MB Market Update for 9/30/18

By Dave Fratello | October 3rd, 2018

You're going to start hearing that local real estate is slowing down.

We're not going to avoid that conversation, which is out there already.

We'll look for data.

We've just now closed the books on 3 quarters of 2018, a reasonable marker for running some data.

But the first numbers we crunched don't tell such a bad story.

Look at the number of closed sales so far in 2018: 308.

That's down from 333 last year. Down by 8% in fact, which happened to be the number that popped into Dave's head as we were discussing this with clients the other day.

But that's down 8% comparing this year with the sugar-high year of 2017, which hit some peaks unexpectedly in Manhattan Beach real estate.

You can say two true things about MB's sales total so far:

1) We're lower than last year.

2) This year's YTD sales total is the second-highest of the past 5 years.

So, pick your spin.

Now, it's also true that inventory is much lower right now than at the same point last year. At 102, we had 20 fewer listings on the market on Sept. 30, 2018, than the 122 available on Sept. 30, 2017. (Here's last year's end-of-September market update.)

Fewer sales... could be a sign. But if there are also fewer houses for sale?

What we don't have today on the market is a glut, or burgeoning inventory at any rate. We're at the same level as this time in 2016.

There are lots more indicators we will look to in the coming days, to see if all the chatter has some basis. (The LA Times business section had this article last week with some anecdotes and data on the topic of possible slowing in the overall SoCal housing market.) You gotta watch mortgage interest rates, too.

We'll have more data soon.

Meantime, let's take a look at some notable sales from late September. Most of the action was in the Tree Section & Sand.

648 26th (5br/3ba, 2770 sqft.) drew offers right away for a very well-located custom 1990s house with a giant, sunny yard, and some updates.

The sale price of $3.015M was $16K over asking, a very healthy number for a home that had some compromises and less space overall than a typical Tree Section family home.

Also, a very remodelable 1980s Spanish on an oversized lot with pool at 3400 Palm (5br/4ba, 3330 sqft.) ended 5 months of drifting by finally closing at $2.475M, $220K under asking.

Finally, a resale of a 2014 build at 750 35th (5br/5ba, 3700 sqft.) came in at $3.250M. After paying $3.095M new in July 2015, the sellers did a ton of interior design, but tried to re-sell almost immediately. They then rented it out for a couple of years. This sale closes that saga.

In the Sand Section, we are glad to feature 2601 Alma (5br/5ba, 3650 sqft.) in part because Dave's clients bought it.

The 3-story 1960s home wants updates, and will get them, but there's no disputing the fundamental appeal of the home's 60-foot walkstreet frontage along the highest part of the 26th St. walkstreet. Large parts of the view are unblockable, and the location just up from Bruce's Beach and its park is great also. Grand View school is just a block away.

Though the property listed originally for $4.000M, the final sale price was $3.360M (-$640K / -16%). Due to the high start price and difficulty showing the property, marketing by an out-of-area agent, and perhaps other factors, it seems that this one was missed or ignored for quite a while. However, in the end there were multiple offers - a very delayed bidding war.

Also, what's not to love about the custom modern near the pier at 1204 The Strand (4br/5ba, 5375 sqft.)?

This one sold quickly, just 9 official DOM, for the asking price of $17.400M.

Curiously, this period also saw basically $1M worth of new price cuts to troubled 108 The Strand (5br/8ba, 6900 sqft.), which now sits at $15.999M.

If everything in local real estate went by price per square foot, 108 The Strand would now look like a steal. It's at $2,315/PSF, while 1204 The Strand just sold for $3,239/PSF.

In March 2017, neighboring 104 The Strand (5br/8ba, 6125 sqft.) sold for $18.400M and $3,005/PSF.

You may remember how the TV show agents for 108 The Strand debated pricing and wanted to go off the neighbor's $3,000/PSF to price at $19.995M. (If you don't exactly recall, take a refresher in our blog post about the televised pricing discussion.)

On a PPSF basis, it's now priced 23% lower, and it's one of 7 active Strand listings. (See them all here.)

Here's the rest of our local real estate market update report for the period ending 9/30/18: