Tuesday, October 30, 2007

Manhattan Beach-Beach Cities:Fire, Finance, Foreclosure and Britney?

Beach people always tend to think of the Beach Cities as different from the Westside and most of LA. We have small communities that are true towns, our schools are better and we just seem to be more California casual then say Beverly Hills or Bel Air or even Malibu. Our homes are on small lots without gates or guards and we let the public use our beaches.

We are surrounded by LA but we don't feel as if we are part of LA. The fires in Malibu and Santa Clarita brought lots of smoke and ash but physically we were far removed. However it looks as if we may get pushed.. kicking and screaming into the LA scene after all.

If the Writers Guild of America strikes on Thursday, and they probably will, then the Beach Cities may be affected. A number of local residents work in the television industry and all production jobs will be impacted. Production will grind to a halt at Raleigh Studios and many residents will be having coffee at The Bean or Starbucks instead of in their office. The last strike in 1988 lasted almost 6 months and cost TV networks millions in addition to a loss of viewers who never returned. Many writers never recovered from the loss of income during the strike. As a whole our market is doing better then others in the state but a prolonged Writers strike could have an impact on our market. It won't be as large as an aerospace layoff but we will be affected.

Today the FED will decide whether or not it is going to cut the funds rate. The stock market gained this morning based on Wall Street's anticipation of a FED cut. It remains to be seen whether a cut will relieve the credit crunch and ease investor fears about the housing market. The looming threat of more foreclosures hangs over the California real estate market.
With home prices declining and the housing market facing huge challenges with financing we could see some real problems for Beach Cities real estate if the Jumbo loan market continues to be tight. While I'm not particularly in favor of a massive bailout by the government I would like to see conforming loan limits lifted to cover the high priced areas of the country. It is very short sighted of the government to continue to ignore the real estate markets in New York, San Francisco and Los Angeles because the guys on the finance committee can't get over the fact that there are homes worth more then $500,000 that are not owned by multi-millionaires

While we were never in danger from the fires that blazed through most of Southern California we will see some consequences from those fires. The bad news is that almost 2000 homes were destroyed.. the good news is that most people will be rebuilding which means help for the troubled California building industry. Yes people will get checks from their insurance companies but many will find those checks are not sufficient to cover the costs of rebuilding. If the Jumbo loan markets stay tight then we could see difficulties obtaining loans in California. Another problem is that some of homes destroyed by the fires were likely in foreclosure and while the owners will get a reprieve for a few months ultimately they may be in worse shape... especially if the insurance money doesn't cover the cost of the mortgage or rebuilding and they can't obtain funds to bridge the gap to rebuild.

Finally MB Confidential has taken on the task of reporting on Britney Spears and her search for a home in either Manhattan Beach or Hermosa Beach. All we can hope is that as she seems to have relatives in Palos Verdes she may decide to move her search there. The schools are great, they have lots of gated estates with views and the streets are wide enough to accommodate her followers. There used to be a magazine called Confidential... that reported on the doings of Hollywood stars.. I'm betting MBC didn't have that in mind when the name was chosen... or realize that he/she would be following in the steps of the old magazine. That said I'll confess that it's fun following the story... so thanks MBC. Hey... I know I'm going to start dressing better when I go to Ralphs... if she moves here I may have a chance to get interviewed by ET.


MBWatcher said...

Kaye, I can guarantee you I never had any intention of writing about Britney Spears when I started MBC, but here we are. Strange market, strange times.

On a serious note, the strike is going to be a problem -- let's hope not for long, but the issues are very tough.

Kaye Thomas said...

"Real Estate" is always about more then the "physical real estate".. right now the Britney story is fun.. but if we suddenly saw a huge move into our little towns by the "young...hip stars" who love publicity it would completely change the nature of our communities.

I too am concerned about the effects of strike.. the last one had consequences that went far beyond who got paid for what..

Anonymous said...


I very much agree.


Kaye Thomas said...

Lots of changes happening in our market area.