down to 299 - a 7% decrease year over year.  The number of sold homes is where we see a larger difference - with April 08 solds coming in at 265 - a 32% drop year over year in the number of units sold.  This makes comping homes for this year difficult as there are not that many to compare to.  The April 2008 Greater South Bay average price of $878,000 is approximately an 8% drop from April 2007’s average price of $963K. 

Let’s look at one neighborhood closely for comparison purposes - Hollywood Riviera vs. the Greater South Bay as a whole.

The story is fairly similar to that of the Greater South Bay as far as number of units sold year over year.  April 2007 showed 11 homes sold and April 2008 shows 5 - a 54% drop.  That’s pretty significant and makes comping homes for a value very difficult.  When someone says, ”What is my house worth?” it is very difficult to say sometimes without a similar house to compare it to.  Let’s look at the current inventory vs. last years inventory - it is relatively the same.  April 2007 had 26 homes for sale and April 2008 had 28 homes for sale.  Where the big difference lies though is in the average Days on Market of those homes.   Those 26 homes last April had only 19 average days on market - and this April shows its 28 homes for sale had an average market time of 70 days….that’s a whopping 73% difference.  Wow!  That is something to think about when you are planning on how long it will take to get your money out of your house.  Add to that a longer typical escrow length - banks are taking longer to get loans underwritten.  Where it used to be very normal to close an escrow in 30 days today we are seeingn 60 days as a norm and even then it is not uncommon to see the bank not close on time.  A very frustrating experience for everyone involved. 

As far as average price in the Hollywood Riviera year over year: this is the first month we are seeing a decrease…it’s been up every month of 2008 until April.  April 2007 had an average sold price of $1,228,000 and April 2008 had the slightest decrease of 1/2% to $1,221,000. 

Keep this information in mind when you are considering marketing your home.  Pricing your property properly is key if you want to reduce your time on market!  

The key to any good deal is “Insider Information.”  And that is certainly true in real estate!  If you want to move to a great neighborhood and buy a great house - the one that is near the park and the good grocery store and with great neighbors,  & on a great street, then you better hire the “Neighborhood Expert.”  That is how you get the insider information - hiring a realtor that really knows the area…not just someone that knows the entire South Bay for instance - which I think is close to impossible anyway.  It’s hiring the expert in the community that you want to live in.  How do you find that person? 

You ask around.  You ask the neighbors, you go to open houses in that area, you look for yard signs and see if there are more than one of the same person.  Just because someone has a listing in a neighborhood doesn’t mean they are the “neighborhood expert.”  It could be a random cousin that got the listing.  Is there someone taking the time, energy and expense of sending out a newsletter to a neighborhood?  This is usually someone you want to find and talk to.  This realtor lives in the community, has kids in the schools of that community (or used to maybe), is part of the homeowners association if there is one, someone who participates in the activities of the community…baseball games, block parties, etc.  This realtor is someone who drives and walks around this community all the time…this is who you want to have as your realtor if you want the “insider information.”  They know what’s going on and it will show when you talk to them.  Ask Questions.

They are going to know the building restrictions (if there are any), what schools the kids would go to, where the local grocery store is, the great restaurants in the area, if the neighbor two doors away is just about to tear down their house, etc. 

The Hollywood Riviera is the community Laura and I live in and love so much.  If you ask us about it, we know it like the back of our hand.  We love to sell homes here.  We sell homes in other parts of the South Bay as well, but you can tell when someone loves what they do and where they live. 

Broker’s Open House - what is it?

Broker’s Open House is one of the most important open houses a listing agent/seller can hold.  They are held during the week and during specific hours that are set by the local board of realtors.  For instance, in Redondo Beach, Hollywood Riviera and Torrance, Thursdays from 12-2 is the traditional time for broker’s to host their broker’s opens.  In Palos Verdes areas - Rolling Hills, Rolling Hills Estates, Rancho Palos Verdes and Palos Verdes Estates - broker’s host their listings open on Tuesdays from 11-1.  The other main South Bay broker’s open house day is Friday and that is for the Hermosa & Manhattan Beach areas….that is also usually from 12-2.  It’s nice when the broker’s make it from 12-2:30 (or 1:30 in PV area) as sometimes their is a lot of area to cover in a short amount of time.   That extra half an hour can make a big difference.

Real estate agents advertise their broker’s opens lots of ways…but the most economical (free) and the easiest way for agents to find out what houses are open is right through our Multiple Listing Service.  We can easily load the open house times into the MLS and it’s easy to check that morning for the Open House List.  Of course, there are other means of advertising that work and many of us employ all the ways in order to attract as many agents as possible to the new listings.  The Easy Reader has a free open house listing for agents…you have to know what your plan is though by Tuesday at noon.  (PV agents never use any other way of advertising their Broker’s Opens though besides the MLS.  That makes life so easy, I’ll tell ya.  Wish the Beach Cities would jump on that boat.)  Professional Flyer Service hands out flyers that they drop off  for free at the different brokerages - seems like a waste of paper (and trees) to me.   Their is a fee for advertising w/ PFS.   Some of the title reps have a service they provide (also gratisse) to help in earning their client’s business….Jim McFarland w/ Southland Title does a great job of this.  And lastly, the Beach Reporter has a popular open house guide, especially for the Hermosa & Manhattan Beach properties.   I find it highly disorganized and hard to read though.  And I believe they used to offer this service of listing broker’s open houses for free and now they only will do it if you advertise in their publication. 

