Why the Beach Cities are Going Up in Value

Marilyn Alva in an article Waterfront Homes Seen Weathering Housing Market Storm from Investors Business Daily on April 12, 2007 discusses the issues about why homes along the coasts seem to be doing so much better at holding their values then their inland counterparts. Her conclusion and that of Alan Hummel from Forsythe Appraisals is that ocean is king.. followed by inland waterways and lake front homes. Water rules.
Their conclusions follow what those of us who live in Manhattan, Hermosa , Redondo or El Segundo have known for years... people want to live at the beach and are willing to pay for the privilege.
Home prices will adjust in a slow market but it's why we don't see values drop 30-50% as predicted by many. It's why home prices in the coastal cities in Southern California continue to rise while inland towns of the state and country are seeing a different market.

In the article Lewis Goodkin of Goodkin Consulting notes that while many people have the resources to buy there are fewer ocean front properties available. He further notes that Southern California coastal cities are one of the areas resistant to price declines in a slowing market. He makes the same argument that I have always noted.. namely that most people who buy in our area are looking for a home and a community to raise their families. We are more about owner occupancy then speculation.

I highly recommmend you read the entire article.

What is the Value of Real Estate Agent?

I belong to a real estate blogging community where we often pose questions about the market. One of these was on value. I thought I would share my comment about how I perceive the value I bring to my clients.

It seems to me that our value lies in our knowledge of the market. Whether the market is a fast or slow; agent knowledge is the key. Knowing your market and recognizing true value is the advantage a good agent brings to the mix. You have to know more then the numbers you have to know why one area is worth more or less than another.. and often a street or a block can be the difference. People buy for a lot of reasons and a good agent will listen to determine what a specific client wants. We can't protect them from a sudden move due to a job change or family difficulty but we can give them our best information on where the market has been in the past, where it is today and where it may go in the future based on XYZ factors.

In Manhattan, Hermosa, Redondo and El Segundo prices declined in some areas and increased slightly in others in 2006. At the moment prices seem flat but that can change if the market suddenly gets flooded with inventory or if inventory stays flat or declines. This is what I need to discuss with my clients. I can't predict what will happen but I can share my knowledge of what has happened. I can tell clients that the home they think is so adorable has a fundamental flaw that will drive them nuts in two years. I can point out that the street may see higher traffic in the future because there may be a new shopping center on the corner.

For investors I need to know what is happening in the rental market and the value of land. The biggest factor in our area isn't the value of the structure (unless it is fairly new) but the value of the land and what can be built on it. Are there zoning changes that may affect future value. Again this is market knowledge.

How do you get market knowledge.. experience is a big factor.. but so is paying attention to what is happening around your town. Find out what builders will pay for dirt, read about planned zoning changes and purposed new developments the city may be considering. Talk to other agents and get their take on what is happening.

My value is my knowledge.. the more knowledgeable I am.. the more I am worth to my clients..that's what we get paid for.