http://www.move2manhattanbeach.com/ South Bay real estate source for Manhattan Beach, Hermosa Beach, Redondo Beach and El Segundo homes and townhomes. en-US http://blogs.law.harvard.edu/tech/rss What a difference a few months has made for Manhattan Beach-Beach Cities home buyers...After a long run in the driver's seat it appears that as the song says.. the times they are a changin ...Adjusting to the change is proving difficult for many buyers. The biggest problem is inventory or rather the lack of inventory. With fewer distressed properties coming on the market and sellers reluctant to sell at lower prices, inventory has plummeted. In Manhattan Beach and most of the Beach Cities inventory levels are half of what they were last year at this time. Agents are networking like mad searching for properties for their clients. Broker's Open Houses are as much about chatting with other agents to see what they have coming up as they are to view the home being showcased.Homes that buyers rejected last year are not only selling this year but often at the prices that were considered on the high side not so long ago.While this doesn't mean huge increases in home prices it does mean that in some areas the price move is up not down for the first time in years.Lots of buyers and small inventory levels add up to multiple offers. Often multiple offers mean higher prices. A few months ago buyers not only had a wide choice of properties but they could also afford to wait if a seller wouldn't take their price. There was no sense of urgency as there would be another property popping up soon and often at a lower price. Buyers not only have fewer properties available to choose from but are finding themselves outbid on choice and sometimes not so choice properties. Adding another twist to the market is that there are a number of buyers with a lot of cash in all segments of the market from entry to luxury. Buyers with good credit and 20% -30% down are finding themselves outbid by the competition with all cash offers. Buyers with smaller down payments are hoping to get FHA loans but are finding that much of the property in our area doesn't qualify. Townhomes can be FHA approved but it takes time and money. Sellers who are seeing multiple offers will pick the cleanest offer which usually means that FHA buyers are not finding as warm a reception as they did last year. If this is the year you have decided to move there are a few things to keep in mind. First you need to have the money for your down payment readily available. Contingency sales are going to be difficult if not impossible in today's market. If Mom and Dad are helping with the down payment get the money in the bank now so you can have the paper trail ready for bank approval. Second you must be pre-approved by a lender not pre-qualified. That means your lender of choice should not only have all your information but have completed the necessary paperwork to process your loan subject to the appraisal. Finally do your homework. You need to know recent sale values. You can't base an offer price on comps that are 4-6 months old. You want to find out about pending sales of similar properties. Were there multiple offers and if so was the accepted offer near or over the listed price. This knowledge tells you what your competition is willing to pay. Typically inventory begins to increase as the spring selling season wanes but this year could be the exception . Before everyone becomes overly excited about the current trend I should probably point out that our local housing market is very typical of a recovering real estate market. http://www.move2manhattanbeach.com/manhattan-beach-beach-cities-buying-a-home-the-rules-are-changing Manhattan Beach Market Snapshot for homes sold in March 2012 Manhattan Beach Walk StreetMarch closed sales often indicate where the spring market is headed.. Based on the 2012 March real estate sales and pending sales in Manhattan Beach just one word describes this market... HOT! We haven't seen a real estate market like this for years. Homes that buyers rejected a few months ago are selling at or above the listed price with multiple offers. It's crazy out there... So what's driving the frenzy? Actually there are a lot of factors but the main one is lack of inventory and not just quality inventory but any inventory. Distressed sales drove down prices to a level where many folks who might have sold and moved up to a new home decided to stay put until the housing market improved. Other made the decision to stay in the same location but remodel or even tear down and build a new home. Often owners who bought another property chose to keep their existing home as a rental instead of selling. These homes may ultimately hit the market but for now they are not available to potential home buyers. There are currently 87 homes and townhomes for sale in Manhattan Beach. and 85 in escrow. Off market homes likely account for another 10 or more sales. Agent networking is the name of the game as buyers scramble to get something before it hits the wider market. Property is selling as soon as it hits the market as long as it isn't wildly over priced. Buyers seem to have developed a sense of urgency that has been lacking in recent years Even more interesting is that they may be willing to pay a bit more this year than last year for a property they really want but it doesn't mean they are reckless. Manhattan Beach: Sold March 2012 http://www.move2manhattanbeach.com/manhattan-beach-market-snapshot-sold-march-2012 Everyone wants to buy at the bottom of the market... the tricky part is recognizing the bottom. The Manhattan Beach-Beach Cities real estate market has been moving down since 2007. During that time we haven't had any false upward movements as has happened in previous markets. Nor have we seen a widespread flat market (with a few exceptions) since the market first started to decline. An often overlooked aspect of the bottom of the market is that once you reach it prices don't start moving upward at a rapid pace. In fact if anything prices become stable and possibly even move a bit downward for awhile before they start moving upward slightly or staying flat for months. Markets that have reached the bottom usually see changes months