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.