Manhattan Beach, CA Market Snapshot of active, pending and sold homes as of October 13, 2008….

Manhattan Beach: Liberty Village home

While the market today didn’t exactly float like a butterfly…it also didn’t sting like a bee which is possibly the best news we have seen in the last 10 days. The gains made yesterday in the financial sector held up today. Even the LIBOR saw a slight decrease which could be good news for homeowners who have ARM loans that will be adjusting in November. But as was noted by the volatile market swings last week it may be awhile before we see stability return to the financial/credit markets.

If you are selling or buying a home in Manhattan Beach or the Beach Cities, the health of the credit markets is of prime importance. Dispite all the rumors qualified buyers can get loans and close escrow. The key however is being sure you are qualified before you make an offer. That means really sitting down with a lender and going over exactly what you you will need for a down payment along with some cash reserves.

It also means being prepared for the fact that a 10% or less down payment is not going to work unless you are obtaining an FHA loan. If you are looking at conventional financing you will need at least 20% for a conforming loan less then $729,750, perhaps 25%-35% on loans between $729,000 and $1.5 million and probably 40% on loans over $1.5 million. You will also have to prove that you have some cash reserves beyond your down payment. In other words you have to have sound financial resources along with credit scores that are well over a FICO of 720.

If you are a seller you may need to consider carrying back a portion of the sale price as a second trust deed to help a buyer meet the higher LTV(loan to value) requirements of lenders. This means you may wind up initially with a smaller net from the property but could make up that difference by the interest you will receive on the note. It may also mean that as a seller you are going to pay some of the buyer’s closing costs to free up additional money needed for a down payment. You will have to be prepared for the fact that you may have to consider a few of these items once you are in escrow if you want the sale to close.

Another item to consider is the appraisal. Lenders are going into their cautious mode which means that appraisals may start comng in low. In today’s market that may well mean adjusting the sale price at the last minute. Although Manhattan Beach and the Beach Cities have not seen a huge number of foreclosures that doesn’t mean we don’t face downward pricing pressures.

September sales were not too bad considering the overall financial market… with 23 homes and 5 townhomes closing escrow. The current inventory is 178 homes ** and 31 townhomes for sale. There are 32 homes and 7 townhomes in escrow… 9 homes and 2 townhomes have gone into escrow since October 1, 2008. so far only 3 homes and 1 townhome have closed escrow since October 1, 2008

Manhattan Beach: Market Snapshot October 13, 2008(click on graph to enlarge)

Manhattan Beach : Price Ranges October 13, 2008

Manhattan Beach: Market Snapshot September 15, 2008

Manhattan Beach: Market Snapshot August 19, 2008

Manhattan Beach: Market Snapshot July 17, 2008

Manhattan Beach: Market Snapshot July 7, 2008

Manhattan Beach: Market Snapshot June 20, 2008

Manhattan Beach: Market Snapshot June 5, 2008

Manhattan Beach: Market Snapshot April 29, 2008

Manhattan Beach:Market Snapshot April 14, 2008

Manhattan Beach: Market Snapshot March 31, 2008

Manhattan Beach: Market Snapshot March 13, 2008

Manhattan Beach: Market Snapshot February 26, 2008

Manhattan Beach, CA: Market Snapshot February 11, 2008

Manhattan Beach, CA: Market Snapshot December 12, 2007

Manhattan Beach: Market Snapshot November 8, 2007

Manhattan Beach: Market Snapshot October 12, 2007

Manhattan Beach: Market Snapshot September 29, 2007

Manhattan Beach: Market Snapshot September 15, 2007

Manhattan Beach: Market Snapshot August 25, 2007

Manhattan Beach: Market Snapshot July 18, 2007

Manhattan Beach: Market Snapshot June 25, 2007

Manhattan Beach: Market Snapshot June 2, 2007

Manhattan Beach: Market Snapshot May 6, 2007

Manhattan Beach: Market Snapshot April 23, 2007

** The MLS shows 184 active but 5 are duplicate listings from other boards that are now part of CARETS and another is a townhome in Manhattan Village listed as a home by an out of area broker.

What a week….

The stock market roller coaster may just make housing look good again as a long term investment. At least if the price drops on a home in Manhattan Beach you can be fairly confident it will go up again in the future. However if you had a lot of WAMU or Bear Sterns stock you lost everything as those stocks and others like them are gone.

A lot of people like to make fun of the South Bay-Beach Cities real estate market but over the long haul homeowners who have made a long term investment in real estate have done well. We have our ups and downs but long term is the key to making money on real estate.

511 Dianthus in the Manhattan Beach Hill Section offers a good choice for buyers who are deciding to follow a more conservative path. This lovely home has over 1900 sq ft, 3 bedrooms, 2 baths, large dining area, delightful family area and a great entertainment room with space to spare for the big TV and a view that doesn’t stop. The serene rear garden and soothing sounds of the waterfall bring a sense of calm after a busy day. A new price makes this home worthy of consideration…. $1.269,000.

If you are not quite ready to make a formal appointment but would like to see this house why not visit me Sunday 1-4 p.m. to view this Manhattan Beach Hill section home.

Remember….Great views….nice home… good price! See you Sunday!

Last week there was a little good news for buyers and sellers in the South Bay-Beach Cities. The MLS is now utilizing a system called CARETS which will give agents and the public listing information on homes from most of the major MLS systems in Southern California. The more information that is available the better it is for consumers.

The map above shows the MLS systems and areas currently part of the new CARETS system. The expectation is that the system will ultimately cover all of So Cal including San Diego and eventually encompass the entire state of California.

