What will the market do next year? More sales? Less Sales? Higher Prices? Lower Prices? And how accurate will AI be at predicting. Here’s a fun and quick task. Go to your calendar and make a note for next, oh, let’s say May of 2026. Then use the CONTACT US tab at the top of this page. Reach out to me, and let’s see if the REAL numbers for next May, match up with the numbers in this AI report. Or watch this video to see my test of accuracy.
Part 1 - the “BAD” news (then go to Part 2)
🏠 South Bay Cities Real Estate Market Analysis
🌊 South Redondo Beach
| Month | Median Price/SqFt | Number of Sales | Status |
|---|---|---|---|
| Dec 2024 | $1,079.88 | 8 | Historical |
| Jan 2025 | $1,355.46 | 14 | Historical |
| Feb 2025 | $1,084.60 | 11 | Historical |
| Mar 2025 | $1,243.63 | 16 | Historical |
| Apr 2025 | $1,099.14 | 12 | Historical |
| May 2025 | $1,095.00 | 11 | Projected |
| Jun 2025 | $1,090.00 | 10 | Projected |
| Jul 2025 | $1,085.00 | 9 | Projected |
| Aug 2025 | $1,080.00 | 9 | Projected |
| Sep 2025 | $1,075.00 | 8 | Projected |
| Oct 2025 | $1,070.00 | 8 | Projected |
| Nov 2025 | $1,065.00 | 7 | Projected |
| Dec 2025 | $1,060.00 | 7 | Projected |
| Jan 2026 | $1,055.00 | 6 | Projected |
| Feb 2026 | $1,050.00 | 6 | Projected |
| Mar 2026 | $1,045.00 | 5 | Projected |
| Apr 2026 | $1,040.00 | 5 | Projected |
🏔️ Rancho Palos Verdes
| Month | Median Price/SqFt | Number of Sales | Status |
|---|---|---|---|
| Dec 2024 | $1,032.35 | 8 | Historical |
| Jan 2025 | $1,123.65 | 10 | Historical |
| Feb 2025 | $1,125.93 | 12 | Historical |
| Mar 2025 | $1,085.71 | 15 | Historical |
| Apr 2025 | $1,095.46 | 14 | Historical |
| May 2025 | $1,090.00 | 14 | Projected |
| Jun 2025 | $1,085.00 | 13 | Projected |
| Jul 2025 | $1,080.00 | 13 | Projected |
| Aug 2025 | $1,075.00 | 13 | Projected |
| Sep 2025 | $1,070.00 | 13 | Projected |
| Oct 2025 | $1,065.00 | 12 | Projected |
| Nov 2025 | $1,060.00 | 12 | Projected |
| Dec 2025 | $1,055.00 | 12 | Projected |
| Jan 2026 | $1,050.00 | 12 | Projected |
| Feb 2026 | $1,045.00 | 11 | Projected |
| Mar 2026 | $1,040.00 | 11 | Projected |
| Apr 2026 | $1,035.00 | 11 | Projected |
🌴 Palos Verdes Estates
| Month | Median Price/SqFt | Number of Sales | Status |
|---|---|---|---|
| Dec 2024 | $1,079.88 | 8 | Historical |
| Jan 2025 | $1,355.46 | 14 | Historical |
| Feb 2025 | $1,084.60 | 11 | Historical |
| Mar 2025 | $1,243.63 | 16 | Historical |
| Apr 2025 | $1,099.14 | 12 | Historical |
| May 2025 | $1,095.00 | 11 | Projected |
| Jun 2025 | $1,090.00 | 10 | Projected |
| Jul 2025 | $1,085.00 | 10 | Projected |
| Aug 2025 | $1,080.00 | 9 | Projected |
| Sep 2025 | $1,075.00 | 9 | Projected |
| Oct 2025 | $1,070.00 | 8 | Projected |
| Nov 2025 | $1,065.00 | 8 | Projected |
| Dec 2025 | $1,060.00 | 7 | Projected |
| Jan 2026 | $1,055.00 | 7 | Projected |
| Feb 2026 | $1,050.00 | 6 | Projected |
| Mar 2026 | $1,045.00 | 6 | Projected |
| Apr 2026 | $1,040.00 | 5 | Projected |
⛰️ Rolling Hills Estates
| Month | Median Price/SqFt | Number of Sales | Status |
|---|---|---|---|
| Dec 2024 | $762.54 | 1 | Historical |
