The health and activity of the Manhattan Beach real estate is often driven by sales at the higher end.
Buyers for the priciest Manhattan Beach homes are something of a bellwether of overall economic health and confidence. They're often the first to benefit, and to benefit the most, when positive trends take hold. In turn, the willingness of high-end buyers to invest in local properties sends a signal that "the water's fine," and that others can come in.
We noted in late Summer this year that our market appeared to be "unlocking," and that high-end buyers appeared to be leading the way. (See "MB's Higher End Is Moving," and take note of the July sale on The Strand that set a record for Manhattan Beach.)
On a much broader note, recent statewide market stats and forecast data produced by Jordan Levine, chief economist of the California Association of Realtors, pointed to the same sort of phenomenon. Levine titled one slide, "The Top End of the Market Is THE Leading Indicator," and his data showed that the one and only category of SFR sales to consistently increase throughout 2024 – on a year-over-year basis – was the highest-priced category. (Homes priced over $2M.)
Being the nerdy sort, we decided to dig into much greater levels of data on this phenomenon, looking not only at Manhattan Beach, but several other markets. (Don't worry, we've got charts – you don't have to read it all!)
One question we explored was whether the second 5 months of the year had been more, or less, active at the "high end" in other markets, like they clearly have been in Manhattan Beach.
In short, we did find that in luxury markets as diverse as Pacific Palisades, Brentwood, La Cañada Flintridge, San Marino and Laguna Beach, the period of June-October did have more high-end sales than the first 5 months of the year. This was true also of Encino, a market with a luxury segment, and where the whole city's market has generally been on fire.
Our research did not show more high-end activity in Redondo Beach or Newport Beach in the June-October period.
The sweep of the data does seem to confirm that higher-end buyers in many markets are keeping those markets more active, lifting all boats.
Read along for our charts and further comments.
Manhatttan Beach Sees 50% Growth in High End Sales
This story starts at home.
This scatter plot shows every sale in Manhattan Beach from Jan. 1-Oct. 31, 2024.
Within the shaded grey area, you have all the sales we deemed to be "higher end" sales, those at 1.5 times the median price or higher. In Manhattan Beach, the median as of Oct. 2024 was $2.900M, so the 1.5x+ sales were all at $4.350M or above.
From Jan. 1-May 31, there were 26 sales at $4.350M or higher; from June 1-Oct. 31, there were 40 such sales, a rise of more than 50%.
Look again at the dots in that shaded area. You'll also see that every Manhattan Beach sale over $8.000M occurred after June 1. That includes 3 at, or just over, $14M, and 2 more over $20M.
When we were trying to tell y'all this Summer that the high end was taking off, well, heck, it's all those "dots" we're talking about.
Because every market has a different prevailing price point, we're going to stick with using this "1.5x median" yardstick to determine which sales to call "higher end" sales for every market – using the current median price for each one.
Rancho Palos Verdes Doubles High-End Sales
Things got busy up on the Hill around the same time as things heated up in Manhattan Beach.
The market in Rancho Palos Verdes doesn't have quite the extremes possible in Manhattan Beach, but luxury homes did sell at a faster clip from June-October than they had in the first part of the year.
With a median home price of $1.728M for the town currently, we defined "higher end" sales as those priced at least 1.5x that value, or $2.592M or above.
On that basis, RPV more than doubled such sales in June-October, with 23 total, against 11 in January-May.
These included 5 sales above $4.000M, compared to just 2 in the first part of the year.
Pacific Palisades Sees a Little Bump
Even if you don't visit Pacific Palisades much, you can recognize some of what the area has in common with our market.
Their median price in Pacific Palisades is just a tad higher than MB's at $3.137M, and their sales volume to date is quite comparable (211 in the Palisades versus 259 in MB).
Not as well-known: The Palisades was the only luxury market we found to have suffered a 10% drop in the median home price for 2023, just like Manhattan Beach did. They're bouncing back fine.
Like MB, the Palisades also generates a few huuuuuge sales on elite properties, with one at $32.300M.
The second five months of the year were slightly busier at the high end (1.5 times median), with 30 sales closing, compared with 28 in the January through May period.
San Marino Racks Up Several More High-End Sales
The exclusive little hamlet of San Marino may have relatively few sales – just under 100 during the study period here – but it's a mighty little market nonetheless.
The median price in San Marino is now $2.910M, nearly equal to Manhattan Beach.
Therefore, we defined the "higher end" for the town as sales of $4.365M and above.
The contrast between halves of the year in San Marino is stark. There were 15 of these higher-end sales from June-October, besting the limited 6 such sales before May 31.
Brentwood Benefits in Summer and Fall
Despite a comparatively modest median home price ($2.132M), Brentwood is home to lots of large and pricey properties.
For our purposes, here, we defined higher-end sales as any priced $3.200M and above (1.5x the median).
When you scrutinize the "dots" here, you can see that many of these "higher end" sales are, actually, pretty darned "high end," priced at or above $4M, with many at $6M, $8M, $10M or higher.
The proportion of such higher sales is much higher in Brentwood than other areas, representing about 1/3rd of all sales. (Much lower-priced inventory, including lots of condos under $1M, make up a chunk of sales.)
There were 49 "higher end" sales in June-October in Brentwood, a jump of 8 over the January-May period, meaning the latter part of the year was somewhat busier.
La Cañada Records a Healthy Bump
The bedroom community of La Cañada Flintridge compares favorably to Manhattan Beach, inasmuch as it's largely a very safe suburban area with homes at comparable prices.
The median price right now in La Cañada is $2.498M, and sales volume was around 140 through Oct. 31, both figures being a step below MB, despite whatever the rough similarities in our markets.
The higher end has been busier here, too, with 17 sales at 1.5 times the median ($3.600M) or higher. That was a jump of 6 such sales over the Jan. 1-May 31 period.
Where the First Half Was Busier for High-End Sales
We ran our analysis here for all of the markets noted above, plus three that didn't pan out.
Nearby Redondo Beach saw 38 sales at 1.5x median through May 31, but only 33 from June-October.
Up on the Hill, Palos Verdes Estates saw a decline from 18 sales at 1.5x median in the first part of the year to 9 in the second half.
Newport Beach declined from 82 higher-end sales through May to 66 such sales in June-October.
Data Limitations, Different Stories
We had to make some decisions about what to look for and report.
Mainly, we were looking for patterns similar to what we've seen in Manhattan Beach, in other markets that could be seen as comparable.
We compared two five-month periods, but was that a fair comparison? January and February often are the slowest months of the year for closings.
Why not two six-month periods? Well, it's too early here within 2024!
And is 1.5x the median price the right way to define "higher end" sales?
We can tell you that the analysis was not as clear with 2.0x the median as a basis. There was less data to work with (due to fewer sales), and the results were "noisier."
Still, we established a pattern of sorts here – the later months of the year clearly have been busier at higher price points. We certainly did not detect any kind of a dropoff, as we might expect if we ran the same kind of numbers on, say, 2022, when there was a clear crash in market activity in the second half.
So now, rub those hands together, let's keep cheering for those higher-end buyers, and hope they'll keep the momentum up to inspire the rest of the market.
