Riviera Village... Redondo Beach


As the economy continues to slip and slide it's no real surprise that housing is still in a state of flux.  October is always a slow month in the Beach Cities.  With the exception of  El Segundo, the number of sale in each South Bay-Beach City  was very similar to the numbers from October 2010.  Prices however  were bouncing around like crazy with North Redondo showing the biggest declines and Manhattan Beach showing an increase.

About the time it seems  the housing market in the Beach Cities is beginning to stabilize something happens to send it back down the road.  This month the culprit maybe be a combination of a lower conforming loan limit ($625,500 down from $729,750) combined with an increase in the  number of short sales.  North Redondo has been hit the hardest by short sales that are pushing down home prices.   Older townhomes  are really taking a beating on price as owners try to get the bank to approve a short sale. 

Lower prices and low interest rates are making North Redondo a hot market right now. Buyers are snapping up units at prices not seen a long time.  Multiple offers on townhomes in North Redondo are becoming the norm rather than the exception.  November could be a very interesting month....


South Bay-Beach Cities: Sold October 2011

Manhattan Beach: Sold  October 2011

 Manhattan Beach Strand and Bike Path


October has never been a great month for home sales in Manhattan Beach and this year is no exception.. While the sale volume was down slightly from last year... 24 properties  in 2011 compared to 26 in 2010.. The median price  was up  in 2011 ... homes: $1,480,000/Townhomes $ 1,185,000  compared to homes $1,180,000/Townhomes $ 1,000,000 in October 2010. In fact the median price was the highest since 2007. 

Financing is a factor... October was the month that conventional loan limits dropped from $729,750 to $625,000 which may explain why there were on 16 home sales.  However townhome sales were higher than normal so maybe financing was just a small issue.  

So what do the numbers really mean.. not much...  The real estate market is still bouncing around.   Last month there were 25 closed home sales  in September 2011 with a median of $1,150,000 and 5 Townhome sales with a median of $765,000.  When you use small samples the mix  affectes the median price a lot.  What is interesting is that the total number of sales has been fairly consistent year over year.   



Consistency is one of the hallmarks of a market that is relatively stable.  This doesn't mean prices have not gone down or that the number of sales isn't down from peak years.  But it may indicate that even with the poor economy,   Manhattan Beach is a relatively stable market.. You can of course speculate on the whys and whats of real estate in Manhattan Beach and all the Beach Cities forever and still wind up with a lot of numbers  that  are probably not nearly as important as people think..


Manhattan Beach: Sold October 2011

 

Manhattan Beach homes and townhomes Sold September 2011

Flowers along The Strand in Manhattan Beach



September is the odd month when it comes to closed sales.   September sales reflect figures from the end of July and August.  August is usually the slowest month for sales as folks take the last vacation  of the summer and scramble to outfit everyone for the new school year. 

While total home and townhome sales for September(34) were near those of  2010(37) and higher than the figures for 2007(31), 2008(29) and 2009(26).... the median price was significantly lower than any year since 2003. 

I've been having an interesting online discussion with a reader about what is a distressed property.  While we don't quite agree on the precise definition of  distressed  properties, I think we are in agreement that this is a distressed market in all parts of the South Bay-Beach Cities.  The question is whether or not the Manhattan Beach real estate market will become more distressed or if it will remain  more on the flat side with  little movement. 

Currently  I see  roughly 20%-25%  of the Manhattan Beach properties that are for sale as  distressed which I think is  better  than  the numbers found  in many communities in Southern California.  My reader sees the market as closer to 38% of the available properties as distressed.   But then we have different definitions of what constitutes  a distressed property.  My definition is based on the financial situation of the owner while my Reader believes that  there are other items that make a property distressed. 

It has been over 4 years since the housing market took a major dive and there doesn't seem to be much happening to change the situation.  The boys in DC don't have a clue as they scramble to come up with something... anything.. to make the housing problems go away.  They can't seem to figure out that if you want the housing maket to stabilize you are going to have to make it easier,  not harder  for people to buy.  I'm not talking about reverting to the old programs that got us in this mess.  What I'm talking about is sensible guidelines that work on the consumer's behalf.  These guys are so busy grandstanding  and posturing  they have forgotten the basics.... making a loan to someone with good credit and cash for a downpayment who wants to buy a home.

Manhattan Beach Market Snapshot: Sold September 2011

 

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

Summer home and townhome sales in Manhattan Beach held up well compared to previous years. Overall sales volume for 2011 is the highest since 2007 with 306 homes and townhomes sold between January 1, 2011 and September 15, 2011. Home prices however are another matter.

Manhattan Beach home prices for entry level properties under $1,000,000 have been relatively consistent since last year but prices above that range are still searching for stability. As the recession continues with little sign of abating anytime soon and the stock marketcontinues its wild ride, many financially stable homeowners are begining to feel the pinch of lower economic expectations. For some that means fewer vacations and nights out but for others it may mean they need to sell and either purchase a smaller home or perhaps rent for awhile until the economy begins to look better.

Manhattan Beach real estate prices have definitely declined in the last few years although not by as much as many had predicted. Prices still seem to be in flux for much of the market although not by the percentages seen in previous years. The big question for both buyers and sellers is whether Manhattan Beach real estate prices are approaching the bottom of the market or are there still more price cuts ahead.

Manhattan Beach Market Snapshot: Sold June 2011

Manhattan Beach Market Snapshot: Sold July 2011

Manhattan Beach Market Snapshot: Sold August 2011