You might feel a little ripple of optimism creeping into the MB market these days. If so, it's based on looking forward, not looking back.
Now that March has closed, we can see that there was virtually no change in SFR sales activity in MB between the horrid 4th Quarter of 2007 and the 1st Quarter of 2008.
When we look at the whole decade, the 1st quarter was much worse, compared with other 1st quarters, than Q4 '07 was compared with other 4th quarters.
As measured by SFR sales closing in these periods, Q1 2008 saw 1 less sale (48) than the previous quarter (49). (Our closed-sale data come from the MLS and include SFRs in all of MB, not just west of Sepulveda. Our source is Kaye Thomas' blog, where she has posted data going back to 2000.)
Both quarters were the worst of the decade, but Q1 sales were much weaker compared to the first quarters of prior years:
- Q1 2008 sales were 54% lower than the next-highest total (2006).
- Sales in the weak 4th quarter of 2007 were just 25% lower than the next-highest year (also 2006).
It's no big surprise how we got here:
- A slow 4th quarter for local RE sales, continued economic uncertainty and tight mortgage credit.
- A January with 13 sales, whereas prior years in this decade had ranged from 30-63 sales in the same month. (See "Off a Cliff in January.")
- A February with 15 sales – the total had ranged from 29-55 in the same month from 2000-07.
It's worth noting that 2007 rocketed ahead in March, with closed sales totaling 50 that month – touching a peak hit in March 3 times previously in this decade. In other words, last year, March was more "normal" than not, at least as the 2000s go.
This year, March helped to define the new normal – anemic sales that require a look further back into the slump of the 1990s, or earlier, to find proper points of comparison.
38 comments:
It is difficult to find the silver lining in these numbers. Sales are way down. In addition, the macro economic indicators seem to indicate the economy is only getting worse. Even Manhattan, NY made headlines a couple of weeks ago with 30% YOY decrease in sales.
That being said, we have seen recent sales of beautiful homes in great locations sell for alot of money in MB. In due time, I believe these homes will ultimately be affected as well. However, we are not interested in these homes because we cannot afford them.
We have been in the market for 7 months now and I believe prices for the kind of home we will be purchasing (3-8 year old homes or new home in a not so great location) will continue to fall in price. We are looking in the tree section and East of Sepulveda and these areas seem to be hurting the most. We will continue in our search, however, unless we come across a decent markdown, we will probably wait another 6-8 months before purchasing.
Given all of the economic and real estate information available, I would bet prices will continue to decline.
Waiting on the sidelines - You are crazy. Don't you know Manhattan Beach real estate is hot and that you are missing out on the best investment since tulips in the 1800s? Prices will never go down here and you are a fool if you think they will. All the homeowners and realtors on this site tell us that everyday. So what that there were 50% less sales in the first quarter vs. other years. Don't you know median home prices are rising? So what that the trend looks like things are getting worse, don't you realize that there is only 4 months of inventory in this town. People that live in Manhattan Beach are way to wealthy to be impacted and there are thousands of rich people lining up at Shorewood to buy all of these homes in case anybody wants to sell. A real estate downturn doesn't hit utopias like this, it only hits places like the inland empire, compton, redondo and torrance. Come on, wake up.
9:13 - You're way off base. There were at least 100 off MLS sales according to various posts I saw throughout the quarter. So in reality, this was one of the more robust Q1s we've seen in MB history.
Yeah, things are looking real good in MB.
Dear MBW,
I love MBC, but does this "Mookie" ever get edited out? It just seems he's constantly on here saying the same thing -- Manhattan Beach is collapsing. We get it, thanks. Now, please, something new that we haven't heard before. On another note, I really like Susan M's comments. Her comments are smart, funny and insightful. Maybe she could be your first hire.
9:31
YOU'RE reaching bro.
Pure and simple it's a slowdown. Whether or not it will become a meltdown (who knows with 200% price appreciation in the past 5 years) if that will materialize. Logic, of course, says that we SHOULD by all likelihood experience a decent retreat (50% from PEAK prices...yes, that's still extremely modest given the insane run up statistically), but then again, this is MB...logic rearely resides here. Probably because it can't afford the nut.
It's so hard for sarcasm to translate in writing or on a post... oh well.
Mookie offers nothing to this site. If anyone can give data to show that prices have declined please do share. That's not to say they couldn't decline, but it really hasn't happened yet, except for a few houses that have sold for less than purchased in 2005/2006.
Any data other than copy and paste articles.
Anon 11:27:
"Prices haven't declined! Except for a few houses that were purchased in 2005 and 2006! Mookie, you're stupid!"
Anon 11:27 in 6 months:
"Prices haven't declined! Except for houses that were purchased between 2005 and 2007! Mookie, you're stupid!"
