360 South Bay... Grand Opening #2

Last week was supposed to be the official opening for 360 South Bay... but they weren't quite ready.  The pool and gym were open for viewing but not any of the units. 

The grounds looked great. The pool area is set up like a resort with  little cabanas in addition to lots of lounge furniture.  The gym had a number of  machines and was fairly good size.  The clubhouse is lovely.  As nice as the amenities are what will sell the complex is the units and the prices.

This weekend the Flats will open and next week the Courts will be open for inspection.  Last weekend there were not  large crowds.  In fact when I went over around 1:00 there were  not as many people as I had expected.  I expect there will be more lookers once the Flats and the Courts finally open.

Manhattan Beach Home Sales... Is Cash King?

Recently there has been  a lot of  speculation at our local consumer blog,  MBC  about where  the Manhattan Beach and the Beach Cities real estate market is headed.   While we have seen prices decline in the last year we still don't have a large number of foreclosure or short sale properties in either Manhattan Beach or the Beach Cities.   As we haven't experienced that perfect storm of massive  numbers of foreclosures along with high numbers of short sales,  property values are still higher then many expected.

From September 2009 to today ( February 19, 2010) there have been 119 single family homes close escrow.   Of the 119 closed home sales 24 (20%) were all cash. 4 sales had less then 20% down,  26 sales had 20% down and the other 65 sales saw down payments in excess of 20%.  What was interesting is that not all the cash sales were upscale homes.  Cash sales were across the spectrum on price.  By the same token a number of Luxury  homes buyers leveraged their purchases with loans above the $1,000,000 maxi mun mortgage interest deduction figure.   There were 15 home sales over $3,000,000.  Of those 15 homes  4 sold all cash, 5 had down payments of 40% or more and the other 6 buyers put down  between 20%-30%.   A few of these folks may have been reaching on price but I'm guessing a number of these buyers were taking advantage of very low interest rates and are keeping their cash for future investments.

 Another interesting factor was the number of  buyers who got  a first  loan of  $729,750 and a second loan to make the total loan amount about  $1,000,000 to take advantage of the mortgage deduction limit.  A year ago lenders were not making second loans no matter how much money a buyer had as a down payment.  There were also a few folks who obtained new secondary financing  a few months after the close of escrow. 


I don't know about  the percentage of down payments in other zip codes but I would think that a market where the median price is well over $1,000,000 and  20% of all sales are cash sales is a market where most owners and buyers  are  financially savvy.  The bad news is that  I expect to see more foreclosures and short sales in the coming months as the California economy continues to be in trouble and mortgage rates get ready to move higher.   The good news  is that our local real estate market looks as if it will continue to weather the storm better then expected.


To view an update about this topic  as of  October of 2014  please read All Cash Makes the difference...

Hermosa Beach: Sold July-December 2000-2009

Hermosa Strand... old and new


After a very slow first half of the year Hermosa saw the number of home and townhome sales almost double in the second half of 2009.  There were 64 homes and 53 townhomes that closed escrow from July-December 2009.    Hermosa hasn't seen that many 3rd and 4th quarter sales since 2005. 

The Hermosa Beach real estate market has been a bit different then the other Beach Cities.  Prices continued  on the high side  for most of the year and inventory didn't move.  Most sellers were not lowering prices and   properties would  re-list over and over at the same price.  After July  changes in the real estate market forced sellers to adjust prices as more short sales and REO's began to sell at prices well under where competing properties were listed.   Units in the Moorings are a good example of how changes in the market  forced many sellers to rethink their pricing strategy. 


Hermosa has a number of Strand properties on the market.  There are currently 7 Strand homes for sale in Hermosa. Prices range from just under $4,000,000 to almost $16,000,000.   Over the last year 4 have closed escrow and 2 are pending.  While asking prices are similar to those in Manhattan Beach the final sold prices this year have been  lower then the prices on similar homes in Manhattan Beach.    This will be an interesting segment of the market to watch as some pricey new homes hit the market.


Hermosa Beach, like Manhattan Beach has little in the way single family homes that are new construction .  While there is  new construction most of the new homes have been built by private parties and are not going on the market.  There are few homes available that were built after 2006  which means that buyers will have to either build themselves  if they want new or buy an older home that has been extensively remodeled.  Even the townhome market is not seeing much in the way of new construction other then the project on 21st street. 


As the new year opens there are 48 homes and 32 townhomes/condos for sale.  There are 20 homes and 19 townhomes in escrow.  As of February 15, 2010 18 homes and 7 townhomes have closed escrow.  It's  looking like a better year for home sales in Hermosa Beach.


Hermosa Beach:  Sold July-December 2000-2009(click on graph to enlarge)

Hermosa Beach: Sand Sold July-December 2000-2009

 

 

Hermosa Beach:  Valley Sold July-December 2000-2009

 

Hermosa Beach: Hills Sold July-December 2000-2009

360 South Bay: Opening Day and Pricing

For those of you who have been waiting to check out what 360 South Bay is offering keep next Saturday open.  The Grand Opening is planned for Saturday February 20, 2010 from 10:00 a.m.-5:00 p.m.  

