3612 Poinsettia Manhattan Beach


In the last few months I’ve written posts on Starter Homes in Manhattan Beach , Prices not crashing …. no kidding and buyers and sellers Thinking Outside the Box along with a number of other posts on Manhattan Beach real estate. These posts were about the market in general and often about my listing on 3612 Poinsettia in particular. Many who commented on these posts blasted me on everything from home prices in Manhattan Beach to my general lack of knowledge about the declining real estate market. The bottom was going to fall out of the local housing market and Poinsettia was wildly overpriced at $849,000.



But a funny thing happened a month ago. Suddenly 3612 Poinsettia was not the wallflower at the prom. Poinsettia was on the short list for Prom Queen. The property was being shown many times every day. Not only did we wind up with multiple offers but it went within a matter of days and I had to turn away of number of people who wanted to make offers. I won’t release the sales price until the house closes escrow in July but I will share a bit about the sale.


First the deal is very solid with the buyers having a huge down payment well in excess of the standard 20%. The agreed price is very close to full price. The buyers have released all contingencies. I’m still receiving calls from people who want to make an offer if it falls out of escrow and are not blinking when I tell them they have to look at full price or more. People are now making comments about what a great little home it is and how lovely and private the yard is compared to many others in the same price range.


Buyers who made low ball offers suddenly found themselves wanting a chance to increase their price to whatever we wanted. The buyers who offered the winning bid didn’t mess around with multiple low offers. They wanted the house and recognized the value of the property and made their offer accordingly. 3612 Poinsettia went from mouse to Prom Queen in less then a week.



So what’s the point of this little tale? It’s pretty simple.. you have to know what is happening in your local market. The buyers who lost on this home were those who paid too much attention to what was happening in markets outside the Beach Cities and Manhattan Beach. The buyers are local people. They grew up here. They are going to live in this house and make changes as their life changes. They bought the home they could afford in the location they wanted. They bought an entry level home that they will turn into the home of their dreams over time. They absolutely love this home. In 5-7 years they will be considered “lucky” to have bought at such a cheap price.



Starter homes that were scoffed at 3 months ago as overpriced are quietly selling. Smart buyers are taking advantage of rates that are still on the low side and sellers who are pricing homes to sell. One by one these homes are moving as buyers begin to realize that Manhattan Beach and the Beach Cities are some of the best places to live in Los Angeles County.



This doesn’t mean you should buy a home if you are not ready to buy. What it does mean is that if you are financially stable and are planning to buy in the next few months you might want to take a look at what is happening in the local city where you want to live. There are good prices on a lot of property in Manhattan, Hermosa, Redondo and El Segundo.

Buying a home in the South Bay/ Beach Cities can be a daunting task whether you are a first time buyeror have purchased a home in the past. Many buyers aren’t sure about prices… will they go down a lot or a little or not much.  Should you buy  a home or a townhome or a condo or maybe a duplex.  How about financing… how much money will you need to buy a property in the current market. There is a lot of advice in the media about buying a home, townhome or condo in today’s real estate market. The best hint I can give to those thinking of buying a home is to slow down.

I know that sounds a bit strange in our current market…after all according to the media you have all the time in the world if you are thinking of buying.  However if you want to buy and get the best deal possible, then you need to focus on those things that will help you accomplish that goal. Too often buyers are scurrying around looking at open houses, talking to their friends about the market, reading media items and just generally doing everything but thinking about what they need to do and the best way to do it.  Price is important but if you really want to be a homeowner then you need a plan.

The 7 Things to Know When Buying a Home :

1. Gather all your financial documents together.. that’s bank accounts, stocks, check stubs, birthday money from Aunt Jane and Uncle Harry… anything that has a bearing on your finances.

2. Find a good lenderand talk to them about the various types of mortgages, interest rates, the costs of the loan and your credit. If your credit is bad find out what you must do to repair it. You may need to wait another year before you buy if you have to clear up your credit and pay off bills.   If you need to save another $100 a month then figure out how many lattes you can’t have.. Get your financial house in order before you look at one more open house.

 3. Find a good agent. Call your friends and ask for referrals. Go to open houses and talk with agents. Get on the internet and check out agent websites and blogs. Pick someone who shares information… a lot of information with clients on their sites and in person. Remember how much you loved your kindergarten teacher because of all the things you learned…. you should like your agent just like that… for the same reason.

