In '19, Fewer Over-Asking Sales, More with Cuts

By Dave Fratello | March 19th, 2020

MBC published data a few weeks ago showing that the Sand Section had seen most listings sell recently for less than the asking price. (See "Most Sand Section Sales Take a Cut.") In that case, the data showed 81% of Sand Section sales over 2 years had taken less than sellers first wanted.

One Sand Section statistic standing alone didn't tell the whole story, however.

We've made a deeper dive now, and it turns out the whole Manhattan Beach market has been trending this way over the past couple/few years.

Put simply, by the end of 2019, we had recent lows for the number of homes sold over asking price, and recent highs for the number of listings sold under asking.

Trends like this might be expected as market participants begin to diverge seriously on their ideas of value. Sellers want more money, buyers wait to pay less.

Let's look at this first chart on over-asking sales.

Seems 2015 was the last boom year citywide, with nearly half (45%) of the listings in town selling for more than sellers were asking.

Saner times prevailed from 2016-18, with about a quarter selling over asking.

But 2019 saw the fewest over-asking sales, just 14%, about half the rate of 2016-17 and less than one-third the rate of boom-boom 2015.

The other side of this coin: Homes sold with price cuts.

Quite nearly three-quarters of homes sold last year (74%) took a cut from the original asking price.

That was a modest tick up of about 10% over the prior 3 years, but more than 30% above the pace in fast and furious 2015, when 43% sold with cuts.

Nerdy note: Data come from MLS-reported sales. MBC conducted a custom sort and analysis of all Manhattan Beach sales data. Final sale prices were compared against the first asking price for a property, even if it was re-listed at a new price after an unsuccessful attempt to sell.

Looking at some data by region of Manhattan Beach, you might be surprised to see which areas rocked and rolled, and which swooned.

You already kinda knew that the Sand Section has been trailing off recently.

Here's the full 5-year data set for the beach areas.

Looks like when we told you that 81% of Sand Section homes over 2 years had sold with cuts, we understated the issue from 2019, when the Sand saw 85% of all sold homes take a cut from the original asking price.

What a change from 2015-16, when only about half the properties sold needed to settle for less.

The suburban rock of MB west of Sepulveda, the Tree Section, saw something similar, if less dramatic.

Data show that three-quarters of Tree Section homes sold last year with a cut, about 10% higher than the three prior years.

Compare this chart with the one above tracking all sales citywide that took cuts, and you see that the Tree Section looked almost exactly the same for the past 4 years.

Now, as desirable as the Sand Section and Tree Section are, how do you think good ol' East Manhattan has been faring?

How about: The best of any region.

Start with a look at price cuts.

With 62% of homes sold taking a cut last year, East MB saw the lowest rate of cuts among real estate areas of Manhattan Beach.

Prior years were bumpier. Heck, 2016 saw more price cuts than 2019 in East MB, but other years were also generally lower than citywide trends or the fashionable Sand or Tree Sections.

Now let's see how many East MB homes got more than asking.

Wow, while the trend may be pointed down, the actual percentages are high.

In a year (2019) when the city saw only 14% of listings sell over asking, East Manhattan saw 23% of listings go higher.

And you can see that from 2017-2018, East MB also had a higher percentage of sales over asking than the city as a whole.

As you can imagine, the reasons for these trends citywide and the divergent results from specific areas trace back to a series of trends in the market and within areas. As a simplest point, Sand Section inventory has been running high, and East MB inventory low, a good reason why you'd see more cuts in one area and more over-asking sales in another.

At this time, we're fixing to update our Q3 2019 market report with year-end data and some updates for 2020.

It seems more important than ever to take an honest look at where all the trendlines have been pointing, even as, today, we find ourselves in strange times indeed, with our real estate market facing a lot of questions in the short term. Watch for updates.

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