Inventory Watch and Market Trends – December 2014
For the third straight year, resale inventory in Playa Vista is approaching single digits as we move toward the end of the year with only 12 resales listed as “active” per the MLS. It is more surprising this fall since hundreds of new phase II homes have been completed and sold and the expectation had been more resales from phase I sellers moving up. While that has happened, so far, demand for resales has kept up with supply despite prices being much higher than in the past.
It has also been a case of the haves and the have-nots. There is a very strong demand for 2 bedroom condos in the $600’s, especially single-level condos. In this case, size does not matter. Buyers are finding as much value in a 1,200-1,300 sf upgraded, single-level condo with a lot of light and/or views than they are in a 1,600-1,700 sf townhome-style condo with less appealing qualities. The latter that are priced in the mid-high $700’s simply because they are larger are not selling. Trying to use price/sf as a tool to comp properties and determine value is very naive.
Additionally, detached homes and true townhomes such as Tapestry and Bridgeway Mills that are priced-appropriately are selling quickly and for top dollar. The qualities here such as private garages, no one above or below, and walk-up entries make them live like a home, not a condo. Overpriced ICONs with functionally-obsolete floor plans that have $9,000/year in Mello Roos are sitting on the market collecting dust and doubts.
It remains to be seen if there will be a large surge of resale inventory as more and more phase II homes are completed, but so far the market has withstood the introduction of new product without falling off a cliff or dramatically impacting time on the market for most resale product types.