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.

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.