Manhattan Beach-Beach Cities: Home Prices and Loans..

On Friday the FED lowered the discount rate and is widely expected to lower the funds rate at it's next meeting in September. The discount rate is the rate banks charge each other for short term loans and the funds rate deals with the cost of money or interest rates. The discount rate will help the credit market retain liquidity and the funds rate rate will have an effect on mortgage rates down line. It's a bit confusing as mortgage rates are actually determined by the bond market...but let's not get too technical.

The credit market is not out of the woods yet and Jumbo loans will continue high as long as the market sees them as risky. Lenders are going out of business as fast as they used to go into business. If you aren't familiar with Implode.com and it's Mortgage Lender Implode-0-Meter take a look. There are now 128 lenders that have officially shut down their lending programs. National City Mortgage which is a big player in the second market is also in trouble. When you get players like Countrywide, WAMU and National City looking shaky then you have big problems. This is not going to go away in a week or two with business returning to normal. To see how rate hikes on Jumbo loans affect our market read The Great Loan Blog post..

So what does it mean to us... well Manhattan Beach has only had 8 properties (homes and townhomes) go into escrow since August 1, 2007. North Redondo, our affordable property gage, has seen 15 pending sales(homes and townhomes).. and 8 of those were before August 4, 2007 when the market took the big dive. South Redondo is actually the big winner with 21 pending sales... El Segundo has 4 and Hermosa Beach only has 3 pending sales since August 1, 2007 .

New listings are not coming on the market and I'm beginning to see some larger price reductions in North and South Redondo. I expect to see home prices in Hermosa Beach and Manhattan Beach shift downward a little in those markets with large inventory over the $2 million mark.

If you have a home that has been on the market over 60 days and no one loves you it might be time to either take it off the market, rent it or think about a realistic price reduction. Otherwise you are going to be chasing a down market and in the end it will cost you more then a quick price reduction today. Trust me on this... the jumbo loan market isn't going to get significantly better even if the FED cuts rates in September. I don't see a major fall in prices (25%+) but I do believe our market is headed for some tougher times as the real estate market tries to adjust to the woes of the financial markets.

No one wants to believe that the South Bay-Beach Cities real estate market will be affected but it will... so be smart now. If you have to sell.. bite the bullet and price your home to sell in today's market not last year's market.

Manhattan Beach: Market Snapshot July 18, 2007

Manhattan Village

Listings for homes in Manhattan Beach are holding steady and are about the same as last month at this time but up from the first and second quarter. Closed real estate salesin Manhattan Beach since July 1, 2007 are not looking great but pendings are doing well.

However as a side note almost all of the pendings this month are under $2,000,000. There are 49 pending home sales in Manhattan Beach and 38 of those are $2,000,000 or less. Currently out of 107 active listings 64 are priced over the $2,000,000 mark. This may be something sellers will need to view more closely as they consider where to price their homes.

Manhattan Beach Townhomes and condos are still doing pretty well but closed sales of townhomes are off there as well. The number of active listings is very low which makes the pending sales appear lower as the inventory decreases.

I think we may begin to see an effect from the tightening of lending rules on the overall mortgage market. Most buyers in our area are in good financial shape but they are still bound by lending regulations which are more stringent then in previous months.

Market Snapshot: Manhattan Beach ( click graph to enlarge)

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: July 4.. Fun Things to do..

El Segundo:

Plan a day of fun in El Segundo with two events..
10:00 am-2:00 pm Rec Park
5:00 pm -9:00 pm 300 and 400 block of Eucalyptus
Lots of games and food and live music


8:30 pm Fireworks at Stevenson Field (tickets a must for grandstand seating.. $3.00 pre-sale $5.00 at the gate)


Manhattan Beach:
Pool Party
10:00 am-2:oo pm at Begg Pool

$ 5.00 to swim and have snacks

Hermosa Beach:
No city planned activities

Redondo Beach:

Seaside Lagoon is the setting for a huge July 4th celebration

The fun begins at 4:00 pm and continues until 11:00 pm

The fireworks and Laser show starts at 8:30 click this link for more information and prices of tickets on the sand.

Torrance:

Wilson Park is the place for the annual Old Fashioned Fourth of July Celebration

The fun starts at 11:00 and finishes with a Fireworks show at 9:00pm

Palos Verdes Estates:

Old Fashioned Independence Celebration at Malaga Cove School begins at 9:00 am

A bicycle parade and pie-eating contest are some of the activities

Rancho Palos Verdes:

32nd annual Independence Celebration runs from 11:00 am -5:00 pm at Point Vicente Park

There will be music, a petting zoo, puppet show and lots of games and crafts

Westchester:

Don't miss the annual parade at Loyola and Manchester.. it starts at 11:00 am

Beach Cities: Sold ....May 2007

This is what Los Angeles and most of Southern California looked like when I was a kid in the 50's. The streets were wide and most of the homes were either Spanish or Craftsman style with wide lawns in front. My aunt lived in Huntington Park in a bungalow just like these homes along the Avenues in South Redondo.


Spanish Style Bungalows in South Redondo

This week rates shot up with some major economic reports due out later in the week. If the numbers point to inflationary pressures bond prices might drop which would continue to put upward pressure on interest rates.... which would no doubt affect future sales. This is similar to what happened with rates about the same time last year.Overall sales volume and prices are very similar to May 2006 for most cities.

The South Bay/ Beach Cities home market seems to have leveled off. However Manhattan Beach saw a big increase in the number of single family homes that are for sale. Manhattan Beach also saw sales volume drop for single family homes. May saw fewer closings then April or March in most areas. Prices held steady overall. Pendings are fairly strong but I don't expect to see a huge upswing in volume.

Buyers remain picky and will not make offers on homes they deem over market value. We will see some short sales (one on Valley just went pending) and even some foreclosures but don't expect to find these homes priced under current market value. The big winners seem to be townhomes in all the beach cities. As always the only sure thing about our Beach Cities market is that it is always changing!.

May 2007 Beach Cities Sold


Compare with May 2006 sales

Beach Cities: April 2007 Sold
Beach Cities: March 2007 Sold
Beach Cities: February 2007 Sold
Beach Cities: January 2007 Sold

Beach Cities: Sold April 2007

Hermosa Beach.... Pier Plaza

The South Bay/ Beach Cities home market seems to have leveled off. April saw fewer closings then March in most areas with the exception of Manhattan Beach. Pendings are fairly strong and we may see more volume in May.

Headlines in newspapers and sound bytes in the media push the increase in foreclosures in CA but so far we haven't had much impact in the Beach Cities. For the moment at least people are listing their homes and other people are buying those homes. However Buyers are picky and will not make offers on homes they deem over market value. They also want a home in great condition or priced low enough to compensate for being dated or in poor shape.

Overall in our market prices seem fairly stable moving up and down slightly. It's beginning to look a lot like a normal market which is something most people have not experienced. We will see some short sales and even some foreclosures but don't expect to find these homes priced under market value. I know of one coming up in East Manhattan that will have a pretty good price tag but will not be in great condition.As always the only sure thing about our Beach Cities market is that it is always changing!

Current market statistics for the Beach Cities April, 2007