There are hot real estate markets…..and then there are crazy real estate markets.
Working in the highly sought after South Bay of Los Angeles, with iconic beach cities such as Manhattan Beach, Hermosa Beach and Redondo, I have gotten used to a market in which demand is nearly constant. Having said that, however, it seemed long ago that we simply must slow down at some point and it seemed to be heading that direction. July recorded 2 of our beach cities with median prices over $2,000,000 with Hermosa Beach seeing a year over year increase (granted YoY % in a small town doesn’t often mean as much) up $600,000 from the prior July.
Whether it’s the busy summer months, the demand for the highly rated school systems, or some sort of influx of lottery winners, the market lately has simply been crazy. Of the last 5 offers I’ve written we were not even countered being $100K over list price on one (this one had 17 offers of which multiple were cash and appears to have sold for $250K over list price), another client was not in the final running being $100K over (5 offers of which one was all cash at $1.5M), another was the 3rd best at $40K over list (again 4 offers of which one was all cash)…the offer only $10K over asking price…..forget it. And it goes on and on. It seemed a turn in the market was inevitable a few years back when pricing seemed bound to outpace demand.
We’ll see what this market holds in store and it seems absolutely unsustainable at this pace but that’s the same thing that was said 18 months ago. When a market is this high in demand in an area where coastal homes are extremely limited we can only wonder just how far prices and demand can take us.