Anon 11:27 in 9 months:
"Prices haven't declined! Except for houses that were purchased between 2004 and this year! Mookie, you're stupid!"
Anon 11:27 in a year:
"Why can't I get market price for my house?"
Anon 9:52, you're stupid! Just continuing the theme.
Glad to see your crystal ball is working so well. Since you've got such a good read on things, how many properties did you purchase when the market was rising these past dozen years or so? Or does your crystal ball only work in one direction?
If the median sale price for single family homes in MB drops to 2004's median ($1,450,000), that would be a decrease of roughly 22%. The last recession caused a drop of 19% throughout southern Cal (less here in MB). But I guess pessimism rules in MBC's cult following. Just too bad the rest of us mere mortal MB homeowners don't share your seer-like abilities.
10:42, thank you for admitting that prices are falling.
9:52- You obviously can't read. Where did I say Mookie is stupid, but thanks for clarifying that for me. Just provide data to back up your claim. That's all I ask. To date, no one has on here. Slowing sales does not mean prices have declined. It may mean they could, but the theme on this site from the commenters, not MBW, is that prices have already declined.
Prove it to me. I already sold my house, so if the market crashes it will benefit me. Too bad, there isn't much worth buying out there. The homes that are good and available are higher than 2 years ago.
Nice comeback though. It shows your intelligence and knowledge of real estate. You must have bought in Vegas and Phoenix and didn't sell in time.
11:11
http://www.melissadata.com/lists/ezlists/ezHomeowners.aspx?zip=90266
YOY price declines
enjoy your data
Hi. I came across this site and found it interesting until I started reading the comments. Here is where I need some help. Can someone clarify some things for me?
I see two sides: bulls and bears. The bulls are trying to convince the bears that the market is strong. The bears are trying to convince the bulls that the market is weak and falling.
OK, so we have two groups of people steadfast in their ways. Why would anyone waste a breath (or a fingertip, I guess) trying to convince the other party that they are wrong? What is the point? Is everyone just hanging around to prove that they're "right" (to an Anonymous audience, no less)? If the market drops, will Anonymous 8:53pm say, "Hey, I was right everybody! I was that Anonymous that posted a few months ago! Horray for me!"?
I don't get it. Do the bulls really think that they will convince the bears that all is fine? Do the bears really think that they will convince the bulls that the market is doomed?
One might buy a home with grand dreams. Once you find "the house" for you, you picture the rest of your life there. Xmas, Halloween, whatever. If you can afford it and are happy with it, you buy it. If you pass on it because you think the market is dropping, then you run the risk of not finding THAT home that "does it for you". But that is your choice.
When I bought my home, I never took future value into account. But that is me. Others might. I will not, however, berate another person into believing what I believe. If another person wants to wait, so?
So why the comments? What is the point? To "have a discussion"? Right, like that'll happen.
To that, I say this:
Bulls: If you own a home, hopefully, values will increase.
Bears: If you are waiting to buy, hopefully, values will decrease.
Making fun of someone who wants to wait 6-8 months (6:02pm) makes no sense. If someone wants to wait, how does that impact YOU?
Alternatively, making fun of someone who wants to buy makes equally no sense. If someone finds that perfect home and has the money to buy, how does that impact YOU?
I guess I can think of 20 things I'd rather do than argue an anonymous face in a crowd. Can someone tell me why this is so appealing to do?
Voice of reason, who are you? You're anonymous, so how do I know to whom I am responding? And if someone replies, how do I know it's you and not an imposter?
Of course, your faithful blogger takes no issue in being anonymous, even when s/he criticizes someone's home and marketability as the main topic of a story.
11:47- Wow would have thought you could have come up with something better than average price. All that shows is in 4/08 average was $1,735 and 4/07 average was $1,736.
Congrats, you just proved my point about this site. I'm with Voice of reason on this.
Not sure what you were trying to prove, but that link doesn't prove anything.
I really like Susan M's comments.
Thanks! I'm a huge "anonymous" fan, too!
There's an article in the L.A. Times today on why beach cities home prices haven't sunk like the proverbial rock. They interview some economists, some realtors-- and some new homeowners:
Southern California beach house prices staying afloat
Coastal bargains are to be had amid the housing downturn, but the properties are holding their value better than homes inland.
http://www.latimes.com/business/
la-fi-nubeach8apr08,1,4182814.story
It's pretty balanced.
11:47, the idiocy of comparing almost infinitessimal data points like monthly median sale prices has been pointed out over and over on this site but some people like you still don't get it. You need bigger data samples for the median to be meaningful, people.
