Kaye's Beach Cities Real Estate Info

The Best Real Estate Blogs in Los Angeles

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Fri, 08 May 2009 13:08:54 -0500

Relocation.com is a company about ...well ...relocation. They are a terrific resource for those planning a a move to a new area. Recently they have begun a series of posts on their relocation blog naming the best real estate blogs written by real estate agents around the country. This week their focus was on Los Angeles. I am very pleased that this blog was named as one of the Best Blogs in Los Angeles.

It should not surprise those of us in the South Bay that three South Bay blogs were chosen... after all we know the South Bay is a great place to live.

South Bay Real Estate Blogs:

Beach City Real Estate Info.... Kaye Thomas

Red Square Homes Blog... Blake and Diana Roberts

Palos Verdes Lifestyle... Norma Toering

Best Los Angeles blogs not in the South Bay:

Long Beach Real Estate... Laurie Manny

Pasadena Views... Irina Netchaev

San Fernando Valley Real Estate Blog... Judy Graff

Malibu Real Estate Blog ... Michael Gardner

Phyllis'LA Real Estate Blog ... Phyllis Harb

Up2Date Real Estate ... Doug Willis

Terra Firma ... Christopher Hain

Other Cities:

Best Real Estate Blogs in Minneapolis/St. Paul

Best Real Estate Blogs in Chicago

Keep an eye out for new cities to be added ....

For all of you who are new to blogging or new to Active Rain... Many of those mentioned by Relocation.com in LA, Minneapolis/St. Paul and Chicago are Active Rain members. Many of us came to AR in the early days and were totally green about blogging. I can truthfully say that I learned how to write an effective blog because of all the information and the terrific people that make up the AR Community.

It's a Buyer's Market...So Why Are Prices Still So High

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Wed, 06 May 2009 04:12:44 -0500

Manhattan Confidential, our local consumer blog, posted an article today about the decline in sales in Manhattan Beach and the Beach Cities. The post points out two things... the number of sales began to decline in 2002- 2003 ( higher prices mean fewer sales) and 2006 was when buyers started saying no and the market started cooling. Fast forward to 2009 and we have a real estate market that is trying to recover from a lousy economy and a tough lending market. Yet with all the chaos of the last few years prices, with a few exceptions, are still on the high side.

The issue for many Beach Cities' buyers is that while prices have fallen a lot in Manhattan, Hermosa and Redondo; they don't seem to be down as much as many believe they should be. Every news source is telling potential buyers that California has the largest number of foreclosures in the nation and prices are dropping like crazy. The media posts a new statistic every day on how much real estate prices have dropped in California. There are a glut of articles about buying foreclosures and short sales. So why are prices still so high in the Beach Cities?

Last Sunday the LA Times had a terrific front page article that addressed the issue... why some markets are not acting in the way buyers expect. The main thrust of the article is that while prices are down overall, they may not be down as much in the more desirable areas.... i.e. The Beach Cities as say in Riverside. This scenario is very frustrating for buyers and for sellers. Buyers believe that sellers should accept lower prices for homes that have been on the market for long periods of time. Sellers/Banks, on the other hand, want to sell for as much as they can, especially when facing a loss.

While not everyone thinks this is the time to buy... there are a lot of folks who are willing to take a chance and buy now. Most of these buyers don't think we have reached bottom but believe lower prices along with some very good long term interest rates mean it might make sense to buy. The problem is that there is still a big disconnect between where buyers believe prices should be and the prices that many home owners or in some cases banks are willing to accept. Many of my clients are especially frustrated with the prices that banks are setting for short sales.

While we don't have a huge inventory of REO's... there are a number of short sales in all the Beach Cities. Many of these are new construction that didn't find buyers. A number of builders have received NOD's. Logic would seem to say that as these homes have been on the market for a year or more that Banks would be wise to be fairly aggressive about accepting offers from well qualified buyers...but that isn't what seems to be happening.

