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
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.