It is often observed in higher-priced or luxury markets that there is an active trade in homes that never hit the market.
Although realtors are subject to a number of regulations that require most listings to go public, still, somehow, the off-market phenomenon persists.
And that is certainly the case in Manhattan Beach, which in the first half this year saw a record percentage of homes sell off-market.
But that record figure was 20%, not 25%, not 35%, and not half of the homes sold, as you might sometimes hear.
As you'd expect, we've got the data.
You can see here that in the first half of this very year, 2026, one-fifth of Manhattan Beach home sales never hit the market.
That's the highest of any year for this period of Jan. 1-June 30, and higher than any other South Bay city that we reviewed. (Stay tuned for that data.)
Our office was involved in one of those off-market sales, at 2204 Oak (5br/4ba, 3236 sqft., $3.750M), and we were proud to pull that off for our buyers. But there were also 35 more – out of 178 sales in the first half.
Of course, if you were a buyer in Manhattan Beach in the first half this year, you were still overwhelmingly likely to find your home on the public market. That's how 80% of the sales went down.
But if you think that you spot a trend of the last five or six years having more off-market sales in town, you're absolutely right. That is what the data shows.
And, again, it is happening here in Manhattan Beach, but not everywhere.
How We Define Off-Market Sales
A quick note on methodology: Since there is no foolproof way to capture all of the off-market sales in any given market, we focus throughout this post exclusively on MLS data. We used a simple cutoff: If a listing reported 0 days on market when closing, we treated that as an off-market sale.
Many off-market sales are reported on the MLS in this manner after they close. This is for the obvious reason that the listing agent probably wants credit for the sale, and the buyer's agent, too. The less obvious – but still very important – reason is that most realtors understand that it benefits everyone to have (almost) all the sales in one database. This helps to track prices and trends, and provides comparable sales for everyone's future listings.
We did see a number of sales with 1 day, or 2, or even 3 days on market, which might have reflected some kind of off-market exposure or deal. But we needed a strict standard, and we set that at 0 days.
You could also try to track off-market sales by looking at tax records of sales in a given market. But sometimes these involve intra-family transfers, non-arm's-length sales of other kinds, builder acquisitions of lots – in other words, sales that don't always look like regular market sales, or may have lots of confounding factors that don't show up in price alone.
Frankly, if a sale has weird x-factors, we don't want to see it in the data.
Context for MB First-Half Sales
There really has not ever been a figure like this 20% off-market share in the first half.
But there has been a recent increase in the share of off-market sales here in Manhattan Beach on a year-to-year basis. Time for another chart.
This time we are looking at a full year's worth of data, instead of just the first half.
Our data here show that before the pandemic, and including the year 2020, most years saw around 5% or 6% of sales in Manhattan Beach reported in the MLS as off-market sales, with 0 days on market. (The year 2016 was a weird outlier with very few off-market sales, just 5 all year by this measure.)
There is a sudden spike in the data beginning in 2021, and going all the way through 2025. Four of those five years saw off-market sales at the pace of 13% to 15%. We saw a similar spike, too, in our first chart above with data that only covered the first half of the year.
What changed?
Obviously, the first year with a big spike (2021) was one of the most incredibly active years that our market has ever seen, or might ever see, with record sales totals. (518 closings that year, where "normal" is closer to 400.) Demand was through the roof, because financing was incredibly cheap.
But a huge demand surge in 2021 does not explain all of the subsequent years' data.
Scientists, engineers and accountants are all trained to look for other external changes that might help explain data anomalies.
We imagined that one factor could be some recent changes in MLS rules. And we imagined this, in part, because Dave is on the CRMLS Rules Committee, and he has helped make some of those changes.
Over the past 5-7 years, the Rules Committee has been trying to encourage more reporting of sales in the MLS, regardless of the circumstances of the sale. The most recent rule change allows reporting of a sale that occurred off of the MLS any time up to 30 days after the closing. This offered a far wider berth than the previous 24-48 hour window that applied some years ago.
Back in those bad old days, before the changes, if an agent sold a property off-market, and wanted to report it, and did so after too many days, it would literally be an MLS violation. No bueno.
So, we might have an increasing amount of off-MLS activity these days, or we might just have more lenient standards that encourage more reporting of those sales.
How Does the Rest of the South Bay Look?
Do you wonder how this is playing out in other cities?
We did. Time for another chart.
Here we have instant context.
If you look at the orange bars, you see the same thing you saw in our most recent chart above, which is a 5-year spike in off-market sales in Manhattan Beach.
And nothing like it appears to have happened in any other South Bay market.
If we go back to look at only 2017-19, Manhattan Beach was already showing considerably more off-market activity than the comparable areas. We looked at the much bigger local markets of Torrance, Palos Verdes and Redondo Beach. The rate of off-market sales in MB was always larger, but not as much larger before 2021 as after.
Consider the size of the other markets. Whereas Manhattan Beach saw 325 sales last year, Torrance had 919, the Palos Verdes area had 670 and Redondo had 640. (For PV, we looked at all sales in the 90274-90275 ZIP codes, which covers the whole peninsula.)
Those are big sales totals, but teensy shares were selling off-market: 4% in Torrance, 3% in PV and a whopping 5% in Redondo.
If you look really closely, you can see that there is something of an uptrend among the other South Bay cities or areas, just nothing near the jump seen in MB.
It's like they don't even care about selling off-market in those other areas!
Off-Market Sales Seem More Common in Pricey Markets
We can wrap up pretty much where we began. Luxury markets do tend to have a somewhat elevated degree of sales that occur off-market. The reasons are legion, and probably beyond the scope of this already-long post.
You may or may not be aware of a very vigorous debate in the real estate brokerage community involving "private" listings, "exclusive" inventory, or whatever else people might call the "whisper network," pocket listings or "shadow" inventory – whatever isn't on the MLS that is for sale.
One of the mega-brokerages that is essentially pushing "private listings" as a competitive advantage for their firm will still tell you that more than 95% of their listings sell publicly on the MLS.
And that is what you see in most of the South Bay.
Just not in a highly exclusive community like ours in Manhattan Beach.
Although we do think that some of our colleagues over-hype the importance of off-market listings here, the data don't lie. There simply are more off-market sales in MB.
And that means Manhattan Beach buyers are likely to do better if they sign up with a local agent to have access to all of the inventory.
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P.S.: This essay is meant more as commentary than as a commercial, but hey, Dave's favorite part of the business is buyer representation, and we're pretty good at it! Reach out if you'd like to learn more!
Nerdy note 1: All data were hand-crafted for MBC from manual searches of the CRMLS database. No A.I. (this time).
Nerdy note 2: Our post here violates "Betteridge's Law of Headlines," which states that the answer to a headline with a question mark is always "no." But here, it's "yes." We broke the law because, y'know, a rebel heart just refuses to be caged.
