Manhattan Beach CA/ e-PRO..... Kaye Thomas...

3612 Poinsettia Manhattan Beach


In the last few months I've written posts on Starter Homes in Manhattan Beach , Prices not crashing .... no kidding and buyers and sellers Thinking Outside the Box along with a number of other posts on Manhattan Beach real estate. These posts were about the market in general and often about my listing on 3612 Poinsettia in particular. Many who commented on these posts blasted me on everything from home prices in Manhattan Beach to my general lack of knowledge about the declining real estate market. The bottom was going to fall out of the local housing market and Poinsettia was wildly overpriced at $849,000.



But a funny thing happened a month ago. Suddenly 3612 Poinsettia was not the wallflower at the prom. Poinsettia was on the short list for Prom Queen. The property was being shown many times every day. Not only did we wind up with multiple offers but it went within a matter of days and I had to turn away of number of people who wanted to make offers. I won't release the sales price until the house closes escrow in July but I will share a bit about the sale. <<< CONTINUE >>>

Classic Redondo Craftsman on the Avenues


There is no doubt that sales volume has declined from the peak of 2005. Prices, on the other hand, have increased in almost all areas and for all types of property in each of the Beach Cities. While 2007 was not a great year it was not as bad as many had predicted due to surprisingly strong sales in the first half of the year.

In August 2007 we saw the first hint of serious trouble within the financial community. Huge numbers of lenders have closed their doors because of losses from subprime loans. Lenders have supposedly revamped their requirements as Fannie Mae and Freddie Mac have restructured what they will buy and are putting a real premium on FICO scores with penalty points for those who have low scores.

While interest rates on conforming loans.. those under $417,000 are at one of the lowest levels in years.. jumbo loan rates continue on the high side. Lenders are claiming that the risk is too high and the cost(rates) must take risk into account... and who knows part of the statement is probably true. Wall Street is in real trouble and there is more to the problem then a few risky jumbo loans. My premise for that statement is that most areas of the country are still able to take advantage of conforming loan limits. It is only a few high priced markets that are dependent on jumbo loans... and surprisingly many of these markets are not in nearly as much trouble as their less pricey cousins.

Contrary to the thoughts and wishes of many our beach real estate markets have not crashed. Sales are slow but prices are holding up fairly well. The softest area seems to be townhomes in North Redondo which has always been less stable then other parts of our market area. North Redondo townhomes are our weakest segment and will be the first to be affected if there are a large number of foreclosures. so far we are not seeing the high numbers of foreclosures that were predicted. Rumors abound about lenders holding back massive inventories of foreclosed properties but I don't think we will see a lot of them here.

The biggest threat facing our market is if we wind up with a massive recession and people lose their jobs. The problems we saw in the 90's were because a large number of residents lost their jobs when the aerospace industry saw a loss of major government contracts with the end of the cold war. This time around we are a bit more diversified.. although I think settling the Writers' Strike would be a real boost to thoughts about our local economy.

These are the numbers for the Beach Cities... Manhattan, Hermosa, Redondo and El Segundo from January 2005- December 2007.
Beach Cities: Sold 2005-2007 (click on graph to enlarge)

Manhattan Beach Pier.. January 2008

The Manhattan Beach real estate market has always been contrary.. contrary to logic... to income standards... to investment basics... basically to most yardsticks used to measure property values in other places. We have continued to maintain high prices even as the market has slowed down. The number of sales have decreased, the days on market have increased while prices have only seen slight declines.

The question floating through our Manhattan Beach community is whether or not this will be the year that we see the real estate market move downward or will we continue with minor adjustments and a basically flat market. Buyers are opting for prices moving downward while sellers are hoping to hang on with a flat market or a minimal downturn.

Manhattan Beach and the Beach Cities in general have fared better then many similar communities in Los Angeles County. So far our foreclosure rate is minimal and the hope is to keep it that way. I'll be posting information about the Beach Cities in the next few days.

