Hermosa Beach has always been the younger version of Manhattan Beach... a little more casual and a tad more non-conformist then its sister city to the north. But like all younger siblings Hermosa is beginning to grow up...
New construction in the north end along The Strand and many walkstreets is rivaling prices in Manhattan Beach. The Hermosa Valley is home to some very pricey homes on large lots. This quiet area is a "locals knowledge" area similar to the "estate sized lots" just east of Sepulveda in Manhattan Beach. The Hermosa Hills east of PCH are also seeing older homes being torn down to make way for larger homes often with some fabulous views.
Much of Hermosa is made up of non-conforming zoning with townhomes next door to single family homes or small income properties. Hermosa has managed to retain more of the older beach cottages then Manhattan which makes for some quaint and charming walk street homes.
While the volume of sales is down by a large percentage...the overall median price of homes in Hermosa has not declined... but has in fact gone up every year since 2000. The reason is some hefty sale prices along The Strand, in the Sand section and in the Hermosa Valley. In the Hermosa Hills, east of PCH, we see a different story. Not only are sales down but prices are closer to 2003 levels.
As with Manhattan Beach one of the looming issues is the lack of comps for some of the higher priced properties. With only 32 home and 28 townhome/condo sales in all of Hermosa from January-June you can expect some real issues with appraisals in the coming months.
Hermosa Beach: Sold January-June 2000-2009(click on graph to enlarge)
Hermosa Beach: Sand January-June 2000-2009
Hermosa Beach: Hermosa Valley January -June 2000-2009
Hermosa Beach: Hermosa Hills January-June 2000-2009
2 comments:
Thanks very much for this info, there's so much more focus on Manhattan than Hermosa, which I actually prefer.
So my instinctive analysis is to say that prices have not fallen as much in Hermosa nor have sales picked up as much, i.e., the downward arc of the bubble has yet to materialize as clearly and it's been "stickier". At least a factor contributing to this would be that Hermosa is considerably smaller and has fewer comps. When you say there could be some "real issues", are you suggesting that there will not be enough sales to accurately appraise property--or that in the off-summer months, when sales will be slower and more tilted towards distressed sales, median prices could take a more dramatic turn? Or both?
Anon 8:38,
Hermosa is a case where the "comps" don't really tell the story.
I think the main issue is that with the low volume of sales, a few high ticket sales can really skew with the comps.
Prices have fallen but that is not reflected because there have been so few sales. While the median hasn't shown much decline the price per square foot has declined across the board.
As for appraisals... I'll be posting one last article on that issue shortly. When you have appraisers who are not familiar with the area and few "comps" then what often happens is that the comps that are available may not be weighted correctly.
I've had appraisers use the agent's remarks as a means of verification of condition of the comp they used because they have not actually seen the property or other properties in the area. This can create some real issues when it comes to value. This is why you often get an initial appraisal that is off by a considerable amount and then get a review appraisal that increases the value by as much as it was decreased... making all parties question the validity of the appraisal.
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