South Bay Buyers Market 2026: What You Can Ask For

by Ben Larson

A few years ago, you had to offer over asking and waive everything to get your offer accepted. That is not the market we're in right now. If you're buying in the South Bay, you have more leverage than you've had in years.

In this post I walk you through what you can ask for, some loan options that make today's rates more manageable, and the condo rule changes that are making some buildings harder to finance.

Watch the video: South Bay Buyers Market 2026: What You Can Ask For

The South Bay Market Has Shifted

We don't have bidding wars like we used to, at least not many. Some pockets still see them. I just had a listing in Torrance that got multiple offers and a ton of interest. Right now, Torrance is where I'm seeing the most multiple offers. If that's where you're looking, start with my West Torrance homes for sale page.

That doesn't apply to every home. The homes getting the most attention are priced right, remodeled, done well and move-in ready. Fewer buyers have the time or money to take on a project, so those homes draw the biggest buyer pool.

Everywhere else, sellers are getting more flexible. Price adjustments tend to happen within the first two to four weeks on the market, and that opens the door for you to negotiate.

What You Can Ask For as a Buyer Right Now

Credits

Credits are back on the table. You can ask the seller for a credit and use it to buy down your rate (more on that below). If you're deciding between a lower price and a credit, read my breakdown of seller credit vs. price cut for South Bay buyers.

Contingencies

You used to waive most or all of them. Maybe you got a few days for inspections. Now you can almost always keep your loan, appraisal and inspection contingencies. That gives you time to do your inspections without scrambling. For condos, also make sure you have time to review the HOA docs. Here's why reviewing HOA documents before removing contingencies matters.

A contingency to sell your home

This one is still not a given, but it was very rare a few years ago. Today you may be able to make your offer contingent on selling your current home.

The flip side is that it's harder to sell a home now than it was a few years ago, so sellers look closely at these offers. They want to know what home you're selling, how it's priced and what activity looks like in that area. I recently did one where the buyers priced their home well and agreed to short timeframes. They sold within a week, ahead of schedule, and it worked out. If you're considering this, learn how a contingent offer with a kick-out clause works.

Closing dates and possession

Sellers used to ask for free rent-backs or a few days of free possession after closing. You're not seeing that as much anymore. Buyers have more control here. For background, see my post on seller rent-backs in the South Bay.

What hasn't changed

Nice homes in nice areas are still competitive. If a home is in the right area with the right layout and size, be open to one that needs a little work, even if that's not your first choice. The remodeled ones still get a lot of attention.

Loan Options That Make Today's Rates More Manageable

There was a saying a few years ago: "Date the rate, marry the house." A lot of people bought assuming rates would be better in two years. They weren't, and some of those buyers stretched themselves into a tough spot.

For the right person, these strategies still make sense. Just make sure that, worst case, you're okay with the full rate if things aren't better in a couple of years. If you are and the right home comes along, explore these options.

Temporary buydowns: 2-1 and 1-1

2-1 buydown: Your rate is 2% below the note rate in year one and 1% below in year two. Using 7.5% as an example, you'd pay 5.5% in year one, 6.5% in year two, then 7.5% from year three on.
1-1 buydown: Your rate is 1% below for the first two years. Using the same example, that's 6.5% and 6.5%, then 7.5%.

The loan underneath is still a 30-year fixed. Most people expect rates to dip at some point. They may not be lower exactly two years from today, but along the way you will likely see dips. Back in February, rates were around 5.98%. Clients who refinanced then ended up much better off than at 7 to 7.5%. You can pair a buydown with a seller credit so the seller is helping pay for it.

Adjustable rate mortgages

ARMs got a bad name years ago, but a 7-year ARM gives you seven years before your rate can change. It's not for everybody, but it's worth a look. I cover this more in why more buyers are turning to adjustable rate mortgages.

Interest-only options

These exist too and are worth considering for some buyers.

