The drummer begins that little roll on the snare.
The crowd quiets. All eyes focus on the front of the room, the anticipation growing as the drumroll continues. You listen more closely, and it sounds like he's building to a crescendo. But is he?
He just keeps on with the drumroll. Tension is building, but turning to annoyance.
Thanks for sticking with our metaphor.
The drumroll, in the context of Manhattan Beach real estate, is the promise of new sales data that will finally give us glimpses of where this year is going.
And the data say...
There's not enough yet. A whopping 17 sales have closed in Manhattan Beach in the first 2 months of 2023.
What's more, only 6 of those closed sales involved deals negotiated within calendar year 2023. The rest came from late 2022.
The better news is that there were 24 pending sales in town as of 2/28/23. Two more were added in the first days of March. (Including our 533 13th.) It's those closings that will start to provide some market intelligence as to demand and pricing.
So, aren't the first two months of the year often pretty slow for closed sales?
Sure. But not this slow.
The 17 sales closing in January & February are less than half the level seen in all but one of the prior 15 years. And even the one somewhat sluggish year, 2008, saw 31 sales close in the same comparable period. (Super yucky 2009 even saw 35 sales!)
We are still seeing a little bit of the hangover from a very slow year for local home sales. Recall that 2022 saw 38% fewer sales (322 total) than the prior go-go year of 2021 (518). (See "Manhattan Beach Volume Drops $1.23B on 38% Fewer Home Sales.") Something closer to 400 annual sales is typical for MB.
That dropoff was due to a chronic shortfall in inventory, then a quick spike in mortgage rates that ended a 2-year party.
Out on the front lines today, we see more buyers out and in the market.
Maybe they hate the new rates, maybe they'll be cautious about what and when to buy, and maybe some are more skeptical about pricing, or inclined to try to time the market. That's all good. In a market in transition, there will be many colors of opinions. The first thing is, people are out and looking.
We've stated our contention here more than once, that prices in the second half of 2022 softened notably, with properties closing 6-10% below where they would have or "should have" earlier in 2022. It happened fast, but has not really shown up yet in median-price data. (We're still at nearly $3.1M.)
Here's a quick look at the 6 closings that were on sales negotiated within 2023:
317 8th - This was a walkstreet corner lot home, built in the 1950s and recently given a quick remodel within its roughly 1900 sqft.
It debuted in Feb. 2022 at $4.700M, re-listed once and cut price a total of 5 times.
It finally sold for $4.025M (-$675K from start).
The buyer instantly rented the home out for $10,500/mo.
2704 Laurel - This Tree Section custom modern build in 1988 was in and out of escrow.
It began at $3.299M and closed for $3.045M (-$245K / -7.7%).
The price drop is notable, but hardly an indicator for the Tree Section as a whole. The floorplan and design were simply a tough fit for many potential buyers, and the home could use updates.
3521 Pine - This single-level sorta-midcentury style home somewhat near Rosecrans began at $2.200M, and just sat.
When a buyer came, they took $500K off, closing it at $1.700M.
Did "the market" drop 23% like this price? Or was the original ask much too ambitious?
We'll say this for sure: The home would have done a lot better a year earlier.
22 Malaga Place and 26 Santa Cruz Ct. - These two Manhattan Village units moved quickly.
The single-level Plan 5 at 22 Malaga got asking price: $1.399M.
26 Santa Cruz actually set a new record high price for the tri-level, 2 bedroom Plan 1 at $1.450M.
No softness in the Village, perhaps.
904 Highview - This sizable 3 bedroom custom architectural makes the absolute most of its ocean views. While it sports a 1996 build date, it had enjoyed recent high-end renovations.
They didn't do too bad on price, either.
Asking $7.499M, they got $7.250M, and fast.
Now recap these one more time and you'll see how little they really tell us about the market so far this year.
Two unique architectural homes, one at $7M+ and one in the Tree Section that most Tree Section buyers couldn't make work.
Two Village 2br townhomes.
A flipper remodel on a walkstreet, and a pretty typical 3br Tree Section house in a C+ location.
That's not a very broad survey of the market. Drumroll continues.
Off-market note: Early this year, three sales in the Tree Section closed in late January or early February that were all arranged off-market. Only one was more than 30 days after the first of the year. We are not counting any as 2023-negotiated sales. They are 632 35th ($4.650M), 571 31st ($3.950M) and 3112 Elm ($2.900M).
Here's the rest of our local real estate market update report for the period ending 2/28/23:
> 51 active listings as of 2/28/23 (+2 from 2/15/23)
> 37 SFRs (+2)
> 14 THs (flat)
See the Inventory list as of 2/28/23 here, or see the MB Dashboard for up-to-the-minute data.
Active listings by region of Manhattan Beach in this report:
> Tree Section: 6 actives (flat)
> Sand Section: 28 actives (+1)
> Hill Section: 9 actives (+1)
> East MB: 8 (flat)
We're also providing a report on closed sales by region of MB.
Sales data, including PPSF for all properties, are organized by sub-region of Manhattan Beach.
Here's a link to the spreadsheet: "MB Pending/Sold as of 2/28/23".