I got an email from redfin with El Segundo’s Demand Pulse. The stats are enough to scare anyone but let’s take it with a grain of salt. A month of sales does not make a trend. Looking at just 30 days and comparing to the previous isn’t a fair assessment. Comparing January to December? A nice warm March to February? You get my drift.
In March, the median list price for homes in zip code 90245 was $1,048,500, up 5.1% from February, when it was $998,000. Want to know more? See all homes for sale and more local data on Redfin.
Market Trends in 90245
Median listing price: $1,048,500, up 5.1% from February
Median listing price per square foot: $577, up 0.3% from February
Median sale price-to-list price ratio: 99.3%
Number of active listings: 42
Could you imagine if prices really ramped up 5% each month? That’s a 71% annual increase! So don’t let stats scare you into making a rash decision.
Like I mentioned in my last post, we have seen the price of a crappy tear-down increase significantly. I’d say ~20% increase in the past 12 months. The demand for nice livable homes in El Segundo is off the charts. In our search for a home that lasted over 15 months there wasn’t any one house we loved. They were either total garbage or livable with some concessions. Concessions being $100-$175k in improvements. Yes, please sign me up for a million dollar purchase that I don’t really like and/or will take and extra $100,000 to make nice! And by a million I mean $1.1 – $1.2 million.
If the economy is doing so great why do people feel cash poor? Why are people worried about the cost of their healthcare, higher education? Why are we seeing so many retailer going bankrupt?
Maybe this time it’s different.
El Segundo Bubble 
I am here on the east coast in Northern Jersey and prices are probably growing even faster than you guys are seeing on the West Coast. And I agree with your sentiment about affordability, though not sure if we are at the top yet.
The retailers are going under because of web sales. The actual total purchases of crap is up, so housing prices are lining up. We are just seeing the death of an outdated retail model.
Now the question is can we buy up the retail space and turn them into housing that is cheaper than actual intended housing?
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The downfall is that even though we all need and want affordable living, no one wants to provide it because you can’t make money. In SoCal the motto is “Not in My Backyard”. Everyone wants to help the working class until it affects them personally.
Developers won’t turn retail into residential because of the cost to benefit reality. They’d sooner tear it down and start fresh.
Los Angeles made some shady deals with developers allowing high rise and xtra large apartment complexes in areas not zoned for such with the condition that they were:
1. Close to or on a public Transit line (public transit in LA is a joke)
2. Had retail space at the ground floor to facilitate “urban living” and less of a need for people to get in their car to shop.
The reality is what we ended up with is giant complexes priced at current bubbly (unaffordable) levels and impacted traffic.
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Similar to this side of the country. They are building many high rise apartments/condos/co-ops, but they are all luxury apartments with prices over half a million for two bedrooms (studios in the city).
Are we at the top is the question. I am looking at a nice location with a large, but very old (1893) and beaten down house.
It is priced at lower than market (by probably 200K due to the required repairs, minimum 125K), but the location is pretty good, though the lot is a bit small. I have a feeling that we might be at the top, but I thought that last year and in my Jersey town we went up 16% in 2016 and the prices have gone up another 10 to 20%. We have houses selling in a day, and cancelling their open houses for asking prices over 500K, and other houses selling for 700K on the same block as houses that were bought for low 300K 2.5 years ago.
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