South Bay-Beach Cities: Sold December 2009

Redondo Beach

2009 was  a year of changes as  home prices in most California communities, including the Beach Cities,  hit the skids.  Builders and homeowners found themselves trying to decide if they should take a huge loss now or rent their unsold properties and pray for a better market in a few years. For some there was no choice as banks made the decision for them by foreclosing on the properties in question.

Things seemed to turn around in late Spring as lenders once again began funding Jumbo conforming loans while the FED helped keep interest ratts down.  Low prices and low interest rates  boosted home sales.  After months of too much inventory it seemed as if there was no inventory.  Whispers of multiple  offers on well priced properties proved true and buyers and sellers were suddenly asking themselves if we had finally reached the bottom of the market.
 
They say that perception is reality and this may be the case for 2009.   Our perception of the  market just might be steering us toward a reality that isn't  quite what it appears to be. There  is no question that inventory has declined since January 2009, not only in the South Bay-Beach Cities,  but in most of California and the nation as well.  The question we should be thinking about is why. 

The immediate response is that sales have skyrocketed in the last year.  While this is true in part... sales did increase over the last 6 months... when you look at the number of sales in 2008 vs the number in 2009,  sales volume didn't really go up that much.  There were only 125 more sales in 2009 then 2008 in all the Beach Cities.  That works out to 10 more sales a month in Manhattan, Hermosa, Redondo and El Segundo combined.  That's good but maybe not enough to account for the decline in inventory we have seen in recent months.

Inventory has decreased for a lot of reasons.  Some homes were taken off the market and  rented which means they will be off market for at least 12 months.  Many owners who tried to negotiate a short sale with their lender  gave up  and are now  moving toward foreclosure.  Other properties were taken off the market because they didn't find buyers.  Since the first of the year some  homes have returned to the market with lower prices and found buyers fairly quickly.  I expect we will see more of these homes returning to the market as sellers realize that prices are not moving upward anytime soon.

Manhattan Beach saw the largest drop in inventory, 55 fewer homes were for sale in January 2010 then in January 2009.  Hermosa, Redondo and El Segundo saw a much smaller shift in inventory. If you view the Beach Cities as a whole there are only 93 fewer homes for sale  in January 2010 then in January 2009...


The December 2009 survey by The Public Policy Institute of California indicates that most Californians are a pessimistic bunch about where the economy of the state is headed.  Until we see the entire economic picture brighten a lot both statewide and nationally,  I don't think we are going to see an end to the housing issue... even for those with deep pockets.

South Bay-Beach Cities: Sold December 2009

In coming weeks I'll be posting year over year sales data for Manhattan Beach, Hermosa Beach, Redondo Beach and El Segundo.

Manhattan Beach: Market Snapshot January 17, 2010

Manhattan Beach: January 2010 Days on Market...

What a difference a year makes.   The Manhattan Beach-Beach Cities  real estate market for the 4th quarter of  2008 was one of the most dismal in many years.  One year later the 4th quarter of 2009 saw inventory drop dramatically as sales volume showed a marked increase over that of a year ago.  The reason for this turn around was twofold... prices finally declined and jumbo loans, while not easily obtained, are being offered by a number of lenders. 

The question now facing  potential buyers and sellers is where the market is headed in 2010.    There is the camp that believes the market has reached bottom and will soon start recouping recent losses (mainly sellers). At the other end of the spectrum are those who believe the market will see an additional 30% decline in value(mainly buyers).  Most folks are somewhere in the middle and think things will likely get a bit worse before they get a lot better.

Manhattan Beach is often a harder market to figure then other Beach City real estate markets because of the financial resources of many buyers and sellers in the Manhattan Beach market. There are  a number of buyers who have the money to pay all cash or put down 50%  or more for a property with a price tag in the multi-million dollar range. In recent months we have seen a number of properties that were purchased within the last 5 years sell below their acquisition price.   While no one knows for sure,  it doesn't appear that the owners of those properties filed bankruptcy immediately after the sale.  

This doesn't mean the Manhattan Beach is immune from market forces but it may mean that we won't get hit as hard.  As an example there is a lot of concern over  Alt-A loan resets.  These might not be as big a problem for owners who have financial reserves as they are for folks who have little or no backup.   While not everyone in Manhattan Beach is in good financial shape there are probably more who are then are not.  The same is true when dealing with employment issues.  I have a number of clients who are not making as much money as they did in the past.  They are not in financial trouble but they are watching what they spend.  None of them are likely to lose their homes but discretionary spending is tighter then in prior years.

I expect to see inventory increase in the coming weeks.  Since the beginning of the year  homes that went off market last year are returning at lower prices and finding buyers fairly quickly.   The big hurdle now will be financing.  I'm believe that we will know the direction the market will take sometime in late spring or early summer.  The FEDS are planning to stop  backing the MBS market in March.  This move will  likely force rates up.  In addition, banks that have been holding inventory off the market may find they need to move it off their books.  Banks may also finally decide that it would be a smart move on their part to find a better way to handle short sales and REO listings.


Manhattan Beach: Market Snapshot January 17, 2010

Manhattan Beach: Price ranges January 17, 2010

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I'm making a change in the market snapshots and will be using sold sales from the previous month rather then partial sales in the reporting month.