Yesterday I reviewed what I had written last year about where I thought our local real estate market was headed in 2012... Boy was I wrong. 2012 was not another slow year in our local South Bay-Beach Cities real estate market.
2012 started off strong and never slowed. Inventory remained low all year as fewer short sales and REO homes hit the market. Many sellers, still slightly underwater, found themselves unable to make a move without losing money. Other Beach Cities' sellers considering moving up decided to wait hoping the value of their homes would increase allowing them to move up to a new price range. All these factors contributed to a year of low inventory.
Buyers who were finally ready to enter the market found themselves facing multiple offers and all cash buyers also anxious to purchase now. It wasn't unusual for a buyer to have made offers on 5-10 properties before finally beating out the competition on a home. Residential income property buyers also saw 2012 as the year of multiple offers on the few properties available.
The turn in the market caught many buyers unready for the change in market forces. Local South Bay-Beach Cities' real estate networking groups were the first to realize what was happening in the market as off market sales soared. Buyers were perplexed with the change while sellers were estatic.
2012 was an interesting year in that while sales increased in all the Beach Cities, prices didn't shoot up as much as might have been expected considering the low inventory and multiple offers. In fact some aspects of the market saw lower prices in 2012 than in 2011 even as the sales volume increased.
So what will 2013 bring for buyers and sellers in Manhattan Beach, Hermosa, Redondo and El Segundo? Once again I'll go out on a limb here and predict that inventory will increase only slightly but so will prices as buyers compete against each other in a changing market . Mortgage loan rates will remain stable but getting a loan will be a challenge as the FEDS keep trying to "fix" a market that no longer has the same problems as 2008. Appraisals will remain an issue mainly because there are simply not enough comparables for appraisers to use to establish value.
As always our local South Bay-Beach Cities real estate market will be a challenging one..
Happy 2013,
Kaye
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