Real Estate Trends: 2021 Mid-Year Market Review
Our column deadline this month was just days prior to June 15th, which was to be the day that our State and County fully opened back up and further lessened COVID-related restrictions. In real estate, the California Association of Realtors® took necessary steps at the beginning of June to allow public open houses and reduce the number of COVID-related advisories required by all parties involved in a transaction. It’s clear that we are rapidly evolving, and our communities are getting back to business as usual.
We should know considerably more after this publication has reached circulation, but it will be interesting to see what impact opening up will have on local real estate sales and the market in general. Will more homeowners, previously hesitant to sell, be inclined to list their homes due to feeling safe now that restrictions have become more laxed? If so, will this positively impact the severe inventory shortage that we have experienced over the last 15 months? If more homes do come on the market, will this help to normalize the market a bit and create a more level playing field for both buyers and sellers? How will the multi-family market be impacted with COVID relief for tenants scheduled to end in June? Will mortgage rates continue to stay as low as they have? Lots of questions to be answered!
Let’s take a closer look at how our local markets have performed thus far in 2021. In San Pedro, through the first six months (Jan-June 10th) of 2021, according to local MLS statistics, there were 157 single-family residences (SFR) sold. This was up 24.6% from the 126 SFR sales during the same period the year prior. The average sales price for an SFR in San Pedro increased by a whopping 14.8%, up from $742,000 to $852,000. Average Days on Market (DOM) decreased from 19 to 9 days (52.6%).
In neighboring Rancho Palos Verdes, there were 199 SFR’s sold in the first half (Jan-June 10th) of 2021, which was up 40.1% compared to the 142 homes sold during the same period in 2020. Average sales prices increased by 20.6% during the same period, from $1.384MM in 2020 to $1.670MM in 2021. Average DOM was at 8 days, which was a 68% decrease from the year prior.
The South Bay as a whole saw the number of SFR sales increase by 20.6% during the first six months (Jan-June 10th) of the year from 1,313 in 2020 to 1,990 in 2021. The average sales price for an SFR jumped up by 21.1% from $875,000 to $1.06MM. Average DOM decreased by 33.3% from 12 to 8 days during the same period.
The trend in San Pedro, RPV and the South Bay was the same across the board during this period: more homes sold, at higher prices with fewer days on the market. Of course, the dynamics this year versus last are completely different. Last year, as you will recall, the real estate market came to a screeching halt when COVID officially set in on March 12th. It took a good 45 days for things to start picking up as the industry and consumers adjusted to the new norm of home selling during the pandemic.
In previous columns, we wrote about evident buying trends during the pandemic. With people working from home and kids distance learning from home, we saw a rise in larger home sales with a premium on yard space and pools. We also witnessed a huge spike in remodeling and construction during this period. Do these trends continue as we emerge out of the pandemic and return back to our pre-COVID lifestyles? Only time will tell.
Mike Harper and Peter Hazdovac are both licensed Realtors® with Keller Williams Realty. For more info., visit www.harperhazdovac.com