Monday, January 12, 2009

Beach Cities: Sold 2006-2008

El Segundo Classic Craftsman

2008 was a tough year for all aspects of the economy. The chaos in the credit markets and the failure of banks to begin lending has been a blow to all aspects of the economy but especially to the housing market. The South Bay Beach Cities have held up fairly well but even our market is finally feeling the pinch.

The drop in the conforming loan limit in the South Bay from $729, 750 to $625,500 is a real issue in the Beach Cities. Jumbo loans are still priced significantly higher then they should be when compared to rates for conventional conforming loans. Rates are bouncing around on a daily basis. Today they went down but they could just as easily go back up tomorrow. We've almost reached the point where a buyer needs to lock in a loan rate and then find a house rather then the other way around.

It should come as no surprise that there were fewer sales in 2008 in the Beach Cities compared to 2007. While home sales were off in all the Beach Cities ... North Redondo had the biggest decline. ** There were 167 fewer sales in 2008 in North Redondo then in 2007. El Segundo fared the best with just 15 fewer sales. Manhattan Beach was off by 137, Hermosa Beach by 64 sales and South Redondo by 71 sales. The Days on Market (DOM) was also much higher.

Prices are finally heading downward after staying on the high side for the last two years. Once again the question isn't whether or not they will decline but rather by how much. Until the economy gets a handle on where it is headed, speculation on prices in the Beach Cities real estate market will continue to be heated.

Beach Cities: Sold 2006-2008 (click on graph to enlarge)

Beach Cities: Sold 2005-2007

** As a side note... Redondo Beach has seen more homes go into escrow since January 1, 2009 then the other Beach Cities combined.

*** Data is from the South Bay MLS and does not include properties that sold off the MLS.

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