South Bay Market Report: What's Happening in the $1M to $3M Range in 2026

Quick answer: Through mid-2026, the South Bay's $1M to $3M single-family home market (Manhattan Beach, Hermosa Beach, and Redondo Beach) has produced 266 closed sales totaling roughly $528 million in volume, nearly matching the dollar volume of the ultra-luxury $5M+ tier, but spread across more than three times as many transactions. Redondo Beach dominates on sale count (155 sales) as the primary entry point into South Bay homeownership. Manhattan Beach commands the highest average price per square foot at $1,671. Nearly 25% of all sales in this range closed off-market, and homes that sell within two weeks are averaging nearly 103% of list price, evidence of just how competitive this segment has become.

Below is the full breakdown, city by city, with the data behind it.

The Data Set

This report covers 266 closed single-family home sales priced between $1,000,000 and $3,000,000 across Manhattan Beach, Hermosa Beach, and Redondo Beach, year to date through mid-2026, sourced directly from MLS closed sales records. Where days on market is listed as 0, that property sold off-market, meaning it never appeared with active market time on the open MLS.

City-by-City Snapshot

• Manhattan Beach: 71 sales · $170.2M total volume · $2.40M average price · $1,671 average price per square foot · 15.8 average days on market · 100.25% average sale-to-list ratio · 35.2% sold off-market
• Hermosa Beach: 40 sales · $84.8M total volume · $2.12M average price · $1,546 average price per square foot · 23.4 average days on market · 100.61% average sale-to-list ratio · 25.0% sold off-market
• Redondo Beach: 155 sales · $273.4M total volume · $1.76M average price · $1,078 average price per square foot · 29.0 average days on market · 100.59% average sale-to-list ratio · 20.0% sold off-market

What this tells us:

• Redondo Beach is the volume leader by a wide margin. With 155 of the 266 qualifying sales, more than double Manhattan Beach and Hermosa Beach combined, Redondo Beach is where most South Bay buyers actually enter the market at this price point.
• Manhattan Beach and Hermosa Beach see far fewer sales in this range because inventory under $3M is scarce in both cities. What does trade here tends to be smaller homes, condos-adjacent lots, or properties in need of updating, since land value alone often pushes larger or newer product well above $3M.
• All three cities are selling at or above list price on average, a clear sign that buyer demand in this tier is outpacing available supply across the entire South Bay.

Average Price Per Square Foot: Where the Value Is

Across all three cities, the combined average closed price per square foot is $1,307, but that number varies significantly by city:

• Manhattan Beach leads at an average of $1,671 per square foot, even at this lower price band, reflecting how much buyers are willing to pay simply to be inside Manhattan Beach city lines and its school district.
• Hermosa Beach follows at an average of $1,546 per square foot, consistent with its dense, walkable footprint and limited lot sizes.
• Redondo Beach trails at an average of $1,078 per square foot, which is exactly what makes it the most accessible entry point into South Bay living. Buyers get meaningfully more square footage and lot size per dollar here than in Manhattan Beach or Hermosa Beach.

The takeaway for buyers and sellers: the price-per-square-foot gap between cities in this tier is significant, roughly 55% higher in Manhattan Beach than in Redondo Beach. Buyers priced out of Manhattan Beach or Hermosa Beach at this budget are increasingly looking to Redondo Beach for more space and a lower cost basis, while still staying within the South Bay.

Days on Market and the List-to-Close Correlation

This tier behaves differently than the ultra-luxury market. Here, speed and competition go hand in hand:

• 0 days (off-market): 100.77% average sale-to-list ratio · 66 sales
• 1–14 days: 102.86% average sale-to-list ratio · 109 sales
• 15–30 days: 98.29% average sale-to-list ratio · 34 sales
• 31–60 days: 97.78% average sale-to-list ratio · 24 sales
• 61–90 days: 97.37% average sale-to-list ratio · 11 sales
• 90+ days: 95.93% average sale-to-list ratio · 22 sales

What stands out:

• Homes that sell within two weeks are the strongest performers, averaging nearly 103% of list price, the clearest sign of active bidding wars in this price range.
• 36.8% of all sales in this data set closed above list price, nearly double the rate seen in the $5M+ tier. Buyer competition is simply more intense at this price point, where the pool of qualified buyers is far larger.
• The longer a home sits, the more its final price slips, following the same pattern seen across the market: properties on the market past 90 days settled for about 4 points below list on average.

Bottom line: in the $1M to $3M range, well-priced homes are routinely triggering multiple offers within the first two weeks. Sellers who price competitively out of the gate are seeing the strongest results, often exceeding their list price.

Off-Market Sales in the $1M to $3M Range

24.8% of all $1M to $3M single-family home sales across Manhattan Beach, Hermosa Beach, and Redondo Beach closed off-market year to date, meaning roughly 1 in 4 deals in this tier never appeared with active market time on the open MLS.

• Manhattan Beach: 35.2% of sales were off-market, the highest share of the three cities, likely reflecting how scarce and sought-after inventory is at this price point within Manhattan Beach.
• Hermosa Beach: 25.0% of sales were off-market.
• Redondo Beach: 20.0% of sales were off-market, the lowest share, consistent with its deeper and more traditional resale inventory.

Why this matters: off-market activity isn't limited to the ultra-luxury tier. A meaningful share of the South Bay's $1M to $3M inventory also moves through private networks before reaching the public market, which is one more reason buyers and sellers in this range benefit from working with an agent who has visibility into deals before they're publicly listed.

