What Does the Future Hold for the Townhome Market in South Redondo?
Today’s real estate market is evolving as we speak. By the time you read this article, things could be drastically different from the time I am writing this. However, today I feel inclined to analyze one sub-market that I have had my eye on. The South Redondo new construction townhome market.
The South Redondo Townhome Market is Quite the Unicorn
Townhomes in South Redondo and the fluid layout of the city make it extremely unique. These intrinsic qualities of this vibrant beach town offer major value to the owners of South Redondo townhomes.
Newer construction townhomes in South Redondo Beach typically consist of 2 and 3 units on a lot. Most of the lots are rectangular, with slight irregularities, and approximately 40 feet of frontage. The depth of these lots varies from 140 to 200 feet. So, if you do the math, the typical lot size is in the ballpark of 6000-7000 square feet. This is a stark difference from North Redondo Beach, where most of the streets have a simple grid layout with the lots measuring 50×100 or 50×150. This gives South Redondo more of a picturesque landscape with peaks and valleys in elevation and curving roads. These irregularities in the landscape also lead to some pretty killer ocean views in places you may not always expect them.
A few interesting trends have recently attracted my attention to the South Redondo townhome market. One of the major trends has been a lack of new construction inventory in the area over the past year or so. Only 12 new South Redondo townhomes were sold in 2021. As of December, there have only been 2 new townhomes sold in 2022. Currently, one townhome listing is in escrow and one townhome listing is active in South Redondo Beach. That makes for a whopping total inventory of 4 South Redondo townhomes in 2022 (so far).
Pricing a South Redondo Beach Townhome
Our office (Merit Real Estate) has one upcoming listing currently under construction located within the 90277 area code. Admittedly, I am chomping at the bit to know what pricing the builder will put on it. The upcoming project I am referencing is located at 411 N Elena Ave. There will be two gorgeous townhomes at this address, each of which exceeds 2800 square feet of living space. There is a possibility these townhomes will have some slight ocean views, as well. These attached twins are sure to generate a buzz with prospective buyers in such a townhome-barren marketplace.
So what does the market say about two townhomes such as these? Well, that’s the dilemma – the market doesn’t tell us much these days. In an ever-changing market with such little turnover, it’s hard to have a good pulse on what to expect. This is where an experienced local agent/broker can prove their value. Markets like this one will require a thorough review of recent data, projected trends, and even a bit of intuition.
Taking a Deep Dive into the Data
It’s time to get a little ‘nerdy’. The best way to determine market value is to strongly consider the numbers from recent sales in the area. We have already mentioned that sales data for South Redondo townhomes is scarce. So let’s look at some of the data points we do have.
Data Point #1
Currently, there is one new townhome for sale in South Redondo. That’s right. Just one. 519 N Irena Ave #B is a 5 bedroom, 5.5 bathroom, 2900 square foot detached townhome boasting panoramic ocean views from the rooftop deck. At an asking rate of $861 PSF, it seems like a decent deal for something new with epic views of the Pacific. However, we are going on 27 days on the market now, without going under contract. I don’t know too much about the background of this project, nor why Unit A is not listed, but I am guessing maybe the builder decided to keep that one for themself, to either live in or rent out. But that’s just a guess.
Data Point #2
The next project to look at would be 528 S Guadalupe Ave. This project also consisted of an A and a B unit, which are attached, and no ocean views to note. This one is West of PCH, offering nice walkability, but it’s also in a flat area, hence no views. These are also under 2400 square feet each and were built by a prominent builder with a lot of experience in South Redondo. Now here’s what’s very interesting about this one, the first unit to sell, Unit A, appears to have been an off-market sale, where a deal was made during construction. That unit was sold for 2.300M ($964 PSF) in July of 2022 – right at the tail end of the post-COVID frenzied real estate market.
In October, unit B then sold. With nearly the same specs, this one sold for 2.025M ($858 PSF). A whopping 275k discount for essentially the same product, just a short 3 months later. Again, I didn’t get a chance to see these, so maybe there’s a possibility that one unit is significantly nicer than the other, or offers big ocean views – I am just inferring based on the data available to me. But it seems like the buyer who waited for the market slowdown got a killer deal.
What is the South Redondo Townhome Market Telling Us?
With two data points hovering around $860 PSF, that would be the logical number to work off of, but with 519 N Irena still on the market, and offering big views, it’s only natural to expect that the next sales will be below that number.
So what does this tell us to help with determining the value of the next new South Redondo builds? Unless you can tell the future, it’s hard to say. We will know more once they are listed and we can see how the market truly responds. For right now, it seems like the buyer of 528 Guadalupe #B got a great deal. Will that “great deal” stamp withstand the next set of sales to publish? Only time can tell. With such little inventory, we will surely have our eyes on all of these homes to see what happens. However, we still don’t know what 411 N Elena will be listed for, nor do we know what they will actually sell for.
This South Redondo townhome market is a tough one to analyze. The sales data is scarce and challenging to fully understand. This particular market seems to be at a critical moment in terms of determining value and pricing trends. With a handful of South Redondo townhomes in the construction phase, I am hopeful that more inventory will help expedite the true identity of this market.