As the year winds down there have been a lot of changes in our local Manhattan Beach real estate market over the last 12 months. Home prices have seen fairly large declines in value since 2008. In many sub markets we are seeing values at 2004 levels and we may see homes at 2003 levels next year.
While the prices of entry level homes seem to be finding a floor, the upper end of the market is still seeing prices decline as financing remains tight for everyone who is not an all cash buyer. Appraisals continue to come in lower then the sale price as lenders try to protect themselves in case prices fall more next year. Sometimes it seems as if lenders really don't want to make loans even to the most qualified of buyers. They talk a good story but when it comes down to funding many lenders seem to have a bad case of sticky fingers when contemplating letting money go from the bank vault to the consumer.
Inventory has dropped significantly from 2008 and is now lower then 2007 levels. There are currently 81 homes and 35 townhomes for sale in Manhattan Beach. A few months ago the inventory was hovering around 190 for homes and 45 for townhomes.
While some of the decline can be attributed to the season, many sellers decided to take their homes off the market as they couldn't get the price they wanted or in some cases needed. Other sellers are doing the finance dance with their lender hoping to refinance at a better rate and a number of homes have been rented and won't be back for at least a year. Others are being remodeled to fit the needs of the owners.
Unlike last year at this time, when we saw some of the most dismal sale numbers posted in many years, there are a number of homes entering escrow...46 homes and 12 townhomes as of this afternoon. That's a fairly respectable number considering the time of year and the financial climate. Price declines have certainly been a factor. Some owners, who got the price right at the start, sold quickly and a few saw multiple offers but most of these homes only found a buyer after a number of price reductions and a long market period.
November, which is usually a kiss of death month, saw 24 homes with a median price of $1,412,500 and 11 townhomes with a median price of $1,235,000 close escrow. Sales are looking up but prices are definitely down. Credit is still on the sparse side even for those with a good financial position. The Feds keep trotting out changes they hope will make the market better for the consumer but often just seem to make things worse. Next year, no doubt, will present a new set of challenges for both buyers and sellers... but that's another post.
Manhattan Beach: Market Snapshot December 11, 2009
Manhattan Beach: Price Ranges December 11, 2009
7 comments:
Thanks for the in-depth update, Kaye. Will you be taking a stab at Hermosa, and if not could you give your general observations here? Have a bid in on a short sale now, but you know how that goes and if it doesn't work out, will probably be looking at next fall myself...looks to me like mostly stale listings clinging to unrealistic prices right now, though distress is driving down the lower (for Hermosa) end and slowly creeping up...I thought 704 4th would go faster at it's new price, that's one I'm watching as an indicator (but not the one I bid on).
Wayne,
I hope to do individual posts on Hermosa, Redondo and El Segundo before the end of the year.
Hermosa sellers have held fairly tough on price while buyers have refused to budge on what they are willing to offer. The result has been a stalemate of sorts with lots of properties on the market for a long time.
Owners who reduce their prices to market value see their properties sell. Those who continue to price their property too high just sit.
Hermosa properties south of Pier Ave street are taking a longer time to sell then those north of Pier. 4th street is a lot of square footage but there is a lot of competition with newer properties.
Wayne,
As I was posting the agent bumped the price of 4th up to $1,099,000 from $999,000... Maybe there was more action then either of us thought.
Maybe they're reading the comments on your blog and reacting instantly!
At that price, I suspect they will have more trouble. There are definitely more properties around 1.1 that are comparable, and they aren't selling. That 10% cut to the million mark could make all the difference in the world, both psychological and real.
Wayne,
What I suspect happened is that as 4th is a short sale this is the number the bank told them they want to see. The number could change if they get a really strong offer but if the bank believes they will make more money on a foreclosure then a short sale they won't take less..
Was just kidding, I'm sure you're right. Though these days, short sales often seem to stay short sales indefinitely rather than turning into foreclosures, whether it's to keep the loss off the books or because the banks are way behind. How does the bank make more money off a foreclosure, having to go through the process and pay the fees, than just fixing the short sale at the same price they'd ask if they foreclosed?
Wayne,
OH dear.. You mean they aren't reading the blog?
Seriously.. My understanding is that if the property goes to foreclosure it can be written off the books for full value as a loss and lender gets funds to cover loss via TARP regulations. Then lender can sell at whatever the market will bear..
If lender is not part of TARP or has paid back funds not sure if continues to work this way.
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