after the bottom has been reached. Suddenly there is a lot of activity in a market that was relatively lackadaisical. Inventory declines as more buyers enter the market and homes sell faster. In our local Manhattan Beach-Beach Cities market we see builders re-entering the market and entry level properties move up in value as developers bid against entry level buyers for smaller homes. Buyers are more willing to pay the listed price and sometimes a bit more if there are multiple offers. If we look at the local South Bay Beach Cities real estate market it looks as if we may have reached the bottom sometime between October -December 2011. Inventory in all the Beach Cities is very low. Pending sale numbers are high and sold prices are often above the listed price. But as we have learned over recent years things are not always as simple as they may appear. All these scenarios are typical of real estate markets as they reach the bottom. Only time will prove whether or not this is the end of the decline or just a stop along the way. So what is the key to knowing if we have reached the bottom... well it's usually when folks realize that they can't buy a home today for the same amount or less than at a time in the recent past. For many of my clients it means that the property they rejected as over priced 6-8 months ago probably sold for less than a similar property in today's market. It means that you can no longer offer 10%-20% below the list price and expect to be taken seriously ( unless the property is grossly over priced). It means there is a lot of competition in the market that wasn't there last year and many of these folks are sitting on large amounts of cash. There is a possibility that as we wind down the armed conflict in the Middle East local Aerospace companies who thrived on government contracts could be seeing a different scenario and start laying off employees. The South Bay Beach Cities had real problems in the 90's when aerospace cutbacks led to major unemployment. This time around the job base is far more diverse and unemployment due to layoffs from governments cuts may not be as serious in Manhattan Beach, Hermosa Beach, Redondo and El Segundo as they were in the 90's. But there are no guarantees.Obtaining a loan remains a challenge as low appraisals are still an issue. The government continues their double talk about helping the housing market while putting major obstacles in the path of qualified borrowers. Fannie and Freddie are no longer the safe haven many investors thought and many if DC believe that Fannie and Freddie should no longer be guaranteeing loans. While our real estate market didn't have as many issues as other areas there are still a number of short sales waiting to hit the market. So.. have we reached the bottom of the real estate market decline in Manhattan Beach and the Beach Cities.... maybe. http://www.move2manhattanbeach.com/manhattan-beach-beach-cities-the-bottom-of-the-market-did-you-miss-it Manhattan Beach Pier.... What a difference a few weeks can make. As we enter the last week of March 22 homes and 12 townhomes/condos have closed escrow as of March 26, 2012....66 homes and 15 townhomes/condos are pending and 68/22 townhomes/condos homes are for sale. As you can see below February only had 20 homes and townhomes/condos close escrow.As the song says it's really something' when the joint is jumpin' .... and the Beach Cities real estate market and especially Manhattan Beach seems to fit the lyrics. Whether this is a permanent condition or just temporary remains to be seen but for now there's a lot of buying and selling going on. The keys to all the action are location and price... the property can be a tear down or well maintained but it must be priced right and in a good location. If you get the right combo you can expect multiple offers.. if you miss it by even a little you will be sitting for awhile. Builders are beginning to rethink the market and entry land value properties are seeing prices move upward. That cute little 2 bedroom 1 bath in the trees at $800,000 is gone. Want a 50x150 in east Manhattan don't bother looking at last year's comps.Manhattan Beach: Sold February 2012 http://www.move2manhattanbeach.com/manhattan-beach-sold-february-2012 South Bay-Beach Cities: Inventory of Homes and Townhomes January 2009-2012 What a difference a year can make. January and February of 2011 were pretty much a replay of previous years... Closed sales from November and December of the previous year were not very robust and inventory was increasing from the January lows. Buyers remained unmotivated while rumors of the large number of foreclosures that were about to hit the Beach Cities circulated among those in the know. Here we are in mid March 2012 and haven't seen inventory this low in years. This year March Madness is about more than basketball as buyers seem willing to enter the multiple offer frenzy that is happening in all the Beach Cities. It was just a few months ago that I was writing about the hit North Redondo townhomes were taking as short sales with big price reductions hit the market at the end of October. Fast forward just a few months and newer 2000+ square foot 2 on a lot townhomes priced under $600,000 seem to be a thing of the past. There are more townhomes in escrow than there are for sale.Manhattan Beach and Hermosa Beach have the same number of homes on the market as are currently for sale. Hermosa also has more townhomes in escrow than for sale and Manhattan Beach is showing numbers that are not far behind. Only El Segundo and South Redondo have more inventory that properties in escrow. Rumors abound that conventional lenders are considering loosening up their guidelines a bit even as FHA is raising their upfront fees. A number of our local lenders are pushing the fact that jumbo loans are available and at reasonable rates. Appraisals will remain an issue as there are not many comparable properties available due to the slow and low sale prices of recent years. Smart buyers and sellers are going to be paying close attention to local markets in the coming months. Beach Cities: Sold January 2012Beach Cities: Sold February 2012 http://www.move2manhattanbeach.com/south-bay-beach-cities-sold-january-february-2012