We have seen an uptick in sales in the last month. This may be a seasonal reaction... spring is historically our buying season. It could be low interest rates. It could be that buyers are seeing a little light at the end of the tunnel in the economy and the housing market. Personally, I think prices still have a way to go before we see the bottom... but the bottom might not be as low as was predicted a few months ago. The kicker for our market will be foreclosures. If we see a spike in the number of foreclosures over the next 6 months then you can expect to see prices drop quite a bit. If we continue to have relatively few foreclosures prices will continue to be soft but will more likely be flat.

South Bay-Beach Cities: Loan Changes for townhome/condo buyers

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Mon, 20 Apr 2009 16:42:36 -0500

Wouldn't you know it.. just as the California real estate market starts to show a few signs of stabilizing... the Feds throw a wrench in the works. Fannie and Freddie, in their infinite wisdom, have made some major Mortgage loan changes for townhome/condominium buyers who are looking at properties with loans under $729,750.

In the South Bay- Beach Cities that means entry level properties in Manhattan Beach, Hermosa Beach, Redondo Beach and El Segundo. It will hit buyers of 55+ units in Redondo, Torrance and Palos Verdes who are looking for a loan. It will affect people buying entry level ( $725,750 or less) townhomes/condominiums in all the South Bay. Want to buy a small unit as a vacation property along the Esplanade... it will cost you more. How much more depends on a number of factors.

So just what have the powers that be been doing.... The basics are that you will need higher FICO scores, you will probably need a larger down payment then you did last month unless you are looking at FHA financing. Your appraisal fee will be higher and must be paid upfront and you will be paying higher upfront fees from .75% to as much as 3% to get that government backed loan. However if you are looking for a jumbo loan on a higher priced property... say one of those spiffy townhomes with great views in Manhattan or Hermosa... then it's business as usual.

I understand the idea behind these changes is because of the numerous problems with large condo projects in other states that went down the drain. However in most of California, townhomes/condominiums are our form of affordable housing. I'm not sure how these changes will affect buyers in the South Bay as we don't have a lot of large developments.... but I expect we will soon find out. It wouldn't surprise me to see an easing of some of the new rules once the administration realizes that this may not be the best move in a housing crisis.

South Bay- Beach Cities: Buying in a Buyer's Market

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Sat, 18 Apr 2009 22:14:54 -0500

While the media argues about where the California real estate market is headed and rumors of massive foreclosures are whispered about on blogs; there are actually a few folks who are buying homes. Over the last few weeks in all the South Bay-Beach Cities escrows have been opened and sales have closed.

Two factors are fueling the slight rise in sales... price and interest rates. In 2006 a lot of folks dropped out of the Beach Cities housing market and have been quietly sitting on the sidelines waiting for the market to turn. Others sold homes a year or two years ago and have been renting. Some are tired of renting and want a home of their own. Others got married, divorced or had a new addition to the family. Contrary to popular opinion they have excellent credit and they didn't lose a lot of money in the stock market crash.

So just who are these intrepid souls who are venturing forth in Manhattan, Hermosa, Redondo and El Segundo? They are not flashy speculators or risky flippers. They are conservative buyers. They are looking in all price ranges. They have cash for a large down payment. They are looking for a home not a retirement account. They are planning to live in the home for at least 10 years or more. They are buying below what they can afford. A few are willing to buy cosmetic fixers at the right price. They understand that the market values may decline more but believe the safety of a long term fixed rate loan will work in their favor.

They are careful and patient. They will wait for the right house. They have determined upfront how much they will pay for a property. They will pay more for a home that meets their exact needs... but they won't overpay. They will bargain and are not afraid to negotiate. They will walk away and find another house if the price isn't right. They aren't interested in "old inventory" at "old prices". They don't necessarily believe that an REO or short sale is a bargain... unless it is. They are pre-approved and have shopped lenders for the best rate and terms.

Since April 1, 2009 they have opened escrow on 9 homes and townhomes in El Segundo, 30 in Manhattan Beach, 15 in Hermosa, 26 in North Redondo and 22 in South Redondo. Most of these escrows will close on time.

