About Manhattan Beach's Tree Section

The Tree Section

The Tree Section of Manhattan Beach is considered one of the most desirable places to live. It is bordered by Sepulveda Boulevard to the East, Manhattan Beach Boulevard to the South, Rosecrans Avenue to the North, and the Sand Section to the West. Its proximity to the ocean, LAX and an easy commute to the city, make it as appealing geographically as it is aesthetically.

The area adopted its name, the Tree Section, not from the many trees that populate the neighborhood, but rather from the street names: Palm , Oak, Elm , Pine, etc. The area is also well known for its strict tree ordinance that restricts homeowners from removing most trees from their property without a permit from the city, thus preserving the visual attraction of the area.

The Tree Section attracts families of all sizes, and like many communities in Los Angeles, it is an area that is in transition. Most of the neighborhood was initially built post war in the 1940s, and was occupied by the many aerospace industry workers that were employed nearby in El Segundo and Redondo Beach. Initially, the homes were smaller in size, ranging from approximately 1,000 square feet to 1,800 square feet. Today, developers have purchased many of these older homes, and have built newer, larger homes, upwards of 3,000 square feet. The architectural styles of the new homes have varied quite dramatically; from the many Cape Cod and Nantucket designs to the traditional Mediterranean styles of Tuscan and Spanish influences. It is not uncommon to see the more conventional Craftsman style home popping up, reminiscent of turn-of-the-Century artisan movement, not to mention the many custom, one-of-a-kind homes designed and built by local residents, adding to the diversity of the Tree section.

Lot sizes vary in the Tree Section, but most of the lots are typically 40 feet wide and range from about 110 feet to about 135 feet in depth, depending on what block and street one is looking at. There are exceptions to the norm, however, and on rare occasion one can see lot sizes approaching 9,000 square feet. Not only are they hard to find, but they are also expensive, as land value in this beach community can be 90% or more of the total value of the property in some cases. Home prices range from just under $1 million for a small post-war sized home to well over $4 million dollars for a custom built home situated on an oversized lot in a highly sought after location.

Within the Tree Section there are several sub-sections that are both extremely popular and notable in their own right. American Martyrs is an example of one, and this area is popular for a multitude of reasons. It received its name for its proximity to the local Catholic church and private school, American Martyrs. There is a waiting list to get into the school, as it is a distinguished institution and thus, quite popular. Some of the more admired streets in this section are 15^th Street through 18^th Street as they offer something unique and hard to find: space. The lots in this section are typically 50 feet wide which not only allows one a little more distance from your neighbors but also allows more street parking and best of all, a very short walk to nearby Live Oak Park and the downtown district of Manhattan Beach. In some cases, these lots even offer a peak of an ocean view.

Another sub-section of the Tree Section is what is called the Gas Lamp District, which is located near Marine Avenue. These streets are beautifully lined with original gas burning lamps offering an enchanting glow to the area on a breezy summer night. Many of the lots in this area are typically smaller; sometimes only 25 or 30 feet wide. However, what one loses in size, one gains in character. Prices in the Gas Lamp District hold up very well, and are priced similarly to the larger homes and lots nearby.

The Tree Section is made up nearly entirely of residential properties with very few commercially zoned lots, making it ideal for families. It is not an uncommon sight to see children riding bikes in the street and families taking an evening stroll with their pets. Yet depending on where you live, there can be found a small commercial area with shops and restaurants just a short stroll away. Depending on the time of year, you can expect a few detours as homeowners will barricade an entire block for impromptu block parties. It's certainly a place that you will find neighbors to be, well, neighborly. An experience sometimes long lost to an era gone by.

To learn more about available homes for sale in the Tree Section or to track current home values and sales trends in the neighborhood, visit www.TreeSectionEd.com

American Martyrs in the heart of the Tree Section

Tracking the Manhattan Beach Tree Section Over the Years

Sand Dune Park is but one of the many great attributes of the Tree section of Manhattan Beach. It had become increasingly popular as a workout destination in the last few years to the point of frustrating many of the neighbors to the park. Apprently, the increased visitor count was taking a toll on the area.

The city council closed the park for several months, but eventually agreed to re-open it with significant restrictions on the use of the dune. The intent of this post is not to delve into the politics behind the decision, but rather to explore the Tree section from the standpoint of property values changes this past decade.

Though no single metric perfectly captures the relative home values for an area, median sales prices are often accepted as a good relative measure of this. Back in 2000, the median sales price for a Tree section home was $799,000 on 162 sales. Prices rose steadily every year thereafter until they hit a peak in 2007 when the median price came in at just under $1.9 million on 112 sales.

The credit market crash of that year left very few parts of the country unscathed and the Tree section was no exception. Median prices dropped down to $1.46 million last year and have fallen even lower to $1.3 million for the first four months of this year. In spite of this, the values of homes here have still comfortably outpaced inflation and, in fact, have experienced nice appreciation.