Manhattan Beach: Home Prices Sold.. 2005-2006 (click on graph to enlarge)

When you review the numbers for each neighborhood over the last three years it's amazing how stable the market has actually been. That may be about to change if the tight credit market continues into most of next year.

The big surprise may be that buyers are going to be fine as most people who want to buy in today's market have to have stable finances, cash for a down payment and good credit. The ones who may wind up in trouble are those who bought with marginal resources. We could also see problems if a recession does materialize. I think we will have a handle on where the Manhattan Beach and the Beach Cities housing market is headed by spring to early summer. If we make it through the next 6 months intact we are likely over the worst.

Manhattan Beach Home Prices : DOM & Median Price...2000-2007 part II


The Manhattan Beach real estate market has been slow the last few months when compared to the first part of the year. The national credit crunch along with continued high prices and fears of a recession have created a lot of questions about the direction of housing in most of California, Los Angeles County and locally in the Beach Cities.

While working on Part I and Part II of this report one of the things I noted is that trends in the Manhattan Beach market seem to be far more stable then many realize. The market started going up in 2002 and while price levels have bounced around they have not showed any major declines. Sales volume is off but not drastically when compared to the last three years. The DOM(Days on Market) for December 2006, January 2007 and December 2007 are almost identical. The fact is the market will probably see more changes next year but the magnitude of those changes is the question no one can answer at this point. No one is even sure if we are or are not in a recession.


Manhattan Beach: DOM and Median Price January-June 2000-2007 ( click on graph to enlarge)



Manhattan Beach: DOM and Median Price July-December 2000-2007




Currently there are 87 homes for sale in Manhattan Beach, 20 homes in escrow( 2 since January 1, 2008) and 3 closed sales since January 1, 2008. I held Open Houses on Saturday and Sunday in the rain.. one in the tree section and one in the sand section. On Saturday I had 10 couples come through and Sunday saw about 15 people. Not earth shaking by any means but rather interesting considering the weather conditions.


If the R Word rears it's ugly head in the South Bay we could see some trouble. However as we are more economically diversified then in the 90's it may not have as large an effect as the loss of aerospace jobs did at that time. It looks as if pressure is coming to bear on those involved in the Writers' Strike and we may see some resolution in that field before too long. Those in the financial markets must be feeling a pinch but again there is no data on how many or who will be affected.



There are Manhattan Beach homes that have received NOD's ( notice of default) and some even appear headed toward foreclosure. What is surprising is the few (3) I have seen in the paper as headed toward auction are not on the market... so I'm guessing the owners may be securing financing as the homes are worth a lot more then the amount of the mortgages recorded against them. But people are funny so you never know. In the 90's I met a number of homeowners who did not deal with the reality of their financial situation.

Manhattan Beach Home Prices 2000-2007 Part I





I've been compiling a lot of numbers in the last week on home prices in Manhattan Beach and the Beach Cities. Over the next two weeks I will be posting that information beginning with Manhattan Beach. The following information is based on the number of sales and the price per sqft for single family homes in Manhattan Beach from January 2000-December 2007.

Manhattan Beach: Home Prices January-June 2000-2007 ( click on graphs to enlarge)


Manhattan Beach: Home Prices July-December 2000-2007



One of the things I noticed is that the number of sales for 2005, 2006 and 2007 are fairly consistent from January-December with the exception of November 2007 when sales were half of previous sales in November for the last three years. The number of first quarter sales in 2007 was higher then in 2005 or 2006. The actual number of sales begins to move downward in the second quarter of 2007 with the largest decrease in May 2007 with 13 fewer sales but with the overall highest price per sqft of any month or year from 2000-2007. The third quarter of 2007 shows sales volume down from 2005 and 2006 but not as much as you might expect( with the exception of November) considering the overall financial problems and general housing market declines nationwide and in much of California.

Part II will be feature the Days on Market and Median Price for homes sold in Manhattan Beach from 2000-2007