| Jan 2025 | $851.75 | 3 | Historical |
| Feb 2025 | $872.34 | 10 | Historical |
| Mar 2025 | $1,100.83 | 3 | Historical |
| Apr 2025 | $861.93 | 4 | Historical |
| May 2025 | $860.00 | 4 | Projected |
| Jun 2025 | $855.00 | 4 | Projected |
| Jul 2025 | $850.00 | 3 | Projected |
| Aug 2025 | $845.00 | 3 | Projected |
| Sep 2025 | $840.00 | 3 | Projected |
| Oct 2025 | $835.00 | 3 | Projected |
| Nov 2025 | $830.00 | 3 | Projected |
| Dec 2025 | $825.00 | 2 | Projected |
| Jan 2026 | $820.00 | 2 | Projected |
| Feb 2026 | $815.00 | 2 | Projected |
| Mar 2026 | $810.00 | 2 | Projected |
| Apr 2026 | $805.00 | 2 | Projected |
🏖️ Hermosa Beach
| Month | Median Price/SqFt | Number of Sales | Status |
|---|---|---|---|
| Dec 2024 | $1,647.29 | 5 | Historical |
| Jan 2025 | $1,141.99 | 13 | Historical |
| Feb 2025 | $1,610.71 | 8 | Historical |
| Mar 2025 | $1,100.79 | 8 | Historical |
| Apr 2025 | $1,405.19 | 11 | Historical |
| May 2025 | $1,380.00 | 10 | Projected |
| Jun 2025 | $1,360.00 | 10 | Projected |
| Jul 2025 | $1,340.00 | 9 | Projected |
| Aug 2025 | $1,320.00 | 9 | Projected |
| Sep 2025 | $1,300.00 | 8 | Projected |
| Oct 2025 | $1,280.00 | 8 | Projected |
| Nov 2025 | $1,260.00 | 7 | Projected |
| Dec 2025 | $1,240.00 | 7 | Projected |
| Jan 2026 | $1,220.00 | 6 | Projected |
| Feb 2026 | $1,200.00 | 6 | Projected |
| Mar 2026 | $1,180.00 | 5 | Projected |
| Apr 2026 | $1,160.00 | 5 | Projected |
🌅 Manhattan Beach
| Month | Median Price/SqFt | Number of Sales | Status |
|---|---|---|---|
| Dec 2024 | $1,229.96 | 12 | Historical |
| Jan 2025 | $1,609.36 | 41 | Historical |
| Feb 2025 | $1,612.90 | 27 | Historical |
| Mar 2025 | $1,450.00 | 15 | Historical |
| Apr 2025 | $1,286.17 | 21 | Historical |
| May 2025 | $1,280.00 | 20 | Projected |
| Jun 2025 | $1,275.00 | 19 | Projected |
| Jul 2025 | $1,270.00 | 18 | Projected |
| Aug 2025 | $1,265.00 | 17 | Projected |
| Sep 2025 | $1,260.00 | 17 | Projected |
| Oct 2025 | $1,255.00 | 16 | Projected |
| Nov 2025 | $1,250.00 | 15 | Projected |
| Dec 2025 | $1,245.00 | 14 | Projected |
| Jan 2026 | $1,240.00 | 13 | Projected |
| Feb 2026 | $1,235.00 | 12 | Projected |
| Mar 2026 | $1,230.00 | 12 | Projected |
| Apr 2026 | $1,225.00 | 11 | Projected |
📊 Report Generated: November 2025 | Data Source: South Bay Cities Real Estate Market
All projections based on linear regression analysis of historical trends
Want to learn more about how supply/demand forces are effecting where home prices are headed next? Check in monthly here
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Part 2
Why the Palos Verdes Market Could Surprise to the Upside in 2026
The Macro Tailwinds No One Is Talking About — And Why They Matter for Palos Verdes & the Beach Cities
If you read Part 1, you know the core takeaway:
Real estate, especially in concentrated coastal markets like Palos Verdes and the Beach Cities, rarely moves in straight lines. Inventory moves. Rates move. Buyer psychology moves. But most of it is predictable through trend analysis and supply-and-demand fundamentals.