What's Commanding the Strongest Results

Looking at the top of this segment (sales approaching the $3M ceiling), a few patterns stand out:

• The $3M mark functions as a natural ceiling for this data set, with several of the top sales landing at or very close to exactly $3,000,000, suggesting sellers and buyers alike are treating that number as a meaningful psychological threshold.
• Pool homes carry a modest premium, selling for an average of $2.22M versus $1.98M for homes without a pool, a smaller gap than in the ultra-luxury tier but still a consistent advantage.
• Redondo Beach product in this range skews toward larger lots and more traditional single-family layouts, while Manhattan Beach and Hermosa Beach sales at this price point tend to be smaller homes or properties with updating potential, since land value alone often pushes larger or newer product above $3M in those cities.

Interest Rates YTD: The Backdrop Behind the Numbers

This segment is more rate-sensitive than the $5M+ tier, since a larger share of buyers here are financing their purchase:

• Rates fell to a 2026 low of roughly 5.98% in February, per Freddie Mac and Wells Fargo tracking, the most attractive financing window of the year so far.
• Listing activity in this data set surged from January through April 2026, with 137 of the 266 qualifying sales listed in that four-month window, directly overlapping with the lowest-rate stretch of the year.
• Rates have since climbed back up, reaching an 11-month high, with the 30-year fixed averaging 6.69% as of the first week of August 2026, per Freddie Mac's weekly survey, up from 6.63% a year earlier.
• Fannie Mae's forecast has rates averaging around 6.4% for the remainder of 2026, though actual rates are currently running above that forecast. Wells Fargo expects a more meaningful decline, projecting rates in the 5.45% to 5.50% range by mid-2027.

What this means for buyers and sellers in this range: the strong correlation between the February to April listing surge and the low-rate window suggests both buyers and sellers in the $1M to $3M range are more responsive to rate movement than the ultra-luxury market. Anyone waiting for a better rate window should know that spring 2026 was likely this year's best opportunity so far, and the market has adjusted to a high-6% environment heading into fall, with any meaningful relief not expected until 2027.

Key Takeaways

• 266 closed sales YTD between $1M and $3M across Manhattan Beach, Hermosa Beach, and Redondo Beach, totaling $528.4 million in volume, nearly matching the $5M+ tier's total dollar volume across more than three times as many transactions.
• Redondo Beach leads on volume by a wide margin; Manhattan Beach leads on average price per square foot at $1,671; Hermosa Beach sits in between.
• Nearly 25% of all sales closed off-market, with Manhattan Beach seeing the highest share at 35.2%.
• 36.8% of all sales closed above list price, nearly double the rate seen in the $5M+ tier, a sign of intense buyer competition in this range.
• Homes that sell within two weeks average nearly 103% of list price; homes that linger past 90 days settle for roughly 96% of list on average.
• Rates bottomed near 5.98% in February and have since climbed to an 11-month high of 6.69% in early August, with listing activity clustering heavily around the low-rate window from January through April.

Frequently Asked Questions

How is the $1M to $3M home market performing in the South Bay in 2026? Through mid-2026, the $1M to $3M single-family home market across Manhattan Beach, Hermosa Beach, and Redondo Beach has produced 266 closed sales totaling roughly $528 million. Redondo Beach leads in volume, Manhattan Beach commands the highest average price per square foot, and 36.8% of all sales closed above list price, reflecting strong buyer competition in this range.

What is the average price per square foot for homes under $3M in Manhattan Beach, Hermosa Beach, and Redondo Beach? The average closed price per square foot is $1,671 in Manhattan Beach, $1,546 in Hermosa Beach, and $1,078 in Redondo Beach, for single-family homes sold between $1M and $3M year to date in 2026.

What percentage of South Bay homes in the $1M to $3M range sell off-market? Roughly 25% of $1M to $3M single-family home sales across Manhattan Beach, Hermosa Beach, and Redondo Beach closed off-market year to date in 2026. Manhattan Beach had the highest share at 35.2%.

Is the $1M to $3M South Bay market competitive right now? Yes. Nearly 37% of sales in this range closed above list price year to date in 2026, and homes that sell within the first two weeks average close to 103% of list price, indicating active multiple-offer situations across much of this segment.

Where is the most affordable entry point into South Bay single-family homeownership? Redondo Beach offers the lowest average price per square foot of the three South Bay beach cities at $1,078, roughly 35% less than Manhattan Beach, making it the most accessible path into South Bay homeownership for buyers in the $1M to $3M range.

Jagger Kroener and Lauren Forbes have closed over 30 transactions year to date in 2026 across the South Bay.

This report is based on MLS closed sales data for single-family residences priced between $1,000,000 and $3,000,000 in Manhattan Beach, Hermosa Beach, and Redondo Beach, year to date through mid-2026. Interest rate data sourced from Freddie Mac, Wells Fargo, and Fannie Mae public forecasts.

Curious how these trends apply to your specific property or search? Reach out: I track this market in real time and I'm happy to walk through the data with you.

Disclaimer: This report is for informational purposes only and should not be relied upon for any real estate, investment, financial, or legal decisions. While data is believed to be accurate as of the date of publication, it is not guaranteed and may be subject to change or revision. Please consult a licensed real estate professional before making any decisions based on this information.