A Scary Time in Local Real Estate?

Halloween is so scary.

Or is it, really? It’s fun to pretend.

Let’s try it with the local housing market. Ready to be scared?

Welcome to the Jungle

First, let's try on a mask for anonymity, so we can really tell it like it is. OK. Let's go!

It was nice to feel “normal” again in the local real estate market. After a couple of sluggish years, the market had recovered. 

That's because, by mid-2024, the economy was stabilizing, and confidence returned, starting at the high end. Local homes sales were helped along further this year, in part, by a wave of buying after tragic wildfires.

But what if the return to “normal” was just an illusion?

Could the slowdown now hitting everywhere else also reach Manhattan Beach?

The California Association of Realtors had been projecting rising sales statewide this year and next. Not anymore.

Luxury sales ($2M+) have been driving the market, but what if even that segment is really cooling?

Did you hear? Home insurance is now more than twice as likely to disrupt a sale as just two years ago (17% vs. 7%).

And national headlines?

Don’t look. Home sales are sluggish, prices stubbornly high, affordability low.

It’s enough to make some people tune out real estate altogether. (No! Don’t!)

Something Wiggly This Way Comes

Much of this ties back to the feds and the broader economy.

What if mortgage rates rise instead of falling?

What if A.I. – the apparent engine of recent economic growth – is just another stupid bubble?

(Try this true/false proposition: 70% of current investment in A.I. will evaporate within 5 years. Place your bets!)

Fed Chief Jerome Powell’s latest remarks raised more questions than answers.

Inflation is ticking up, unemployment is rising, tariffs are starting to bite and healthcare costs are exploding.

Did Powell just describe a recession and/or "stagflation" without using either term?

Which part of this looks like a gold-embossed, booming economy?

Where's the optimism, outside of crypto?

And when Powell is replaced next year, will his successors steady the ship – or maybe steer us toward hyperinflation?

We can scare ourselves plenty... without even mentioning ICE and its detractors, SNAP, the CDC, trade wars, violence, government cutbacks and shutdowns, the midterms, or a possible shooting war (?) in Venezuela (!?).

Instability Comes Home

The real risk is instability. That’s no one’s friend.

We love to think of Manhattan Beach and the South Bay as a bubble.

But we’re not an island. Every big trend eventually washes up here.

What if the recent market recovery is at risk?

What about rates?

Could your home be worth less next year?

Could your buying power shrink?

Could a negative vibe funk up even our market?

These are the scary questions that can make it harder to sleep.

Ha Ha. Just an Exercise

Of course, we don’t know what’s coming. We’re asking questions.

Are you more scared than before? Happy Halloween!

Here’s the truth: Homes sell in all market conditions. Prices matter, but sales volume tells us whether people in the market are happy to be there – or not. In some ways, that's the best gauge.

By that measure, 2024 and 2025 have been mostly good.

Our market is always full of contrasts. You can point to the big sales (hi, Luka!) or the ones that aren’t happening (sad trombone). Seems data can be spun either way.

Most realtors will tell you that the market is always strong and rising.

That’s not always true – and not always good advice.

If you know us here, we're more like seekers. Bring us the numbers, we'll crunch 'em, and let the chips fall where they may. 

We’ll keep coming back to this theme, even after Halloween. Because it might not be just a trick.

There might be something happening here, and if so, we’ll try to help you see just what it is.

Stick around. We’ll share what we find.