Manhattan Beach-Beach Cities Real Estate: Are we headed to boring?

Last week Curbed LA  pondered that real estate may be on the way to boring.    They wondered  if our local real estate markets have lost the frenzy we have all come to associate with buying and selling real estate in Southern California.

However if the 24 folks who made offers on 1708 Magnolia in East Manhattan Beach  last week are any indication... we have not reached boring.   The home was listed for $699,000 and drew big crowds.  The accepted offer was about $825,000 for a 3 bedroom+ den,  1 bath home with 1236 sq ft home on a 4870 sq ft lot that needed upgrading.  A few days later  1509 Manzanita  a 3 bedroom 1 bath 1098 sq ft home also needing updates on a 5247 sq ft lot  in Liberty Village  saw a quick sale.  Originally listed for $749,000 this one appears to have accepted an offer at $799,000.

Of course the real excitement will occur when these homes are appraised. That is the cliff hanger as the loans on both these homes fall under conventional guidelines and therefore will be subject to the appraisal rules under Fannie Mae and Freddie Mac guidelines.


Mid level priced homes  also seem to be faring well.  In the Trees a  newer home at 648 26th Street  on an over-sized lot drew over 300 people at the  Saturday and Sunday Open Houses.  The home was built in 2004 and is on a 5120 sq ft lot.  It  is listed at $1,799,000.    Rumor has it that they have received offers but so far no sale has been reported.


While sellers in the upscale price ranges continue to search for buyers, sellers in the entry to mid level price ranges seem to be having better luck providing they are priced right.  Overpricing is still the kiss of death no matter where your property falls on the price scale.   I can think of  a number of   homes that have been on the market forever.  They were priced too high and have been rejected by buyers.  Now they are "old" inventory and will likely have to really drop their price to attract interest.  It's never a good idea to chase the market down  at any price level.

An  article in the Daily Breeze  points out that South Bay median home prices were up overall even as prices were lower then at this time last year.  While prices in the South Bay were up 7.4%, the Beach Cities saw prices drop 25.6% from last year.  Manhattan Beach was down 12.9%, Hermosa saw declines of 25.8% and Redondo was off 7.2% from September 2008.  However even though prices were off from last year by a fairly significant amount,  Manhattan Beach had the highest median home price in the California with a median of $1,502,000. 

Meanwhile the financial markets are very concerned about what's happening in the commercial real estate sector.   For those of us who remember the S & L debacle of the '80's this could be an issue that will have consequences for the residential market.   We just saw what happened when credit dried up from 2007-2008 and the effect that had on the  residential housing market. 


Personally,  I think a little boring might be nice....

Thinking about buying a Short Sale or REO... check this Video.

If you are thinking about buying an REO or tackling a short sale then this video is for you! 


The video may be a bit  over the top but  it does reflect the frustrations of many buyers who are trying to work with banks on short sales and REO's.    I have a client who submitted an offer on an REO almost 6 weeks ago.  His first offer was over the listed price and  was not accepted.  He  resubmitted a new offer that is  higher then his previous offer.  In the meantime the price has been lowered but the listing agent says that the bank hasn't made a decision about  accepting any offers even though his offer is now 10% above the  current asking price.  Needless to say he is very frustrated.

 At least the listing agent on the above property will communicate with me.  In many instances listing agents will not give out any information and only put a fax number on the listing.  They will not answer questions or speak with other agents about the status of offers.  It is not unusual for a lender to take 60 days before giving a reply on an REO and even longer on a short sale.  Often by the time the lender finally responds the initial buyer has found another property and is no longer interested.


 Last week a home sold as a short sale in the Tree section of Manhattan Beach at a price that was the same as the price on an offer my clients made over 9 months ago.  Had the lender accepted the offer from my clients back in February they would have closed escrow in  40 days and been done by April 2009.  Instead they  horsed around  and ultimately wound up losing an even larger chunk of cash by waiting another 6 months to take the same offer they could have received in the Spring.


And just to make things more interesting on properties with conforming loans backed by Fannie Mae and Freddie Mac some new rules are about to be implemented across the country under the Making Homes Affordable Program.  As of September 23, 2009 over 60 lenders  have signed on to be part of the program.  Basically it means if you can't make the payments or sell your home for more then you owe,  you can't just decide to offer your home as a short sale.  You must talk with the bank about modifying the loan first and if that doesn't work then the bank will make the decision about offering the home as a short sale to the general public not the owner.  We live in interesting times...






****A big thanks to Laurie Manny at Long Beach Real Estate for finding this gem!

Beach Cities: Sold September 2009

                                         Happy Halloween... don't forget the Pumpkin Race!

Fall has proven to be  busier then usual for real estate sales in the Beach Cities.   Since October 1, 2009 there have been 142 homes and townhomes listed for sale,  130 homes and townhomes entered escrow and 96 have closed escrow.  Of the 96 closed escrows, 8 were in El Segundo, 25 in Manhattan Beach, 12 in Hermosa, 31 in North Redondo and 20 in South Redondo... and there is still another week left in the month.

On another note it seems that Hermosa Beach  was the only South Bay-Beach City to make the CNN list of USA towns where residents make over 6 figures.  Hermosa was listed with a median income of $137,941 and a median home price of $1,135,000.  Guess there won't be many more jokes about poor Hermosa!