South Bay-Beach Cities: Refinancing or Loan Modification Help Online

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Thu, 19 Mar 2009 21:26:52 -0500

While the South Bay-Beach Cities have managed to stay above water better then other parts of the state there are a number of homeowners who are finding themselves in trouble and need some help with their home loan. Not all of us paid cash for an ocean view home in Manhattan, Hermosa or South Redondo. Many folks looking at the troubled California housing market feel as if they are jumping from the frying pan into the fire when considering their options. However there may just be a little help from the FEDS.

There are a number of homeowners who bought with 10%-15% down in Redondo, El Segundo, Torrance and other South Bay communities who now find themselves owing more then the value of the property as prices have declined over the last 3 years. Job losses along with the normal problems folks face from time to time...death, illness, and divorce... have caused some real issues for many residents.

If you have a conforming loan ( $729,750 or less) and need to either refinance or modify the loan then you may find some help from the government. Today the Federal Government finally got its helpline on line at MakingHomeAffordable.gov. The phone number is (888) 995-4673.

The truth is that not many homeowners in the South Bay will not qualify for help as your loan amount can't be more then 105% of the market value. Also the loan must be a conforming loan... that is when it was originated it was a loan guaranteed by Fannie Mae or Freddie Mac. You don't have to be behind in your payments to receive help. If you aren't sure about whether your loan qualifies, click this link to see if it is owned by Fannie or Freddie.

If you haven't contacted your lender you should do so immediately. If they are not helpful then use the links to the above sites. These are legitimate sites that will offer help. Be wary of anyone sending you an e-mail, regular mail or calling your home with offers of help and wanting money upfront. There are some good sites that can offer you help but most are scams and will just take your money and leave you in deeper trouble.

About 3%-5% of people in trouble with their mortgages have equity(the difference between what you owe and the value of the property) in their homes. These people often give up and wind up losing their homes to foreclosure because they are not sure what to do. If you have equity in your home you need to talk with someone who can help. Don't be embarrassed.. call your attorney or someone you trust. Even in today's declining market you may be able to refinance or if necessary sell and come out with cash.

Manhattan Beach-Beach Cities: 6 things to know abour loans if you are buying or refinancing...

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Thu, 26 Feb 2009 07:47:04 -0600

If you are thinking of buying a property or refinancing your South Bay-Beach Cities home there are 6 things you should know about the current financial market.

While almost everyone knows that lenders have tightened their rules about making loans; most people really don't quite understand what that means when they are shopping a loan for a purchase or a refinance. If the only real estate loans you have obtained have been within the last 7 years... you may be in for a shock.

The rules have changed drastically from a few years ago. The Beach Cities have seen conforming loan limits raised to $729,750 but these loans, known as conforming Jumbo loans, have a higher rate then loans under $417,000. If you want a jumbo loan (over $729,750) you will need a big down payment along with excellent FICO scores. You will also need to be patient as a number of lenders are not offering jumbo loans because they have to keep them as part of their in-house portfolio rather then sell them to Fannie and Freddie.

6 things you need to know if you want to refinance your current loan or would like to buy a property....

1. I have great credit.... maybe... maybe not... a lot has changed in the last year. So what is a good credit score today? Two years ago a good FICO was 700 or better. In today's world a 700 FICO will cost you money. I stole the chart below from Dan Green at The Mortgage Reports. If you check out the chart (Fannie & Freddie rate fees) you can see that a credit score under 740 is going to cost you upfront fees in addition to the points the lender wants. These fees are for conforming loans. If you are looking for a non-conforming loan (jumbo) the best rates are for those with FICOs of 780 or higher.

