Do you like speculation?
We prefer hard data, like most folks, but once in a while, it's worth looking ahead to see where trends may be going.
The Manhattan Beach real estate market remains active and even "hot," certainly hotter than Spring has been so far, weather-wise. But we're still watching median price data come through that might illustrate negative price trends – trends that took hold late in Spring 2022 and into Summer last year.
We wonder: If the median price keeps dropping, will people see that in context, or believe that the market is actively in decline?
A Bold Prediction: More Declines
Today, it looks like the median price in Manhattan Beach could decline for a while.
Also, that could be misleading if it happens.
First, a refresher. The median price is the price at which half the homes sold lower, and half sold higher. With an odd number of sales, it's a single home sale right in the middle. With an even number of sales, it's the average of the two middle sale prices.
The local median price shot through the roof and into the stratosphere in recent years. (See our roundup of year-end median prices, when MB hit $3.137M: "Manhattan Beach Median Home Price Up 3% in 2022.")
But last year, as interest rates spiked, over and over again we saw individual homes sell for less in late 2022 than they would have in early 2022. It was easy to see sale prices 3% to 8% below expected values.
These real-world price trends took quite a while to creep into median values. The median home price for Manhattan Beach, properly calculated using 12 months' worth of data, only began a downtrend late last Fall.* The median has been flat or declining each month of 2023, ending in April at $3.060M, even with March 2023.**
That's down from the peak median price of $3.166M (Sept. 2022) as well as down from December/January's $3.137M.
Currently Pending Sales
As of Tuesday, noon, there are 40 pending sales in Manhattan Beach.
The median list price among those pending sales is $2.999M. If this became the new median sale price, we'd see Manhattan Beach down another $61K at some point.
Since we're in speculation mode, let's look closer at a few of the "middle" listings among the current pendings. We'll go in price order, lowest to highest. We're looking at pending listings #19-22 out of those 40.
746 29th is a Tree Section lot sale with plans for a new home. (There's a lot of that going on today.) They were asking $2.799M, but also encouraging just about any offer.
327 36th is a partly remodeled corner-lot SFR in the North End, on the corner with Alma, asking $2.899M. It sold very quickly, after failing last year at a higher price.
1232 2nd (pictured here) was one of the longest-running listings in the city, at 190 DOM, when it recently got an offer. The house had already shed $400K from asking and was at $3.099M when a deal was made.
23 Village Circle is an SFR ("Estate Home") in Manhattan Village that recently fell out of escrow, and was in its 6th month on market. It had cut $250K from start, and was last asking $3.149M.
Any one of these could be the "median sale" in Manhattan Beach by some time in June, and therefore representative of our city's median price.
Is it possible to see every one of these 4 "middle" pendings closes below the current median price of $3.060M?
Yes. In which case, the local median price will drop further.
Prices on Current Active Inventory
Current inventory in Manhattan Beach is overwhelmingly priced above the median.
Again, as of right now, noon, Tuesday May 9, there are (only) 50 active listings in town.
The median asking price is $4.324M.
Indeed, only 13 listings are priced under the April 2023 median price of $3.060M.
So if everything sells, the median price will rise.
Heck, if only a little over half the current listings sell, the median will rise.
Do Median Prices Matter?
In 16+ years of writing about Manhattan Beach real estate online here, we've often pooh-poohed median prices as a measure.
Median prices don't tell you anything about the proper value for your house that you're selling right now, or the right price for the one you just looked at and liked enough to offer on.
Medians mainly offer trend data, and it can be valuable to know which way the wind is blowing.
But here's the real kicker.
The median price, properly calculated, is a lagging indicator.
The market is now hot, and arguably rising.
The median price is declining, and might continue doing so.
Such a result would then tell you that the median price is not a very useful measure.
Or so we can speculate, anyway.
* The goofy way to calculate median price is using single-month figures, which for MB comes out of just 25 sales in April. The goofy median was $3.400M. We just saw that figure promoted by a local brokerage this week. Don't use it. Or if you're going to, be sure to explain how the median jumped $700K month-to-month, and why it's up $1.250M since 2023 began. Gah. Small samples.
** Nerdy note: Auto-calculations of the median price show $3,067,500, not $3,060,000. But these include a duplicate sale in Manhattan Beach. 904 Highland ($7.250M) was co-listed by a local broker and one from a different area and MLS. They each input the listing in separate MLSes, and now both sales appear in our data. It's legal, but annoying. MBC re-figures the median price with corrections for this duplicate entry.