2019 Real Estate Year in Review
2019 went by really fast. Maybe because I spent most of January in Thailand so 12 months felt like 11. In any case, 2019 is officially in the books.
Let’s take a look back at my Real Estate year in review. I’ll reflect back on the market, life, and whatever else occurs to me.
I did my usual 16 deals and considering a major distraction I had along the way (I had to rather abruptly change Brokerages), it was all in all a good year.
Half my business, 8 deals, was in Redondo Beach. No surprise there. I always say that 50% of my sales are Redondo and the other 50% everywhere else. This year the everywhere else included the ThreeSixty South Bay complex in Hawthorne, a few sales in the gated communities in Gardena, an investment property in Long Beach, the DTLA Arts district, Rolling Hills Estates and Rancho Palos Verdes plus Culver City and I’m sure I’m leaving something else out but I’ll remember as I start typing.
In addition to the video up top, I’ll add a few galleries of photos so you can get the visuals.
THAILAND TRIP
Let me start first with my trip to Thailand. If you haven’t been there, it is both exactly what you would expect and nothing like what you expect all at the same time. My travels there are different than yours would be because my wife is Thai so I get way off the beaten track to points beyond. Way beyond.
I’m told that most Americans who go to Thailand usually visit the south with Phuket being the most common destination. Maybe that’s because the DiCaprio movie “The Beach” was filmed near there on Phi Phi island. In fact, there’s been so many visitors there that the actual beach where it was filmed has been temporarily closed.
We didn’t go to the south.
We flew into Bangkok which is a city I quite like. Large and very urban. But we also visited Chiang Mai in the north and Pattaya which is a beach resort area south of Bangkok. And then we went to the Issan region where my wife is from. Here’s some representative photos. Not sure why I chose these over the thousands of others I have.
2019 MARKET SURPRISES
Almost every agent agrees that Q1 2019 was very slow by any normal standard. On retrospect everyone now sees it as a function of interest rates which had risen to the mid 4’s during January-March 2019. I’ve long been saying that at 5% we have a Buyer’s market but I was really surprised to see that just getting into the 4’s made a huge difference in buyer sentiment as in they didn’t want to buy.
I think it was late March when rates kind of went into a free fall and voila the Buyers were back. In droves.
While many agents and brokerages focus on listings, and I think sometimes overly focus, the truth is that without Buyers nothing happens.
I was surprised at the extent to which “Buyer’s Remorse” weighed on the purchase decision and really impacted people. I had clients who were absolutely intent on finding fault with a property in escrow and they wouldn’t give up until they found something wrong. For another of my Buyers I had to negotiate a $26K contract price reduction based on he just didn’t want to pay what he agreed to. On one of my listings, a Buyer - who was acquiring the unit as a rental, decided it was too noisy for her even though she wasn’t going to live there.
Many Buyers also seemed less inclined than in previous years to do any upgrade work. I’m not talking about moving walls just the usual painting and flooring and maybe new appliances. Tired properties were punished.
REDONDO BEACH SALES
As I mentioned, I had 8 sales in Redondo Beach which remains my main market. Over the last decade I probably sold as many homes in Redondo Beach as anyone who isn’t a big team or representing a builder. So maybe I should say I’m the leader in resale properties non team. (Is that like being the best supporting actor in the non funny comedy category?)
Every Buyer transaction I was involved in was a multiple offer situation that my clients won. Well except for one which was a new construction property that only had my client’s (contingent) offer. In the multiple offer situations we weren’t always the highest bid. (It must be my charming personality.)
Most, but not all, of my listings also had multiple offers.
Speaking of listings, I was a little surprised at what a bad job a lot of lenders are doing these days. I had one listing transaction - not my buyer, that defaulted with the first lender who decided the day before we were set to close that they couldn’t do the loan. Really. That’s just bad loan processing. The sale eventually closed with a different lender.
For 2020 I might make any Buyers get pre-approved or at least vetted by a lender I know. I don’t like to go that route but as long as we stay in a Seller’s market, I just might have to.
My Redondo Beach Buyers all performed well because they were working with a lender I know - usually Chase who in my opinion is out performing everyone else right now.
The 8 sales broke down as follows:
2 Detached 2 on a lots
2 3 on a lots (one was new construction)
1 Golden Hills Tall & Skinny
1 remodeled SFR in the TRW Tract
1 SFR in South Redondo
1 attached 2 on a lot
Here’s another slideshow, these are my 2019 Redondo Beach sales. On the other side, I’ll discuss some of what I see going on in Redondo Beach if you are thinking of Buying or Selling here.
A few thoughts about the Redondo Beach Real Estate Market.
Buyers definitely want turnkey as much as Sellers don’t want to do repairs.
Best to list properties close to where they might sell for.
Listing Agents have to point out what makes properties unique. Don’t assume Buyers or their agents will figure it out on their own.
The larger attached 2 on a lots may be undervalued right now.
The pace of price appreciation over the last few years is not sustainable unless rates go down a lot.
Inventory will remain low.
Redondo Beach will continue to be one of the best coastal values in LA County going forward.
ThreeSixty South Bay
This popular gated community is unique in the South Bay. It has amazing amenities that are only eclipsed by Playa Vista and it offers a great luxury lifestyle plus it is in a desirable school district in Hawthorne (Wiseburn) and is dig friendly. Can’t beat that right? Follow this link to learn more about ThreeSixty.
I listed and sold what was previously the model home in the Terraces. As such it has a great location as well as numerous builder upgrades.
Here’s an interesting anecdote from this sale.
A lot of Buyers mistakenly think that putting their offers in through listing agents is going to get them some great advantage. Not true and in fact each party in a Real Estate transaction needs their own representation. I did have buyers approach me to represent them. They didn’t get the deal because an “all-cash” Buyer did. Funny how that works.
GARDENA GATED COMMUNITIES
Priced lower than Redondo Beach or ThreeSixty, there are a few really cool gated communities in Gardena. I sold one very nice townhomes in Newfield and a SFR in Gardena Village.
One of these Sellers followed my pricing recommendation exactly and we were in escrow even before any Open Houses. The other Seller listed at his price, not mine, and it took a whole lot longer to find a Buyer as well as some price reductions along the way.
Curiously, one of the purchases was “all cash” and the other was over 50% down which surprised me.
Also, counter intuitive is that the fact that these properties were further east - located closer to Freeways was a selling point. There’s other similar communities in Gardena as well as affordable SFRs. So if you are priced out of the Beach Cities, this might be neighborhood to consider.
PALOS VERDES
I had two sales in Palos Verdes - both representing Buyers and I considered them to be great deals.
One was a SFR in the neighborhood of RPV off Western Ave. You can get a really nice SFR there for under $1M and I usually wind up selling a few properties there every year.
The attraction is the schools and you just get a lot more for your money. The drawback is that if you are commuting to work some locations are just not doable.
The other sale was a condo in Rolling Hills Estates off Crenshaw Blvd. Same story, affordability and great schools if you can make the location work.