2. I have 20% down so no problem... on a conforming loan ( $729,750-) 20%-25% down and good credit (720 FICO+)will work ...usually. If you want to utilize an FHA loan then you can have as little as 3% down and a slightly lower FICO score but you will get a higher rate and pay some upfront fees. If you are looking for a loan over $729,750 then 20% and good credit isn't enough. You may find lenders wanting 30%-40% down with great credit (750+ FICO)and a good chunk of cash in reserve. The guys who 2 years ago would have tripped over themselves to throw money at you will now barely acknowledge you exist.

3. My income is 1099 based not W2 but I make lots of money... There has been a lot of talk about stated income loans... those loans were made for people who were not traditional W-2 employees. Today many lenders turn a blind eye and a deaf ear to 1099 employees. There are a few lenders making stated income loans with a large down, verification of assets and 2 years in the business. For the most part 1099 employees are out of the loop unless they have very large bank accounts.

4. But Interest rates have dropped... Rates have indeed dropped but the "great rates" are only for those with high FICO scores and large down payments. Conforming loans with 10% down or FHA's are not to be found for 5%. The big boys with large accounts can find some sweet deals on jumbo loans but most borrowers are going to need high FICO's and pay points to see those lower rates.

5. I can always get an adjustable...buyers got used to having a number of choices in the types/terms of adjustable loans. There are more choices for conforming loans but if you are seeking a jumbo loan you may find your choices limited to a 1/1 or a 5/1 term . A number of lenders are not making 7/1 or 10/1 loans as they are not sure where rates will go in the future. If you are thinking of interest only add at least another .25% or more to the rate.

6. I have 20% equity, so a refi should be a snap... Don't count on it. There are not many lenders who will even consider a loan-to-value even if you use the same lender . Some lenders are looking for 30%-40% equity on a refinance in markets they feel are trending downward. On a similar note lenders are not real crazy about cash out refinancing. There are some who have those programs but they are likely to cost more money.

In today's market the best way to ensure you get a loan is to do your homework. Don't assume that because you got a loan a few years ago without any issues that you can do the same today. If you are buying a home you need to be fully approved before making an offer and be ready to throw in additional cash if necessary. If you are refinancing, don't expect the process to be easy. Remember, banks are more apt to give loans to people with substantial resources... and cash in the bank can buy a lot of goodwill.

Manhattan Beach- Beach Cities: Loan Limits Raised

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Mon, 16 Feb 2009 14:11:06 -0600

Amid all the hoopla about the $7500..nope $15,00... make that an $8,000 tax credit... there was almost no mention about reinstating the hybrid conforming loan limits back to $729,750 from $625,000. This is good news for South Bay-Beach home buyers and owners who want to refinance existing loans.

The final tax credit will have a limited impact on our market because of limits on income and local home prices. Increasing the conforming loan limits however will have an impact on our Beach Cities real estate markets. Last year in the short time frame these loans existed(July-Nov.), a number of buyers took advantage of them. While the rates on these loans are slightly higher then rates on loans under $417,000 they are usually considerably lower then those on Jumbo loans... and much easier to obtain.

Anyone who has been loan shopping lately knows that jumbo loans are still expensive and not easy to obtain. Most lenders have a loan max of $1,000,000, with LTV around 50%-70% depending on the loan amount. There are not a lot of choices as to the term... either a 5/1 or a 30 year fixed. FICO scores to get a rate around 6.65% must be over 750+. The bank may also want you to set up an account with them to provide for direct deposit of the monthly payments. If you want a rate around 6% you will need a FICO of at least 780+. If you want to buy a $2M home you will need 50% cash down.

While banks will make loans over the $1M mark these only go to members of the bank's High Roller Club..( those having accounts at the private banking window) which usually means that you are willing to keep a minimum of $100,000 or more in accounts at the bank. The more money you stash in the bank the higher the loan amount, the longer the term and the lower the rate. Historically this was how banks conducted business back in the good old days.

A number of lenders are getting rid of their wholesale operations and only making loans directly to consumers via in house staff. This means that most Mortgage Brokers will not be able to place loans with BofA, Chase, Wells Fargo or many of the Big Banks. The banks often have better rates but usually offer fewer choices to consumers as they may only offer one or two loan options. Traditionally Mortgage Brokers were able to offer consumers an array of products. This means fewer options for buyers or for owners looking to refinance.

