As this year is ending it seemed like a good idea to review my 2010 New Year post on our local real estate markets. I was happy(make that relieved) to see that I had been right more often then wrong about where I thought the 2010 market was headed. So with that in mind I'm gong to share my thoughts again...


After all the hoopla from the media and government all year, the reality is that not much changed. Unemployment is still high nationwide and in California. Consumer confidence goes up and down on a monthly basis. The FEDS and our state continue to run massive deficits and think the deficit fairy will somehow make it all go away with a wave of her wand and no pain for anyone.


Foreclosure issues continue because the government doesn't understand that most of the people in trouble can't be saved. You can modify loans and have foreclosure holidays but the chances of people in major financial trouble holding onto their homes without jobs is nil. It's hard to make a house payment if you don't have a job. At some point the process will have to reach the bitter end before things can get better.


The fascination with shadow inventory continues but somehow that inventory never makes it to the market. Originally the term referred to bank REO's but recently I read that the term now includes everyone who might want to sell a home they haven't yet put on the market.... which doesn't make much sense as owners are always thinking about putting their homes on the market if the price is right.


Credit markets remain shaky. The interdependence of worldwide markets and our markets makes for some strange bedfellows. Lou Barnes has an interesting take on where we have been and where we might be going. The FEDS tossed billions at credit institutions with no requirement that they actually use the money to make loans. Consequently it is harder for consumers to get loans or refinance. Folks who own small businesses are struggling to obtain credit to keep their doors open.


Our local South Bay-Beach Cities real estate market was a bit of a mixed bag. Sales volume was down while prices bounced around.. up in some areas and down in others. The market was slow but relatively steady... Not an exciting or depressing market but rather a blah one.... which isn't necessarily bad in today's economic climate.


Closed sales January-December 2010 South Bay-Beach Cities*** Manhattan Beach had 309 single family homes and 78 townhomes close escrow in 2010. Hermosa Beach had 104 single family sales and 76 townhomes/condo sales. North Redondo had 174 single family homes close escrow and 260 townhomes. South Redondo had 95 homes and 154 townhomes/condos close escrow. El Segundo closed escrow on 58 homes and 45 townhomes.


So what will next year be like? Here's my take on where we may be headed...

I think overall unemployment in the nation and in California will dip a bit but remain high. This is going to be a tough one to change. We have to get deficit spending under control before we can hope to get the economy to improve. Unless we all agree to make some tough choices we are in for more of the same.

One of the reasons the Beach Cities have held up better then other areas of Los Angeles County is because most folks in these cities are employed. Step into almost any restaurant and they are crowded with people spending money. I was at Del Amo the week before Thanksgiving and during Christmas and folks were buying. Not as much as a few years ago but more so then last year.

I think the local real estate market in 2011 will be similar to the one in 2010. We may see a slight increase in sales volume but prices will remain on the flat side in most sub markets. Prime properties will always command a premium but not as much as in previous years.

Interest rates will bounce around... up for a few weeks then down as the markets try to determine how to price risk. If you see the word inflation in print for any length of time you can bet rates will move upward. Loans will remain difficult to obtain for those who don't have stellar credit or a steady income. Appraisals will be a source of problems for properties that are not in good shape. The appraisal process will be a little easier as the FEDS have finally set up some workable guidelines for lenders and appraisers.

Inventory is down in all the Beach Cities as many properties have sold in the last 2 months. Manhattan Beach has 101 homes and townhomes currently for sale. Hermosa has 64, North Redondo 106, South Redondo 97 and El Segundo 40. Watch the Spring market sales as an indication of where the market may be headed. If inventory bumps up dramatically we will be in for another slow year as consumers will feel no urgency about the market.

So that's it for my thoughts as we say farewell to 2010 and hello to 2011....

Wishing you all a Happy and Healthy 2011!

***There will be a few more sales posted after the first of January

Manhattan Beach Open House Sunday Nov. 14, 2010: 1450 Manhattan Beach Blvd.. New Prices.. Open 1-4 pm

Check out the new new prices!

1450 Manhattan Beach Blvd.... Unit C and Unit  D,  Manhattan Beach CA:

 Open House Sunday November 14, 2010  from 1-4 pm..



Don't miss these  2 terrific condos listed under $550,000 in Manhattan Beach, CA.  Both units have been updated and show like new.  Each unit has a private 2 car garage, large storage room and a separatre laundry room.




1450 Manhattan Beach Blvd #C...Manhattan Beach CA... $539,000






1450 Manhattan Beach Blvd # D Manhattan Beach CA ... $549,000

I apologize for being late with the November home sales figures for the South Bay Beach Cities. I'm currently working on year over year numbers for all the Beach Cities and will post after I get December home sale figures.