Thank you for pointing out the article in today's LA Times, Susan. However, such positive sounding articles are not appreciated by MBC's cult following. Expect mookie to sign on any moment and diss you for this breach of MBW propriety.
waaah, the data doesn't support my argument that prices are going up, so i'm going to cry about it, waaaaah, even though i used the same data in the past, waaaaaah...
Susan M. there you go again contributing something interesting. Good article. When are you going to start your own blog? MBW, don't be jealous, I mean after all you've got "Mookie."
Huggy (or his/her sockpuppet) is back with their usual "...last recession caused a drop of 19% throughout southern Cal (less here in MB).." line of Bull Pucky. And what a steaming pile it is. The last drop in MB was anywhere from 30% to more than 50% for the really inflated stuff. Facts are facts.
12:14 I will reveal myself soon. I thought about your comment for a while and it dawned on me. The blogger on this site constantly drags homeowners out of anonymity and into public light with comments both accurate and inaccurate. So why not do the same? I read a story a few weeks ago about a person offering a reward to the person that "outs" a particular blogger. It worked. I'll start with a good sum of my money. Donations accepted! If interested, e-mail me at RevealMBWatcher@gmail.com. It is only fair!
To the person that has named themself voice of reason?,
You are not.
19% drop in prices in southern Cal last recession is courtesy of Dataquick, as quoted in the LA Times. Looks like that "steaming pile" exists right above your neckline, Anon 2:03. Facts are facts.
11:56 -
Why, you ask? Because it's fun. Who cares who believes what?
It's a comment thread on a blog. It never makes sense.
For anyone interested in actual meaningful data, here are the median sales stats for all MB single family homes sold over the past 2+ years:
1st Half '06 - $1,790,000
2nd Half '06 - $1,687,500
1st Half '07 - $1,799,500
2nd Half '07 - $1,805,000
1st Half '08 (to date) - $1,825,000
Sorry, MBC cult losers, MB home prices are still hanging in there - barely. Good confirmation of that LA Times article in today's paper, I'd say.
$1,825,000 is wrong.
Thanks, 4:55, for the research and data. Too bad you ruined your own post with a gratuitous slap at the end there, but we know emotions can run hot here.
Now that you've done this work, what does it mean –to you– if median price holds steady while sales drop 50% and inventory starts to balloon?
The way you fairly sniff in saying you're offering "actual meaningful data," I take it that the other data isn't that important to you.
Just checked the MLS 5 minutes ago - 51 SFRs sold in Manhattan Beach this year, the midpoint is 1511 1st Street, which sold for $1,825,000.
To date this year, the median sale price for single family homes in Manhattan Beach is $1,825,000, the highest it's ever been.
Oh, and not a gratuitous slap, MBW - a well-earned one. However, to answer your question, I honestly don't know what it means to say prices are holding up even though demand has dropped. It could be something as simple as the few buyers who are out there demand quality and have the means to pay for it while the lesser homes sit (and sit and sit). However, inventory is no higher than it was about 18 months ago (Fall 2006).
Hey 3:29,
Nice weak effort. The BS in the story was regarding the price drop in MB, not LA County as a whole. Huggy, his sockpuppets and the Polish Porn Star/Realtor are all full of it with their pathetic fantasy of the last bubble bursting scenario in our area. They claim Manhattan's decline started later, was less severe, and recovered quicker. Well, they got the first part correct, the South Bay started to drop later (just like this time), but after that is where the BS begins. Manhattan, by many measures suffered a greater percentage devaluation over the course of the decline than the Los Angeles County average.
BTW 5:19,
Keep an eye on the trends. Snapshots, much like cheerleading, mean zero.
10:42/10:43 - another deranged member of MBC's cult. Truly pathetic how divorced from reality you are, pal, even when presented with the facts. Polish Porn Star?? Your delusions are starting to make your ramblings completely incoherent.
When are you going to start your own blog?
I am not a crazy person!!!!
Seriously, MBC makes it look easy, but blogging every day is a lot of work. We appreciate it Mr. MBC.
I thought the Polish Porn Star reference was pretty funny. Not to mention, his/her "ramblings" seemed completely coherent to me...and guess what?...I'm not a renter...I own a MB home...go figure.
OK, I'll bite. What is the meaning of "Polish Porn Star/Realtor"?
10:16, here's a hint: "Its old"
10:47, It may be old, but it's still funny. And, it may not be old to all readers.
BTW, I saw Ed Kaminsky's house under construction yesterday. Boy, is it big. Maybe some kind of compensation issue.
Of course it is a compensation issue. The issue is, his compensation is about 8x yours! Sucks to be you.
1:26,
Boy, did you just display yourself. Thanks for the chuckle. Seriously.
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