I'm not a lender, so talk to one about what fits you. I work with great lenders and I'm happy to connect you. You can also check out 3 things you can actually control about your mortgage rate.

New Condo and Townhome Financing Rules

There have been big changes here, whether you own a condo or townhome or you're shopping for one.

Lenders have changed how they review condo buildings. It mostly affects communities with 11 or more units. Many have moved from a limited review to a full review, which is much more detailed. Before you make an offer, ask where the building stands on these items:

Balcony inspections. These need to be done.
Master insurance policy deductible. Requirements are stricter now. Lenders are looking for a deductible of $50,000 per unit, which is stricter than it used to be.
HOA reserves. The reserve requirement went from 10% to 15%. That sounds small, but it's a 50% increase. If an HOA was barely at 10%, it has to make up the difference. I've seen HOAs do special assessments of $20,000, $30,000, $40,000 or more per unit. That's a big chunk for a homeowner to come up with.

Why this matters for value

This is my opinion: communities that have all of this in place will hold their value better and may even increase in value compared to those that don't. When a building doesn't meet these requirements, buyers can't get the best financing. Fewer buyers qualify, rates are higher, and people offer lower prices. I have a listing right now in a large community of 11+ units with solid financials. It's easier for buyers to get a loan there, so they can get a better rate, a lower payment, and offer more.

If you're thinking about a condo, my post on why you shouldn't overlook condos is a good place to start.

A tip for condo owners thinking about selling

Before you list, request this information from your HOA. They typically have to give it to you for free or at a minimal cost. If you wait until you're in escrow and order it through the management company, it costs quite a bit more. Get it ahead of time and give it to your agent.

Don't Wait for a Perfect Market

Most buyers I talk to who are on hold are waiting for rates to get back to the sixes, or into the fives. A lot of other people are waiting for the same thing. Many have been on the sidelines for a couple of years or more. When rates come down, it will get more competitive and buyers will start losing the leverage they have now.

It's almost impossible to time the market. When it turns, it can turn quickly and values go up. You can change your rate later. You can't change the price you paid.

Don't stretch yourself with these programs, or with buying in general, if you're not comfortable. But if you are comfortable and the right home comes along, don't wait just because of the market.

Get my free South Bay Buyer Guide. It covers each city and what to know before you make an offer.

If you're looking at a specific condo, home or community, call or text me at 310-400-0536. We'll look at the numbers and go through the HOA docs together.

Frequently Asked Questions

Is the South Bay a buyer's market in 2026?
For most homes, buyers have more leverage than they've had in years. Sellers are more flexible, and you can usually keep your contingencies. Move-in ready homes in great areas, especially in Torrance, still get multiple offers.

What can I ask a seller for right now?
Credits, including credits to buy down your rate, loan, appraisal and inspection contingencies, and in some cases a contingency to sell your current home. Sellers are also asking for free rent-backs less often.

What is a 2-1 buydown?
Your rate is 2% below the note rate in year one and 1% below in year two, then it goes to the full rate. A 1-1 buydown is 1% below for the first two years.

How do the new condo rules affect buyers?
Lenders now do a full review on many buildings with 11 or more units. They look at balcony inspections, a master policy deductible of $50,000 per unit and HOA reserves of 15%. Buildings that don't meet these can be harder to finance.

Should I wait for rates to drop before buying?
Only buy if you're comfortable with the payment. But when rates drop, competition comes back. You can refinance a rate later, but you can't change the price you paid.

Looking for These Types of Homes in the South Bay?

About Ben Larson

I'm Ben Larson, broker associate and founder of Larson Realty Group with Real Broker. I help buyers and sellers across the South Bay, Palos Verdes, LA and Orange County. Call or text 310-400-0536, email Ben@LarsonRealty.Group, or book a free consultation. DRE #01746853.

This post is for general information only. It is not legal, financial or tax advice. Talk to a licensed lender or advisor about your situation.