Thursday, February 05, 2009

Manhattan Beach... Million Dollar Sales and Foreclosures


If you caught the LA Times article about Million Dollar home sales in CA you know that in 2008 Manhattan Beach had more home sales over one million then any other community in the state. There were 296 sales in Manhattan Beach of homes above $1M in 2008 . While that probably makes most Manhattan Beach homeowners happy as an indication that values didn't take a complete nosedive... the information also points out that 2008 numbers were down considerably from the 403 homes that sold in 2007. So far this year that trend seems to be continuing with closed sales in January 2009 of 7 homes and 2 townhomes...ouch!

None of this information is surprising if you are buying or selling a home in Manhattan Beach or any of the Beach Cities. Sellers are trying to figure out the magic number that will make a buyer decide to make an offer, while Buyers are waiting for prices to drop more and loans to get easier to obtain.

There is a lot of information in the article that didn't make the headline. If you read the chart one of the things that pops out is that price-wise Manhattan Beach is in the middle of the pack. While prices are still on the high side they are below the prices of Laguna Beach, Newport Beach and even some areas of Palos Verdes.

However you have to read most of the article before you find what is perhaps the most significant piece of information...namely that of the 236,000 homes that went into foreclosure last year...only 1,612 were homes that sold over the $1M mark. I believe we will see more million dollar plus home in trouble this year as the economy worsens, but as a percentage that number will continue to be small relative to the total number of REO homes in CA.


Over the last few years there has been this assumption that anyone who bought an expensive home really couldn't afford the home. While I have no doubt there are a number of buyers who did get in over their heads... the low numbers above seem to indicate that perhaps most folks who bought in the more expensive communities were not as financially imprudent as many thought.






4 comments:

Anonymous said...

A couple of comments on your thoughts.

First, the million dollar home market is a very small fraction of the total california market these days.

Second, the downturn seems to be only very recently hitting the more affluent area (see the LA times article on Westside drops).

Third, if distress in the high-end is only now starting to ocurr (which makes sense, I am seeing a significant number of short sales now where I saw pretty much none last year), then we'll have to wait a while to see the impact. Lots of folks are reporting that foreclosures are taking up to a year these days. I would expect a market stalling out to caused the distressed homes as people cannot sell or are underwater. And only as houses are foreclosed on (or not) can we see the results.

Finally, for what it is worth, here are some observations on orange counties 1-M market.

http://mortgage.freedomblogging.com/2009/02/05/one-million-dollar/6234/

Kaye said...

Anon 12:56,
You make some good points. I've been tracking the foreclosure market in our area and so far we are not seeing major increases in any of the Beach Cities. Nor are there a lot of short sales in either Manhattan, Hermosa, S. Redondo or El Segundo. There are more in North Redondo because of the number of townhomes.


That could certainly change if the economy continues to slide. Our market is a bit different then the OC market... mainly because we are a small area with fewer housing choices.

If you work in LA and want to live in a beach community with non-LAUSD schools you are looking at Santa Monica and the South Bay Beach Cities. The truth is Santa Monica is not really a "beach town" in the way of Newport, Balboa and Laguna.

Anonymous said...

How does the 7 and 2 this January compare to 2008, 2007, 2006, etc.?

Kaye said...

Anon 2:49

I have a post on that Beach Cities: Sold 2006-2008 posted about 2 weeks ago...
The numberd for MB are on that post...