Rising Inventory Is Splitting Los Angeles' South Bay Housing Market Into Fast Sales and Stalled Listings

Inventory in the South Bay beach cities of Los Angeles County is higher than it was a year ago, according to Susan Murphy, who has spent two decades running the Hoffman Murphy Real Estate Team out of Hermosa Beach, California. That would normally suggest softening conditions and more leverage for buyers. But the additional supply is not producing uniform results. Instead, it is sorting listings into two distinct camps: homes that sell within the first two weeks, often with multiple offers, and homes that stall past 30 days and eventually close for less than they would have at a lower initial asking price. The dividing line is not location or square footage; it is the work done before a listing goes live.

Murphy, who has held a real estate license since 1988, says the current market is balanced in aggregate – enough supply that buyers have choices, enough demand that well-presented homes still attract competition – but unforgiving to sellers who skip preparation or overprice.

“Homes typically sell within the first two weeks, or they sit on the market,” Murphy says. Once a listing passes the 30-day mark, she adds, “nobody’s making a full price offer, and you’re going to be probably ending up with an offer that’s less than what you would have gotten even if you had priced it lower to begin with.”

The Renovation Math That Drives Listing Strategy

The team’s approach centers on a pre-listing preparation – typically paint, flooring, landscaping, and staging – calibrated to keep costs low relative to the additional sale price those improvements generate. The investment ranges from a few thousand dollars to around $50,000 depending on the property’s condition.

A current listing illustrates the calculation. A longtime owner of a roughly 1,200-square-foot cottage in Venice, purchased in the 1980s, was weighing whether to sell to a builder, list as-is, or renovate before going to market. The team solicited investor offers, obtained contractor bids, and compared the net outcomes. Murphy says putting approximately $50,000 into a kitchen renovation, interior and exterior paint, porch restoration, and backyard refresh would yield $100,000 to $200,000 more than an investor would pay. The property is scheduled to list soon.

The strategy reflects a specific condition in today’s South Bay market: buyers are already stretching financially to get in and are reluctant to take on additional work after closing. “Most buyers don’t actually have the vision that you think they might have,” Murphy says. Offering a seller credit for deferred repairs, she adds, is less effective than completing the work beforehand and letting buyers see a finished home.

Multiple Offers Are Fewer but Still Attainable

The competitive dynamics have shifted since the low-rate period of a few years ago. During that period, Murphy says properly priced listings in the beach cities could draw 10, 20, or even 30 offers. With rates higher now, buyers cannot as easily stretch $50,000 or $100,000 over asking without meaningfully affecting their monthly payments. Murphy says a well-prepared, accurately priced listing currently generates two to four offers – enough to negotiate effectively on behalf of sellers.

Price sensitivity varies by segment. The luxury tier above $5 million is noticeably slower. The team’s core market – townhomes and single-family homes, particularly in Redondo Beach, where average townhome prices fall in the $1.2 to $1.6 million range – remains the most active segment.

Sellers who resist the team’s pricing recommendation in favor of a higher number often pay for it. Murphy describes a recurring pattern: a seller lists above market value because they believe their home is better than comparable properties, the listing sits past 30 days, and the eventual sale price comes in below what a correctly priced listing would have attracted in the first two weeks.

Why Monthly Price Data Misleads in Small Markets

Reports suggesting coastal LA pricing is softening deserve scrutiny in markets with very small transaction volumes. In Manhattan Beach or Hermosa Beach, monthly closings can number 25 or 30. At that scale, the mix of properties sold in any given month can swing the average substantially.

Murphy points to a pattern: a month heavy with new construction closings in the $1.8 to $2.5 million range will produce a higher average, followed by a month where more sales cluster in the $900,000 to $1.5 million band, creating what looks like a price decline. “When you have fewer than 100 homes sold in a month, you really have to look at the mix of the homes that were sold,” she says.

Tracked over any five- or ten-year window, Murphy says the appreciation rate in the beach cities has held steady at roughly 4 to 5 percent annually. There were years when prices ran along the bottom, and the pandemic produced sharp increases, but leveled off over time; the trajectory has been consistent. New land is essentially unavailable in the beach cities, and new construction is limited to one-off teardown replacements or localized projects like a 115-unit townhome development Murphy mentions in Hawthorne. That supply constraint underpins the long-term pricing floor.

The Silver Tsunami Pipeline

A significant share of the team’s listing pipeline comes from longtime homeowners – many of whom have been clients for 30 years or more – now considering downsizing. These sellers often begin conversations a year or more before deciding to list. Their primary concerns are not market timing or pricing strategy but logistics: where to go next, how to manage tax consequences, and what preparation their home actually needs.

The team connects these sellers with accountants, relocation agents in common destination markets, and senior living resources. In the Venice listing, for instance, the seller’s accountant identified a path to combine a 1031 exchange with the primary-residence capital gains exclusion – a sequencing that addressed the seller’s biggest hesitation about selling.

“Counseling sellers on how to make that move to the next place and where it should be, and then what to do to get their home ready – those would be the two biggest things that we talk about,” Murphy says.

For sellers weighing a move in the beach cities, Murphy’s advice is direct: condition and pricing are the only variables within a seller’s control, and both must be addressed before listing day. The homes drawing multiple offers are not inherently better located or larger – they are the ones where that work was done upfront.