Will $15K make a difference in upscale communities?

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Fri, 06 Feb 2009 10:19:24 -0600

Will $15K make a difference to home sales in the South Bay-Beach Cities of Los Angeles County?

The U.S. Senate in an effort to customize their version of the Bailout Bill and add a few more perks the House missed, voted to give home buyers a credit of 10% of the sale price or a maximum of $15,000 on a home purchase. Of course the bill is not actually a done deal... It has to go back to The House and then be signed by The President before it takes effect. Right now I'm guessing the bill will be changed along the way and won't be ready for consumers anytime soon... if ever.

Unlike the previous version of a $7500 tax credit that must be paid back..the new bill will not require buyers to reimburse the government...ie taxpayers... for the money. I understand the idea behind the bill but once again I think the folks in DC are off the mark.

Would a $15,000 credit stimulate sales in the South Bay-Beach Cities...yes and no. Certainly getting an extra $15K credit looks like a good deal for anyone buying but the problem is that while the credit is nice, it's pretty useless if banks are not making loans. And therein lies one of the major problems with many of the ideas about real estate and the housing market floating around Washington.

You can pass stimulus packages 'til the cows come home..but they are pretty useless if consumers can't use them. If the boys in DC are really serious about doing something about the housing crisis then I would suggest that the first step is putting a few conditions on the money they are passing around to lending instutions... namely if you want money from the government you have to make loans on homes.

Manhattan Beach, CA.... Million Dollar homes and Foreclosures

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Thu, 05 Feb 2009 11:22:44 -0600

If you caught the LA Times article about Million Dollar home sales in CA you know that in 2008 Manhattan Beach had more home sales over one million then any other community in the state. There were 296 sales in Manhattan Beach of homes above $1M in 2008 . While that probably makes most Manhattan Beach homeowners happy as an indication that values didn't take a complete nosedive... the information also points out that 2008 numbers were down considerably from the 403 homes that sold in 2007. So far this year that trend seems to be continuing with closed sales in January 2009 of 7 homes and 2 townhomes...ouch!

None of this information is surprising if you are buying or selling a home in Manhattan Beach or any of the Beach Cities. Sellers are trying to figure out the magic number that will make a buyer decide to make an offer, while Buyers are waiting for prices to drop more and loans to get easier to obtain.

There is a lot of information in the article that didn't make the headline. If you read the chart one of the things that pops out is that price-wise Manhattan Beach is in the middle of the pack. While prices are still on the high side they are below the prices of Laguna Beach, Newport Beach and even some areas of Palos Verdes.

However you have to read most of the article before you find what is perhaps the most significant piece of information...namely that of the 236,000 homes that went into foreclosure last year...only 1,612 were homes that sold over the $1M mark. I believe we will see more million dollar plus home in trouble this year as the economy worsens, but as a percentage that number will continue to be small relative to the total number of REO homes in CA.

Over the last few years there has been this assumption that anyone who bought an expensive home really couldn't afford the home. While I have no doubt there are a number of buyers who did get in over their heads... the low numbers above seem to indicate that perhaps most folks who bought in the more expensive communities were not as financially imprudent as many thought.

Manhattan Beach- Beach Cities Real Estate.... Hello 2009

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Wed, 31 Dec 2008 23:21:04 -0600

In just a few hours 2008 will be gone. I don't think many will be sad to see it go. No one has escaped unscathed from the financial and economic turmoil of 2008. Our local Manhattan Beach-Beach Cities real estate market has certainly been adversely affected by the disruption to the economy. While we have fared better then other communities in Southern California we have not escaped the problems that affect California real estate. In our little slice of Paradise prices are down in all the Beach Cities and sales volume is lower then last year at this time. Interest rates have dropped, but jumbo loans( $625,000+), with few exceptions, are still at high interest rates when compared to overall rates. This is a real problem in our Manhattan Beach-Beach Cities real estate market with median prices in most of the Beach Cities over the $625,000 hybrid conforming level. While conforming rates are lower then at any time since 1971, the requirements to obtain a mortgage are probably stricter then they have been in the last 25 years. It is a bit ironic that lenders who gave loans to anyone who could fog a mirror are currently refusing loans to people who are are well qualified for sometimes inane reasons. As with all things in the financial community... this too will change.