The good news is that prices are lower then the projected prices I posted a few weeks ago.... although I suspect they may need to drop a bit more especially on the Plan 1 Sudios in The Flats.  Most folks are going to want a bedroom is they are going to spend almost $400,000 for a unit.    Location and price are  definitely going to be  issues for the development.  As Renee Moilanen pointed out in her column in the Daily Breeze last week  most of us know that there is a big difference between  living in a beach community and Hawthorne.   

Manhattan Beach Home Sales: 2000-2009

Manhattan Beach.. February storms

2009 has been quite a year for Manhattan Beach real estate as well as for real estate in all the Beach Cities.  The year started out following  dismal home sales in the 4th quarter in 2008.  The the financial markets took a huge dive and a number of folks saw their stock portfolios and 401 K plans sink like the Titanic.  Manhattan Beach and the Beach Cities saw some major changes in the local real estate market as inventory rose and prices declined.

 Financing was difficult to obtain as the FEDS had dropped the conforming jumbo loan limit to $625,000 from $729,750 as of November 2008.  While the FEDS agreed to raise the limit again in February,  lenders were not able to fund loans until the end of April.  Jumbo loans were only being offered by a few institutions and they were (and still are)  difficult to obtain as most lenders want very high FICO scores along with down payments in excess of 20%.   That left of lot of months with few choices for many consumers who were considering buying a home.  Just to make things more interesting the government also changed the way appraisals were handled which led to a slew of issues that are still a problem.

Interest rates were moving upward and the housing market was stalling so the FEDS decided to support the market by keeping loan interest  rates low.  Some buyers bought homes in Manhattan Beach using  FHA financing and that hadn't happened in 25 years.  With lower prices and low interest rates the market began rebounding in the summer and continued into the 4th quarter as many buyers decided it was time to get back into the market.   Inventory began to decline and suddenly multiple offers were back but with a caveat this time... the property had to be priced at or below market value.  Buyers  know where market value lies and  homes that are over priced continue to sit.  

The coming months will see some major changes to our current market.  As of March 31, 2010 the FED will stop supporting mortgage rates by  buying mortgage backed securities.  There is a lot of speculation about how this will affect rates  as no one knows whether or not investors will pick up the slack or find other places to invest their fund.  FHA will be tightening up their rules again. Minimum  FICO scores will increase as will the upfront fees buyers must pay.  Sellers will be limited to paying a maximum of 3% toward buyer closing costs.  While we still do not do a lot of FHA loans the new rules will have an effect on Fannie and Freddie conforming loans.  If Fannie and Freddie continue to see more trouble with their existing portfolios you can expect to see a tightening of underwriting rules .  These steps may well  have an impact on the underwriting guidelines of Jumbo loans.  Lack of financing has always been a hurdle in our market and will continue to be an issue even for the highly qualified buyer.

Another area of concern is foreclosures.  While stories run high about shadow inventory there isn't any real information on the numbers.  Issues with continued high unemployment nationally and in California will  exert pressure on  homeowners at the high and low end of the scale. Loan resets are a reality and will have some effect on all homeowners.  In California a moratorium on foreclosures by the state legislature has ended and we may indeed see more distressed properties hit the market.  The big question is will they be in Manhattan Beach or Morongo Valley.

Below are two sets of data..  One set covers home sales by month and by year for July-December  2000-2009. ( January-June 2000-2009)  The other  is for sales in Manhattan Beach east of Sepulveda and west of Sepulveda from July-December.  ( January-June Sales 2007-2009)

Manhattan Beach: Home Sales January-December 2000-2009

Manhattan Beach sales by month: ( single family homes no townhomes)

Manhattan Beach sales by year:

Manhattan Beach: Westside/Eastside 2007-2009 

I apologize for posting this information so later but sometimes life gets in the path of real estate... I will also  be posting information for Hermosa, Redondo and El Segundo.  

360 South Bay: Home Prices

About a month ago I wrote a post on the return of the housing development at 360 South Bay.  The project was scheduled to open sometime this month but  it may take them a bit longer  with all the rain we have been having in the last few weeks. 

In my last post I speculated about the possible pricing of these units.  I believe one of the reasons the project had such a tough time last time around was that the units were priced too high for the location.  A reader was kind enough to send me some information posted by the company in November about the prices the company was projecting upon the re-opening of the project. 

There are 3 phases to the project.  If all goes well the development will take about 3 years from re-opening  to completion.  The Flats and the Courts  will be offered for sale this year.  The Lofts and The Rows in 2011 and the Gardens  in 2012.   The prices above may not be the asking prices on the units when the project officially re-opens, but these are the prices the company was posting in November on the company financial information .

The prices for the Flats and The Courts appear to be fairly close to the  prices the last time around in 2007-2008 and we know they didn't generate the interest that William Lyon Homes  had hoped to see.   You can't help but wonder what they are  thinking... $495,000 for a  studio condominium in Hawthorne by the 405 Freeway in today's market seems rather pricey...especially when you can buy a 2 bedroom 2 bath unit at Fusion for less. 
I'm hoping the above prices are higher then the actual asking prices will be when the project officially re-opens.  I would like to see the project succeed as we don't have much in the way of newer affordable housing in our area. However at  roughly  $500,000-$790,000 for the first phase  these units may not be affordable for most of the folks who would like to live there.   $790,000 will buy a nice rear unit  townhome  in North Redondo....



The three rules of real estate are location, location, location... it will be interesting to see if folks are willing to pay these prices for new in this location.