With the close of the first quarter several days ago, we now offer a second round of data analysis on the local RE market. (Our first data runs were published under "Another Poor Quarter" on Monday.)
Now we have a complete report (click to download PDF) on all of the closed SFR sales in Q1 2008 in our subject region (west of Sepulveda), and a new look at the average monthly sales rate in the whole of MB.
Let's start with the graph (click to enlarge further). This is the second time we've published the 12-month moving average for monthly sales of SFRs in all of MB. (See January's "Another Look at Sales Rates in MB.")
This is one of the best ways to show trends. Each month's sales figure is the average of that month plus the 11 months preceding. Presenting the data in this way dampens or removes seasonal effects, which are prominent in RE sales.
The recent peak was May 2007, and now we're scraping out a new trough. As of the end of March, the moving average hit 24, a total of 10 fewer than in May '07 (-29%). The downward arc from last May is stunning. The only similar drop in the 12-month moving average came from the hallucinatory high of 52 in Sept. '02 to 42 in Aug. '03. But that Aug. '03 figure was still 75% higher than today's sales rate.
Of course, it's not big news here anymore that the MB RE market is very slow compared with the recent boom years, so we won't dwell. A bottom of sorts is, however, in sight. We told our computer to assume that the rest of 2008 would see 20 SFR sales per month, just like March had. The 12-month moving average bottomed out at 18, just 25% below today's average.
Now let's look at the specific sales that closed in the first quarter. Click to download a 3-page PDF that shows all of the SFR sales west of Sepulveda for which MBC had information this quarter. (We're also putting this up on the upper-right corner of the front page, under "MB Market Info & Updates.")
The data here cover 33 sales of SFRs west of Sepulveda in this period. One of those (117 Highland) had been listed on the MLS, but it expired before it sold and the sale price was never posted there. That means only 32 of these sales are from MLS data. As we noted the other day, there were 48 sales of SFRs in all of MB in the same period, so our subject region west of Hwy. 1 represented 2/3rds of all sales.
The 3 separate pages of the download organize the sales by:
- Closed date;
- Sale price; and
- Home condition.
Illustrating the extremes of our local market, the lowest-priced home sold for $772k (626 Rosecrans), while the highest-priced home sold for $5.6m (200 19th). (Doesn't that make us a diverse community?)
Ten new homes were among the 33 sales; 4 of them netted less than $2m – a fairly new phenomenon.
There's plenty to work with here, so we'll look forward to readers' reactions and analyses as well.
22 comments:
Los Angeles South Bay Beach Cities Housing Bubble suggested one way of trying to figure out if median housing prices compared apples to apples y-o-y. She found that Redondo median prices were up 4.5% y-o-y, but median square footage was up 14% y-o-y. It's probably not fool-proof, but it tells you something.
http://sbbeachbubble.blogspot.com/2008/04/preliminary-look-at-march-2008-redondo.html
My weekly raw numbers show inventories and open homes holding steady for the most part.
GSB realtor.com listings for MB -
230 up 57% YOY
ziprealty.com listings for MB -
225 up 56% YOY
MB open homes per TBR -
84 up 44% YOY
As usual, I realize that some of the resident real estate sales people have access to different (more accurate?) numbers. Nevertheless, the sources I use are the same ones used last year and can help reveal trends.
Wow! Two intelligent posts that are not attacks against someone else's opinion. Wooo hoooooooooo.
Well, it is definitely an unsettled market, but it
is neither roaring like some say nor collapsing like others say.
I did see where a tree section lot just got scraped (3600 block of Maple) and I have also seen a couple of "We want to buy your lot" mailers in the last week. It looks like someone is willing to bet that things may be a bit more favorable in about 18 to 24 months.
Now may also be a good time for some of the homeowners with a low basis to get a nicer house built without having to compete with speculators for a good contractor.
It looks like someone is willing to bet that things may be a bit more favorable in about 18 to 24 months.
There's still a surprising amount of new construction going up on the East side, and these are recent builder purchases and scrapes (within the last couple of months). To me it doesn't seem like a good time for them to make that bet-- but then, I'm not in that business and they are.
Maybe this is the developer version of "Buy low, sell high"?
So, due to my flight getting canceled this morning, I found the time to mess with the data on the provided pdfs a little. I was thinking that ppsf was a little more resilient a number as it, well, takes into account house size.