After the dismal home sale figures for the last quarter of 2008,  home sales for the 4th quarter of 2009 are looking very good.  Inventory is well below the figures we became accustomd to earlier this year.   Many homes were taken off the market when the owners decided to stay put as they couldn't get the price the wanted/needed .  Others were rented  as sellers had to make new decisions about their real estate portfolios.  Still others sold after sellers found the right price to gain the interest of buyers.  All in all the last 3 months have been interesting as folks try ot decide if the bottom of the market is near or if this continuing  sales trend is just another blip in the road.

South Bay-Beach Cities: Sold November 2009

South Bay-Beach Cities: Sold October 2009

South Bay-Beach Cities: Sold September 2009

South Bay-Beach Cities: Sold August 2009

The signs are up and the ads are running as  360 South Bay  is giving it another try.   The trees are bigger,  the models are a year older and there is a new entrance sign, but not much else has changed since I was last here in March of 2008 when 360 South Bay closed the gates.  Prices will not be publicly available until the project officially re-opens in February 2010 but they should be a lot less then the prices the developer sought back in July of 2007 when the project first hit the market.  Expectations of getting almost a million dollars for units near the 405 Freeway were not very good back in '07 and  are even worse today.  Hopefully the builder has learned a few lessons about location, location, location.

There have been a lot of changes in the South Bay real estate market since this project officially opened in  July 2007 and quietly closed up shop in March 2008.  Prices have declined across the board  in all the South Bay cities but especially in the communities east of  Manhattan Beach, Hermosa, Redondo and El Segundo.  Financing is now  far more difficult to obtain then it was in the summer of 2007.  In fact unless William Lyon homes has made arrangements for in-house financing, that is not dependent on FHA, Fannie Mae or Freddie Mac underwriting, they may find it will take a long time to sell out the project..

One of the biggest casualities in the housing market has been condominium financing.  While obtaining a jumbo loan can be difficult,  obtaining financing on a new condominium project is even tougher.  A large part  of the losses lenders had in the Nevada and Florida markets were in condominium developments.   With these losses in mind  FHA along with Fannie Mae and Freddie Mac have issued some tough rules about loans issued on condominium projects.   The recent changes in  guidelines by FHA and conventional lenders backed by Fannie Mae and Freddie Mac are going to have an impact on the project as prices should fall within the conventional loan range of $729,750 or less.

FHA Guidelines:

Having a project  FHA  approved allows the developer to tap a larger pool of buyers as the down payment requirement  is less for FHA loans then conventional loans.  However recent changes issued by FHA in October 2009 have made it more difficult to obtain FHA financing on large new projects.

1. There will be NO more spot approvals after February 1, 2010

2. All development not considered primarily residential are out. For instance, a development with more than 25% of the total floor area dedicated to commercial business use is out.

**3. Noise issues is a new concern, so any development within 1,000 feet of a highway, freeway, or heavily traveled road, 3,000 feet of a railroad, 1 mile of an airport, or 5 miles of a military airfield will become ineligible for approval.

 4. If the property has an "unobstructed view , or is located within 2000 feet of any facility handling or storing explosive or fire prone materials, it is not insurable - we're not talking just fireworks factories here. A gas station 2 blocks away can disqualify this development.

 5. Any property located within 3000 feet of a dump, landfill, or superfund site, is ineligible.

6. No more than 10% of the properties can be owned by a single investor, including builders or developers who are renting out or have not yet sold vacant units. For 2-3 unit developments, no one can own more than one unit.

 7. No more than 15% of the homeowners can be more than 30 days late on their homeowner dues.

 8. For new developments, at least 30% of the units must be sold prior to applying for FHA approval (valid presales include those with purchase agreement and lender validation of an approved loan in process)

 9. A minimum of 50% of the units must be owner occupied or sold to owners who intend to occupy as their principal residence.

10. Projects in designated wetland and flood zones will not qualify.

11. All current condominium project approvals will be invalid (with the exception of projects approved on or after October 1, 2008) and projects must be re-approved under the new options available. Going forward, all projects will require recertification every two years.

Conventional Condominium Loan Guidelines:

In addition to changes in the general guidelines issued in the summer by Fannie and Freddie,  there are additional guidelines  for condominium projects seeking loans of $729,750 or less:

1. For new construction and converted new condo developments, 70% of the units must be pre-sold (closed or under contract). This is a tough requirement for most projects.

2. No more than 15% of a condo project units can be more than 30 days delinquent on HOA dues. This is an existing guideline that is now being applied to new condo projects. The calculation was also changed from being 15% of HOA fee payments to 15% of total units.

