As a short sale specialist I have tracked the short sale market for years and as Torrance is the largest city in the South Bay, it has been a very good indicator of how much of a factor short sales and bank owned homes have been on the local market. Short sales first became a factor in mid 2007 with a high point in 2010. In August of 2010 there were 159 active short sale homes for sale in Torrance. Those numbers started to decline in April of 2011 and have continued downward to the current level which has seen an average of 4 homes for sale for the past few months. What was a source of the “deals” sought by buyers is no longer putting downward pressure on the market and has basically ceased to be a factor. View short sale homes for sale on our distressed home site for Torrance and all of the South Bay
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.
Of the 5 current “distressed” homes for sale in Hermosa Beach, 4 of them are condominiums with the other being a townhome.