In this ultra hot market any sign that things are slowing down is big news. While the market is still very favorable for sellers we are noticing that many homes in the tree section of Manhattan Beach seem to be sitting on the market for a little longer. The current average for “active” listings (those not sold or in escrow) is 56. The number can be a bit misleading due to the fact the local MLS days on market continue to accrue if a home that is in escrow posts as “backup” status. The number of days on market has risen every month since August of 2014 with a slightly higher number in January. As inventory slowly rises the days on market will likely follow. See all of the latest Manhattan Beach real estate market trends at our updated statistic pages.
October showed no signs of a slowdown in the luxury real estate market of Manhattan Beach. 42 homes closed escrow and prices reached new highs with a median home price of $2.1M and an average home price of $2.2M which is well over the previous 18 months. Of the 42 home sales only one was sold below $1,000,000. 12 of the homes sold between $2.0M and $3.0M, 3 homes sold between $3.0M and $4.0M and 3 homes sold above $4.0M. Visit our market trends page to see the current price and market trends for all of Manhattan Beach CA.
One of the more challenging aspects of selling homes in the luxury community of Manhattan Beach, is the “sticker shock” many out of town buyers have when we first start searching for a home. As one of the more expensive markets in the country, buyers are often unprepared for the type, size or condition of the home that they can get for their money. Buyers inevitably compare the home they are selling to the home they are buying and without taking location into consideration, they find that they can often purchase something not even similar to what they’re selling. The greatest surprise comes to buyers from states such as Texas in which they owned a 5000 foot mansion on acres of land for example and the $1.5M that they sold it for translates to a 3 bedroom, 2200 foot townhome in Manhattan Beach with a lot measured in feet and not acres.
The reason for all of this, of course, is that it’s all about location….and the demand for that location. There is such demand for homes in Manhattan Beach which offers great neighborhoods, ocean views, award winning schools, almost perfect weather, proximity to a world class destination beach, and near enough but far enough from the hustle and bustle of Los Angeles, that prices just continue to rise at an often incredible pace. As there is no additional land to build on, even “fixers” or tear downs sell above market value as builders are eager to cash in on the demand for new construction luxury homes.
So what can an out of state buyer do? Research the recent home sales in Manhattan Beach and current listings. Getting comfortable with the fact that, although the prices are dramatically higher than other cities and states, these are the prices and the costs to live in such a high demand area. Southern California has always been one of the most sought after housing destinations in the country and nowhere is that demand greater than life on the coast in Manhattan Beach. Buyers that research values, prices and trends, may still have that initial shock but just having an understanding that these are not “inflated” prices but just the values of the area and down the road when it’s time to sell, they’ll be on the other side of this incredibly strong market.
May marks the 5th straight month with an increase in available homes for sale in Manhattan Beach with 65 current MLS listings as of May 5th, 2014. See information below on the current market trends including current MLS listings, recent sales, pending home sales and home prices in this luxury coastal community in Southern California.
Active Homes for Sale: Current Median Home Price $2,050,000
Active Homes for Sale – 65 homes
Pending and Backup
Homes Currently in Escrow with Pending or Backup Status – 48 Homes
Closed Home Sales in Past 30 Days (April 5th to May 4th)
Every Monday I get together with some other agents and discuss the latest happenings in real estate and each week the news seems to become more discouraging for home buyers in Manhattan Beach. Homes are selling well over asking, almost all sales involve multiple offers, often buyers are competing with all cash buyers or with builders, and not much that’s remotely priced close to market value lasts longer than a few days.
So how is a “regular” home buyer supposed to compete in this high end market.
The answer, unfortunately, is that until a significant increase in inventory starts to lessen the demand, a regular buyer with conventional financing just may have to wait it out. What’s driving this is clear….absolutely record low inventory. As of this article there are only 37 active homes for sale in Manhattan Beach. Contrast that with the near peak of 284 homes for sale in February of 2009 and it’s not hard to see why each and every new listing is receiving so much interest. The chart below shows the active homes for sale in Manhattan Beach over the last 5 years and at this point…nobody is selling.
Why sellers aren’t listing their home in this market is an entirely different issue as everything from prices, to demand to terms, to interest rates favor them but that doesn’t seem to be making a difference.
We’ve seen the market increase in value dramatically in the past 12 months with values generally rising each month but since late November we seem to be seeing more homes priced well above the current market and well above the pricing trend. Only time will tell what 2014 has in store in the Beach Cities real estate market but as perception is such a real part of real estate, buyers now seeing homes sit on the market without selling may mark the beginning of a slow down.