On the surface, this recent downturn appears to be attributable to the beaten up financial markets and the recent economic recession. Ultimately, this may very well explain why values have declined as much as they have, but not for obvious reasons. Over the years, the development and sales of new homes has essentially been a catalyst for the tremendous growth in home values. Their absence effectively removes this catalyst from the equation and dampens these value gains.

There have been many new homes built in this area since 2000 and their presence has impacted the community on a number of positive levels. In my view, they have significantly added to the quality of life here, though I imagine the pounding of nails and the like have frustrated more than a few neighbors over the years.
One of the benefits of this renewal is that it leads to a rise in aggregate home values. The Lunada Bay area of Palos Verdes Estates, with a median home sales price of $859,000 back in 2000 exceeded the values here. However, by last year the Tree section had pulled well ahead of Lunada Bay by this measure, primarily because the pace of new home development here has been triple the rate there.

Looking at this from yet another perspective, back in 2000 the value of existing occupied homes sold and the new homes sold were commensurate on a price per sq. ft. basis. The fact that the new homes were larger pushed prices as well as comparative values higher. The effect of this was somewhat modest in 2000, but in 2007 it had a huge impact. New homes became even larger and there was a premium in value on a per sq. ft. basis paid for these homes over the other homes sold. The net effect was that the median sales price was lifted by over $300,000 that year.

When the financial markets tanked, the number of newly built homes sold dropped in half. As a result, the lift from the new homes sold was about $100,000 or only a third of what we experienced in 2007. Interestingly, for the first four months of 2010, we’ve managed to hold steady on 2009 pricing but in the complete absence of any new home sales.

On a side note, a lot of the new building of 2007 occurred in the area of the Tree section north of Valley/Ardmore. This resulted in a significant increase in the gap between the median sales prices between the two sides of this dividing line. Historically, the number of sales south of the greenbelt has always exceeded those of the area to the north. Prices, on the other hand, have always been greater on the north side. In 2007, there were more new homes sold to the north and the gap in median prices was significantly higher that year. More recently, more new homes have been built to the south and the gap in values has fallen as a result.
Now getting back to the Sand Dune, I wondered what, if any, impact the challenges and the subsequent controversy there have had on home values in the immediate area. In the end, the relatively small size of the neighborhood adjacent to the park and the few sales of homes there make it very difficult to definitively address the question of impact on value.

The median price for a home in the Tree section back then was $799,000 on 162 sales of all home types. The neighborhood adjacent to the park, which for the purposes of this article includes the homes located between 29th Street and 36th Street out to Blanche Road, accounted for 15 of the homes sold that year. The median price of $842,000 for these homes actually exceeded the median for the entire Tree section though the average price per sq. ft. of these homes was $329 compared to $350 for the broader area.

Spinning forward to last year, the median price of the six homes sold by the Sand Dune was $1.56 million compared to $1.46 million for the entire Tree section. This gap is about the same as what we saw back in 2000. The overall average came in at $587 per sq. ft. while the Sand Dune area homes averaged $512 per sq. ft.
This morning after I dropped my daughter off at her pre-school, which is, coincidentally, near the Sand Dune, I noticed signs of new development in progress. This is a clear indication of an increase in confidence in the market and I anticipate that we will see home sales rise in the coming months ahead.

Manhattan Beach Tree Section Home Sales in 2009

This past year has been a tough one for home sales in the Tree section of Manhattan Beach. In fact, the word tough may actually be sugar-coating it. There are 34 sub-areas in the South Bay when this region is defined as the three beach cities and the primary cities of the Palos Verdes peninsula. Only a handful of these sub-areas had a decrease in the number of single family homes sold from 2008 to 2009. The Tree section not only had a drop in sales, but the number of sales fell sharply by over 20 percent. Median sales prices fell by a similar percentage. To put this into a broader context, the strongest year for home sales in the Tree section was back in 2002, as it was for most areas in the South Bay. Whereas most areas had sales in 2009 drop to about half of the peak of 2002, the Tree section sales this past year were only 38 percent of the 192 sales back then. So this begs the question: What has changed in the market conditions for the results to be off by this much?

One significant clue would be the drop in the number of new homes built here last year. During the three years leading up to 2009, there were at least 26 or more new single family homes sold here each year. Last year there were only 13. This is clearly an artifact of the credit market crash of 2007. The huge drop in available lending made it difficult for builders to develop new homes. The number of projects subsequently dropped rapidly, though perhaps not by as much as some might have expected. It is, therefore, no wonder that the median sales price would drop as it has. This would no doubt impact the number of homes sold as well.

The current inventory of single family homes for sale stands at 19, or about three months. Of these, only three were recently built. More encouraging is the number of homes in escrow at this writing, but anything can happen over the next few months.

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