Lower End Deals Adding Action in Market

By Dave Fratello | May 27th, 2020

When the stats and the outlook change, we'll tell you.

About two weeks ago, we posted statistics about the Manhattan Beach real estate market showing that the properties in escrow were mostly higher-end properties, those priced above the median price of $2.500M. (See "Pending Sales in Manhattan Beach Skew Pricier.")

In fact, 73% of homes in escrow at the time were above the median, a big imbalance compared to prior years.

668 36th Street Manhattan Beach CANow, it's just 53% of homes in escrow above $2.500M.

The story behind the numbers is that buyers at "lower" price points (it's all relative!) have been the ones inking deals in Manhattan Beach over the past two weeks. (Pictured here is 668 36th, a 3br/3ba, 2150 sqft. remodel on a corner in the Tree Section, listed at $2.199M, which just made a fairly quick deal.)

Take a quick look at the deals posted just since our mid-May blog, newest deal first (email subscribers, please view this post online):

ADDRESS BD/BA SQFT LOT PRICE $PSF DOM START $ START
424 S Meadows Avenue 3/2 1529 6164 $1,699,000 $1,111 69 $1,799,000 02/25/20
668 36th Street 3/3 2150 4550 $2,199,000 $1,023 15 $2,199,000 05/11/20
1151 Lynngrove Drive 5/3 2543 5677 $2,000,000 $786 17 $2,000,000 05/09/20
1157 6th Street 5/4 4292 7502 $3,375,000 $786 7 $3,375,000 05/19/20
1525 Artesia Boulevard B 3/3 1422 13465 $969,000 $681 24 $969,000 04/18/20
1200 Magnolia Avenue 2/2 1271 4899 $1,499,000 $1,179 13 $1,499,000 05/13/20
3004 The Strand 4/4 3348 3489 $9,495,000 $2,836 0 $9,495,000 04/13/20
129 Moonstone Street 3/4 2143 1349 $2,485,000 $1,160 61 $2,485,000 03/06/20
1520 Manhattan Beach Boulevard B 2/2 1095 9894 $799,000 $730 53 $850,000 04/03/20
3617 Elm Avenue 3/2 1200 5097 $1,699,000 $1,416 20 $1,699,000 05/06/20
1550 5th Street 5/6 5964 7505 $3,899,000 $654 31 $3,899,000 04/25/20
8 Fairway Drive 2/2 1449 3415 $1,495,000 $1,032 11 $1,495,000 05/13/20
794 27th Street 5/4 3077 4436 $2,649,000 $861 66 $2,689,500 02/14/20

(You can click any address above to see property details.)

You'll quickly see that out of these 13 new deals, only 4 are on properties priced above the median.

It is as if the market quickly began re-balancing, filling in as more "affordable" properties found buyers (heck, two are under $1M!).

Our chart here shows the recent change in the proportions of recent sales (new escrows) by price.

Mainly, we'd focus your eyes on the bottom of the chart.

The bottom half is properties priced under $2.5M. There weren't many of those pending in the May 13 sample on the right.

Today (left pie chart), it's almost half under $2.5M.

Properties priced $3.5M+ still make up 27% of the pending sales. It's somewhat more than you would expect based on typical rates for closed sales. For instance, 20% of all 2019 sales were over $3.5M. But that 27% now is lower than the really odd 34% just 2 weeks ago.

You should never make judgments about a market based on any 2 weeks' worth of data, but. But.

But, it was possible to craft a hypothesis two weeks ago that "only" or "mostly" higher-priced properties were attracting buyers here, as the COVID situation prevailed but real estate seemed to be opening up, while, at the same time, perhaps the more typically busy $1.5-$2.5M range was suffering.

The last two weeks or so have pushed away any such hypothesis. Buyers are making deals at all price points.

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Nerdy note: Soon after this post was first published, an alert reader asked if these 13 new deals in 2 weeks represent a substantial quickening of the pace of new escrows. New deals have been sputtering along at a record-low pace for weeks, including 8 per 2-week period in April and 10 in the first half of May.

The answer: feels like it, but the 2-week period of May 13-27 doesn't align perfectly with the first half/second half data captures that we normally do for our market updates. Watch this space in the first couple of days of June for our May 31 update.

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