Pending Sales in Manhattan Beach Skew Pricier

By Dave Fratello | May 12th, 2020

We have marveled at the (perhaps) surprising jump in the Manhattan Beach median home price recently.

How could it be rising in the middle a pandemic? Setting records!

At a time when sales activity has been on a lifeline?

We've crunched some more numbers, and concluded this: The median price is more likely than not to continue rising for a bit.

That's because most homes in escrow now are priced above the current median price of $2,499,500. If most closings are above that number, the median will rise.

What we see now is an unusually high proportion of higher-priced properties with deals.

Let's do a year-over-year comparison, starting with 2019 data.

Last year at about this time, the overwhelming majority of homes in escrow (84%) were priced below $3.5M.

And 45% of the properties under contract were priced under $2.500M, which happens to be the current median price.

What a difference a year makes.

As we look at 2020 data, there's one drastic change: Many fewer homes in escrow under $2.500M.

Last year: 45%.

This year: 27%.

The biggest crunch: A drop by 14% in escrows on properties priced $1.5M-$2.5M. Like it or not, that's more or less the "entry level" price for Manhattan Beach.

So right now, 73% of homes in escrow were listed above the current median price. Even if all don't close, you can still see why we're saying it's more likely that the median has to rise.

Notably, the proportion of sales in the range of $2.5M-$3.5M remained almost totally steady, 39% last year and 38% this year.

At the high end, there's been growth.

Above $3.5M last year, we found "just" 16% of the active deals.

This year, it's 34%, basically a doubling.

You can guess at any number of reasons why buyers now making deals skew toward the higher end of the price spectrum.

The median price is calculated based on the mix of closed sales over a period of time. (We use 12 months.) The median is the exact middle point: Half of all sales are above that number, half are below. So if most of the new escrows opening up are on properties priced well above the median, and most close, the median's going to keep rising.

In our recent median-price report, we noted that we had looked at recently failed escrows. More of the failed escrows, too, had been priced higher than the current median price. This made it possible, at least, to declare that the median wasn't rising because lower-priced deals were failing.

Now we see more reason to expect continued increases. There are fewer lower-priced deals.

This median price rise would occur even if there are fewer sales, and even if "typical" prices for similar properties seem to be dropping.

If we get to that point with May, June and July sales, for instance, it may become harder to see what's going on in the market as a whole.

A rising median price suggests strength and scarcity, and an upward trend suggests most homes are getting more expensive. Let's see how things look as we close out the next few months.

Right now, even as real estate is just tentatively "opening up" again, we might begin to worry a bit about demand.

Do we have a problem with buyers looking at the sub-$2.5M price point?

Let's give this a few-to-several weeks to play out in an oh-so-slightly-more-normal market before we assume so.

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Nerdy notes:

- We scrubbed both the 2019 and 2020 data of a few "zombie" escrows, properties that remain in the MLS database as "pending" sales but have been "stuck" there for many, many, many months, over a year in one case, for reasons unknown.

- There were 30 current escrows as of May 12, 2020, and 51 escrows as of May 15, 2020, used for the charts above.

- Crystal ball time: There are 19 sales between $2.500-$2.600M right around today's median point, and which would be factors in any median price calculation at the end of May. This is a way of saying any rise may be modest, within $100K.

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Current Escrows in Manhattan Beach

(this data is constantly updated and may not be limited to pending escrows as of the date of the original post)

ADDRESS BD/BA SQFT LOT PRICE $PSF DOM START $ START
Address 2704 Laurel Avenue BD/BA 4br/4ba SQFT 3200 sqft LOT 4644 PRICE $3,150,000 $PSF $984 DOM 120 DOM START $ $3,299,000 START 10/05/22
Address 904 Highview Avenue BD/BA 3br/4ba SQFT 3643 sqft LOT 6761 PRICE $7,499,000 $PSF $2,058 DOM 11 DOM START $ $7,499,000 START 01/22/23
Address 769 29th Street BD/BA 5br/4ba SQFT 4457 sqft LOT 5774 PRICE $3,799,000 $PSF $852 DOM 8 DOM START $ $3,799,000 START 01/25/23
Address 210 Larsson Street BD/BA 3br/2ba SQFT 1340 sqft LOT 5158 PRICE $1,985,000 $PSF $1,481 DOM 3 DOM START $ $1,985,000 START 01/26/23
Address 22 Malaga Place BD/BA 2br/2ba SQFT 1449 sqft LOT 3529 PRICE $1,399,000 $PSF $965 DOM 16 DOM START $ $1,399,000 START 01/17/23
Address 461 35th Street BD/BA 3br/1ba SQFT 1034 sqft LOT 2708 PRICE $2,199,000 $PSF $2,127 DOM 251 DOM START $ $2,999,000 START 05/27/22
Address 904 Highview Avenue BD/BA 3br/3ba SQFT 3643 sqft LOT 6761 PRICE $7,499,000 $PSF $2,058 DOM 20 DOM START $ $7,499,000 START 01/13/23
Address 413 5th Street BD/BA 5br/7ba SQFT 4200 sqft LOT 2703 PRICE $7,750,000 $PSF $1,845 DOM 7 DOM START $ $7,750,000 START 01/26/23
Address 26 Santa Cruz Court BD/BA 2br/2ba SQFT 1474 sqft LOT 1799 PRICE $1,474,900 $PSF $1,001 DOM 39 DOM START $ $1,499,900 START 12/25/22
Address 1658 Ruhland Avenue BD/BA 2br/1ba SQFT 819 sqft LOT 7458 PRICE $1,900,000 $PSF $2,320 DOM 66 DOM START $ $2,000,000 START 11/10/22
Address 3316 Vista Drive BD/BA 4br/3ba SQFT 2156 sqft LOT 2697 PRICE $2,995,000 $PSF $1,389 DOM 92 DOM START $ $3,295,000 START 10/20/22
Address 3521 Pine Avenue BD/BA 3br/2ba SQFT 1664 sqft LOT 4638 PRICE $2,200,000 $PSF $1,322 DOM 46 DOM START $ $2,200,000 START 11/17/22
Address 641 13th Street BD/BA 4br/3ba SQFT 1803 sqft LOT 2113 PRICE $2,599,000 $PSF $1,441 DOM 92 DOM START $ $2,900,000 START 10/05/22
Address 3408 Maple Avenue BD/BA 5br/6ba SQFT 3620 sqft LOT 4640 PRICE $3,895,000 $PSF $1,076 DOM 72 DOM START $ $3,989,000 START 10/11/22
Address 1300 11th Street BD/BA 5br/5ba SQFT 4007 sqft LOT 7863 PRICE $4,995,000 $PSF $1,247 DOM 158 DOM START $ $4,995,000 START 08/27/22
Address 1305 Faymont Avenue BD/BA 2br/1ba SQFT 884 sqft LOT 5426 PRICE $1,500,000 $PSF $1,697 DOM 45 DOM START $ $1,500,000 START 10/03/22
Address 34 Bermuda Ct BD/BA 3br/3ba SQFT 2077 sqft LOT 3163 PRICE $1,799,000 $PSF $866 DOM 47 DOM START $ $1,925,000 START 06/15/22
Address 1825 Pacific Avenue BD/BA 4br/5ba SQFT 3350 sqft LOT 4778 PRICE $4,250,000 $PSF $1,269 DOM 0 DOM START $ $4,250,000 START 12/27/21

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