4. Look at property. Be ready to meet with your agent if they tell you a great property has come on the market in your price range.  Don’t get caught up in the idea that because inventory has increased there will lots of homes you will like in your price range.  Many times an increase in inventory is not an increase in homes that fit your budget and needs.  If you are too busy going out with your friends or are just too tired or not in the mood to see homes then you might not be ready to buy. Buying a home is a grown-up decision.. if you aren’t ready.. pass until you are ready. Never buy a home if you are not financially and emotionally ready.

5. Figure out why you want to buy a house. If you plan on making a quick buck and selling for a profit in a year then you are not very realistic and may wind up in trouble in the future. Thoses days are long gone.   Remember buying is a grown- up decision..if you see a home as shelter for you and your family and as a long term investment that you are willing to make a few sacrifices to obtain.. now just might be a good time to buy.. Interest rates are still low and a lot of sellers have realized that the market is not going up anytime soon and are willing to negotiate price and terms.

 6. Be realistic.. start with a property you can afford.. which may not be the one you dream of owning..  Yes,  prices have declined but in many areas they have not dropped as much as buyers were hoping to see.  If you are looking in Riverside or San Bernardino Counties prices have really dropped.  However if you are looking in the Beach Cities prices are certainly less then they were two years ago but they are still on the high side. You need to know where prices are in your market. 

7. Listen to your agent not your buddies or co-workers. If you don’t trust what the agent tells you then you need to find an agent you do trust. Your friends are not in real estate.. they don’t know the market. Your real estate agent knows the market and will guide you if you pay a bit of attention.  If you have chosen your agent well,  they will offer you good advice.  That’s why it is important to choose someone you trust.   I know there are a lot of people who don’t think this is the time to buy and it may not be for them. But if you are ready this may be the right time for you. Trying to time the market is almost impossible. Generally by the time you figure out it’s time to buy .. the best deals will be gone.

This is a very tough market for many potential buyers.  Unlike the market of a few years ago,  you will have to have cash for a down payment along with very good credit.  This isn’t something new or scary…this is just common sense. 

If you are looking for a property in the $1 million plus range then you are going to need 25%-35% down along with high FICO scores and cash reserves in the bank. Imagine actually having to qualify and be qualified.. how will anyone ever buy a home? How could this happen… the entire Beach Cities market will be in shambles.. prices will drop 50%… the end is near! But wait.. something is wrong…people are buying homes. There are buyers who have.. gasp.. not just good credit but excellent credit. There are buyers who have enough money in the bank to have a 20% or more down payment and still have excess funds. There are buyers who are purchasing homes they can afford at payments that are not subject to some weird bank come-on. Yikes… there are people actually buying homes just like people did 10-15 years ago.

I am being a bit facetious for a reason. No… the market hasn’t begun an upswing. It looks as if home prices are going to remain soft to flat for the next few years. However there are some happenings that are pointing to a moderation of the current real estate market. There was an interesting article in last week’s WSJ about the housing market. The Daily Breeze had an article in the Business section about possible changes in the credit markets that may be good news for mortgages. Even the FED is seeing a little improvement although as Bernanke notes we are still not out of the woods. Lower rates by the FED have pushed down the prime rate. Many adjustable rate home loans are tied to the prime. Consumers who have one of these loans that is re-setting will be seeing rate increases that are significantly less then anticipated.

 None of these items taken individually mean much but if we continue to see more small signs of an improving market buyers need to be watching closely. Everyone wants to time the market. A lot of buyers are waiting for the bottom of the market before they buy a home. Most buyers never know when the market has reached the bottom until long after it has happened. The reason is that buyers think there will be a big headline that says… home prices have reached the bottom… buy now. It doesn’t happen that way. Investors know this and begin buying long before most consumers even have a clue. They see the bottom coming because they pay attention to the little signs that begin appearing in the market. Consumers want big signs, so they usually miss the small signs.

I think we have a bit longer to wait for the market to reach bottom but the little signs are beginning to appear. If I were thinking of buying I would pay attention to what the market is saying.. instead of what my friends say. I would also find a good lender and find out just what I should do to be ready to buy when the time is right.

