City officials have noticed an uptick in new condominium projects in Hermosa Beach this year, continuing a trend that began in Manhattan Beach.
Community Development Director Ken Robertson said his office has received six applications this year for condo projects, which range between two and four units. In 2009 and 2011, the city received just two applications for multi-unit condo projects.
“When you see six in a short period like this it really shows that things in the residential construction or development market are changing,” Robertson said. “Generally it’s an indicator that more speculative type of development is going on rather than custom home remodels or custom home building.”
After having no condo projects in 2009, the city of Manhattan Beach approved a total of five in 2010 and 2011. Although no applications have been filed so far this year, Sal Kaddorah, a Manhattan Beach building official, expects that to change in the second half of the year. Kaddorah said the number of new single family homes being built continues to increase over the past three years, and permits for home remodeling and additions are increasing by 30 percent year-to-year since 2010.
In Hermosa, the number of new single family homes approved went from 8 in 2010 to 19 in 2011, with five so far this year.
Arda Clark of Shorewood Realtors in Redondo Beach said she sees more Beach Cities developers getting active. “We are seeing developers buying lots to build new construction,” Clark said. “It’s been slowly happening the last couple of years, but we’re seeing more of it now.
“Some of the developers who have the cash and are willing to take the risk, I think they are going in and starting to buy lots. I’m not seeing a huge stampede of developers— probably most of them feel like they want to wait and see,” Clark said, adding that the Beach Cities resale market – not new construction – is experiencing more cases of potential buyers making multiple offers.
“We’re seeing properties sell over asking price. It’s not just isolated cases, so the market is shifting,” Clark said. “It’s hard to say right now if it’s going to be a sustained shift.”
The latest condo project in Hermosa to be approved by the city council was Monte Williams’s plan to tear down a single family home and replace it with three condos at 1516 Monterey Boulevard. Williams, who has developed about 20 properties in Hermosa over 20 years, said his project is not speculative because he plans to live there.
“Spec projects are still very risky,” Williams said. “Houses are selling for less than what they cost to build.”
Williams said there is more of a need for apartments than for condos because people remain hesitant to invest. “They don’t know where the economy is going,” Williams said, adding, “There’s a shortage of good quality properties. And so I think you’re going to see more and more projects [like this] be approved.”
