Home Sales for Manhattan Beach, Hermosa Beach, Redondo Beach and El Segundo for June, July and August 2007-2011..

If you are confused about where the housing market seems to be headed... you have lots of company!  Even the experts can't seem to get a handle on what is happening..  In fact  the same story can be seen from different points of view... check out the LA Times  and the Daily Breeze  headline views of August home sales.

The graph above  for home sale volume in Manhattan Beach, Hermosa Beach, Redondo Beach and El Segundo for June, July and August  2007-2011  indicates some very mixed messages.  Manhattan Beach, the most expensive of the Beach Cities,  had more sales in the summer of 2011 than in 2007 as did El Segundo.  South Redondo sales are  fairly stable while Hermosa and North Redondo saw sale volume declines.    

This is a very interesting time in our local real estate market.  Prices are down and in many sub areas are still looking for some sign of stability.  Inventory is down across the board with the exception of Hermosa Beach where inventory rose by 4 properties since mid September. Interest rates are still hovering around 4.2% for a 30 year fixed rate loan.  5 year adjustables are 2.75% for conforming loans ( $625,500 or less).  Jumbo rates are slightly higher at 4.875% with 0 points up to $1,250,000 loan max... significantly below the 7%-8% we thought was amazing  just a few years ago.

For buyers at the entry level  in the Beach Cities the combination of low rates and falling prices mean it may be cheaper to buy than to rent.  I have 2 clients who are closing escrows this month who are paying less on their mortgage  than they were paying in rent.  This isn't true at all price points but definitely at the entry level. 



Beach Cities: Sold June 2011 










Beach 2011Cities: Sold July








Beach Cities: Sold August  2011

The State of California recently enacted a new statue concerning the installation of carbon monoxide detectors in 1-4 residential units. The Carbon Monoxide Poisoning Prevention Act of 2011 states that every owner of a dwelling unit intended for human occupancy must install an approved carbon monoxide device in every unit having a fossil fuel heater or appliance, fireplace or attached garage.

Carbon monoxide poisoning is one of the leading causes of death in the home. Carbon monoxide is a colorless and orderless gas that not only causes serious health problems but can kill you. The detectors are similar to smoke detectors and will alert occupants if carbon monoxide gas is present.

The regulations call for all single family homes, townhomes or condos to have the detectors installed as of July 1, 2011. All other types of residential dwellings have until January 1, 2013 to install the mandated detectors. The law requires all properties to have carbon monoxide detectors installed by the above dates whether or not the home is being sold.

The detectors must be centrally located outside of each separate sleeping area in the immediate vicinity of the bedrooms. The detector should be located at least 6 inches (152mm) from all exterior walls and at least 3 feet (0.9 meters) from supply or return vents. The detectors must also be on every level including basements within which fuel-fired appliances are installed and in dwelling units that have attached garages.

The devices are required on properties that are owner occupied and on properties that are tenant occupied. There are fines for non-compliance. The regulations also allow for a stronger form of the law to be passed by individual cities... so don't be surprised to see tougher requirements in some of our local Beach Cities .

Monday, July 25, 2011

On October 1, 2011 a lot of folks in the Manhattan Beach-Beach Cities real estate market are going to be very upset. That is the day the FEDS have targeted to lower the conforming loan limit from the current $729,750 to $625,000. The downward shift in the conforming limits isn't just going to affect buyers but also homeowners who have been waiting to refinance their existing loans.

If you haven't filled out loan documents by August 15, 2011 you may not be able to take advantage of the current conforming limits for your loan. In fact Bank of America is no longer making conforming loans over $625,000 even thought the official cutoff date is September 30, 2011.

So how will the decrease in conforming limits affect you?


Manhattan Beach-Beach Cities Homeowners:
Many homeowners have been waiting to see how low interest rates will go before they refinance to take advantage of lower rates. If you purchased your home a few years ago with a loan amount of $729,750 and want to refinance... DO IT NOW! If you wait and your loan amount is over $625,000 you will have to take out a jumbo loan which may have tougher guidelines and will certainly have a higher interest rate.



South Bay-Beach Cities Buyers:
For many buyers in the Manhattan Beach-Beach Cities the lower loan limits mean they are going to have to get a jumbo loan to buy the same property they could have purchased a few months ago with a conforming loan or come up with a significantly higher down payment. That means tougher qualifying guidelines and a slightly higher interest rate. As an example;e a buyer looking at a $900,000 purchase price today would be able to purchase with 20% ($180,000) down and a loan of about $720,000. When the conforming limits change a buyer would need to come up with slightly more than 30% ($275,000) down for a conforming loan of $625,000 to purchase the same property.


There are a lot of folks trying to get the FEDS to leave conforming levels where they are for at lease another year for the higher priced areas of the country. However I don't think it will happen. There is a bit of good news. More lenders willing to make jumbo loans are stepping into the market. Also the difference in rates for conforming and jumbo are fairly close... conforming fixed are about 4.6%-4.75% and jumbo rates are 5.125%-5.5%. However that could change if Congress doesn't stop playing King of the Hill with each other and the administration.

The boys in D.C. lament the fact that housing continues to be an issue in most of the country, yet they can't seem to understand that much of the fault lies at their doorstep. There is a new guideline/rule/formula change every few months as the government tries to put the horse back in the barn that burned down. If the folks in D.C. want to see housing markets make a comeback they need to leave the process alone for awhile and let things settle. Ultimately local real estate markets will find their way through the muddle if folks aren't waiting on a daily basis to see what the next new thing will be.

Classic South Redondo Beach Home

Real estate sales in all the Beach Cities are down and much slower than last year at this time. Buyers remain unsure about where the economy is headed. The reports that come out of Washington are mixed.. one day the news is great and the next not so hot....



I was reading an article this morning that puts some interesting perspective on the "economic recovery". The article notes that it has been 2 years since the recession ended but not much has changed in the overall economic picture.



While real estate values in the South Bay -Beach Cities have held up better than in other parts of Los Angeles County we have seen values decline. The current market seems to be on the flat side but that could change in October when the conforming loan limits drop from the current $729,250 to $625,000. Home prices have declined but losing $100,000 on conforming loan limits will have an effect on how buyers perceive the market... even if the effect is more perception than reality.




While the difference might not be felt as much in Manhattan Beach or Hermosa Beach, it will affect the Redondo Beach and El Segundo real estate markets as entry level prices are lower. Currently the difference in interest rates for a jumbo vs a conforming rate is not a large amount but qualifying guidelines may well be a factor. If you have a loan over $625,000 that you are planning to refinance now is the time to talk with your lender.





Beach Cities: Sold May 2011

A Time to Remember... Memorial Day 2011







Every May when I was a child Veterans would hand out poppies made of red, white and blue paper on the street as a sign of remembrance for those who died in the service of their country. The poppies were to be used to decorate the graves of the soldiers. At that time it was still called Decoration Day. Over the years the name has changed and Memorial Day is now more often thought of as a three day holiday than as a time to honor the dead.

How we view the military has changed over the years and we see battles in the streets as part of the nightly news. But one thing remains constant... the loss of our men and women in combat. So take a few moments from your celebration this weekend to remember those who have died in the service of their country.



Local Memorial Day events:


Hawthorne

A ceremony for war veterans will take place at 10 a.m. Monday at the Hawthorne Memorial Center, 3901 W. El Segundo Blvd. A free lunch will follow at noon at American Legion Post 314, 14124 Prairie Ave. For information, call 310-675-1313.



Lomita


Lomita VFW Post 1622 will hold a memorial service at 11 a.m. Monday at Veterans Park, 25700 Walnut St. (at 257th Street just north of Pacific Coast Highway). A luncheon follows at the VFW Hall, 1865 W. Lomita Blvd. You must have a flier to attend the luncheon. Fliers will be available at the memorial service.

For information, call 310-326-7132.


Redondo Beach

The city of Redondo Beach will hold its annual Memorial Day tribute from 1 to 2 p.m. Monday at the new Veterans Memorial at Veterans Park, adjacent to the Redondo Beach Pier

Donations are being accepted for the Redondo Beach Veterans Memorial. For information, visit www.RBVeteransMemorial.com/.

The Redondo Beach Elks Lodge 1378 is sponsoring a Memorial Day barbecue in the Elks parking lot south of the lodge next to the park. The barbecue is free for all veterans and members of the military. A $5 donation is requested for all others.

The Rev. Bhagavan Friend will hold his annual Empty Chair Memorial to America's Fallen Soldiers - All Services - All Wars. The service is dedicated to fighting men and women who have sacrificed their lives for the country.

The ceremony will be at 11 a.m. Saturday at 124 Sapphire St. It will feature distinguished speakers, a bagpipe player, harpist, bugler and color guard. Refreshments will be served. Attendees are invited to bring flowers to place around the memorial.

For information, call 310-540-6044 or visit www.emptychair.org/.

American Legion Post No. 184 is hosting a Memorial Day potluck picnic with hamburgers, hot dogs and potato salad. The public event is from noon to 3 p.m. Monday at 412 S. Camino Real, Redondo Beach.

Proceeds from donations will be used to purchase calling cards for the troops at Christmas.

Rancho Palos Verdes/Green Hills Memorial Park
The Memorial Day Observance begins at 10 a.m. Monday at Green Hills Memorial Park, 27501 S. Western Ave.


The event include a parade of colors presented by all branches of the armed forces, the mounted posse from the Lomita sheriff's station, musical performance by the 300th Army Band and Cabar Feidh Bagpipe Band, aerial flyovers and the release of 100 doves. Also the Boy Scouts and Girl Scouts will place roughly 8,000 American flags on the grave sites of veterans at Green Hills.