South Bay-Beach Cities: Sold September 2009

South Bay-Beach Cities: Sold August 2009

South Bay-Beach Cities: Sold July 2009

South Bay-Beach Cities: Sold May 2009

South Bay-Beach Cities: Sold April 2009

South Bay-Beach Cities: Sold March 2009

South Bay-Beach Cities: Sold February 2009

South Bay-Beach Cities: Sold January 2009

South Bay-Beach Cities: Sold December 2008

South Bay-Beach Cities: Sold November 2008

South Bay-Beach Cities: Sold October 2008

South Bay-Beach Cities: Sold September 2008

South Bay-Beach Cities: Sold August 2008

South Bay-Beach Cities: Sold July 2008

South Bay-Beach Cities: Sold June 2008

South Bay-Beach Cities: Sold May 2008

South Bay-Beach Cities: Sold April 2008

South Bay-Beach Cities: SOLD March 2008

South Bay-Beach Cities: Sold February 2008

South Bay-Beach Cities: Sold January 2008

South Bay-Beach Cities: Sold November 2007

South Bay-Beach Cities: October SOLD 2007

South Bay-Beach Cities: September SOLD 2007

South Bay-Beach Cities: August SOLD 2007

South Bay- Beach Cities: July Sold 2007

South Bay-Beach Cities: Sold June 2007

South Bay-Beach Cities: Sold May 2007

South Bay-Beach Cities: Sold April 2007

South Bay-Beach Cities: Sold March 2007

South Bay-Beach Cities: Sold February 2007

South Bay-Beach Cities: Sold January 2007

South Bay-Beach Cities: Home Buyer Credit... Did you cheat?

According to  a number of housing reports the First Time Home Buyer Tax Credit has been a huge boon to the housing market.   Estimates vary,  but most agree that the credit has been claimed by about one million folks and that of that one million about 350,000 home sales would not have happened if the credit had not been in place.    

However it now seems that IRS is wondering just how many of those receiving the credit were entitled and how many were cheating.  With that in mind IRS is now reviewing 100,000  of the claims  filled by buyers.  Seems like someone finally figured out that maybe as there was little need to prove your qualifications  a few of these claims might not be on the up and up.  What a shock!  

The South Bay hasn't had many folks receiving the credit because of  home prices and the income restrictions...$75,000 for single folks and $150,000 for married people.  However with talk of extending the credit and upping the income levels we could see more potential buyers qualifying. 

The Real Estate Bloggers are finding the timing a tad suspicious.  Is there a reason the government is sending out IRS just as it comes time to start paying out the credit?  Wouldn't it have made more sense to have had  tougher criteria in place in the first place rather then now spending a lot of money reviewing tax claims... Questions...questions...questions.

The word around town is that if you did file for the credit you best have all your paperwork together for at least the last three years and it needs to be pristine.  If Congress does agree to extend the credit and revamp the  income requirements upward then take heed if you plan to file for the credit.  It's probably not a good idea to file for the credit along with a creative tax return.

Selling your Manhattan Beach-Beach Cities Home... It's all about price/value

Why setting the right listing  price is essential when selling your home...

It is a fact of life that sellers always think they have priced their home too low and buyers always think it is priced too high. In "up markets" sellers can price above where the last comp sold and often get that price or more . However in "down" markets sellers who over price their home often wind up settling for a price that is considerably less then they might have received if they had priced the home at market initially.

 As we all know we are in the down cycle of our local  real estate market with prices currently hovering around 2004 levels or lower.   The Beach Cities have been fairly fortunate compared to the rest of California real estate and have not had huge numbers of foreclosures.   However I expect we will see more foreclosures and short sales on higher priced properties in the coming months... not record numbers but probably enough to influence home prices. 

So what does this mean if you are thinking about selling your home?  Along with all the givens of selling... clear the clutter, paint, spiffy up the landscaping, etc... the  # 1  item on your list should be pricing at or slightly below the current market value.   This is not the market to test the waters, so to speak,
when it comes to pricing.  

Buyers are looking for value... and value can mean $600,000 or $6,000,000 depending on the property.   I'm seeing a number of homes priced  over market that just sit.  I know  many  of these sellers priced their homes on the high side as they expected to negotiate the  price to reach their desired price.  Unfortunately many buyers who set price limits are not willing to look at homes priced over that limit in the hopes the seller will negotiate. 

Buyers don't care that you paid $XXX three years ago.  Buyers are only concerned with what the home is worth now.  The homes that are selling in today's market are priced to sell and those that aren't selling are priced too high.  The only thing that happens when you chase the market down is that you lose more money then if you priced it right in the first place.

 Often buyers not only perceive a listing as "old" they also believe there may be something wrong with it.  Consequently even when a seller eventually lowers the price,  the house carries a taint of something not quite right about it.   This leads buyers to often dismiss a property or  if they do take a look and make an offer it will be substantially lower then if the price had been on target when it was first listed.


Another major issue is appraisals.  Appraisers are now only looking at values on homes that sold within the last 90 days and often  the last 60 days.  Proximity along with time is a real issue.  You see this in East Manhattan  on homes selling north of Manhattan Beach Blvd.  In the old days appraisers would take any sale within 1-1.5 miles in all of east Manhattan.   Now they start with homes closer to the subject property and if there are enough comps they use them even if they are lower rather then move to homes sold south on Manhattan Beach Blvd.  The same is true for North Redondo when dealing with properties north and south of Artesia.  You can't justify a value on a property south of Artesia by using comps north of Artesia.

There are a number of homes in all price ranges that have been sitting for months at the same price with no offers.  As sale numbers continue to decline as we enter the fourth quarter there will be fewer comps available to appraisers and  owners who are trying to establish value.   Don't expect to get the same amount that your neighbors did 6 months ago... in this market expecting less may ultimately mean receiving more at the end of the transaction.