Saturday, April 04, 2009

Manhattan Beach: First Quarter Sales... 2007-2009

Polliwog Park.. Manhattan Beach

Last week I was asked to provide year over year information for 2009 first quarter home sales in all areas of Manhattan Beach. It was not a big surprise that the volume of 2007 sales was significantly higher then either 2008 or 2009. Nor was it a surprise to see that 2009 prices compared to 2008 prices are down by about 24%. However there were a couple of surprises that I didn't expect.

Surprise #1... The median price for 2008 was higher then the 2007 figure by about 8%.
Surprise # 2...The 2007 median price and the 2009 price difference shows a 12% decline ...
Surprise # 3... The number of sales in the 1st quarter of 2008 compared to 2009 is only off by 10 sales.

I broke the numbers out for West of Sepulveda and East of Sepulveda. The picture that emerges is very interesting. While West of Sepulveda seems to have been hit far harder then East of Sepulveda. While the volume east of Sepulveda is down prices have actually held fairly steady. West of Sepulved however got trounced in 2009. Median prices have taken a nose dive compared to 2007 and 2008.

Inventory is up west of Sepulveda. There has been a rather large increase in the upper end homes over $4,000,000 and not many sales. There are 143 homes and 28 townhomes for sale west of Sepulveda. In east Manhattan there are 47 homes and 20 townhomes on the market. That's a very big difference in inventory.

March saw 21 sales per the MLS... 16 homes and 5 townhomes. Pending numbers look a bit better with 43 properties in escrow... 33 of them in March. 4 homes and 2 townhomes have closed escrow since April 1, 2009 . While these numbers are better then February, sales are still slow. It will take a little time to see if the return of Jumbo loans at lower fixed rates makes a difference in sales.

Manhattan Beach: 1st Quarter home prices 2007-2009:

Manhattan Beach: West of Sepulveda 1st Quarter home prices: <

Manhattan Beach: East of Sepulveda 1st Quarter home prices:

UPDATE: 04/06/2009

There was a question that came up on Manhattan Confidential about the sale numbers for West of Sepulveda. I checked the information on the tax record and have amended the information I posted. As I have noted before I only use information from the MLS... which doesn't show non-MLS sales or recorded items that are not sales. I also only use homes and townhomes. When reporting information from the MLS sales there can be a hitch early in the month with sale dates being posted to the system that may be at odds with tax information.

This is a breakdown of the difference between my original number of 24 sales West of Sepulveda and tax information showing 41 sales.

1. 3 sales show in the MLS as closing after April 1, 2009 but were actually recorded as of 3/30/2009. ( I added these to data)
2. 1 sale was from outtside the local MLS and did not show up on records ( I added this sale)

Using the above changes I'm now showing 28 sales for WOS for Quarter 1....

3. 3 properties were residential income properties and are not part of the data
4. 4 sales were not for properties that were not on the MLS
5. 2 are not sales and appear to be financial transactions or changes in percentage of ownership.

The 28 amended sales and the 9 other items not equal the 41 sales noted on the MLS..


bondinvestor said...

if you want to see something very interesting, go to redfin and look at the map of MB west of sepulveda and compare it to a similarly sized area in westchester/playa del rey.

the density of homes on the market is far higher in 90266 than westchester. interestingly enough, the density of homes for sale in brentwood, the palisades and santa monica is also far higher than westchester.

it's difficult to look at the map and not come to the conclusion that there is quite a bit of stress emerging at the high end of the market.

Kaye said...

I'll take a look...
I'm not sure whether the high end market is so distressed or if a lot of folks are doing some tax planning. I suspect it may be a bit of both.

mookie said...

Kaye- Thanks for taking the time to do this. The median price data is interesting, but I've stated before that it is less about prices moving lower as opposed to affordability for buyers. Buyers are less able to buy the high end home they once wanted so now they find themselves being more rational compared to their income. Therefore less expensive homes are selling and that brings the median down. Don't get me wrong, prices still moving down. What is even more interesting to me is the almost doubling in DOM. So not only are prices moving lower and the number of sales are declining, but DOM has dramatically increased. Doesn't bode well for 2009 unless prices come down even more.
Thanks again.

Kaye said...

You are welcome.. I'll keep it as a feature...

Lots of changes in the market the last 60 days or so.. with Jumbo loans making a comeback I'm seeing more buyers entering the market especially now that BofA will go with 20% down.

However buyers are far more conservative in the prices they are willing to pay and the types of loans they will accept. Now most buyers only want a fixed rate, not a variable rate loan.

Anon7 said...

Agree with Mookie, with one major difference... buyers are not just being "more rational", they are being forced to do so by lending institutions who all know that Alt-A and pay-option resets are yet to come.

BofA will do 20% on Jumbos, only if buyers have all the other stars aligned just right.

Thanks for the snapshot Kaye.

Anonymous said...


The median in East MB may be holding up but this doesn't tell the whole story. You're getting a LOT more for the same money than you did 2 years ago. Prices are falling but the median isn't.

Kaye said...


Actually BofA is making loans up to $1.5 with 20% down and a 720 FICO. From $1.5-$3 you will need a 30% down. It's is the reserve that is often a problem.

The higher the FICO the less reserves you have to have. Most lenders want to see 4-6 months in reserves right now.

Kaye said...

Anon 10:31,
It's alway those pesky numbers causing problems. Therer just doesn't seem to be anything that is fool proof.

You are absolutely right... you are definitely getting more house now then you were a few years ago in East MB.

I think you are going to see the same thing WOS before long.

Anonymous said...


I agree with anon. would you mind...when time permits to rerun your numbers and calculate ppsf over the same period for west and east side? I think that will give us a clearer picture.

Kaye said...

Anon 8:25,
I 'll post the numbers.. although I suspect they may not make things much clearer. I post ppsf monthly and that figure really seems to bounce around.

Fight On said...

I think something that gets lost in the data is that some of the homes sold in 2006 and 2007 were the tear downs that turned into McMansions. So their price in 2006 could have been $900K and then turned around and "resold" in 2007+ at $2m-$3m. Taking that into account its probably taken a much harder nose dive than people are quoting.

Kaye said...

Fight on,
You are right that will have an impact however as that has always been a factor in MB, over time the effect is not as important a it might be in other areas. Another issue is larger homes selling at lower prices because they are not be in as good condition as a similar home in great shape. Lot size is another factor that can make a big difference but it not included in ppsf.

There are always lots of issues involved which can make it tough if you only use just one set of criteria to measure the market.

Anonymous said...

Dear Kaye,
Thank you for posting the information. It's amazing how much the median has decreased. Very few homes in the $2million dollar range and up are selling. Given the amount of a down payment and cash reserves required I expect prices for a $3million dollar home to substantially decrease.

Kaye said...

Anon 10:36,
I'm going to add YOY sales as a regular feature. A word of caution... these numbers were based on a small sale volume and a number of lower priced homes.

With the availability of jumbo loans the picture may change a bit. Right now there have been 31 homes go into escrow in the last 30 days.. 8 were between $1.5-$2.0 and 9 were over $2.0.

Of course not all of these homes will close escrow and we don't have any idea of prices until they actually close escrow. Don't be surprised to see median prices rise a bit in the second quarter over the first quarter.

That doesn't mean prices are rising.. they aren't. I think we will see prices on the upper end decline more which will put pressure on the middle.

I have no idea how much of a decline we will see in prices. I can tell you that MB will need to see a big increase in defaults across the board to see really massive declines in value. Right now I think the odds are 50/50... values could drop a lot more or a little. It depends on what happens with banks and the economy as a whole over the next 6-8 months.