As local real estate professionals and writers for SPT, we pride ourselves on keeping up with local market trends and providing our readers and clients with what we hope are helpful insights. In our 2023 “Year in Review” column we noted that the predominant trends in the San Pedro and South Bay housing market were highlighted by significantly lower sales volume and modest price softening. Tight inventory was an ongoing theme and mortgage rates reached a high of 8% toward the end of the year.
To summarize the California Association of Realtors® forecast for 2024, expectations were for an increase in existing SFR home sales volume of +22.9% with the median home price forecasted to rise +6.2% to $860,300 in 2024. A persistent housing shortage and a competitive housing market would continue to put upward pressure on home prices during the year. With the economy expected to soften in 2024, the Federal Reserve Bank would begin loosening its monetary policy during the year. Mortgage rates were expected to trend down throughout 2024, and the average 30-year fixed rate mortgage could reach the mid 5% range by the end of the year.
Through the first half of 2024, we haven’t seen any loosening in the Federal Reserve’s monetary policy due to lingering high inflationary conditions. After housing benefited from stabilized mortgage rates in the mid 6% range during the first two months of the year, rates have continued to hover around 7% since March. With the Federal Reserve recently announcing that they would begin taking rate cuts perhaps in December, mortgage rates are expected to fall back to the mid 6% range through the end of the year as inflation cools.
So how has our local real estate market fared? Through the first five plus months of this year (Jan -June 18th year over year) in San Pedro, according to local MLS statistics, there were 131 single-family residences (SFRs) sold. This was up +7.38% from the 122 SFR sales during the same period in 2023. The average sales price for a SFR in San Pedro increased by +9.02%, up from $953,000 to $1,039MM. Average Days on Market (DOM) came down slightly from 38 to 34 days.
In neighboring Rancho Palos Verdes, there were 128 SFRs sold, which was down -9.22% from the 141 homes sold during the same period in 2023. Average sales prices decreased by -5% from $2,058MM to $1,955MM. Average DOM also came down slightly from 35 to 31 days versus the year prior.
The Greater South Bay saw the number of SFR sales increase by a modest +1.31% during the first five plus months of the year from 1,373 in 2023 to 1,391 in 2024. The average sales price for a SFR increased by +6.99% from $1,517MM to $1,623MM. Average DOM also dropped slightly from 35 to 31 days during the same period the year prior.
It’s clear that our local housing market has remained strong even with higher mortgage rates and inflationary concerns. This is due mainly to a strong job market and the tight inventory environment which is expected to continue throughout the year. It will be interesting to see how the remainder of 2024 plays out and we look forward to providing our annual year in review next January.
Mike Harper and Peter Hazdovac are both licensed Realtors® and co-owners of HH Coastal Real Estate, an independent local brokerage. For more info, visit www.hhcoastal.com
