If you're a client of our real estate practice, Edge Real Estate Agency, you've been hearing Dave say for a few weeks: This year, it's going to be a Summer market.
What does that mean, and why is it different?
Let's start with the fact that there is a typical seasonality to the Manhattan Beach real estate market:
- We see the most listings and sales activity from March-May, or, more broadly, February through June. That's the Spring market.
- Summer is often relatively quiet, although plenty of listings do come out, and buyers who need to make a move for the school year are out in force.
- Once school returns and Labor Day comes, we have another little burst, the second-busiest time of year, with more listings and sales.
That's typical. But the last 2-3 years haven't been typical.
So, of course, 2022 is going to go off and do things its own way.
We began this year with unusually cramped inventory. It's been a significant problem all year.
You can see how 2022 stacks - or pales - in comparison to other years in this chart of inventory.
By May 15, we were at less than half last year's inventory at the same time of year, and obviously about a third or less of inventory levels typical of recent years.
You can see how the yearlong trend is so weak, yet consistent.
And look at that yellow line. That's inventory for 2021. It became anemic by midyear last year, trending down the whole time.
It's almost like... there was a warning of some kind in the data.
Here's another chart just focused on May 15 inventory levels.
This just emphasizes the point. It's been a hard market for buyers all year.
Each year, it seems that local home inventory rises and remains steady throughout Summer.
Look at that big chart above again. With the notable exception of 2021, inventory tends to hold at its highest levels of the year throughout Summer. (This was even truer when we had 10 years' worth of data in the same chart, but we did trim that back to make it readable.)
So as we approach Summer here in Manhattan Beach in 2022, should frustrated buyers be optimistic?
Yes, we think so.
Immediately after May 15, there was a burst of inventory. We got as high as 46 active listings, for about 10 minutes. (The figure is at 43 as of this writing.)
Just as significantly, we've noted among sellers over the past 6-8 weeks or so, the vast majority are planning Summer moves for personal and family reasons. (End of school, etc.)
That's perfectly normal, and a good sign. Something normal is happening. People who are ready to move are choosing to sell. There should be options for buyers who are active in the market.
Contrast that with the ebbing Spring market, which had far fewer willing sellers, for reasons that no one has really seen fit to explain. Conditions for sellers were great. But people didn't want to make a move, anywhere. (Low real estate inventory has been a problem on in every market at every level this year, just look it up.)
We're going out on a limb here.
When we say, "This year, it's going to be a Summer market," what we mean is, an unusually large portion of sales for 2022 are likely to result from listings and sales made during June-August. It's a prediction. (Uhoh, here we go, committing a prediction to "print.")
Let's see how the first part of the year has gone so far in terms of sales.
That's a 10-year sample, with 2022's 130 sales to date tied for 2nd-worst (with 2015), and within a small margin of being tied for 3rd/4th (with 2016 and 2018).
Only 2020 is lower - by a lot - but there are obvious reasons there. The market was frozen for 2 months for the early COVID lockdowns.
There's a whole big story yet to be written about 2022.
We'll get through Summer and see how that compares to prior years in terms of inventory, pending and closed sales.
We'll need to get to year end to really test the proposition, or prediction, from above. Will this year feature a "Summer market" at its heart?
We'll watch the data and tell you what we see.
Please see our blog disclaimer.
Listings presented above are supplied via the MLS and are brokered by a variety of agents and firms, not Dave Fratello or Edge Real Estate Agency, unless so stated with the listing. Images and links to properties above lead to a full MLS display of information, including home details, lot size, all photos, and listing broker and agent information and contact information.