The problems in the financial markets have spurred speculation on the prices of Manhattan Beach real estate and real estate prices in the other Beach Cities... Hermosa, Redondo and El Segundo. Many are predicitng (hoping) that the entire South Bay real estate market and the Beach Cities in particular will crash dive. I don't think our market will escape unscathed but I don't see it going back to 1990 levels either.
In last Sunday's ( August 12, 2007) LA Times there was an article titled Foreclosures May Spur Price Drop... that has a cool tool labled Foreclosures: How Does your Zipcode Fare next to the article. If you put in a zipcode it tells you how many foreclosues are in that zipcode. Naturally I put in the zipcodes from the Beach Cities and wasn't surprised at the results.. namely there are very few bank owned properties in Manhattan Beach, Hermosa Beach, Redondo Beach or El Segundo. There are a total of 8 bank owned ( reo) properties in the Beach Cities. However if you go to inland cities you will see a much higher number and they are going to have some problems.
Here's how the numbers break out..
Manhattan Beach: 1
Hermosa Beach: 3
North Redondo : 2
South Redondo: 1
El Segundo: 1
Yes.. there will be more in the future... that's life. There will be people who get divorced and run into problems. There will be those who can't refinance and will have to sell or lose everything. Some will have health problems and huge medical bills. There will be people who lose their jobs and can't make their house payment. But these are problems that happen in all markets. We just got used to the fact that you could sell fairly quickly if you got in trouble and that option is not as viable.
Most homeowners in our area are in fairly decent financial shape and should weather this market relatively intact. Many who don't have to sell will simply take their homes off the market. Prime location property will likely continue to see big dollars as these properties are getting scarce. Marginal location property and homes in poor condition will not bring top dollar and will see discounted prices. Those who have to sell will need to be sure their property is in excellent condition in order to beat the competition. The will also need to be aware that prices may be fairly stagnate for a period of time as the market adjusts.
Buyers with cash and a good FICO (above 720) will be Kings in this market. Morgan Brown has a great three part series on credit.. Part III deals with improving credit scores. Whether you are a buyer or seller take the time to read this post. You might also want to check what Brian Brady has to say about the current financial market.
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