Redondo Beach Library...Veterans Park

Yet despite all the issues facing us the South Bay economy seems to be holding up better then other areas of California and the Nation. The fact that our overall economic picture is more secure is one of the reasons the local real estate market hasn't taken more of a nose dive. If we continue to maintain a relatively good economic outlook we will survive a bit better then other parts of the state. That's not to say we are not affected by what is happening in the financial markets... we are.

The continuing high rate for a Jumbo 30 year fixed immediately springs to mind. I have had a sneaky suspicion for sometime now that one of the reasons for the continued high rates is that lenders would like to do away with a 30 year fixed rate on larger loans in the residential market. The risk factor is larger for these loans as they are usually held in house by lenders as part of their portfolio. The funny thing is that lenders holding loans they made is what lenders historically did. It has only been recently that financial institutions sold off mortgages to the secondary market. Maybe if these guys had to hold their loans in house they would have been a bit more prudent. Then again.. maybe not as many of the shaky loans were made at the behest of the government to further social programs.

One of the things that struck me while putting the August Sold 2008 report together is that inventory has gone down or remained about the same for all the Beach Cities. Inventory in Manhattan Beach continues to be higher in recent months then the other Beach Cities but by less then 10 homes for the last quarter. Redondo Beach and the North Redondo home and townhome market in particular, is showing a big drop in inventory and a rise in sales along with declines in price. The North Redondo market is usually a preview of where the markets are headed in the other Beach Cities. If that continues to be true we will likely see prices fall more and sales rise in Manhattan , Hermosa, South Redondo and El Segundo as we head into the fourth quarter. Then again if the market continues on the current course who knows what the future will bring.

South Bay-Beach Cities: Sold August 2008(click on graph to enlarge)