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!

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.

Manhattan Beach Homes west of Sepulveda with 1500 + sq ft under $1,500,000 ……

(click on graph to enlarge)

In today’s uncertain economic and real estate market consumers are making more conservative choices about how much they will spend for a home. This is true of the Manhattan Beach and the Beach Cities real estate market. One of the oldest maximums of real estate is to choose your home based on location…location…location. In Manhattan Beach many buyers prefer a home that is west of Sepulveda and an easy walk to the Beach and downtown Manhattan Beach.

Along with location, price and square footage are also major considerations when a buyer is thinking about purchasing a Manhattan Beach home. The chart above is a list of the homes currently for sale that are west of Sepulveda, over 1500 sq ft and priced at $1,500,000 or less. As you can see even in this market there are not a lot of homes in this price range.

One of the best values is # 4 on the list… 511 N Dianthus Manhattan Beach. This home is located in the Hill section of Manhattan Beach and features 3 bedrooms, 2 baths, 1900 sq ft. The views from the living room and master bedroom are awesome and the back yard is lovely with a wonderful Koi pond and lush landscaping. This home offers a wonderful opportunity for those who want a home on the Hill but are also budget conscious.

We won’t have an open house this weekend as I’m working at the Hometown Fair but I would be happy to arrange a private showing . You can reach me via e-mail or just pick up the phome and call… (310) 721-7438

With all the hoopla in the financial markets over the last few weeks many potential buyers in Manhattan Beach and the Beach Cities are adjusting their views on “how much home” to buy. Buyers, who a few weeks ago couldn’t imagine buying anything less then a new 5 bedroom home, are now thinking that perhaps an older home with a lower price may make more financial sense.

People who are considering buying a home in this market are not financial idiots. They are looking at a long term commitment rather then a short term trade up. They believe that prices can be negotiated and that rates are not going to stay low over the long run. They have enough money to put down a minimum of 20% or more depending on the price range. While adjustable loans are still a favorite choice over a 30 year fixed, they want loans that are actually fixed at a specific rate for 5-10 years and will cover P+I. They are not looking for an exotic loan but rather are very conservative in they type of loan they will consider. Option arms are not a consideration.

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!