What’s far less discussed — and what could turn a “moderate” 2026 into a surprisingly strong year — are the enormous macroeconomic forces currently building under the surface. These aren’t guesses or hype. These are structural inputs that may collide all at once over the next 18–24 months.
And when they do, markets like Palos Verdes, Rancho Palos Verdes, Manhattan Beach, Redondo Beach, and Hermosa Beach could experience stronger appreciation than historical projections suggest.
Let’s look at the big picture.
1. Trillions in U.S. Investment Could Create a Demand Wave Coastal Markets Aren’t Ready For
Whether you call it the “Trump effect,” the onshoring boom, or the domestic-capital surge, the fact remains:
The United States is about to receive the largest inflow of domestic investment in modern history.
We’re already seeing:
Manufacturing returning onshore
Infrastructure and energy investment accelerating
Multinationals expanding U.S. operations
Historic levels of private-sector capital repatriation
Job creation across engineering, tech, biotech, defense, and aerospace
So why does this matter for Palos Verdes and the Beach Cities?
Because these sectors are exactly the ones that disproportionately employ the kind of high-earning households who buy in PV, the South Bay, and coastal L.A.
When corporate investment expands, executive and high-skill hiring expands.
When hiring expands, relocation expands.
When relocation expands, demand expands—especially in lifestyle-premium markets.
The supply in these neighborhoods cannot scale to meet that demand.
Geography doesn’t allow it.
That lack of inventory is a tailwind that linear projections cannot fully capture.
2. Wage Growth + GDP Acceleration = More Buying Power Than Forecast Models Assume
Most projection models assume moderate GDP growth and normal wage expansion.
But the forward-looking data tells a different story.
Economists are already revising expectations upward due to:
Increased productivity (AI, automation, robotics)
Expanded corporate earnings
Tight labor markets in high-skill sectors
Accelerating wage gains in coastal metros
If southern California outperforms — as it often does in early-cycle expansions — then household incomes in the South Bay and Palos Verdes could increase sharply.
This matters because:
When wages rise faster than home prices, affordability improves — even if interest rates stay the same.
Your income grows into the price instead of chasing it.
And in affluent areas, higher wages often lead to more aggressive bidding behavior, not less. That’s how upside surprises happen.
3. A High Probability of Rate Cuts in 2026 Could Release Two Years of Pent-Up Demand
This may be the single biggest upside catalyst.
If a new Fed Chair takes over in 2026 and executes a more accommodative policy stance — which is highly likely — the impact could be immediate and powerful:
A 1.0% drop in rates increases purchasing power ~10–12%
A 2.0% drop increases purchasing power ~22–25%
Refi cycles restart (unlocking equity)
Move-up sellers re-enter the market
Buyers who have been sidelined run back in
For markets where the median sale price is $1.5M–$3M, a 1–2% rate shift is not a small adjustment — it’s a structural accelerator.
And because inventory can’t instantly expand in PV, RPV, or the Beach Cities, the only thing that can adjust is price.
4. Buyers Will Try to “Buy the Dip” — But May Find the Dip Already Gone
Every cycle brings a group of analytical buyers who try to time the bottom.
Here’s the risk for them in 2025–2026:
The bottom may occur before the public realizes it.
When macro tailwinds and local supply constraints collide, price shifts happen quietly at first:
Days on market shrink
Competing offers return
Discount margins narrow
Withdrawn listings re-activate
Appraisals start catching up
By the time the headlines confirm the trend, the dip is already in the rearview mirror.
This is why correctly-priced homes today are attracting more serious buyer activity than people expect — and why mispriced homes stick out even more.
5. The South Bay & Palos Verdes Are “Luxury-Elastic” Markets — Meaning Upside Can Accelerate Quickly
Most real estate markets respond slowly to macro change.
Luxury-elastic markets respond fast and disproportionately.
Why?