Agents typically provide lunch or snacks for the hungry agents that drive around from house to house checking out the new inventory.  Good agents do this on a regular basis to keep up with the new inventory.  Agents who specialize in certain areas typically just go on certain days.  You do tend to see the same agents over and over and these are typically the ones that are doing business….this is why they are doing business.  They are out working.  It is also a great way to network with other agents and discuss what may be coming on the market or how to improve listings or pricing strategies.  It is very important to get good feedback from the realtors that you work with.  You never know when they are going to be the agent you are working with to make a deal come together and it helps to get along. 

It’s here…yuck!  May-Gray to be followed by June-Gloom.  There is actually a definition in Wikipedia for May-Gray & June-Gloom…I’m shocked!  And it’s right on the money - “June Gloom (also May Gray) is a California term for a weather pattern that results in overcast skies with mild temperatures during the late spring and early summer….”  It also mentions that it may lead to “Seasonal  Affective Disorder” - depression basically. 

Here in the Hollywood Riviera and any other South Bay area with views, it is a horrible time to put a “VIEW” home on the market.  You can’t see a thing right now - on a clear day it feels like you could reach out and touch the Santa Monica Mountains and during May-Gray - forget that there are even mountains there.  One may even call you a liar if you told them there were mountains and/or an ocean out there in the pea-soup!

I sure hope it clears up for 4th of July this year.  The fireworks at Torrance Beach are gorgeous when you can see them!!  Let’s hope all hope for clear weather soon!  Here’s what it looks like on a clear day at the sunset hour!

Out of the 3100 homes here in the Hollywood Riviera,  30 of them are currently for sale.  14 of them are on the Redondo Beach side and 16 are on the Torrance Side.  The Redondo Beach side is merely a P.O. Box - the entire Hollywood Riviera is part of South Torrance.  A lot of people don’t even know that there is a Torrance Beach.  Torrance Beach is the last beach before Palos Verdes.  The highest price house is $2,299,000 for a gorgeous newly built home with great ocean views.  The lowest price house is on the service street of Pacific Coast Highway for $650,000.  Some of the highlights in my opinion are the following:

424 Via La Selva - Gorgeous Remodeled Modern Architectural Ocean  & City View Home - priced at $1,849,000

308 Via Anita - Ocean Views from the Remodeled Kitchen & Family Room (Great Room) - priced at $1,399,000

308 Via El Chico - Panoramic Queen’s Necklace Views & Remodeled House - Priced at $1,199,000

This market is changing as we speak.  Right before our eyes it is very different all of a sudden.  Spring is usually a great time to put your house on the market and I still believe it is, but don’t expect the old days’ of the last 4-5 years. 

We are still seeing multiple offers believe it or not ~ music to our seller’s ears ~ but they are not the same multiple offers of the last 5 years.  Now we are seeing “lowball multiple offers.”  And this is after only days on the market when the buyers know there are other offes.  We just had one where the buyer actually made their counter offer worse than their original offer and this was in a  multiple offer situation.  Crazy!  They did not get the house!

Pricing is all too critical now for sellers.  Staging is critical as well…having “the house on the market” that stands out from the rest and that is priced slightly under it’s competition is the key.  Pricing is not as easy to do as it was over the last 5 years.  Our number of sales are way down, so there is little sold inventory to compare to.  Even though our 2008 sold prices are seemingly 6% higher than this time same quarter 2007, one can not build that into their sales price.  I would ascertain that the 6% rise in average price for the Hollywood Riviera this year over last is due to some very high end homes selling this year and thus raising the average.  We have also seen the lowest price sale in a long time occur this year -2008- $575,000 for a fixer upper in the lower Torrance side of the Riviera.  That is lower than the last low sale of $605,000 which was an even worse location on the Pacific Coast Highway service street of the lower Torrance side of the Riviera.    We have quite a diversity of homes in our “designated-by-the-MLS” Hollywood Riviera neighborhood.  There are definitely two sides to the Riviera and two separate price ranges that go along with the different addresses. 

To date the 90277 (Redondo Beach) side of the Riviera has an average sales price of $1,375K and the 90505 (Torrance) side of the Riviera has an average sales price of $946K.  That is a $444,000 price discrepancy.  Wow - a 32% price difference. 

This is interesting here….the Redondo Beach side (90277 only) had an average price of sold homes this same period last year (Jan 1 - May 2, 2007) of $1,195K.  That means the RB side has gone up 14% year over year - same time period.  Now the number of sales has gone down from 23 last year to 11 this year…that’s more than a 50% drop.   The Torrance side had an average price this same period last year of $951K and it’s $946K this year.  They had a drop in their year over year average price of 1/2%.  Not much, but not the increase in average price the RB side had.  There were 7 houses sold in 2007 Jan - May 2nd 2007 and 9 solds for 2008.   About the same which makes their numbers a bit more in line with each other. 

Here’s the map of the Riviera with the dividing line in different colors.