There is more and more buzz about the fact that property inventory is getting scarce, and the data definitely support that conclusion. Our first chart shows inventory levels in the three beach cities of Manhattan Beach, Hermosa Beach, and Redondo Beach over time based on pending sales. As you can see, it is dropping like a stone, with less than two months worth of inventory in these cities. This means that a home put on the market today ON AVERAGE should be in escrow within two months time, no matter the condition, because there is so little out there. In actuality, what it really means is that anything good is snatched up within days and the badly priced or poorly located or bad condition stuff still lingers like always. But this DOES indicate a growing “sellers market” in the Beach Cities for homes that are priced correctly in good locations. If I were a buyer, based on this data, I would put an offer in right away with very good terms if I found my dream home.
The second chart shows the same data for the Palos Verdes cities of Palos Verdes Estates, Rancho Palos Verdes, Rolling Hills, Rolling Hills Estates, and Palos Verdes Peninsula. Although not quite as dramatic as that of the Beach Cities, it also shows a dropping inventory level to less than three months worth of inventory. Again, signs of a developing sellers market here, though we have a ways to go. By digging into the detailed price data, it becomes apparent that it is the lower end that is still selling up in the PV area — the higher priced properties are still staying on the market a little bit, due primarily to the longer commute that PV area offers to most people.
Finally, the last chart I ran shows my favorite “bread and butter investment” city, Lawndale, for the same parameter, but this time for investment property. This is down to an amazing 1.5 months! This is the reason why my smart investor clients are making offers sight unseen as “subject to inspection”, which means they inspect AFTER they get an accepted offer, since the properties are moving so quickly that they make the offers first and ask questions later!
This is really starting to look like 2012 is the start of a true real estate recovery in the South Bay!