Manhattan Beach Home Sales: 2000-2009

Manhattan Beach.. February storms

2009 has been quite a year for Manhattan Beach real estate as well as for real estate in all the Beach Cities.  The year started out following  dismal home sales in the 4th quarter in 2008.  The the financial markets took a huge dive and a number of folks saw their stock portfolios and 401 K plans sink like the Titanic.  Manhattan Beach and the Beach Cities saw some major changes in the local real estate market as inventory rose and prices declined.

 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.

Interest rates were moving upward and the housing market was stalling so the FEDS decided to support the market by keeping loan interest  rates low.  Some buyers bought homes in Manhattan Beach using  FHA financing and that hadn't happened in 25 years.  With lower prices and low interest rates the market began rebounding in the summer and continued into the 4th quarter as many buyers decided it was time to get back into the market.   Inventory began to decline and suddenly multiple offers were back but with a caveat this time... the property had to be priced at or below market value.  Buyers  know where market value lies and  homes that are over priced continue to sit.  

The coming months will see some major changes to our current market.  As of March 31, 2010 the FED will stop supporting mortgage rates by  buying mortgage backed securities.  There is a lot of speculation about how this will affect rates  as no one knows whether or not investors will pick up the slack or find other places to invest their fund.  FHA will be tightening up their rules again. Minimum  FICO scores will increase as will the upfront fees buyers must pay.  Sellers will be limited to paying a maximum of 3% toward buyer closing costs.  While we still do not do a lot of FHA loans the new rules will have an effect on Fannie and Freddie conforming loans.  If Fannie and Freddie continue to see more trouble with their existing portfolios you can expect to see a tightening of underwriting rules .  These steps may well  have an impact on the underwriting guidelines of Jumbo loans.  Lack of financing has always been a hurdle in our market and will continue to be an issue even for the highly qualified buyer.

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.

Below are two sets of data..  One set covers home sales by month and by year for July-December  2000-2009. ( January-June 2000-2009)  The other  is for sales in Manhattan Beach east of Sepulveda and west of Sepulveda from July-December.  ( January-June Sales 2007-2009)

Manhattan Beach: Home Sales January-December 2000-2009

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

Manhattan Beach sales by year:

Manhattan Beach: Westside/Eastside 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.  

360 South Bay: Home Prices

About a month ago I wrote a post on the return of the housing development at 360 South Bay.  The project was scheduled to open sometime this month but  it may take them a bit longer  with all the rain we have been having in the last few weeks. 

In my last post I speculated about the possible pricing of these units.  I believe one of the reasons the project had such a tough time last time around was that the units were priced too high for the location.  A reader was kind enough to send me some information posted by the company in November about the prices the company was projecting upon the re-opening of the project. 

There are 3 phases to the project.  If all goes well the development will take about 3 years from re-opening  to completion.  The Flats and the Courts  will be offered for sale this year.  The Lofts and The Rows in 2011 and the Gardens  in 2012.   The prices above may not be the asking prices on the units when the project officially re-opens, but these are the prices the company was posting in November on the company financial information .

The prices for the Flats and The Courts appear to be fairly close to the  prices the last time around in 2007-2008 and we know they didn't generate the interest that William Lyon Homes  had hoped to see.   You can't help but wonder what they are  thinking... $495,000 for a  studio condominium in Hawthorne by the 405 Freeway in today's market seems rather pricey...especially when you can buy a 2 bedroom 2 bath unit at Fusion for less. 
I'm hoping the above prices are higher then the actual asking prices will be when the project officially re-opens.  I would like to see the project succeed as we don't have much in the way of newer affordable housing in our area. However at  roughly  $500,000-$790,000 for the first phase  these units may not be affordable for most of the folks who would like to live there.   $790,000 will buy a nice rear unit  townhome  in North Redondo....



The three rules of real estate are location, location, location... it will be interesting to see if folks are willing to pay these prices for new in this location.

South Bay-Beach Cities: Sold December 2009

Redondo Beach

2009 was  a year of changes as  home prices in most California communities, including the Beach Cities,  hit the skids.  Builders and homeowners found themselves trying to decide if they should take a huge loss now or rent their unsold properties and pray for a better market in a few years. For some there was no choice as banks made the decision for them by foreclosing on the properties in question.

Things seemed to turn around in late Spring as lenders once again began funding Jumbo conforming loans while the FED helped keep interest ratts down.  Low prices and low interest rates  boosted home sales.  After months of too much inventory it seemed as if there was no inventory.  Whispers of multiple  offers on well priced properties proved true and buyers and sellers were suddenly asking themselves if we had finally reached the bottom of the market.
 
They say that perception is reality and this may be the case for 2009.   Our perception of the  market just might be steering us toward a reality that isn't  quite what it appears to be. There  is no question that inventory has declined since January 2009, not only in the South Bay-Beach Cities,  but in most of California and the nation as well.  The question we should be thinking about is why. 

The immediate response is that sales have skyrocketed in the last year.  While this is true in part... sales did increase over the last 6 months... when you look at the number of sales in 2008 vs the number in 2009,  sales volume didn't really go up that much.  There were only 125 more sales in 2009 then 2008 in all the Beach Cities.  That works out to 10 more sales a month in Manhattan, Hermosa, Redondo and El Segundo combined.  That's good but maybe not enough to account for the decline in inventory we have seen in recent months.

Inventory has decreased for a lot of reasons.  Some homes were taken off the market and  rented which means they will be off market for at least 12 months.  Many owners who tried to negotiate a short sale with their lender  gave up  and are now  moving toward foreclosure.  Other properties were taken off the market because they didn't find buyers.  Since the first of the year some  homes have returned to the market with lower prices and found buyers fairly quickly.  I expect we will see more of these homes returning to the market as sellers realize that prices are not moving upward anytime soon.

Manhattan Beach saw the largest drop in inventory, 55 fewer homes were for sale in January 2010 then in January 2009.  Hermosa, Redondo and El Segundo saw a much smaller shift in inventory. If you view the Beach Cities as a whole there are only 93 fewer homes for sale  in January 2010 then in January 2009...


The December 2009 survey by The Public Policy Institute of California indicates that most Californians are a pessimistic bunch about where the economy of the state is headed.  Until we see the entire economic picture brighten a lot both statewide and nationally,  I don't think we are going to see an end to the housing issue... even for those with deep pockets.

South Bay-Beach Cities: Sold December 2009

In coming weeks I'll be posting year over year sales data for Manhattan Beach, Hermosa Beach, Redondo Beach and El Segundo.