Is MB Inventory Often 'Top Heavy'?

By Dave Fratello | May 21st, 2019

We posed a question earlier in the month and wanted to come back to it.

The question was whether the Manhattan Beach real estate market is currently "top heavy," possibly featuring more high-priced listings than demand can absorb. (See "Top Heavy? More Than 1/3rd of MB Listings Are $4M"," May 7.)

At the time, we cut the market into sub-$4M and over-$4M tiers, finding that 36% of active listings were priced in that upper tier.

Wasn't it curious, though, that in 2018, only 15% of sales had closed over $4M?

This was a hint that supply might be out of line with demand in 2019, but we were careful to say that we needed another look at the numbers.

With a new data run, we find something illuminating: Higher-end inventory seems to often swell quite a bit above the observed percentage of sales that eventually close at the higher end.

In other words, maybe it isn't so strange to find a disconnect, where a lot of the active market is higher-priced, even though a smaller percentage of sales by year end will actually fall in that higher-priced tier.

Consider some data. (These charts were produced for a forthcoming MBC report on the Manhattan Beach real estate market, which you'll hear more about soon.)

First, let's look at last year's sales totals for all of Manhattan Beach.

The two green areas show the percentage of 391 sales in Manhattan Beach last year that were priced at $3.5M and above.

It's a total of 21%, and it is the highest share ever recorded in Manhattan Beach.

You can see that the "entry level" of homes, priced up to $1.5M, made up just 15% of sales last year.

In 2012, that "low" price tier saw 55% of sales locally. Big change.

Take a look at how the high end has grown as a share of the local housing market.

In just the past 5 years, sales over $3.5M have doubled to 20-21%.

This market segment has grown while the lower end has shrunk considerably.

We kept the left-edge scale for this chart at 60% for a reason.

That's because we'll now use the same scale to look at inventory.

As of May 15 each year, the share of active inventory priced over $3.5M has always been considerably higher, in the 30s and 40s, and fully 50% as of May 15, 2019.

(These figures all come from our published MB Market Updates from each year.)

Some observations now.

First, it's still remarkable that half of the Manhattan Beach market is priced over $3.5M today. Standing on its own, that's an amazing stat.

Second, as we stated in the lead-up to these charts, it appears to not be very strange to have a disconnect between inventory levels by price tier and closed sales, at the end of the year, by price tier. Looking back, it seems that there's always a lot more for sale at the high end than one might expect.

Third, we'd like to know, as you might: Where the heck do all of these $3.5M+ listings go, if they're not sold?

It's possible this is a mid-Spring phenomenon. That is, sellers are all bringing out their higher-end offerings during prime time, hoping to sell quickly. But the reality is that pricier listings always take longer to sell. This may be an artificial "bump" in inventory at this time of year that works itself out by year-end.

Meantime, lots more homes priced under $3.5M are selling quickly, not sitting around on the market.

There's also a chance that higher-priced listings are disproportionately likely to cancel after failing to sell.

We'll take another look at these data and track some listings in a future report.

Meantime, enjoy a look at the latest $3.5M+ listings in Manhattan Beach. (At the time this post went live, there were 62 active; we can only display 48 within this blog post. Email subscribers will need to view this post online to see the listings.)

