MB Real Estate Inventory Hits 100+

By Dave Fratello | March 31st, 2016

A new peak was hit early Thursday, with Manhattan Beach real estate inventory hitting 101 homes for sale.

It's the first time in more than 50 months – since late 2011 – that buyers have had 100 or more choices.

There are many ways to say the same thing:

  • This is 66% more inventory than buyers saw last year at this time, when there were 61 homes for sale in all of Manhattan Beach.
  • This is double the inventory at the end of March 2014.
  • This is far more than in 2013, the first year of a chronic inventory crunch, when there were 42 listings at this time of year – a figure which dropped throughout April before rebounding.

In preparing this inventory graph, we had to change the scale from a max of 100, otherwise inventory would literally be "off the chart."

What might account for this steady increase in the number of listings on the market?

We took a quick look at the pace of sales. Since March 31 hasn't finished yet, we won't publish a second chart yet comparing against past years that are already fully in the books. But here's an initial conclusion: The number of closed sales on a 3-month timeframe is down 10% from last year, while on a 6-month timeframe, it's down 20%.

Now, if you've been following MBC's analyses closely, you know that fewer sales is not exactly new news. For all of 2015, Manhattan Beach saw fewer real estate sales – about a 14% drop year-over-year – but still saw the median home price rise 8%. (Two places to look back at the data are "Inventory Higher in 2015; Prices, Too" and "Sales Down, Prices Up So Far in 2015.")

In our December 2015 post, we asked why there were fewer sales, and hypothesized that it was mainly due to lower inventory:

"If there were an actual slackening of demand, you wouldn't see prices rising at the same time. It's a safe observation now that if more people would be willing to sell, we'd see more sales to match that loosening of supply."

What was that, Dave, about "more sales" expected along with higher inventory?

Before we bury it, this prediction might still work out over the course of the year.

The closed-sale data we're looking at now tend to lag somewhat. Escrows take 30-45 days, sometimes longer. Buyers have only been operating in this new environment of higher inventory and greater choice for a couple of months, and sellers have not necessarily adjusted yet.

The fundamentals are still good for buying Manhattan Beach real estate. But change is trying to come.

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