There is a lot of speculation about what will happen in the Manhattan Beach-Beach Cities real estate markets in 2009. While there are those who are predicting a complete collapse in housing with markets returning to 1990 levels, most of us who have lived here for a long time are not quite so pessimistic. We have seen these market dives before and will no doubt see more in the future. If the recession gets worse then we could see more problems but so far we seem to be holding up fairly well. Could that change... of course it could. The market may be slow but it hasn't died.

Thoughts on the housing market of 2009 in the South Bay- Beach Cities.....

Consumers will exercise more discretion in spending. Buying a home will once again be about shelter rather then a short term investment where you expect the value of your home to double in 2 years. 25 years ago an entry level home was not a new 4000 sq ft home in the tree section of Manhattan Beach. People bought small older homes and worked their way up to big new homes over years. I think we will see a return to consumers buying below their means rather then above.

Foreclosures continue to be on the low side in the Beach Cities. Interest rates are at their lowest level since 1971 which means that many of the loans that will be resetting may do so at rates that will not be a problem for owners. Inventory continues to be much less then many had anticipated. As of today there are 507(total) homes and townhomes for sale on the MLS in the Beach Cities.... Manhattan Beach((178), Hermosa(78), N. Redondo (85), S. Redondo (124)and El Segundo(42). While you can expect the number of homes on the market to increase in the spring, we would need to see the economic crisis worsen considerably in the South Bay to create a scenario that dumped vast numbers of homes on the market. This doesn't mean we won't continue to see prices moving downward... we will. It just means we probably won't see massive numbers of foreclosures and the devastating loss in value that happened in the '90's as long as the employment situation in the South Bay remains fairly stable. The new Administration seems committed to stabilizing the housing market. The question is whether or not they will be able to do what the old one couldn't... namely bring stability back to the financial sector by buying up toxic assets and creating jobs with programs like the old WPA? If they can accomplish these goals without inflation rearing it's ugly head then the South Bay-Beach Cities real estate market may just squeek by with a minimal amount of problems. Once again only time will tell what awaits us in the future...

HAPPY NEW YEAR ......

Kaye

Manhattan Beach- Beach Cities: FED Bailout... the good...the bad... and the ugly

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Mon, 22 Sep 2008 17:34:31 -0500

Real estate values in Manhattan Beach and the Beach Cities have held up fairly well compared to other parts of the nation and the state over the last few years. However, make no mistake, we are headed for some rocky times if the FED can't figure out the right way to solve the current financial crisis. No question Treasury Secretary Hank Paulson along with FED Chairman Ben Bernanke and New York FED President Tim Geithner did their best to find a reasonable solution to a major disaster... the question is whether or not the solution is going to work.

A lot has happened in the last week as credit markets scramble to deal with some massive changes... Fannie and Freddie got a lifeline, Lehman is toast, AIG is saved, BofA got a whole lot bigger, while Goldman Sachs and Morgan Stanley are no longer investment banks and instead have opted for the relative safety of becoming commercial banks. The government is trying to set in motion a new entity to buy up the bad debt that is sucking the life out of our credit markets. The thought went that the bailout would solve everything and settle the economy... however today's stock market doesn't seem to agree.

Contrary to the hopes of boys in D.C. the stock market didn't see the bailout in the same rosy terms as the administration... the dollar fell, oil shot up to over $120 a barrel, gold is over $900, financial stocks are down and the market lost all the gains from Friday... it was a pretty crummy day for all.

As with all things when dealing with the FEDS the devil is in the details. The government is conveniently forgetting that it played a major role in this little debacle. First by pushing the concept of home ownership at any cost to individuals who should never have bought homes and then by allowing Wall Street to create nebulous products to fund a precarious social experiment. Now the boys in D.C. are scrambling to try and fix what they broke.

Part of the reason the market is bouncing around today is because we still don't really know the extent of the problem. There are big questions about how the actual program is going to work... and if it even has a chance of working. While there may be a need for some speed in passing the legislation in order to stabilize markets, Congress should be leery about putting all the country's eggs in one basket with little or no oversight. ... Paulson may be the man for the job but he should not have carte blanc without public scrutiny as is proposed by the current administration. That's what got us here in the first place.

On the other hand this is not a time for Congress to try and squeeze in a bunch of political junk. You can't save people who can't be saved. Sounds a bit convoluted but the bottom line is that the subprime fiasco that started this slide was based on loans made to people who didn't qualify for them in an effort by the government to make everyone a homeowner. Guess what... most of these people still don't qualify and throwing money at them will not solve their lack of financial stability... it's like trying to put water in a bucket full of holes.

So grab your hats and hang on to your wallets ... this ride is going to be very bumpy... even in Manhattan Beach

Manhattan Beach, CA Homes: The Tale of a Sale

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Mon, 23 Jun 2008 16:36:40 -0500

3612 Poinsettia Manhattan Beach

In the last few months I've written posts on Starter Homes in Manhattan Beach , Prices not crashing .... no kidding and buyers and sellers Thinking Outside the Box along with a number of other posts on Manhattan Beach real estate. These posts were about the market in general and often about my listing on 3612 Poinsettia in particular. Many who commented on these posts blasted me on everything from home prices in Manhattan Beach to my general lack of knowledge about the declining real estate market. The bottom was going to fall out of the local housing market and Poinsettia was wildly overpriced at $849,000.

But a funny thing happened a month ago. Suddenly 3612 Poinsettia was not the wallflower at the prom. Poinsettia was on the short list for Prom Queen. The property was being shown many times every day. Not only did we wind up with multiple offers but it went within a matter of days and I had to turn away of number of people who wanted to make offers. I won't release the sales price until the house closes escrow in July but I will share a bit about the sale. <<< CONTINUE >>>

South Bay-Beach Cities Real Estate: Short Sales Suck

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Sun, 06 Apr 2008 13:34:12 -0500

I had dinner with two very savvy real estate agents last night. These agents have been in the business for a long time and know their way around a short sale. They have listed and sold short sale properties. Neither of them will deal with short sales again.

I sympathize with them. I don't want to deal with short sales either. Banks have no idea how to process these types of sales. Nor do they have the staff to deal with them even if they knew what they were doing. It's a joke. I did a number of short sales in the 90's so this is familiar territory. Last month I closed a short sale after an arduous escrow that saw my buyers ready to bail. The lender would only communicate via fax and refused to take calls even from escrow.

Lenders are just plain stupid at this point. They will not talk to a listing agent who might be able to expedite the situation. They don't use e-mail. Many will only communicate by fax. They change personnel and phone numbers and don't give out new information. They will approve a sale and then change their mind two weeks later. They will try to stiff an agent on commission after they have approved the fee. I know of agents who wound up receiving no money after working for 2-6 months on one of these sales. They believe we should work for free because they made poor choices. Then they wonder why good agents will not work these types of sales. They have no clue about local real estate markets. Yesterday one of the agents had a bank suddenly decide to go to sale rather then approve the short sale because they "knew someone would buy the property at auction for more then the short sale".... talk about out of touch. <<CONTINUE>>

Closing Escrows.. Making Active Rain Work for You

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Thu, 20 Mar 2008 18:14:37 -0500

There are a number of reasons to like Active Rain. One of the perks of membership for me has been the relationships I've formed with other AR bloggers. A few weeks ago I finally closed an escrow on townhome in Redondo Beach, CA. I worked with the buyers for 9 months by the time the escrow closed. The buyers had found me through my blog. We had e-mailed a few times and I answered their questions about the South Bay real estate market. We started looking at property in May 2007. We looked at every property in their price range over the next 6 months to the point that even they began to question whether or not they were being too picky. The answer of course was Yes... but they had just gotten married and were still learning the art of marital compromise. During the 6 months of our property search I sent them the names of a number of lenders I was comfortable working with in my area. One of those names was Brian Brady... America's#1 Mortgage Broker.

