Tuesday, April 08, 2008

Manhattan Beach-Beach Cities: Prices Not Crashing... No Kidding



I almost choked on my coffee this morning while reading the LA Times Business section. The main headline, in bold print, read Home prices staying afloat at the Beach. I was gob-smacked! This is a sentence you would possibly find in the last paragraph on page 10 from an article titled California Home Prices Crash... but never on the front page of a major media source.

WOW... could it be... South Bay real estate agents have been telling the truth... the housing market is slow but not dead. Darned if it doesn't seem to be true. According to the article real estate home prices in most Southern California Beach Cities are holding up well compared to other markets. There is even a graph on the front page showing how much better the Redondo Beach market is then the Huntington Beach market. Manhattan, Hermosa, Redondo and El Segundo seem to be holding their own in our local real estate market.


Now put your pens down... our market is still slow and prices have declined... just not as much as in other areas of So Cal. MB Confidential recently posted an article about the 4th quarter of 2007 vs the first quarter of 2008 and sales are definitely down when compared to recent years. But being down is a far cry from crashing which is something a lot of people are having a difficult time understanding. When residents say the Beach is different we don't mean it is immune from problems; but rather that we will usually fare better then other areas of the state and country.

On Sunday I had over 20 visitors at my open house at 3612 Poinsettia. People were waiting for me to open and were still coming as I was taking down the signs. A number of people were back for a second or third look while others seemed to have just discovered that this is the lowest priced house west of Sepulveda. I actually had a couple of builders who have sold homes and are thinking about starting a new project. This would not have happened 2 months ago. So maybe we have a little Spring bounce or maybe there are potential buyers who are ready to buy and feel this is not a bad time to make a purchase.

While the Bulls and Bears will never agree on the state of the housing market it seems the buyers in the middle may just be ready to buy a home.

12 comments:

Anonymous said...

Kaye

Things are far from over in the real estate downturn. Anyone who buys a house right now is taking a very big risk to say the least. I think even you can admit that.

Kaye Thomas said...

Anonymous 10:33,
While I agree that we are a long way from seeing prices going up.. I don't know if we will see further large price declines.. I tend to think the market will continue on a flat level.. unless we see some major economic problems that push up unemployment.

If we experience a major recession that creates large job losses then we will see some big problems. At this point that doesn't appear likely... but you never know.

Anonymous said...

So if you think prices are going to remain flat it only makes sense for buyers to wait and see. They have nothing to lose by waiting, except alot of money!

Kaye Thomas said...

Anonymous 11:33,
No reason not to wait if you want.. but I would keep an eye on interest rates. I think they have to go up. A one point increase in rates is about equal to a 10% increase in price.

If prices fall another 5-10% and rates go up 1-2% you could actually wind up paying more per month even if the price is cheaper.

Lots of things to watch if you are in a buying mode. Price is primary to many but interest rates determinwe what you pay monthly..

Anonymous said...

Kaye,
Zillow.com still has this house listed for over $900k. you may want to update it there.

Kaye Thomas said...

Anonymous 4:20,

I wish I could change it on Zillow but I can't they have to pick update from MLS and they don't always do that.. This is one of the reasons information is not always correct on these sites.

I may try entering it again and see if they will allow that.. sometimes they will and sometimes not if it's already in the system..

Anonymous said...

You said: "There is even a graph on the front page showing how much better the Redondo Beach market is then the Huntington Beach market."

SHAME ON YOU Kaye. You are spinning the truth. While South Redondo prices fared better than Huntington Beach, a 12% loss in 11 months is nothing to brag about ($1.25M in March, $1.1M in Feb). This is even worse than the 8.9% drop for the 18 beachside ZIP Codes reported in the article.

Please explain how you can be so upbeat when S. Redondo dropped 12% against an 8.9% drop for the 18-zip composite?

You said: "Manhattan, Hermosa, Redondo and El Segundo seem to be holding their own in our local real estate market."

SHAME ON YOU again. Other than the South Redondo example mentioned above, this article did not provide data specifically for these cities.

Please stop spinning and start giving your readers the straight dope. We are not all as gullible as you think.

Kaye Thomas said...

Anonymous 7:44,
Hmmmm..
Fact We have seen prices drop in the Beach Cities.. more in Redondo then in Manhattan,Hermosa or El Segundo but we have not seen a market in any of these cities that is crashing.
Fact What I said was we are still holding our own.. check out the prices on any of my monthly snapshots and you will note that while prices have gone down over the last two years they have not dropped drastically. Sales volume has slipped but prices have held up when compared to other areas of LA County.
Fact:The local Beach Cities have not seen large numbers of foreclosures or even short sales. There have been some but probably less then 25 in RB, 5 in MB about the same for Hermosa and El Segundo.

Fact: Redondo prices.. even with the decline held up better then Huntington Beach

Go to Data Quick or the LA Times to verify this information. You will find that compared to other communities in the area the Beach Cities are definitely holding their own.

Dave said...

Ah! I see comment moderation has been enabled!

I should have expected as much!

Don't allow anyone to read the other side of the story. You will sell more houses that way!

MBLooker said...

Kaye,

My wife and I met you briefly at the Poinsettia house. This makes sense as a tear down. However, as a livale house it really fall short.

Kaye Thomas said...

Dave,
Not sure wht you are taking about.. I publish all comments I receive without alteration. The only ones I don't publish are spam or ones that contain foul language.

Kaye Thomas said...

MBLooker,
Interesting that you think that... I think it would be great for a young couple or just one person. Yes..it needs a new bath and kitchen but I could do that fairly inexpensively.. the house itself is pretty solid..

But you are right it is not what most buyers want today.. most want newer and already fixed.