Distressed Home Inventory Continues to Decline in Redondo, Hermosa and Manhattan Beach

Distressed home sales and listings continues to go down with both REO and short sale opportunities fading. The number of short sales and bank owned homes in Manhattan Beach, Redondo Beach, and Hermosa Beach have always been relatively low compared with other, more inland, areas and communities, but it appears that the inventory of these homes is at a several year low and looks to remain that way. The days of finding a “deal” in these cities may be a thing of the past. Redondo Beach, due to both the size of the city and the entry level price point options, has far and away the greatest concentration of distressed sales between the 3 cities but numbers decline there as well.

The chart below shows the most recent number of active, pending and sold short sales in Redondo, Hermosa, and Manhattan Beach.

And then there were two…..short sales a thing of the past in Manhattan and Hermosa?

With the low inventory and high demand, the few short sales that appear on the market don’t seem to last long.  We’ve tracked the Manhattan Beach and Hermosa Beach short sale and foreclosure market for the past few years and we are now at a several year low with only two “distressed” sales currently active on the South Bay MLS.  In recent months the few short sales and foreclosures in these areas are generally pricing and selling closer to market value.  Below are the two current foreclosures, one each in Manhattan Beach and Hermosa Beach.  The condo in Hermosa Beach is located in the condo/hotel The Beach House Hermosa Beach and is unusual due to it’s condo/hotel aspect which only allows owners to stay a total of 90 days a year.  This challenge makes financing almost impossible which is partially responsible for the past and current short sale situation.  The other is located in the El Porto area of the Manhattan Beach sand section.

Keith Kyle is a licensed Realtor, short sale specialist and Top Producing agent with Vista Sotheby’s International in Manhattan Beach.  He serves his clients throughout the South Bay and his websites KeithKyleHomes.com, Redondo Beach Real Estate , Torrance Real Estate, Manhattan Beach Luxury Real Estate and FindYourSouthBayHome.com offer the most comprehensive real estate destinations in the South Bay with free MLS access, current home listings, open houses, recent home sales information and more.  Keith can be reached at 310-251-2344 or by email at info@KeithKyleHomes.com.

 

Condos Bearing the Brunt of The Hermosa Beach Foreclosure Market

While we have been buffered a bit from the distressed home market, foreclosures and short sales are still an active part of the Hermosa Beach real estate market.  Not surprisingly foreclosures and short sales in Hermosa Beach over the past 12 months have consisted primarily of condos.  Why is this?  From my experience there are several factors.

  • Starter Homes – In a very high end market such as Manhattan Beach and Hermosa Beach, it is inevitable that many of the homes that eventually find their way to the foreclosure process are considered “starter homes”.  Many or most of these homes were attainable during the loose lending days and many were first time home buyers taking out adjustable mortgages or taking loans that were very aggressive compared with traditional standards
  • Moving up – Condos in towns such as Hermosa Beach are often considered “stepping stones” and although a good way to start the process of home ownership in a high end market, the intent is often to live in the home only long enough for values to go up, use the equity and buy up.  This is a fine strategy if the market is going up.
  • Demographics – Condos are also often bought by young single people, or younger couples.  Once again they are a starting point, and the plan is often to sell and buy up once there are kids involved.  Again the challenge becomes trying to sell in a down market.
  • Shorter term owners –  The other aspect that separates condos from single family homes is the relatively high turn over and therefore higher % of short term owners that bought at the peak.  For some of the reasons above condo owners are generally shorter term and therefore many bought at the peak of the market and the decrease in home values impacted those owners far more than those that have owned for years and years.

Below is a list of the current “foreclosure” listings in Hermosa Beach.

Hermosa Beach Foreclosures

Of the 5 current “distressed” homes for sale in Hermosa Beach, 4 of them are condominiums with the other being a townhome.

 

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