Beach Cities: Prices.. What Happened in August?

Wow... August has been a month to remember. The big question is what has happened to real estate and home prices in the Beach Cities of Manhattan, Hermosa, Redondo and El Segundo since August 1, 2007. I know the month is not technically over yet but thought I would post some numbers for all the Beach Cities based on what happened from August 1 - August 30, 2007. The figures reflect new listings and pending sales ( in escrow) since August 1, 2007

Manhattan Beach:

Overall not a great month to be sure but not bad when you consider what's going on in the market. Lot's of high priced listings hit the market this month. However there were also a number of homes that were priced pretty well. One smart builder has at least three homes that just hit the market and all are priced well under the competition.

Listings:
There were 21 home listings ( I'm not counting relisted) 7 were under the $ 2 million mark... 6 were over $3 million.. and the other 8 were in the $2-$3 price range.
There were 5 townhome listings.. two are listed under the price of recent sales of similar units.
Pending Sales:
There were 15 pending home sales and one was 1212 The Strand ... listed at $10.9 million and sold immediately at close to full price. There were lots of buyers looking at this one.... it sold 2 hours after the Broker's Open. This is a record price for a home in Manhattan Beach. 10 of the 15 pendings were under $2 million.
There were 4 townhomes that went into escrow. Two were new construction over $2.4 million

Hermosa Beach:
Lots of new townhomes hit the market and compared to Manhattan Beach the prices are very good. The new listing at $9.5 million on Amby will bear watching. This is a seculded cul de sac with stunning views for those who value their privacy.
Listings:
There were 7 home listings. As in Manhattan Beach, there is a very expensive new custom home listed at $9.5 million. There are 2 others over the $3 million mark.. 2 just a bit under the $3 million mark and the other 2 are under $2 million.
There are 20 new townhome listings... 11 are over $1 million but under $2 million. 4 are new construction.
Pending Sales:
There are 4 pending home sales after August 1, 2007.. Three were under $1 million.
There are 4 pending townhome ssales... all are over $1.3 million... Hmmmm.

North Redondo:
Not a great month for townhomes sales in North Redondo. Next month is going to be pretty dismal for closed escrows. But home sales were not too bad. Prices seem to be shifting downward with a number of properties showing price reductions.
Listings:
There were 17 home listings and 6 of those were over the $1 million mark.
There were 20 townhome listings... 10 of those were under $700,000.
Pending Sales:
There were 9 home sales in August. Five were under the $800,000 range.
There were 12 townhome sales and surprisingly 9 were over $800,000 and of those 3 were over $1 million.

South Redondo:
It was a pretty good month for South Redondo.. especially in the townhome and condo market. The home market over $1 million had a number of sales.
Listings:
There were 9 home listings. Four were over $1.5 million.
There were 18 townhome listings. Six were listed over $1 million and 5 are new construction.
Pending Sales:
There were 9 homes that went into escrow and 8 of those were over $1 million
There were 21 townhomes and condos that went into escrow after August 1. Nine were over $1 million.

El Segundo:
El Segundo is a little different from the rest of the Beach Cities. Not a lot of new listings this month.. and not many sales either. One thing I am noticing is that there is more for sale in The Grand Tropez then usual.
Listings:
There were 2 home listings.
There are 5 townhome/condo listings. Two were under $500,000.
Pending Sales:
There were 2 home sales.. both under $1 million
There were 3 townhome/condo sales.. all under $800,000.

Manhattan Beach: Market Snapshot August 25, 2007

Downtown Manhattan Beach

The last three weeks have been like driving a car downhill without brakes. No one knows what will happen at the bottom of the hill but we all hope for a safe stop without anyone getting hurt. There is a lot of speculation about how the woes of the credit market will affect the Beach Cities and Manhattan Beach in particular.

I have no answers because there are no immediate answers...just a lot of questions that can only be answered over time. All I can share at this time is what I do know....

I know that we are not seeing a run up in foreclosures notices in Manhattan Beach and the Beach Cities. I know that if you have to refinance you can get a 90% LTV jumbo loan around 7%-7.5% fixed ( maybe a bit less) or a 6.5% adjustable providing you don't take any cash out and yesterday I heard about a HELOC program that can be used as a first for 10 years at a fixed rate. I know that a number of lenders are making jumbo loans... even some hybrid types of stated income jumbo loans.. with 10%-20% down if you have a good FICO score and verifiable assets. I know people are still buying and selling homes although at a slower pace so far this month. I know that you need to pick a reputable lender who knows the market and can offer you not only sound financial advice but has a lot of connections with a number of lenders.

I know there will be some people who are in trouble and will have to sell. I know there will be some people who will go into foreclosure. I know there will be some short sales. I know there will be some buyers who will no longer qualify for a loan as high as they need to buy the home of their dreams. These are things I know because these things always happen.

I know that in 1979 interest rates jumped from 11% to 17% in less then 6 months and the credit market had almost no liquidity. I know that in the 80's the S & L's went under because of bad judgment by lenders. I know that in the 90's we had massive foreclosures because people lost their jobs and were unable to find new employment. I know that the market always rebounded. I know this market is totally different from others in the past yet is very similar to all of them.

I think we will make it through a little bruised but intact to the dismay of many who are hoping for a market collapse. I know only time will tell where this market is headed. I know that by the time people figure out it is time to buy the best deals will have gone to those who took a chance in the market because this is the way it always happens. Now you know what I know... so let's see what's happening in Manhattan Beach

Manhattan Beach: Market Snapshot August 25, 2007

(click on graph to enlarge)

Market Price Ranges

Manhattan Beach: Market Snapshot August 5, 2007

Manhattan Beach: Market Snapshot July 18, 2007

Manhattan Beach: Market Snapshot June 25, 2007

Manhattan Beach: Market Snapshot June 2, 2007

Manhattan Beach: Market Snapshot May 6, 2007

Manhattan Beach: Market Snapshot April 23, 2007

South Bay-Beach Cities: Sold July 2007

Manhattan Beach Walkstreet

What a difference a week can make. Had I posted Beach Cities: Sold July 2007 figures the first week in August I would have said that rates were low and the market was chugging along although at a slow rate. That was before August 4 and the collapse of American Home Mortgage and a number of other lenders.