Making a housing decision based on Doom and Gloom could wind up costing consumers who want to buy a home a lot of money.   Most people think they can time the market and buy at the bottom. A number of potential buyers are afraid that if they buy now the housing market will drop drastically and they will lose money. The fact is that a lot of buyers will wind up missing the point when the market begins to change. They will miss it because they are so caught up in bad news that they will not be able to tell when the market changes and take advantage of the change.

 I dont know when the market will reach bottom. I do know that once it reaches that point it will stay relatively flat for a time before cautiously moving upward. I know this because this is how the Manhattan Beach-Beach Cities and the general California real estate market has behaved for many years. I know that the flat time will be a good time to buy. I also know that bar a massive recession or other disaster we may see the market begin to level off within the next 6-8 months. A number of buyers will miss that period because they dont understand that a flat market after a down market is the bottom. Too many prospective purchasers keep waiting for the bottom long after the bottom has been reached and the market begins to move upward.

In a recent Daily Breeze article on California foreclosures the article noted that most of the foreclosures in the South Bay were in Carson and Gardena and other areas to the east. The article pointed out that the rate of foreclosures in the South Bay was half what it was last year¦ Hmmm¦now that would have been an interesting headline but it wasnt the one chosen by the paper. Nope the headline was about the large number of foreclosures in CA. Im betting a number of potential buyers caught the headlines and missed most of the report. Negativity sells newspapers. But negativity can also cost you money.  Most of the people who are trying to time the market will fail miserably. A number of those who are the most adamant about waiting for prices to drop are the same people who missed the late 90s and early 2000 market. They are going to miss this one too.

If you are thinking about buying a home then you need to find out what is really happening in the market where you want to buy. Do you want to know about the number of foreclosures in your zip code¦ check out Foreclosures: How Does your Zip code Fare . This tells you the number of foreclosed properties in your zip code. There are 2 in Manhattan Beach, 3 in Hermosa Beach, 7 in North Redondo, 9 in South Redondo and 1 in El Segundo. If you are waiting to buy a foreclosed property in the Beach Cities¦ it could be a long wait. Its tough for prospective buyers in this market. The media cries that the entire state of California is in foreclosure but most of the highly desirable local markets just dont seem to reflect that data. Buyers still dont understand that when the headlines talk about massive foreclosures they are in Palmdale and Lancaster not Manhattan, Hermosa or Redondo. Prices have gone down but they havent reached meltdown¦. and are not headed in that direction.

 Real estate agents get blamed for spinning if they dont talk about the terrible real estate market in the Beach Cities. The truth is the market isnt what it was four years ago but it isnt awful. Since April 1, 2008 20 homes and 6 townhomes have gone into escrow in Manhattan Beach. Thats a bit more then one per day. This is not a bad market.. not great¦ but definitely not bad. We need to stop comparing the current market to that of a few years ago. More homes sold in 2003, 2004, 2005 and 2006 then at any other time in the last 50 years. We won’t see those numbers again.

It’s time to look at the current market. If you are thinking of buying make your judgement on what you need to do personally and on what you see happening in this market… not the one in 2004. Buy something you can afford and plan to stay there for awhile… 5-7 years at a minimum. Understand that you are buying a place to live not a mutual fund. If you plan smart and buy a property that makes sense the chances are very good that you will have a nice place to live and maybe make a little money along the way.

Buying in a Buyers Market… How to Buy The Home You Really Want. 

 I can hear you now.. “It’s a buyers market and I’m a buyer…. what’s so difficult”?…. It may surprise you but buying in this market may be a little tougher then you think . A Buyers market can be a harder market to maneuver in then a Sellers Market. I know this sounds crazy but it’s true. In a Sellers real estate market everyone knows where the market and prices are going… upward. You know you need to make a quick decision on a home you want. You know there will be a lot of competition. You know there will not be much inventory in any price range. The key is to try and outbid the other offers yet not go too crazy. It’s all very nerve racking but everyone knows the rules of the game.