I had to combine the numbers into two-month chunks to get any decent plot density. But at any rate, here's a scatterplot of the last year's square footage price with the median overlaid in red.
The thing that strikes me is the resemblance of feb/mar 2008 to apr/may 2007. Other than the median being a tick lower due to a handful fewer higher-middle end sales, it looks like a do-over of last year.
It looks like in aug/sep the high end really went into high gear and that pulled up all prices for oct/nov, but then things settled down again and the data points re-consolidated.
The data do look bimodal. Notice the dmz just at 1000 (or slightly above during the hot months). Bimodality makes median a dubious number some months, but not others, depends on how active that higher (very skewed) population of sales is.
Matt Morris' twin new construction homes on Palm in the tree section are both off the market (one showing pending and the other showing contingent)...
Again, homes in good locations with high quality of construction/finishings are still moving quickly and without discounts off of a higher price point ($2.699M)...
It is not all Doom and Gloom...
Those are two of 7 or 8 high-end homes currently in escrow in the Tree section. I believe the one on the corner - 2701 Palm - sold for $2,749,000, but am awaiting confirmation of that price.
Wez,
Do you have a theory for the bimodal appearance of the data?
MBW - how would a month over month chart for average dollar per square foot look?
Yes - the best of the best is selling well (New and GREAT - not good, locations).. but the rest is sitting and inventories will build futher... we are still not past the mid point of the mortgage issues...and now economy, wall street, frozen credit etc.. not doom, but not good and will press prices down further.
2:01 and 2:27 - You're absolutely right. Quality homes in good locations are selling, but don't interpret that to mean that the market is strong. Those homes would have likely sold for close to 3mm at the peak. That is a quote from two of the top 10 realtors who were recently honored at Shorewood in the Beach Reporter. Either that or they are liars. I know them both well and don't think they'd be anything but truthful since neither are my realtor. Lucky them :)
5:15 - average or median?
I can only cover the past year. Months are small sample sizes. A moving average would be interesting but there's just 12 months in the can...
Mookie, with all due respect to your realtor 'connections', one need only look at the history of home sales in the Tree section to see that no new homes, outside of the 3 that sold on 31st Street last year (not representative, as 31st commands a premium), have ever sold for close to $3 mil unless they were very large homes (4000+ sf) and/or on very large lots.
Maybe if the market was still rapidly ascending, a $3 mil price tag for the two new Matt Morris homes or the new Gary Lane home on Pine or the new Ken Johnson home on 26th, etc, would have been achievable but, if so, those would have been records. The prices currently being paid for these homes is comparable to, and in some cases, exceed prices paid in 2005-2007 for similar high-quality homes in good locations.
Jr, I suspect, and others have commented to this effect too, that there are two markets in MB. There are houses that have an MB address but don't have any or enough of the inherent value to go along with the brand (location, year of construction, view, style, etc...) and then there are houses that fit the brand in spades.
The market for homes with inherent value is always more resilient. Honestly, I think the fact that there isn't a good place to put large chunks of money right now (certainly not wise storing it in dollars, perish the thought) makes it more likely that someone will be buying at the higher end if they have the cash. So that market is on its own trajectory.
MB is a luxury brand and as such doesn't operate on an ordinary supply/demand curve. Perceived value is partly determined by the price tag itself. Also, a luxury brand is more than an expression of lifestyle, it functions as a powerful social cue to others, and nothing recently has changed with that for this brand. So, a rise in price does not necessarily result in a degradation in demand, quite the opposite. The high end properties with inherent, easily perceived and socially constructed value, are going up. The other properties which share the MB address but have some debilitating feature or lack location are starting to reflect the broader market. The slowdown in closings and increase in listings indicate this but the sales data are so noisy it really hard to be certain. Question I would ask then is does the MB brand begin to suffer in that case, and at what point? It's carrying a lot of weight for some of the houses with its address.
Whoops, sorry pretty long. My woman is in Italy and I made no plans because I'm not supposed to be here...
