Editorial by Lucas Commiso
Real estate activity is known to be cyclical, and conditions vary by location. Hermosa Beach’s ‘Sand Section’ – stretching from Ardmore Avenue to the Strand – depicts a stalwart market favoring both property owners that are choosing to sell, and developers that are building luxury homes.
Currently, there are 6 new construction properties (built within the last 2/3 years) listed for sale in the Sand Section. On Manhattan Avenue alone, there are 11 properties in the process of being built. Each in different stages of the building, some projects are beginning foundation work, while others are well into framing or finishing the interior.
The increase in construction activity correlates with demand for Hermosa real estate that lies to the west of Ardmore. The average sale price during the first quarter for a Sand Section home was about $3.281 million, up ~36% from $2.409 million in Q1 of 2018. The number of properties sold in Q1 increased from 7 in 2018 to 11 in 2019, further demonstrating the rising appeal of developing property that lies close to the coast.
Today’s market presently shows 30 Active properties, 5 Pending, and 11 Sold in the last 30 days. The absorption rate – the rate at which properties sell relative to a period of time – is calculated by dividing a given month’s number of sales by the number of homes available / listed. An absorption rate greater than 20% is indicative of relatively quicker home sales. Hermosa’s Sand Section has an absorption rate of 36.7%, a condition which favors local property owners.
It is critical to understand local markets beyond the current inventory. Please contact your RE/MAX Estate Properties agent to help you navigate the new construction market.
Lucas Commiso Realtor®, B.A. Business Economics
At RE/MAX Estate Properties