Things are still in a state of flux as the new system gets set up and information is downloaded from all the participating MLS providers. Ultimately we will have access to all listing and sale information including the history of a property for the last year. Each individual MLS will continue to have property information for their areas for a longer period of time.

What this means for consumers is that you will now have access to listings that are listed by out of area agents who in the past may not have put the listing on the local board. It also means that searches for properties in other areas will be easier and more information will be available.

The downside right now seems to be the number of duplicate listings in the system. As an example I belong to the Westside MLS and the South Bay MLS… so I might put a listing on both systems. With CARETS the listing will show up twice.. once from the South Bay system and again from the Westside system. I’m guessing that glitch will be fixed later this month along with the promised information on sold and property histories.

It seems as if there is no magic bullet to help resolve the current financial crisis. Paulson and the FED may have thought the bailout/rescue bill would pop the rabbit out of the top hat but so far no such luck. A lot has happened since I posted Part I and Part II on the FED bailout/rescue…. the good…the bad and the ugly. Over the last two weeks we’ve seen a lot of ugly, more bad and not much good as the markets continue to crumble. The financial sector just doesn’t seem to care what governments around the world are proposing in their efforts to bring back stability to the credit markets. Even a worldwide lowering of rates this morning didn’t calm the markets… although by the afternoon the market had improved slightly.

Credit remains very tight while companies and states try to stay afloat. The State of California will have to rethink their recently passed budget … which might be the best thing to happen in years. I think we are going to see some financial common sense finally return to the market even if we have to bring it back kicking and screaming.

Most of us are concerned about how the financial market will affect our local South Bay-Beach Cities real estate markets. Both buyers and sellers have legitimate concerns. We know the market is going to face more changes…we just don’t know how severe the changes will be. If we see a lot of people in our market lose their jobs then we can expect to see a bigger impact on the real estate market then if we are faced with a stagnant job market… few actual job losses but no new jobs being created.

I’ve had a number of people ask about buying in this market. My response is pretty much the same to everyone. While some markets appear to be better then others within the normal real estate market cycle; there really is no good or bad market if you need a home… as long as you are thinking long term. If you are a short term flipper don’t buy… you will definitely lose money. If you don’t have some solid financial reserves then this may not be the best market for you. At best this market is going to be flat which means if you have to sell in less then two years you will probably lose money on the transaction.

Historically in our area if you held onto your home, even in a bad market, you made money… no matter when you bought in the cycle. For those who have solid financial resources and want to buy a home this might be a very good market. Sellers are negotiating.. even bank REO’s have seen the light. If you plan to own the property over the long term then getting a low long term fixed rate loan could be a very good move. In fact you just might see some investors returning to the real estate market in places that have held their value. If you had stock in Bear Sterns, Lehman or WAMU you are out of luck. You can’t wait out the market for your stock to go back up because it doesn’t exist. However if you buy a property in Manhattan Beach or any of the Beach Cities…even if the value declines in the short term it will go up over the long term. I think we may well see investors reconsider tangible assets as a place to park funds for the long term.

If you are a seller you have other concerns. We are looking at about 4-6 months as an average market time. Many homes have been on the market close to a year or more. If you have to sell in a given time frame then you will probably not get as much for your home as you might if you could take more time. If you need a quick sale then you will have to adjust the price accordingly. A lot of buyers may have 20% down, good FICO scores and make great money but may find that lenders only want to make loans with a 70% LTV (loan to value) so sellers may need to consider owner financing to help move the process along. Owner financing used to be fairly common but with lower rates and less stringent qualifying it went by the wayside. I think sellers may need to explore this concept once again.

Even in the worst of markets people buy and sell homes. The current financial market is shaping up to be one of the worst we have seen in a number of years. It will take at least a month before the FEDS get the bailout/rescue plan working. Once it is up and running it will take a longer period to see if it is actually going to work and by then we will have a new administration with a new set of issues. We may squeek our way out of this mess but it will take some time before we know how it will all play out. In the meantime for all those hoping for a total market collapse…be careful what you wish for as you may not like it so much if you get your wish.

UPDATE: 10/09/2008… Weird stuff is happening in the loan markets… The LIBOR index which should have declined yesterday after cuts in the European funds rate went up… meanwhile rates on 30 year fixed loans dropped today. Most ARM loans are tied to a major index so these rates can be very important when ARM loans adjust. If the LIBOR, the Prime rate or Treasury Bill note rates fall then resets on loans will be lower then expected which means borrowers may see decreases rather then increases on their loan rates…that’s good news for homeowners. On the other hand if these rates rise then resets will be on the high side and that will push up rates on loans that are resetting which could lead to more foreclosures.

While there are a lot of things to love about living in Manhattan Beach.. one of the best is the Hometown Fair. The 10K race is an event for the whole community… whether you are a marathon athlete or an I can do this cuz I want a tee shirt competitor this is an event cheered by the whole community.

After the race take a leisurely stroll through the booths filled with handcrafted items made by a number of our local residents. Then it’s off to the food and games areas for the whole family. These booths are staffed by non-profit community groups who raise money for their organizations.

One of the oldest of the philanthropic groups in Manhattan Beach is the Neptunian Woman’s Club of Manhattan Beach. The Neptunian Woman’s Club was started in 1909 before Manhattan Beach was officially Manhattan Beach. Next year we will be celebrating our 100th Birthday! Each year the club raises money for scholarships for Manhattan Beach students and other local charities with a number of events.

Last year The Neptunians had a soda booth. We had a great time! It was so nice to see many of the parents and students who received scholarships stop by and say hello. This year you will find us at the Pineapple booth and the Beer Garden. We hope you will stop by and join us again this year as we continue our goal of providing scholarships for Manhattan Beach students and local groups who need a helping hand along with some cash.