Newest Manhattan Beach Home Listings Priced $3.5M+

ADDRESS BD/BA SQFT LOT PRICE $PSF DOM START $ START
Address 3516 Manhattan Avenue BD/BA 4br/4ba SQFT 2570 sqft LOT 3498 PRICE $4,499,000 $PSF $1,751 DOM 2 DOM START $ $4,499,000 START 01/16/20
Address 440 6th Street BD/BA 6br/6ba SQFT 4144 sqft LOT 2700 PRICE $5,995,000 $PSF $1,447 DOM 11 DOM START $ $5,995,000 START 01/07/20
Address 3203 Vista Drive BD/BA 5br/5ba SQFT 3178 sqft LOT 1751 PRICE $4,200,000 $PSF $1,322 DOM 23 DOM START $ $4,200,000 START 12/26/19
Address 124 38th Place BD/BA 3br/4ba SQFT 1920 sqft LOT 1353 PRICE $3,500,000 $PSF $1,823 DOM 33 DOM START $ $3,500,000 START 12/16/19
Address 659 18th Street BD/BA 4br/3ba SQFT 4037 sqft LOT 6260 PRICE $4,499,000 $PSF $1,114 DOM 38 DOM START $ $4,499,000 START 11/14/19
Address 216 13th Street BD/BA 5br/5ba SQFT 4620 sqft LOT 2706 PRICE $7,999,000 $PSF $1,731 DOM 44 DOM START $ $7,999,000 START 12/05/19
Address 724 13th Street BD/BA 6br/7ba SQFT 4844 sqft LOT 2999 PRICE $5,495,000 $PSF $1,134 DOM 44 DOM START $ $5,495,000 START 08/21/19
Address 308 20th Pl (aka 309 20th Street) Place BD/BA 5br/5ba SQFT 4200 sqft LOT 2709 PRICE $6,995,000 $PSF $1,665 DOM 46 DOM START $ $6,995,000 START 12/03/19
Address 217 21st. Place BD/BA 3br/4ba SQFT 1964 sqft LOT 2700 PRICE $3,850,000 $PSF $1,960 DOM 58 DOM START $ $3,850,000 START 11/21/19
Address 216 Marine Avenue BD/BA 3br/4ba SQFT 1951 sqft LOT 2710 PRICE $3,975,000 $PSF $2,037 DOM 58 DOM START $ $3,975,000 START 11/21/19
Address 849 12th Court BD/BA 5br/6ba SQFT 3600 sqft LOT 5018 PRICE $3,795,000 $PSF $1,054 DOM 63 DOM START $ $3,795,000 START 11/16/19
Address 712 Highland Avenue BD/BA 3br/4ba SQFT 2101 sqft LOT 3326 PRICE $3,799,000 $PSF $1,808 DOM 67 DOM START $ $3,799,000 START 11/12/19
Address 504 1st Street BD/BA 5br/7ba SQFT 5400 sqft LOT 5293 PRICE $6,499,000 $PSF $1,204 DOM 68 DOM START $ $6,499,000 START 10/31/19
Address 676 18th Street BD/BA 6br/8ba SQFT 5843 sqft LOT 6434 PRICE $6,650,000 $PSF $1,138 DOM 69 DOM START $ $6,650,000 START 11/10/19
Address 3301 Pine Avenue BD/BA 5br/7ba SQFT 5723 sqft LOT 9283 PRICE $6,750,000 $PSF $1,179 DOM 80 DOM START $ $6,750,000 START 10/30/19
Address 600 Anderson Street BD/BA 3br/3ba SQFT 2025 sqft LOT 7151 PRICE $3,649,000 $PSF $1,802 DOM 88 DOM START $ $3,649,000 START 10/22/19
Address 1801 Oak Avenue BD/BA 6br/5ba SQFT 5251 sqft LOT 4484 PRICE $4,999,000 $PSF $952 DOM 99 DOM START $ $4,999,000 START 10/11/19
Address 3419 Bayview Drive BD/BA 4br/4ba SQFT 3385 sqft LOT 1891 PRICE $3,999,995 $PSF $1,182 DOM 109 DOM START $ $4,300,000 START 09/19/19
Address 2016 Ocean Drive BD/BA 5br/6ba SQFT 5739 sqft LOT 2698 PRICE $14,000,000 $PSF $2,439 DOM 131 DOM START $ $14,000,000 START 09/09/19
Address 501 N 18th Street BD/BA 5br/8ba SQFT 6126 sqft LOT 6688 PRICE $7,150,000 $PSF $1,167 DOM 139 DOM START $ $7,150,000 START 09/01/19
Address 225 25th Street BD/BA 5br/4ba SQFT 2563 sqft LOT 2708 PRICE $4,399,000 $PSF $1,716 DOM 151 DOM START $ $4,900,000 START 08/20/19
Address 224 16th Street BD/BA 5br/5ba SQFT 4224 sqft LOT 2698 PRICE $7,195,000 $PSF $1,703 DOM 154 DOM START $ $7,295,000 START 08/17/19
Address 328 19th Street BD/BA 5br/5ba SQFT 4107 sqft LOT 2698 PRICE $5,395,000 $PSF $1,314 DOM 156 DOM START $ $5,795,000 START 07/29/19
Address 3400 The Strand BD/BA 5br/6ba SQFT 5478 sqft LOT 3502 PRICE $15,900,000 $PSF $2,903 DOM 159 DOM START $ $16,750,000 START 08/12/19
Address 116 4th Street BD/BA 4br/5ba SQFT 4226 sqft LOT 2692 PRICE $15,900,000 $PSF $3,762 DOM 165 DOM START $ $15,900,000 START 08/06/19
Address 127 16th Street BD/BA 5br/3ba SQFT 2157 sqft LOT 2700 PRICE $5,999,000 $PSF $2,781 DOM 177 DOM START $ $7,200,000 START 07/25/19
Address 460 29th Street BD/BA 4br/6ba SQFT 3852 sqft LOT 2708 PRICE $3,995,000 $PSF $1,037 DOM 177 DOM START $ $4,200,000 START 07/25/19
Address 1246 10th BD/BA 6br/6ba SQFT 7000 sqft LOT 7500 PRICE $5,295,000 $PSF $756 DOM 187 DOM START $ $5,495,000 START 07/15/19
Address 939 Duncan Avenue BD/BA 4br/4ba SQFT 3947 sqft LOT 4500 PRICE $3,895,000 $PSF $987 DOM 228 DOM START $ $3,895,000 START 06/04/19
Address 4122 The Strand BD/BA 5br/5ba SQFT 4154 sqft LOT 3503 PRICE $6,700,000 $PSF $1,613 DOM 231 DOM START $ $7,200,000 START 06/01/19
Address 4117 The Strand (aka Ocean Dr) Drive BD/BA 5br/3ba SQFT 2804 sqft LOT 3500 PRICE $5,999,000 $PSF $2,139 DOM 231 DOM START $ $6,500,000 START 06/01/19
Address 577 31st Street BD/BA 5br/6ba SQFT 4369 sqft LOT 5025 PRICE $4,499,000 $PSF $1,030 DOM 312 DOM START $ $4,799,000 START 03/12/19
Address 1000 The Strand BD/BA 9br/8ba SQFT 5967 sqft LOT 4979 PRICE $25,900,000 $PSF $4,341 DOM 326 DOM START $ $25,900,000 START 02/26/19
Address 2304 The Strand BD/BA 3br/3ba SQFT 2360 sqft LOT 3497 PRICE $7,950,000 $PSF $3,369 DOM 340 DOM START $ $9,950,000 START 01/18/19

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