Who would have thought Countrywide would possibly be on the verge of bankruptcy or that the FED might seriously be considering bailing them out. While I think Angelo Mozilo is a bit smarmy I also realize it would be a disaster if they went into bankruptcy at this time. They make 1 out of every 6 loans in the country so you can see what their demise would do to the fragile credit market. Brian Brady wrote an excellent post on The Bloodhound Blog about the problems with Countrywide going down in this market. It's worth a read.

At this time jumbo loans are hovering around 7%-8% depending on the lender and the amount of points. Lenders are dropping like flies as they succumb to the woes of the subprime market. It will be a few weeks before the dust clears and rates settle down after much hand wringing and blame tossed around by the major players.

Buyers with FICO scores over 720 with money for a downpayment who have jobs where they can document their incomes will be in high demand. While I suspect there will still be stated income loans the regulations on them will be significantly tighter. Sellers will need to pay a lot more attention to a buyer's qualifications when choosing the best offer to accept for their property.

North and South Redondo did better then the other beach cities in sales. They were close to June numbers. Inventory is also holding steady in both cities. Manhattan Beach had a surge in sales and closings toward the end of the month....however most of the sales were in the under $2 million range. Pendings since August 4, 2007 are definitely down in all cities but especially in Manhattan Beach. There were 44 properties that went into escrow since August 1, 2007 in all of the beach cities... 22 homes and 22 townhomes. El Segundo ..3 Manhattan Beach...7 Hermosa Beach.....3 North Redondo...... 14 and South Redondo...17

Beach Cities: Sold July 2007 (click on graph to enlarge)

South Bay-Beach Cities: Sold July 2006

South Bay-Beach Cities: Sold June 2007

South Bay-Beach Cities: Sold May 2007

South Bay-Beach Cities: Sold April 2007

South Bay-Beach Cities: Sold March 2007

South Bay-Beach Cities: Sold February 2007

SouthBay-Beach Cities: Sold January 2007

Manhattan Beach... Where are the Listings?

If you are house hunting in Manhattan Beach you know that inventory is very limited especially in the $2,000,000 or less range. On February 12, 2007 there were 97 homes for sale in Manhattan Beach. Today there are 87.

Here is how they break out based on price:

• $0-$1,000,000 ( 5 properties for sale )


• $1,000,000-$2,000,000 ( 31 properties for sale )


• $2,000,000-$3,000,000 ( 35 properties for sale )


• $3,000,000-$4,000,000 (13 properties for sale )


• $5,000,000 or more (3 properties for sale )

This is the break out by area:

Sand Section ( Area 42) 20 homes

Tree Section (Area 43) 29 homes

Hill Section ( Area 44) 9 homes

Manhattan Village (Area 45) 1 home

Manhattan Heights (Area 46) 11 homes

Mira Costa ( Area 47) 17 homes

There are 56 homes pending ( in escrow.. price not released) median price is $1,995,000

30 homes have closed escrow since February 1, 2007 with a median price of $1,787,000

I suspect the February numbers for the price of homes in Manhattan Beach will be significantly higher then those posted for January. If inventory continues to decline you will see a very different market in May of 2007

Are the Beach Cities Home Prices Going Down?

In today's Daily Breeze there is an article on the front page of the Business section: Area Real Estate Loses Ground that must have made the Bubble Bloggers dance for joy. Headlines point to a 14.8% drop for Manhattan Beach. and a 9.5% drop for Redondo. It's not till you get to page 3 that you find out that Manahttan Beach is still #2 on the list of most expensive cities in the state.

In the interest of fairness I must note that we know 2006 was not a great year for real estate in CA. It sure wasn't for Manhattan or Redondo. Until the end of October inventory was running very high in both cities and sales were at a standstill. But inventory has gone down by 50% since November 1, 2006 in both cities mainly because property has sold. So it will be of interest to see how the numbers shake out for the next few months. I can tell you that what is selling is very clean and well priced. Anything else is just sitting. I expect to see more price reductions in the next month on new homes and some hopefully priced homes... that is those where the owner was hoping they would sell at a high price.

The question then becomes what has sold. Pretty consistently across the board it appears to be the low to mid priced homes and the really prime expensive stuff. In Manhattan this means homes priced at $2,100,000 or less. or at $5,000,000 or more. New homes are sitting once again after a brief flurry of sales at the end of the year.

So... are prices coming down in the South Bay... of course they are.. but still overall it is less then 10%..
FYI: 2006 sales in MB compared to 2005 sales... prices are median prices..

February: The state didn't post numbers for MB
March: $1,625,000 +13%
April: $1 ,685,000 +22.5%
May: $1,241,000 -8.9%
June: $1, 570,000 -.03%
July: $1,457,750 +1.3%
August: $1850,000 +26.76%
September: $1,465,000 -8.4%
October: State has no numbers for MB
November: $1,400,000 -22%
December: $1,275,000 -9.9%


So there you have it... a pretty much mixed bag of prices with some big numbers and some small numbers. So are prices going down.. of course when compared to 2005 which saw more sales at higher prices then any year since housing information has been kept. Will they drop another 25-35% .. it's not looking that way.. but then they won't be going up drastically again either.