Wild Year for Inventory Now Calming

By Dave Fratello | October 14th, 2020

In a strange and surprising year for Manhattan Beach real estate, one thing seems to be normalizing.

The inventory of homes for sale is now dropping, in line with expected seasonal trends.

At the time of our typical mid-month snapshot, we see inventory at 111 homes for sale in MB.

As our first chart shows, last year, inventory stood 16% higher at 129.

It's notable to contrast 2020 with 2019, before we introduce other data.

The year 2019 often had the highest inventory of the current cycle, peaking at 132 in mid-June and persisting into the Fall with that 129 figure, before a steep seasonal decline later in the year. (To find Manhattan Beach inventory levels higher in September-October than 2019's levels, one has to go all the way back to 2010.)

Here in 2020, inventory trends went off track in Spring, during the main lockdown/stay-at-home period, dropping when they should have been going up, only rising later in May.

Inventory met demand in May and June, and homes just could not stay on market. Inventory dropped again, but a powerful signal was out: It's a good time to sell.

We briefly saw a new inventory peak at 134 homes for sale, both in mid-July and in mid-August, before a downtrend began. Remember, record-setting levels of sales activity have been part of the MB market since late May, which is definitely a factor holding inventory down, even as more sellers entered the hot market.

Now let's bring in a few more years' worth of data.

For mid-October, this year has the same level of inventory as 2017-18, and the seasonal downtrend more or less matches 2016-17.

Not to make too much of one data point, but it's notable that things look a little more typical.

Our Edge Real Estate Agency has one active listing in MB, two coming, and plenty of consultations every day with buyers and potential sellers.

One of the big questions: Is Q4 going to see the typical seasonal drops in inventory and sales? Or, if people are traveling less and mortgage rates remain favorable, could the 4th quarter be just as spunky and surprising as Summer 2020?

It's a variation on everyone's question: Is it a good time to buy? Is it a good time to sell?

Our view is that there's a lot of life left in this market. Seasonal trends have been upset and we could still see a bigger 4th than we're used to seeing, even with some natural pause.

The mini-trend of declining inventory at this time of year is one of the first trends to look "normal" this year. But we'll go on record as expecting surprises to continue this year.

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