Saturday, October 12, 2013
Manhattan Beach: Monthly Home Sales January-September 2000-2013
The health of local real estate markets continues to be a major topic of concern across the nation. While real estate loans in the Manhattan Beach-Beach Cities market are not as dependent on government backed loans as other parts of the country the government shutdown has caused some issues. Buyers using Fannie Mae and Freddie Mac backed loans as well as FHA loans are seeing longer time frames. Home buyers seeking jumbo non-conforming loans are also seeing issues as lenders can't make use of information from the IRS to speed the process of verification.
Interest rates seem to be settling down from earlier this year but low inventory along with rising home prices continues to make the market frustrating for both buyers and sellers. A story in the Daily Breeze a few days ago speculates that we can expect similar conditions in our real estate market next year along with a rise in mortgage rates.
The most frequent question I am asked is about rising home prices in the Beach Cities. A lot of folks thought the return to higher prices would take a few more years. Some even thought home prices would not reach the levels of 2006-2008 for many years if ever. For many buyers prices were just beginning to be affordable and then they shot up again. A few believe this may be another bubble as interest rates are low because of FED policies. However most market watchers don't agree because the major factors pushing up values are normal market forces.... . supply and demand.
Inventory levels of single family homes since 2009 show the relationship between prices and the number of homes for sale. A look at Manhattan Beach sales of single family homes since 2000 provides a long term view of market prices. . .
Manhattan Beach: Monthly Inventory of Homes 2009-2013
Manhattan Beach: Home Sales January-September 2000-2006
Manhattan Beach: Home Sales January-September 2007-2013
One item that many folks forget is that interest rates were significantly higher than current levels for most of the period from 2000 to 2008. Rates were running 7% for conforming loans to 8.5%+ for jumbo loans.... even with "magical" financing...