MB Market Update for 6/1/16

By Dave Fratello | June 7th, 2016

When we captured data for our twice-monthly Market Update last week, inventory was consistent with recent levels, but it was just about to rise.

921 9th Street Manhattan Beach CASo our report as of June 1 shows 115 active listings, but we saw it climb to 123 by the weekend, when 921 9th St. (6br/5ba, 4900 sqft.) came to market asking $4.999M. (Inventory is at 117 on Tuesday.)

Either figure would be the highest we've recorded here at MBC on one of our market snapshots. Two weeks ago, we had 111.

We were at 63 homes for sale in Manhattan Beach at this time in 2015, so this year's trend of inventory hovering at nearly double last year's level continues.

The other day we were trying to explain the inventory trend to new clients. They had a reasonable question: Why is it so much higher now?

New construction explains it only part way. There are 24 active listings right now that were built in 2015-16.

That still means 28 other active listings – 44% above last year's level – aren't new.

Truth is, there's no simple answer. The trend of higher inventory took hold in Summer 2015, though nobody really noticed at the time.

We did graph it for this January 2016 post, wondering if the trend would continue this year. It did. Here's the chart we had then, going through year-end 2015.

Today, are prices higher, deterring buyers? Maybe.

Are prices higher, enticing more sellers to sell? Maybe.

Does more inventory lead buyers into a "wait and see" mode, thereby slowing the sales pace and increasing inventory further?

Why, yes, definitely. We hear it all the time. In at least this one way, it's clear that rising inventory can become a self-reinforcing trend. There's a very simple psychology to it.

Our market's not glutted and not crashing. The rest of the Southern California real estate market seems to be chugging along. Higher-priced coastal markets like Manhattan Beach don't typically lead the way to a housing down-cycle. 

617 Manhattan Avenue Manhattan Beach CAThis is still a market where a half-lot major fixer like 617 Manhattan Ave. (pictured) can sell for $4.250M, as it did during the period covered by our update here.

And it's still a market where a remodeled Spanish like 621 Marine (5br/4ba, 3070 sqft.) can sell for more ($3.240M) than new construction that's notably larger in the Tree Section like 2409 N. Poinsettia (4br/5ba, 3550 sqft.) at $3.100M.

1708 Elm Avenue Manhattan Beach CAIndeed, the only Tree Section home of 3000-3500 sqft. or so to sell under $3M in the past several weeks was 1708 Elm (4br/3ba, 3600 sqft.) at $2.850M. (Dave's clients got that amid multiple offers.)

Everything else similar from mid-March till now in the Trees has been over $3M.

One more sale worth noting here comes from the Hill Section.

873 9th Street Manhattan Beach CANew construction at 873 9th (5br/5ba, 5100 sqft.) came out last year at $4.999M. It had to work its way down to $4.200M to close a sale, also during this period.

What does that mean for the non-view side of the Hill?

Here's the rest of our local real estate market update report for the period ending 6/1/16:

  • 115 active listings as of 5/15/16 (+4 from 5/15/16)
  • 98 SFRs (+8)
  • 17 THs (-5)

See the inventory list as of 6/1/16 here, or see the MB Dashboard for up-to-the-minute data.

Active listings by region of Manhattan Beach in this report:

  • Tree Section31 actives (+1)
  • Sand Section: 42 actives (+4)
  • Hill Section12 actives (+1)
  • East MB30 actives (-1)

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 6/1/16."

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