Monday, July 23, 2007

Manhattan Beach/Beach Cities: The Seller's Lament

Historic Strand Home

Where Oh Where Have the Buyers Gone.... is a question being asked by many sellers in the Beach Cities . I think the answer might be found in a post on LA Land.. the LA Times Real Estate blog by Peter Viles. Buyers are reading stories like this and like Kate in the article believe they may not have to settle for a small fixer but can buy something better without having to go above the amount they have budgeted. From what I'm seeing and hearing from my clients this is exactly the position taken by many buyers in Manhattan, Hermosa, Redondo and El Segundo.

Inventory is rising in the Beach Cities and sales volume is slowing. Some of this is seasonal but lot of the reason for slower sales is that many buyers have set price limits. I have clients who are willing to go to $2.M for the right house.. older about 2000-3000 sqft but they won't go over that price. They won't pay $2.25 or $2.5 for a home they believe is worth around $2.M. They will wait until properties come on the market that meet their criteria. I think there are a lot of buyers who feel the same way. Townhomes in Manhattan Beach and Redondo Beach that are priced at market value are selling quite well. Inventory is these markets is not growing as fewer properties come on the market to replace those that have sold.

There are 112 homes for sale in Manhattan Beach; the DOM is for homes under $M is 72 for those in the $2-M range it's 98 and over $M is 106 and over $M is 116.

There are 83 homes for sale in Redondo Beach; DOM in North Redondo is 72 and 58 in south Redondo.

There are 50 homes available in Hermosa Beach; DOM is 109.

There are 33 homes in El Segundo and the DOM is 74 days..

Pending sales (homes in escrow) are not too bad but the homes that are selling are mainly under the $2 million mark in all the Beach Cities. Home sales ( homes that have closed escrow) are not looking great for July in most of the Beach Cities and are really low in Manhattan Beach.

The graphs below tell the story. Most of the homes that have been selling are in the under $2 million price range. Those in the $2 million plus range are not seeing a lot of activity. Possible reasons are the tightening mortgage market but a lot of the slowing is the price. Buyers and Sellers are just not in the same ballpark on prices. Many sellers are looking at prices from their perceived idea of value not true market value. The Days on Market numbers in the different price ranges tell the tale. Buyers will buy if they believe the property is priced at market value. But the ones they feel are over that value are just sitting.. often for a very long time.
The true test will be to see who can hold out the longest in the price war.. buyers or sellers..

(to enlarge click on graphs)

Beach Homes: For Sale July 2007

Beach Homes: Pending Sales July 2007

Beach Homes:Sold July 1-23, 2007

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