5:57 - Appreciate the comment. Not my words, words of the realtors I know and again, I think they're two of the better ones. For those that don't like realtors, I wouldn't start bashing them with wise cracks as they are truly quality people with high morals. It could have simply been their opinion and sounds like it could, yes could have been prone to some exaggeration. As people on this blog like to point out, as much as I think I'm an expert on MB I actually do rely (sometimes) on those with more experience :) With my new realtor almost every house I go to I ask them what it would have sold for during the peak craze and virtually everytime, she says 10-15% higher. In fact, one Hill section house I looked at the exact words were "they just missed the top and now have priced it 400k below where it originally listed." Look, I don't believe realtors earn their keep, but I do appreciate some of the things they do for me. I also appreciate their judgement and experience in the local market. I do discount some of what they say, but when they tell me homes could have gotten x during the peak, there isn't a lot of reason to doubt them, unless I'm skeptical of their agenda.
Mookie- Of course they're going to tell you it would have been more during the peak. Of course, it's their personal agenda. Once again, houses in the hill section with a good location are not 10-15% below peak. Maybe they are 10% off original list, but that doesn't mean much.
Mookie, I love MB, you love MB. Find the house that you love and buy it. I honestly believe you're not looking to flip it. Having said that, if you love your home, the old saying holds true: they're not making more beach. Santa Monica (for the most part) ain't the beach, it's a bluff as is PV and parts of Malibu. I wish you the best.
Wow 7:58, I can't win either way. I'm a bear and a skeptic and actually tried to give realtors some kudos for their expertise and I get shot down. If I can't trust two of the top realtors in town, who can I trust. Regardless what anybody says, I do trust their comments. By the way, the Hill property was a fantastic location. On that note, I'm curious, who verifies whether a location is fantastic? Is there some independent group who drives around and puts a "location" stamp of approval on the for sale sign? I mean, you're telling me homes with a good location are selling at great prices (not your words), but who determines what a "good location" is. I thought the one in the Hill with an unobstructed ocean view and about 4000 sq feet, fairly new property was a good location. My realtor told me the same thing, but you're telling me they may be wrong. I'm confused.
I hope all of you understand sarchasm.
MB is one of the most interesting social experiments I have ever witnessed in my life.
Should be interesting to see how it all shakes out.
Thanks for the data MBW, and a great post Wez!
Best to all!
8:12 - you're assuming everyone loves the beach. And I would hardly go so far as to call MB a "beach town." Unless you've never actually been in a beach town, to which I would encourage you to test a few more waters. Don't get me wrong - I think it's a pretty cool place as well.
Much of the new crowd, at least the ones that have moved into my neighborhood, don't really seem to be beach-goers per se...they're drawn to a safe neighborhood (in LA we all knwo there are very few) and a great public school system. Nice people most of them, not people I'd hang with if they weren't my neighbors but what the hell -- we share space, I can dig it.
But not making anymore beach??? There are literally thousands of miles of relatively uninhabited beach around the globe.
I think this all assuming attitude I see on this board -- by bulls as well as bears -- is what brings out the worst in people. Bulls are protecting their investment, and bears are afraid they're gonna miss out on something.
Can't we all just agree to disagree ? Why do people around here get so aggressive about people hearing their POV as the only POV, or worse yet...the "right" POV. I agree with many posters, the market here isn't healthy and it isn't horrible. Oh well.
If you can find a home here that you absolutely love and can afford - by all means buy it. If you can't, wait it out...who knows (certainly no one here) you may save a few bucks by the time you are ready to jump in the water or it might cost you a little more than you wanted to spend, hopefully not because everyone should be happy in the place they live.
Peace to all - hope everyone finds what they're looking for!
Thanks 8:36, but you assume much when you say "test a few more waters." I won't cite my geographical resume, but suffice it to say, English is not my first language. I saw a man who posted a few weeks ago that that your Manhattan Beach is paradise. Having seen many of the world's most beautiful beaches I can understaand his thinking. You have a wonderful place here, plese see that.
Mookie- I'm 7:58. I wasn't dissing on you. I was on the realtors. I think you are smart enough, at least I hope you are, that you aren't going to believe everything they say. There was even a case in Carlsbad that just ended where the realtor representing the buyer did not provide comps to the buyer, and they overpaid by 10% for the same exact house on the same street-(google Marty Ummel). Big surprise... the realtor won.
I even know realtors that don't provide certain comps to buyers in hopes of selling properties. A lot tougher to do nowadays with Redfin, Zillow, etc. Also, harder to do in MB, given the small area.
But it was rampant back in the day when information was not available to the public. It still isn't, but at least MBW provides what he can.
By the way it is "sarcasm". Hope you find a house for a good price.
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