 3. Fidelity insurance will be required for condos with 20 or more units, ensuring that homeowner association funds are protected. Presently, this requirement applies to new projects and is now being extended to include established condos.

4. A requirement that borrowers must now obtain a condo-owners insurance policy unless the master policy provides interior unit coverage; coverage may not be less than 20% of the assessed value. A condo-owners policy, known as an HO-6 policy, covers personal property, personal liability, and the physical unit from the studs and in. Many policies also include special assessment coverage or the option to include a special assessment coverage rider.

5. No more than 10% of a project can be owned by a single entity.

 6. No more than 20% of a project can consist of non-residential space.

7. The homeowners association must have at least 10% of its budgeted income designated for replacement reserves and adequate funds budgeted for the insurance deductible.

8. Buyers without at least a 25% down payment will have to pay closing cost fees equal to 0.75% of their loan, regardless of the borrower's credit score.  Buyers with  20% down will need a credit score of 620 or more with a total overall debt ratio 45%  or less of gross monthly income.  The FICO required for the best rates has increased to 750 from 720.  Depending on your FICO score there are additional fees  that can be as high at 3.5% of the loan.

Pricing is going to be a huge factor.  Last time around the development was priced well above market value based on the location.  This time around prices have declined enough in the Beach Cities that buyers may not be willing to pay a high price for new construction in a less then desirable location near the freeway.   Beach close is not Aviation and El Segundo Blvd. While there are many buyers who will exchange new construction for location,  in the long run location remains the #1 factor in sustaining home value.    The last new development in out area was Fusion on Aviation and Marine. Fusion remains a popular community as it is very close to Manhattan and Hermosa but  prices are significantly less then in the Beach Cities.

The project is technically in El Segundo but the school district is Wiseburn and Hawthorne not El Segundo.  While the development is being pitched to young singles looking for a Beach lifestyle  rather then families, the school district is still of major importance in establishing value.  Time is fleeting and it might not be long before the young singles find themselves married with a growing family.   Wiseburn schools are  good at the elementary/middle school level,  but once children reach  High School then students go to Hawthorne High School although if Wiseburn has its way there will be a Charter School for High School students.

There are going to be a lot of nice amenities at 360 South Bay including a full gym, pools and lots of recreation choices.  Large new construction  developments are something we don't have much of in the South Bay as the bigger parcels of land were built out long ago.  Inventory is low in most of the South Bay communities and especially in the Beach Cities.  I suspect that this time around there will be more interest in the project providing it is priced right.  Today's buyers are very cautious and smart about the housing market.  Many have been following the real estate market closely for a long time.  They know how much they will and won't spend on a home purchase.  Glitzy ads proclaiming  beach close won't have much effect on savvy buyers who know exactly where the beach is in the South Bay.

. **  Item # 3 on the list above may be the deal breaker for FHA financing approval on the project which means that all potential buyers will need large down payments and will be paying an additional 3/4 of a point in interest.

*** As of today I couldn't find 360 South Bay included on the list of Fannie Mae approved projects.  It may mean that the development is still under review.

In 2006 Joe Ferrara and Rudy Bachraty , when blogging was just beginning, decided to name the Top 10 Women Real Estate Bloggers for 2006.  In 2007  and 2008 the list grew to 12 Women.  These women are chosen from all over the United States.  It is an amazing honor to be part of this special group of women. 

This year I am very excited to be among the 12 Top Women Real Estate Bloggers in the United States.   I am still stunned and amazed and thrilled to be chosen along with  these 11 amazing Women Real Estate Bloggers:

 Colleen Kulikowski Buffalo New York 

 Mary Pope-Handy in the Sillicon Valley

 Dru Bloomfield from Scottsdale AZ

 Diane Guercio founder of The TwitterQueens,

Amy Chorew truly a Tech Queen

 Jessica Riffle Edwards from Wilmington North Carolina

Susie Blackmon another North Carolina blogger with some great insights

Elaine Reese from Central Ohio has lots of sweet information  

Gena Riede  The Sacramento  Real Estate Voice of experience, 

 Kim Wood from Philadelphia loves photography,

 Monika McGillicuddy from New Hampshire has amazing photos.

 Kaye Thomas Manhattan Beach CA

 I am fortuante to be friends with many of these women and know others by their wonderful blogs.  All of us are actively working in some part of the real estate market. Most of us are actively engaged in sales while others are finding ways to make real estate more user friendly for both consumers and agents.  Blogging has allowed us to be more interactive  within  our communities and offer consumers a more intimate view of our local real estate markets.