Are Manhattan Beach Starter Homes a Thing of the Past?

By Keith Kyle

Without question, Manhattan Beach is a “hot” real estate market.  As if the number of homes selling over list price with multiple offers doesn’t pose enough of a challenge to entry level buyers, the competition with builders and developers makes it all but impossible.  Whenever the market heats up to this extent it seems that every builder, investor and developer wants a piece of the action.  Whether it’s flipping a larger but older home, or knocking down the original bungalow to build an estate property, the potential profits are just too enticing for builders…..and that all but eliminates the opportunities for entry level buyers.

These builders are looking for just about any well priced home or piece of property and many get sold before they’ve even gone on the market.   The problem is that what these builders consider “tear downs” are the very same homes that many buyers would consider starter homes…and their entry into this high demand community.   What might be an affordable original 3 bedroom, 1200 foot home built in the 1940s priced in the low $900s, gets knocked down, quickly developed and soon comes to market as a $3.0M+ mansion.  Unfortunately buyers looking to get into this neighborhood are often young professionals or young families interested in the award winning schools, but are priced right out of the market.

128 14th Street -  2012  Sold April 2012 for $1,950,000

128 14th Street – 2012 Sold April 2012 for $1,950,000

128 14th Street  - Currently listed at $6,399,000

128 14th Street – Currently listed at $6,399,000

221 23rd Street sold at 1,013,000 in 2012

221 23rd Street sold at 1,013,000 in 2012

Listed for $2,999,000 2014

221 23rd – Listed for $2,999,000 2014

This isn’t the first time that this has been the struggle and it won’t be the last.  Buyers either need to be very patient and wait for these dramatic price increases (and almost instantaneous profits for builders) to ease up, or be willing to overspend a bit to compete with the builders when the home actually does make it to market.

For sellers the time is most certainly right, but they need to be cautious as more often than not they could likely get more money by listing the home and putting it on the open market than selling to a builder without any competition.

With Builders Buying Everything in Manhattan Beach…is there anything left for Buyers?

By Keith KyleEast Manhattan Beach homes

There is no question that due to the incredible rise in prices and the demand for new construction luxury homes, Manhattan Beach is definitely in a full blown building frenzy.  Any original bungalow or “starter” home is quickly bought by builders with all cash, non contingent offers  This was similar to the environment from 2005-2007 and it adds to the already challenging environment for home buyers.

So how is a buyer to compete?

The solution is to either be very patient, or very aggressive with offers and offer prices.    In a seller’s market it always poses a real challenge to buyers but when builders begin buying all of the lowest priced homes, it adds an entirely different pressure on the market.  Builders are generally fairly cautious with their numbers and unwilling to overpay, but in a market in which new home prices are beyond record levels, builders are willing to take risks on even marginal properties.

Home buyers do have the ability to come to the negotiating table with a different perspective, however.  This ability to consider long term aspects may be the one advantage that they have.  Home buyers in this luxury coastal community may need to overpay somewhat but can take confidence that even when the bubble burst several years ago, prices did not drop severely.

Liberty Village – Manhattan Beach’s Most Affordable Neighborhood

By Keith KyleEast Manhattan Beach homes

Located in the section of Manhattan Beach known as “East Manhattan”, Liberty Village remains the most affordable neighborhood in this luxury real estate market.  One of the primary reasons for this affordability is that, unlike many of the other neighborhoods or “sections” many original homes built in the 40s and 50s still remain. As proximity to the beach is one of the driving factors in price, Liberty Village is the furthest east that Manhattan reaches.  Lot sizes are often smaller than other areas of east Manhattan and are generally just a little below 5000 sq feet which is significant as the demand for land from builders is considerably less than the larger lots found to the south.  As with all neighborhoods in this prosperous city, the schools rank in the top of the country, streets are charming and the area has a very safe and family friendly feel.  Although the concept of $1,000,000+ starter homes is likely to raise eyebrows in most markets, prices generally hover around this mark and are the most affordable single family homes in Manhattan Beach.

The homes below include the Manhattan Heights area as well.   Click here to view only the Liberty Village homes for sale.

Current homes for sale in East Manhattan – Manhattan Heights and Liberty Village

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An Abundance of Sub Million Dollar Homes in Manhattan Beach?

By Keith KyleBeach Bungalows

While there’s not a true abundance of any type homes in any price range on the market in Manhattan Beach at the moment, there has been a recent increase in single family homes priced under $1,000,000….barely.

I recently wrote a post that there were no single family homes in Manhattan Beach priced below $1,000,000 which hadn’t been seen in some time, but several homes have recently come on the market in this ever rarified price point.  Generally the homes in this price range are original beach bungalows with minimal square footage and few, if any, updates.  Most often they are sold “as is” which means they’re being sold to builders who are taking full advantage of this market as home prices for new construction continues to skyrocket.  As of this post there are 4 single family homes for sale in Manhattan Beach priced under $1.0M.  All of the homes were built in the 40’s and 50’s with the largest home just over 1200 square feet.

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No Single Homes For Sale in Manhattan Beach Under $1,000,000

“Starter” Homes in Manhattan Beach Harder and Harder to Find

By Keith Kyle

For the first time in quite a while there are no single family homes currently active for sale in any area of Manhattan Beach priced under $1,000,000.

Currently there are 5 single family homes in escrow that are priced under $1,000,000 with almost all exclusively in the Liberty Village area which is the most affordable neighborhood in Manhattan Beach.  Gone may be the days of homes in the sub $1,000,000 range.  Below are the current homes in escrow (as of 12/18/13) and below is a historical chart showing the past 3 years of homes below $1.0M.

Manhattan Homes Under $1M

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