Sometimes consumers get so caught up in the media headlines they miss what is happening in their local real estate housing markets. I see this in many of the comments attached to articles in our consumer blog Manhattan Beach Confidential and on this blog. There are many commenters who cut and paste large articles or links to articles on the "dismal real estate market" or "the devastated economy" they believe support their position that home prices in Manhattan Beach and all the South Bay-Beach Cities are about to tank by another 20%-30%. So far the market has failed to live up to their expectations.
Prices have declined 7%-10% in the Beach Cities since 2005.... not great news if you bought less then 4 years ago and must sell; but hardly a major housing market disaster considering the overall increase in value in the last 10 years. Prices may well continue to soften over the next few months and will probably remain flat over the next few years... again not great news if you have planned to double the value of your home in 2 years. However most of us who have lived in the Beach Cities understand that real estate values are cyclical. The good news is that historically home values in the Beach Cities have continued to increase over the long term despite short term fluctuations.
Dan Green has an interesting post on The Mortgage Reports.com about Why National Real Estate News is Useless. This post illustrates the difference in perspective between national and local real estate markets. On the local level almost every article about foreclosures in California has to do with the areas we know are having massive problems... San Bernardino County, Riverside County, The Central Valley and Sacramento. Headlines are not touting the drastic plunge in prices in Manhattan Beach and the Beach Cities. FNC Inc released a report June 9, 2008, noting that in certain coastal areas of Southern California prices are stabilizing and even increasing. They have a color map showing how the areas fare by value. The South Bay-Beach Cities are holding up very well.
Tonight I showed a property in the sand section that came on the market today. There were three buyers there at the same time. I know the property has been shown all afternoon. I expect there will be multiple offers and it will sell over the list price. There are a lot of properties currently for sale. Not all of them will see multiple offers or even sell at the listed price...but some of them will. Not everyone has 20% down but there are a number of buyers who have great credit and 20%-50% or more as a down payment. Many of these buyers are ready to buy now. They are not naive or stupid but rather are very savvy about the Beach Cities real estate market and the financial markets in general. You have to wonder if they know something others don't..I guess time will tell.