Recently there has been  a lot of  speculation at our local consumer blog,  MBC  about where  the Manhattan Beach and the Beach Cities real estate market is headed.   While we have seen prices decline in the last year we still don't have a large number of foreclosure or short sale properties in either Manhattan Beach or the Beach Cities.   As we haven't experienced that perfect storm of massive  numbers of foreclosures along with high numbers of short sales,  property values are still higher then many expected. 

From September 2009 to today ( February 19, 2010) there have been 119 single family homes close escrow.   Of the 119 closed home sales 24 (20%) were all cash. 4 sales had less then 20% down,  26 sales had 20% down and the other 65 sales saw down payments in excess of 20%.  What was interesting is that not all the cash sales were upscale homes.  Cash sales were across the spectrum on price.  By the same token a number of Luxury  homes buyers leveraged their purchases with loans above the $1,000,000 maxi mun mortgage interest deduction figure.   There were 15 home sales over $3,000,000.  Of those 15 homes  4 sold all cash, 5 had down payments of 40% or more and the other 6 buyers put down  between 20%-30%.   A few of these folks may have been reaching on price but I'm guessing a number of these buyers were taking advantage of very low interest rates and are keeping their cash for future investments.

 Another interesting factor was the number of  buyers who got  a first  loan of  $729,750 and a second loan to make the total loan amount about  $1,000,000 to take advantage of the mortgage deduction limit.  A year ago lenders were not making second loans no matter how much money a buyer had as a down payment.  There were also a few folks who obtained new secondary financing  a few months after the close of escrow. 


I don't know about  the percentage of down payments in other zip codes but I would think that a market where the median price is well over $1,000,000 and  20% of all sales are cash sales is a market where most owners and buyers  are  financially savvy.  The bad news is that  I expect to see more foreclosures and short sales in the coming months as the California economy continues to be in trouble and mortgage rates get ready to move higher.   The good news  is that our local real estate market looks as if it will continue to weather the storm better then expected.

 Financing was difficult to obtain as the FEDS had dropped the conforming jumbo loan limit to $625,000 from $729,750 as of November 2008.  While the FEDS agreed to raise the limit again in February,  lenders were not able to fund loans until the end of April.  Jumbo loans were only being offered by a few institutions and they were (and still are)  difficult to obtain as most lenders want very high FICO scores along with down payments in excess of 20%.   That left of lot of months with few choices for many consumers who were considering buying a home.  Just to make things more interesting the government also changed the way appraisals were handled which led to a slew of issues that are still a problem.

Another area of concern is foreclosures.  While stories run high about shadow inventory there isn't any real information on the numbers.  Issues with continued high unemployment nationally and in California will  exert pressure on  homeowners at the high and low end of the scale. Loan resets are a reality and will have some effect on all homeowners.  In California a moratorium on foreclosures by the state legislature has ended and we may indeed see more distressed properties hit the market.  The big question is will they be in Manhattan Beach or Morongo Valley.

Manhattan Beach: Home Sales January-December 2000-2009

Manhattan Beach sales by month: ( single family homes no townhomes)

 

 Manhattan Beach: Westside/Eastside July-December 2007-2009

I apologize for posting this information so later but sometimes life gets in the path of real estate... I will also  be posting information for Hermosa, Redondo and El Segundo.  

Manhattan Beach: January 2010 Days on Market...

What a difference a year makes.   The Manhattan Beach-Beach Cities  real estate market for the 4th quarter of  2008 was one of the most dismal in many years.  One year later the 4th quarter of 2009 saw inventory drop dramatically as sales volume showed a marked increase over that of a year ago.  The reason for this turn around was twofold... prices finally declined and jumbo loans, while not easily obtained, are being offered by a number of lenders.

  The question now facing  potential buyers and sellers is where the market is headed in 2010.    There is the camp that believes the market has reached bottom and will soon start recouping recent losses (mainly sellers). At the other end of the spectrum are those who believe the market will see an additional 30% decline in value(mainly buyers).  Most folks are somewhere in the middle and think things will likely get a bit worse before they get a lot better.

Manhattan Beach is often a harder market to figure then other Beach City real estate markets because of the financial resources of many buyers and sellers in the Manhattan Beach market. There are  a number of buyers who have the money to pay all cash or put down 50%  or more for a property with a price tag in the multi-million dollar range. In recent months we have seen a number of properties that were purchased within the last 5 years sell below their acquisition price.   While no one knows for sure,  it doesn't appear that the owners of those properties filed bankruptcy immediately after the sale.  

