These Trying Times : Job Security Evaporates as Economic Ripple Effect Hits Home : Until the turnaround comes, however, the South Bay will continue to feel the recession in several areas: Real Estate
For months now, the South Bay real estate market has mirrored the description for a hard-to-sell home: “Priced to sell! Loads of potential! Needs TLC!”
Despite low interest rates, a glut of properties and some of the lowest prices in years, the sale of South Bay homes and condominiums has been slowed by the economy as surely as a troublesome escrow.
Throughout the area, both sales and median prices of homes and condominiums are down--in some areas as much as 16%--compared to a year ago. The current sales prices now are barely keeping pace with the first months of 1989.
And although many real estate brokers, with fingers crossed, say the market is ready to rebound, their experience--and real estate surveys--show that sales continue to be sluggish. With few exceptions, sales reports also show that properties that have sold recently have gone for far less than they would have a year ago, roughly matching the prices they would have fetched in early 1989.
“We have had moments like the good ol’ days of 1988 where we’ve had, God forbid, multiple offers on a property. But it hasn’t happened with any continuity yet,” says Mike Collins, sales manager for Shorewood Realtors in Hermosa Beach and chairman of the South Bay region’s association of realtors.
The problem, according to Collins and other real estate agents, began last summer when some jitters about the economy--and later, the Persian Gulf War--persuaded buyers to wait out the market.
But then, when properties began falling in price, the South Bay real estate market fell into what Collins described as “gridlock”--a standoff between still-nervous buyers and increasingly anxious sellers.
The result: a glut of homes and condominiums remains on the market with no solid indication when sales will pick up.
Today, about 6,500 properties are on sale in the South Bay--about the same as last year and roughly 25% more than two years ago.
Overall, real estate sales figures and interviews with real estate agents show that although no area of the South Bay has been immune to the recession, the lowest-priced homes and condominiums in inland cities like Torrance and Gardena have fared better than more expensive communities along the coast and on the Palos Verdes Peninsula.
In recent weeks, some brokers say, sales have showed signs of rebounding, spurred largely by the quick end to the Gulf War and optimism that the economy is recovering. “The market has definitely picked up,” said Mickey Turner, president of the South Bay Board of Realtors.
Then again, Turner and others say continuing worry about the economy--coupled with layoffs in the local aerospace industry--are keeping the inventory of homes and condominiums too high to inspire a buying frenzy.
Convinced that the sales numbers--if not prices--will soon be on the rise, Turner and others say the market is poised for a rebound, providing there is no new shock to the nation’s economy.
Said Collins: “It’s rather like a junior high school sock hop with all the boys on one side and girls on the other. Everybody is just waiting for one or two couples to brave the dance floor. And while I don’t know when it will happen, I’m sure we’ll soon see the dancers on the floor.”
Home Sales The South Bay real estate market has been jolted by the recession. With few exceptions, sales are significantly down and so are prices from a year ago. And, while prices are generally returning to their 1989 levels, the actual number of single-family homes and condominiums sold continue to lag behind the sales recorded two years ago--a sign that low interest rates have yet to ease jitters about buying real estate during an uncertain economy. Zone 1: Hawthorne, Inglewood, Lawndale, Westchester Zone 2: Gardena, Torrance Zone 3: El Segundo, Hermosa Beach, Manhattan Beach, Palos Verdes Estates, Rancho Palos Verdes, Redondo Beach, Rolling Hills, Rolling Hills Estates Zone 4: Carson, Harbor City, Lomita, San Pedro, Wilmington Single-Family Homes
1Qtr 89 1Qtr 89 1Qtr 90 1Qtr 91 1Qtr 91 Zone $ Median Sold $ Median Sold $ Median Sold 1 $195,000 476 $209,000 408 $203,000 303 2 $240,000 374 $291,000 322 $255,000 298 3 $420,000 470 $507,000 455 $427,000 357 4 $166,000 474 $196,000 414 $189,000 298
Condos
1Qtr 89 1Qtr 89 1Qtr 90 1Qtr 91 1Qtr 91 Zone $ Median Sold $ Median Sold $ Median Sold 1 $92,000 24 $124,000 53 $124,000 35 2 $125,000 72 $164,000 112 $173,000 59 3 $245,000 126 $321,000 124 $261,000 106 4 $145,000 110 $158,000 111 $147,000 68
Source: Dataquick Information Systems
Times staff writers Gerald Faris, Shawn Hubler, Deborah Schoch and Tim Waters contributed to this story.
