Will South Bay Home Prices Drop This Fall?

The South Bay has long been one of Los Angeles’ most desirable real estate markets. From ocean-view properties in Palos Verdes to family homes in Torrance and Redondo Beach, buyers and sellers alike are asking the same question this year: will home prices finally come down this fall?

Current Snapshot of the South Bay Market

• Prices Leveling Off After years of steep increases, South Bay home prices have cooled. Average sales prices in Manhattan Beach and Hermosa Beach remain high, but appreciation has slowed, while Redondo Beach and Torrance are seeing steadier, moderate gains.

• Inventory on the Rise More listings are hitting the market compared to last summer, especially in Redondo Beach and Palos Verdes. This gives buyers more choices, but the overall supply is still far below pre-pandemic levels.

• Luxury Homes Taking Longer to Sell Unlike in past years, high-end homes in Manhattan Beach and Hermosa Beach are sitting longer before selling. While lifestyle demand remains strong, today’s buyers are less willing to overpay in the luxury segment.

What’s Driving Conditions?

1. Mortgage Rates Stay Higher With rates still hovering around 6–7%, buyers are cautious about stretching budgets—especially at the higher price points.

2. The “Lock-In” Effect Many South Bay homeowners refinanced at ultra-low rates and are reluctant to list. This continues to keep overall inventory from spiking, which helps prevent steep price declines.

3. Selective Buyers Buyers are more patient, shopping carefully and negotiating harder. They’re quick to pass on overpriced or outdated homes, which explains the longer market times in Manhattan Beach and Hermosa Beach.

4. Lifestyle Premium Still Matters Proximity to the beach, top schools, and coastal living continue to drive interest across the South Bay—especially in family-friendly Redondo Beach and Torrance.

   
   

Forecast: What Could Fall Bring?

• Mild Softening, Not a Crash Prices are likely to ease slightly in markets with more inventory, like Palos Verdes and Redondo Beach. Manhattan Beach and Hermosa Beach may see longer listing times, but sellers who price correctly should still find buyers.

• More Buyer Leverage Expect more negotiating room this fall. Price reductions, seller credits, and concessions are becoming more common—especially on higher-priced homes.

• Neighborhood Variations

  • Manhattan Beach/Hermosa Beach: Luxury homes are sitting longer; buyers are choosier and more price-sensitive.

  • Redondo Beach/Torrance: Balanced markets, with inventory giving buyers options and families driving steady demand.

  • Palos Verdes Peninsula: Larger homes and estates are moving slowly, with buyers gaining negotiating power.

What $1.75 Million Buys You in the South Bay

• Manhattan Beach/Hermosa Beach: Typically a condo or small 2-bedroom bungalow, often a fixer, and usually inland from the beach.

• Redondo Beach: A 3-bedroom townhouse around 1,400–1,800 sq. ft., possibly with a small yard or ocean peek-a-boo views.

• Torrance: A spacious, and possibly updated, 3–4 bedroom home with 1,200–1,800 sq. ft., good schools, and family-friendly neighborhoods.

• Palos Verdes Peninsula: A larger 3–4 bedroom fixer home with 2,000–2,500 sq. ft. and some yard space, possibly with scenic views.

The South Bay market isn’t crashing this fall, but it is shifting. Buyers have more leverage than they’ve had in years, particularly in the luxury segment where homes are sitting longer. Sellers who want to move quickly will need to price competitively and showcase their home’s value and appeal to buyers who want move-in ready homes.