2009  has been quite a year for Manhattan Beach real estate as well as for real estate in all the Beach Cities.  The year started out following  dismal home sales in the 4th quarter in 2008.  The the financial markets took a huge dive and a number of folks saw their stock portfolios and 401 K plans sink like the Titanic.  Manhattan Beach and the Beach Cities saw some major changes in the local real estate market as inventory rose and prices declined.

Interest rates were moving upward and the housing market was stalling so the FEDS decided to support the market by keeping loan interest  rates low.  Some buyers bought homes in Manhattan Beach using  FHA financing and that hadn't happened in 25 years.  With lower prices and low interest rates the market began rebounding in the summer and continued into the 4th quarter as many buyers decided it was time to get back into the market.   Inventory began to decline and suddenly multiple offers were back but with a caveat this time... the property had to be priced at or below market value.  Buyers  know where market value lies and  homes that are over priced continue to sit.  

The coming months will see some major changes to our current market.  As of March 31, 2010 the FED will stop supporting mortgage rates by  buying mortgage backed securities.  There is a lot of speculation about how this will affect rates  as no one knows whether or not investors will pick up the slack or find other places to invest their fund.  FHA will be tightening up their rules again. Minimum  FICO scores will increase as will the upfront fees buyers must pay.  Sellers will be limited to paying a maximum of 3% toward buyer closing costs.  While we still do not do a lot of FHA loans the new rules will have an effect on Fannie and Freddie conforming loans.  If Fannie and Freddie continue to see more trouble with their existing portfolios you can expect to see a tightening of underwriting rules .  These steps may well  have an impact on the underwriting guidelines of Jumbo loans.  Lack of financing has always been a hurdle in our market and will continue to be an issue even for the highly qualified buyer.

Below are two sets of data..  One set covers home sales by month and by year for July-December  2000-2009. ( January-June 2000-2009)  The other  is for sales in Manhattan Beach east of Sepulveda and west of Sepulveda from July-December.  ( January-June Sales 2007-2009)