Manhattan Beach Real Estate

Manhattan Beach-South Bay Beach Cities: The Sellers Market is Here

Inventory levels for single family homes, townhomes and condos in Manhattan Beach January 2007-2013






It wasn't all that long ago when those "in the know" said that The Real Estate Market in Southern California was toast.  Multiple offers and offers above the list price  were no more.  People who bought property were crazy and wasting their money.  Prices were going to decline and there was nothing special about property in Manhattan Beach or any of the Beach Cities for that matter.... and they were a little right and a little wrong from 2007-2011.

 But a funny thing occurred during the Spring of  2012.. as it usually does in the Southern California coastal real estate market.. the bottom of the market was here and gone before a lot of folks  realized what had happened.  Historically the Beach Cities real estate market has changed numerous times over the years.  Sometimes prices only move a bit up or down and sometimes they move a lot.  Sometimes the market is stagnant for long periods and other years it moves like a Yo Yo.  The only thing you can really count on is that the South Bay-Beach Cities real estate market is always changing.

While prices still seem to be fairly stable I think you can count on that changing soon.  New properties hitting the market have multiple offers in days not weeks.  Networking among agents is pushimg off market sales to a point that many MLS organizations are thinking about serious sanctions against members who don't put listed properties on the MLS.

8-20 offers on a home is the norm not the exception at the entry level.  Higher priced homes are also seeing bidding wars as buyers scramble to buy before the market  revs up even more.  All cash buyers are at every price level.    Buyers have been stock pilling cash for a long time and want to buy now before prices really start moving upward. 

Two things seem to be pushing the market... low inventory and  pent up demand by buyers who have been waiting a long time to make a move.   If you look at the chart above you can see how much  lower the current inventory is compared to previous years.   The threat of shadow inventory seems to be a thing of the past as more lenders are doing loan modifications and short sales.  Supply and demand have always been the driving forces of  markets.

The big question for many qualified buyers is how to get their offer accepted  amid all the other offers on the table... but that's a topic for another post... Buying in a Seller Market.



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Kaye Thomas
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Posted on February 17, 2013 22:14:36

Posted in Buyers, Manhattan Beach

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Manhattan Beach-Beach Cities: Buying a home...the rules are changing.


 

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. 



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Kaye Thomas
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Posted on April 24, 2012 17:43:06

Posted in Buyers, Beach Cities

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Manhattan Beach- Beach Cities : The bottom of the market.. did you miss it?





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.



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Kaye Thomas
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Posted on April 04, 2012 21:37:38

Posted in Buyers, Beach Cities

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Manhattan Beach-Beach Cities: 2012 Real Estate Market .. The year ahead


 


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.



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Kaye Thomas
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Posted on January 01, 2012 19:25:44

Posted in Buyers, Sellers, General, Market Reports for the South Bay- Beach Cities, Beach Cities

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Manhattan Beach-Beach Cities... Conforming loan limits going down

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.



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Kaye Thomas
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Posted on July 25, 2011 17:13:44

Posted in Buyers, Financial Information, Beach Cities

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more Kaye Thomas, Realtor

Kaye thomas, Hermosa Beach Realtor I am a veteran real estate agent serving the South Bay communities of Manhattan Beach, Hermosa Beach, Redondo Beach and El Segundo. I specialize in helping my South Bay neighbors to buy and sell luxury oceanfront homes.

Your South Bay Real Estate resource for Buying and Selling in the So. CA /LAX Beach Cities of Manhattan Beach, Hermosa Beach, Redondo Beach and El Segundo.

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