MB Median Prices Rocket to New High in 2014

By Dave Fratello | January 9th, 2015

From the department of unsurprising – and yet still shocking – news, we have this update.

Manhattan Beach real estate hit an all-time high for median home prices in 2014: $1,900,000.

Maybe you saw a new peak coming? Still, the data are pretty incredible.

The rocket-fueled jump from only the prior year, 2013, was an amazing 17%. (Well, 16.7% to be exact.)

That 17% year-over-year figure suggests monthly home price appreciation of 1.4%.

Some other angles to see in these data about our booming market:

  • The MB median price is up 34% in just 2 years;
  • The median price jumped exactly $500K since 2010;
  • From recent trough (2009) to current peak, the median price is up 38%; and
  • This new record high median price bests the prior, 2007 peak, by 11.7%.

All of these data come from MLS-reported sales of all residential properties in MB in the years 2004-2014. That means SFRs, townhomes and condos, in all parts of the city (west and east of Sepulveda). Here's the full run of data going back the full 11 years:

Now, the story is slightly less dramatic if we look only at data for SFRs, although the new peak set in 2014 is a bit higher at $1,910,000:

Here at MBC, we do tend to prefer to compare SFR data because there are fewer quirks to the data than the complete set with condos and townhomes.

An example: The 2013 median price for SFRs was $1,725,000, or nearly $100K higher than the median for all properties citywide.

That means the jump year-over-year to 2014 was less dramatic: 11% year-over-year, instead of 17%. (Or, really, 10.7% instead of 16.7%.)

The jump in SFR median prices for the 2 years from 2012-2014 was "only" 31%, less than the 34% seen in the data for all properties.

And finally, while the 2014 median price figure is a new high for MB, it's up "only" 7.6% over the 2007 peak, not the 11.7% jump seen in the broader data set.

These caveats, though, don't take much away from the big picture:

  • 2014 saw huge jumps even from 2013's high heights;
  • 2014 carved out new peak median prices for MB, no matter how you slice the data; and
  • Even the most "conservative" cut of data suggests monthly price appreciation of about 1.3%.

The last time we looked at comparative median price data, it was in September 2014. We were mainly focused on trough-to-peak comparisons. (See "How Prices Have Bounced Since '09.")

At that time, we found median prices were up 26-29% from 2009. However, anecdotal cases of same-house sales were showing much higher price increases: 43%-64%.

The lesson there: Whatever the median price trends are, you'll often find a different story with individual properties.

Now, everyone wants to know if this kind of appreciation we are seeing is sustainable.

All we really know is that the past 2 years have been a heck of a rally, and there are some interesting fundamentals driving it: Among them would be low inventory, ongoing ultra-low interest rates and – more amorphously, but still importantly – the arrival of buyers bringing even higher levels of wealth and income than those who came before.

Obviously, 15%+ per year appreciation cannot continue indefinitely, and maybe not for long. But something in those fundamentals would need to change before we might expect a slowdown.

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Nerdy note: All sales data and median prices were checked and re-checked, including removal of duplicate sales entries in the various data sets that could have changed median prices. Yes, we really do flyspec the datasets that carefully.

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