For the last few years I have shared my thoughts about where I thought the market was headed each year... and this year is no exception.   Making predictions is easy, the difficult part is finding out close your ideas were to reality. 

Last year I thought the market would be very similar to the one in 2009 and I was  fairly accurate.  Truthfully I don't see much change in 2012.  I believe sales will continue to be slow but steady and prices will be flat with a few sub markets markets declining and a few showing increases in value.  . 

Nationally the economy appears to be growing.  The final numbers won't be available for a few more weeks.  Retailers and others are counting on a strong surge in spending in recent weeks  as an indication that we are moving forward.  California's unemployment rate dipped to 11.7% in recent weeks which is still very high but at least it is finally moving in the right direction.  Nationally the rate dropped to 8.6%.   Whether the trend continues down is another issue that all the Presidential  candidates will discuss at length I'm sure. 

Unfortunately there are issues that will affect our economy over the coming months.  Just as we were beginning to see a measure of stability in our country the European nations are showing signs of real problems.  China is also facing economic problems.  As our major creditor this could have an effect on our economic progress.    Like it or not we have become a global economy. 

The Government says the problems faced by the ongoing housing crisis are a high priority but new Federal regulations and guidelines add to the problems. What Bozo thought that adding a tax on mortgages for 10 years to fund the "payroll tax cut" for 2 months was a smart idea. All we need is more of that  brilliant thinking  to make sure the housing market continues to flounder.





Manhattan Beach-Beach Cities Real Estate...

The final sale numbers won't be in until next week but it looks as if  the number of  sales in Manhattan Beach and South Redondo  increased  while they decreased in Hermosa Beach, El Segundo and North Redondo. If the traffic at the local Malls was  any indication of how people were viewing the economy...  things are looking up.   The  Neptunian Womans Club Gift Wrap station at  The Manhattan Village Mall was busier than it has been for the last 4 years.

Our local real estate market saw an increase in the number of distressed ( foreclosure, short sales and pre-foreclosure) property sales in all  the Beach Cities.  Manhattan Beach had the least with about 10%  distressed  sales and North Redondo saw the highest with 21% of closed sales. 

In October the conforming loan amount officially declined from $729,750 to $625,500.  The change didn't take effect until October but lenders stopped making loans at the higher amount  around the end of August.  While the decrease didn't really affect Manhattan Beach it definitely had an effect on the other Beach Cities.   I don't believe it is a coincidence that prices on short sale townhomes in North Redondo dropped significantly at the same time.

I don't think we will see a major change in most of the South Bay real estate markets in 2012 from 2011. Prices will  bounce around as buyers remain cautious.   Manhattan Beach  home prices have been the most stable of all the Beach Cities.  I believe that trend will continue.  North Redondo will likely be plagued by short sales that will push the market down a bit.  Hermosa Beach, South Redondo and El Segundo may well see an uptick in short sales as lenders decide it might be more prudent to  clear their books rather than continuing to delay the inevitable. 

 If interest rates remain stable you could see an increase in entry level prices in Manhattan Beach.  This will hold true if more builders decide to take the plunge and start buying lots.  I know of  a number of agents who are actively looking for buildable lots and fixers in Manhattan Beach.    I don't  think you will see much new construction  in the other Beach Cities  for awhile although there have been a few new projects in North Redondo.

 Obtaining a new loan continues to be difficult.  property prices in the South bay-beach Cities remain high despite the declines in value.  many entry level properties will require Jumbo loans with the drop in conforming loan rates.  New FHA limits will help buyers  but many of their rules discourage folks who don't want to pay the upfront fees required by FHA..  Refinancing your home can take months.  Appraisal issues haven't gone away as out of area appraisers are used by many lenders even though there have been changes to the original law.


While overall Manhattan Beach and the Beach Cities have had fewer problems than many other communities in LA County we are at the mercy of  conditions we have no control over. Many homeowners have been holding on with a tenuous grip as the economy has remained precarious for  longer than expected.   Some good news in the economy would be a welcome sign for everyone.

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.

1450 Manhattan Beach Blvd # D, Manhattan Beach..
New Price!

$469,000

Manhattan Beach address for a North Redondo Beach price!

If you want to live in Manhattan Beach but don't have a lot of cash this unit is the perfect choice. Updated 2 bedrooms, 2 bath with fireplace and city views...This sunny upper floor unit has a private 2 car enclosed garage with a large storage room and the units have their own private laundry room with space for storage. There is additional parking in front of the garage for a total of 3 parking spaces.



Ideally located near the park, shopping and schools. The unit is about a mile to the beach and downtown Manhattan Beach... Call(310) 721-7438 or email Kaye for an appointment to view..




$469,000

Manhattan Beach March 2011

Manhattan Beach address for a North Redondo Beach price!

If you want to live in Manhattan Beach but don't have a lot of cash this unit is the perfect choice.  Updated 2 bedrooms, 2 bath with fireplace and city views...The unit has a private 2 car enclosed garage with a large storage room and the units have their own private laundry room with space for storage.  There is additional parking in front of the garage for a total of  3 parking spaces.

Ideally located near the park, shopping and schools. The unit is about a mile to the beach and downtown Manhattan Beach... Call(310) 721-7438 or email Kaye for an appointment to view..

                                                          $525,000

                                                                                        Polliwog Park