In a Buyers real estate market it isn’t quite so easy. For one thing the rules are not always clear. Advice on buying a home is everywhere…no one should buy a house for at least 5 years anywhere…..the market is crashing and anyone who buys now will regret it when prices drop further…… soon ocean front property will be at 1990 levels if you just wait. What you may not realize is that a lot of the advice is being given by people who either can’t afford to buy or who may never buy. You may be afraid that you might pay too much and wind up losing a lot of money or worse yet look foolish to your friends. Human nature tell us we want to talk about the deal we got on a house and how smart we were about the local real estate market. The problem is that while there are deals out there you may not recognize them immediately.

Another difficulty is that all real estate markets are local and some will fare better then others. In the current housing market there will be markets that go down, markets that go up and markets that go up and down and then are flat. Prices are softening and some areas are going to be in for a real blood bath but not everywhere. Home prices in Manhattan Beach may drop 10% while home prices in Palmdale will likely drop at least 50% because of the foreclosure problems in that area. They are not the same market and different rules will apply. One of the things I’ve noticed when reading consumer blogs is that a lot of the people commenting on the local market don’t live in the area.. some don’t even live in the same state. Many buyers think that because the market has changed from a strong Seller market to a Buyer market the world is theirs .. so to speak. The media has distorted a lot of information to a point that buyers believe all they need is a little cash and a decent credit score and they can pretty much offer what they want and sellers will be begging to take their offers. A lot of buyers are sadly disappointed.

Certainly some sellers are unrealistic when it comes to the value of their home. I can think of a number of properties in the Beach Cities priced well over market value. They have been on the market a long time and may continue to be on the market even longer if their asking prices don’t get more realistic. However there are also a number of homes that have come on the market priced at market value. These properties sold quickly.. often with multiple offers and sometimes over the list price. The difference is buyers perceived these properties to be at or slightly under market value.

Here are 3 tips for buying a home in a Buyers market:

1. Know Your Market: It doesn’t matter what the market is like where your brother-in-law lives.. you need to know what is happening in your market. There is a big difference between a home that has sat at $ 1.9 for 7 months and is worth $1.5 and a home that comes on the market at $1.7 and could easily sell for slightly more. A 1600 sqft 3 bedroom 2 bath completely remodeled home in the Trees on a great street priced under $1.4 million is probably going to sell in 20 minutes. If you offer $1.2 because you know prices are going to drop drastically.. you will not be the new owner. Who made the right decision.. you may have to wait 5 years to get the answer. The same is true in the North Redondo townhome market. Right now a 2 on a lot townhome in North Redondo with a private yard in good condition built prior to 2000 is not selling unless the price is below $790,000. Every property that has gone into escrow in the last 6 weeks has been $720,000-$785,000 because that is where the market finds value. Properties priced at that level are selling.. those over are sitting. If you only want to spend $675,000 and want a yard…look at the rear unit of a three on a lot. Know the market.

2. Be Realistic…Buy What You Can Afford: Wow.. this seems to make sense but it’s surprising how many people don’t do it. Too many buyers want to buy the home their parents finally ended up with rather then the one they started with. Buyers don’t understand that they may be better off buying a small condo in Hermosa or Redondo then a new house in a marginal location. Your first home doesn’t need to be 3000 sqft in the trees. Buy a starter home or townhome in North Redondo, Torrance or Holly Glen… build a little equity… then move up to a different home. It may take a few years to get to where you ultimately want to live but you won’t be in trouble along the way.

3. Get Pre-Approved for a loan: You really need to know what your credit profile looks like to a lender. You may get 40 offers of credit a week from Cards ‘r Us but that doesn’t mean you qualify for a prime interest rate on a home loan. Sometimes there are mistakes on your credit that can take time to fix. You should have at least 10% and ideally 20% plus closing costs for a down payment. There are still a number of different loans that are available to consumers but the guidelines have gotten tougher in the last three months. You need a current evaluation of your financial picture. You may have qualified for $XXX in June but today you may only qualify for $XX. Interview a few lenders. Ask questions about fees and rates. There isn’t a lot of difference in rates. If the market rate is 6.5% for the loan you need … no one is going to give you the same loan for 5.5%. If it’s too good to be true… it is too good to be true.

Finally… Find a Good Agent( you thought I would say something else?)….. Contrary to all the hype there are good agents out there. Part of your job is to find one. A good agent knows the market. A good agent will help you find the right house and will tell you the truth. You may not like what you hear but that’s another story.