Because buyers in these zones:
Have higher down-payment reserves
Are less rate-sensitive
Move for lifestyle, not necessity
Compete for scarce neighborhoods and views
Value exclusivity (not just price)
In other words:
Demand can spike faster than supply can react.
And that’s exactly the recipe for upward pressure on price.
6. Why You Should Not Use Linear Data Alone to Predict a Non-Linear Future
Part 1 article emphasized linear regression projections — a responsible baseline.
But real estate is not exclusively linear.
When several structural forces converge — capital inflows, wage growth, rate cuts, limited supply — the resulting price movement often looks like a step function, not a slope.
This is why your baseline projections may actually understate the potential for:
Higher median prices
Faster appreciation in premium sub-markets
A stronger-than-expected spring or summer 2026
More bidding competition for renovated or view-oriented properties
In short:
The downside appears modest.
The upside appears underappreciated.
Final Takeaway: 2026 Might Not Be a “Normal” Year — It Might Be a Breakout Year
The Palos Verdes Peninsula, Rancho Palos Verdes, Manhattan Beach, Redondo, and Hermosa are uniquely exposed to the very forces that could push the U.S. into an unexpectedly strong housing cycle:
Trillions in domestic investment
Faster wage and GDP growth
A rate-cutting Fed in 2026
Severe supply constraints
Strong relocation pipelines
High-earning demographics
When you combine all of these, the conclusion becomes clear:
The biggest risk for homeowners and buyers is assuming the future will look like the past.
If the tailwinds arrive as expected, 2026 may not simply be “stable.”
It could be the beginning of a multi-year appreciation cycle that surprises even seasoned analysts.
Part 3
✅“How Sellers Should Prepare for an Upside Surprise in 2026”
The Strategic Playbook for Palos Verdes & South Bay Homeowners
If Parts 1 and 2 showed you why the Palos Verdes and South Bay markets could outperform in 2026, this part shows you what smart sellers should be doing right now to position themselves at the front of the wave — not behind it.
The next 12–18 months could be defined by three things:
Tight inventory
Expanding buyer demand
Macro tailwinds that drive more purchasing power into coastal markets
In an environment like this, the sellers who win the most money are the ones who prepare the earliest and price the smartest.
Here’s your blueprint.
1. Get Your Property “Market-Ready” Long Before You List
When the market shifts upward, buyers become competitive again — but they also become selective.
That means:
Paint
Flooring
Light fixtures
Landscaping
Minor kitchen/bath updates
Decluttering and pre-staging
Small improvements create outsized returns when demand accelerates.
If the upside surprise happens suddenly (like it did in 2013 and 2021), you don’t want to be scrambling to prepare your home while the market is moving without you.
Early preparation = first-mover advantage.
2. Price Strategically — Not Aspirationally
In a rising market, most homeowners believe they can “price ahead” of the trend.
That’s a mistake.
The homes that command the biggest premiums during an upswing are the homes that:
Price at or slightly below fair market value
Attract maximum buyers
Create competition
Trigger emotional urgency
This is known as market-based pricing — and it consistently outperforms aspirational pricing.
In a tightening inventory environment, competition is not optional.
Competition is the engine that drives price.
3. Prepare for Rapid Showing Activity
If demand accelerates in 2026, buyer urgency will return.
That means:
2–4 showings per day
Tight appointment windows
Multiple offers in the first week
Agents calling immediately after a listing goes live
Sellers who prepare for this tempo have a smoother—and more profitable—experience.
4. Your First 7 Days on the Market Determine 70–80% of Your Outcome
If the macro forces described in Parts 1 and 2 materialize, the “first week rule” becomes even more powerful.
You never get a second chance to be new inventory.
That’s why your preparation, pricing, staging, photography, and agent strategy matter now more than ever.
5. Choose a Listing Strategy That Maximizes Buyer Psychology
In a market that may be accelerating, you want a strategy that:
Creates anticipation
Releases information in the right sequence
Generates immediate attention
Drives urgency and competition
Pulls buyers emotionally before they calculate numerically
A skilled listing agent (one with deep market data and tactical experience) knows how to do this with precision.
In 2026, having that expertise may be the difference between:
An average sale price
Or a record sale price
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