This doesn't mean the Manhattan Beach is immune from market forces but it may mean that we won't get hit as hard.  As an example there is a lot of concern over  Alt-A loan resets.  These might not be as big a problem for owners who have financial reserves as they are for folks who have little or no backup.   While not everyone in Manhattan Beach is in good financial shape there are probably more who are then are not.  The same is true when dealing with employment issues.  I have a number of clients who are not making as much money as they did in the past.  They are not in financial trouble but they are watching what they spend.  None of them are likely to lose their homes but discretionary spending is tighter then in prior years.

I expect to see inventory increase in the coming weeks.  Since the beginning of the year  homes that went off market last year are returning at lower prices and finding buyers fairly quickly.   The big hurdle now will be financing.  I'm believe that we will know the direction the market will take sometime in late spring or early summer.  The FEDS are planning to stop  backing the MBS market in March.  This move will  likely force rates up.  In addition, banks that have been holding inventory off the market may find they need to move it off their books.  Banks may also finally decide that it would be a smart move on their part to find a better way to handle short sales and REO listings.

Manhattan Beach: Market Snapshot January 17, 2010

Manhattan Beach: Price ranges January 17, 2010

***I'm making a change in the market snapshots and will be using sold sales from the previous month rather then partial sales in the reporting month.

Manhattan Beach Homes and Townhomes :   December Average Days on Market

As the year winds down there have been a lot of changes in our local Manhattan Beach real estate market over the last 12 months.  Home prices have seen fairly large declines in value since 2008.  In many sub markets we are seeing values at 2004 levels and  we may see homes at 2003 levels next year. 

While the prices of entry level homes seem to be finding a floor,  the upper end of the market is still seeing prices decline as financing remains tight for everyone who is not an all cash buyer.  Appraisals continue to come in lower then the sale price as lenders  try to protect themselves in case prices fall more next year.  Sometimes it seems as if lenders really don't want to make loans even to the most qualified of buyers.   They talk a good story but when it comes down to funding many lenders seem to have a bad case of sticky fingers when contemplating letting money go  from the bank vault to the consumer.

Inventory has dropped significantly from  2008 and is now lower then 2007 levels.   There are currently 81 homes and 35 townhomes for sale in Manhattan Beach.  A few months ago the inventory was hovering around 190 for homes and 45 for townhomes.  

While some of the decline can be attributed to the season,  many sellers decided to take their homes off the market as they couldn't get the price they wanted or in some cases needed.   Other sellers are doing the finance dance with their lender hoping to refinance at a better rate and a number of homes have been rented and won't be back for at least  a year.  Others are being remodeled to fit the needs of the owners.

Unlike last year at this time, when we saw some of the most dismal sale numbers posted in  many years,   there are a number of homes entering escrow...46 homes and 12 townhomes as of this afternoon.   That's a fairly respectable number considering the time of year and the financial climate.   Price declines have certainly been a factor.  Some owners, who got the price right at the start, sold quickly and a  few saw multiple offers  but most of these homes only found a buyer after a number of price reductions and a long market period.

November, which is usually a kiss of death month,  saw 24 homes with a median price of $1,412,500 and 11 townhomes with a median price of $1,235,000 close escrow.  Sales are looking up but prices are definitely down.  Credit is still on the sparse side even for those with a good financial position.  The Feds keep trotting out changes they hope will make the market better for the consumer but often just seem to make things worse.  Next year, no doubt,  will present a new set of challenges for both buyers and sellers... but that's another post.

Manhattan Beach: Market Snapshot December 11, 2009 

Beach: Price Ranges December 11, 2009 

Get all your Christmas/Holiday or December birthday gifts wrapped at the Manhattan Beach Mall...... We will be wrapping from December 11-24, 2009.

Are you gift wrapped challenged? Do you have a lot of gifts to wrap? Are you so busy that you don't need one more thing to do? If you answered YES to any of these then let me offer you a solution.

The Neptunian Woman's Club of Manhattan Beach will wrap all your holiday gifts.. whether you bought them at a Mall store or made them at home. We are conveniently located near the South Entrance. We'll wrap one gift or one hundred and the fee is tax deductible. This is one of our largest fund raisers of the year. Proceeds go toward scholarships for Manhattan Beach students. Each year we give academic scholarships to local students in Art, Music, Literature, Fashion Design, Nursing and for women who go into Police work.

 The Neptunian Woman's Club is the oldest Woman's club in Manhattan Beach. We were the driving force that got the city incorporated, the library system started and opened Pacific school. These are just a few of the things we have done over the years as part of our philanthropic services for the City of Manhattan Beach. You will find us at the Hometown Fair, the Pier Lighting, the Santa Float, the Fireworks on Sunday and at the Manhattan Beach Mall wrapping away.

Bring us your gifts and we'll make your life easier..... Remember...Big or small... we'll wrap them all.. and it's tax deductible..