The clients were very nice people but boy were they tough. They typified the "new" generation of buyer. Internet savvy and computer literate. They wanted information and answers immediately. There were no givens on this deal. They had both owned property in other parts of the country and the hardest thing for them was finding that real estate is local. It didn't matter how deals were done in other places.. what mattered was how they were done in CA. This is a very difficult concept for a lot of buyers who have purchased in other states. They were experienced homeowners... just not in California.

They found searching for a lender was as difficult as searching for a home. They had financed their other homes through their credit unions and didn't understand that using a credit union from another state was probably not a wise choice let alone a very practical one. They tried Internet brokers and traditional bank sites. Ultimately they kept coming back to Brian Brady's blog as the best source for the information they were seeking. About three weeks before they found the right property I managed to convince them they needed to be totally pre-approved to make an offer. They finally chose Brian as their lender.

In November of 2007 they found a great property in South Redondo about 3 blocks to the water. The property was a short sale that appeared to be a slam dunk until we got into the transaction. The seller was a former lender who thought he had the deal wired.. he didn't. There were a number of hurdles we had to cross to get this one closed.

Fortunately Brian was on top of things. We were able to submit the offer to the lender with full approval for the buyers subject to the appraisal and lender acceptance of the short sale. We waited and heard nothing for about three weeks when the lender suddenly demanded an appraisal within a few days. Brian decided to call on Mike Tarabotto of California Appraisal Solutions Corp as Mike was an AR guy and close to Redondo Beach. Mike scheduled an appraisal immediately. I can truthfully say that Mike submitted one of the best appraisals I have seen in many years. In fact the appraisal was so well done it included the name of the HOA president. I'm guessing that Mike's appraiser gave her my name and phone number at some point which proved to be of major importance later in the transaction.

After being in escrow for over 2 months with almost no communication from the lender and a seller who really didn't know what he was doing it was time for our side to get tough. After threatening to walk from the transaction after a seller bluff I managed to get the number for the person who was in charge of the file. I passed the information along to Brian who began calling them every few hours. I won't be able to "prove" Brian's calls were the catalyst to get this sale moving but about three days after he started calling we suddenly received a demand from the lender and could proceed.

I was incredibly impressed with Brian throughout the entire transaction.. he is a pro. However my approval became complete adoration when Brian drove from San Diego to Redondo Beach to sign the loan docs with the Buyers. WOW.... I haven't had a lender do that in 20 years. As it turned out there was a glitch in the paperwork and we would have been in real trouble if Brian had not been at the signing. As Brian and I were talking with the Buyers while waiting for paperwork... they told us that the reason they picked both of us was our blogs. They were very impressed with the information we offered and how quickly we responded to their questions.

Brian's latest blog on AR is about Justifying Your Fees . I can guarantee that after you work with Brian Brady he doesn't have to "justify" anything.. he earns every cent of his fee. Thanks Brian... I couldn't have done it without you!

100 years later ..J.P Morgan Saves the Day... Again

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Tue, 18 Mar 2008 02:49:41 -0500

Yesterday JP Morgan Chase literally pulled the rabbit out of the hat and picked up Bear Stearns for $2 a share and a little help from the FED. While it may be too soon to tell.. the hope is that keeping Bear Stearns out of bankruptcy may also keep the financial markets from collapsing. However like teenage boys with fast cars.. credit markets and banks just seem to keep making the same mistakes over and over.

This is not the first time J.P. Morgan and friends have bailed out the economy. Around the turn of the 20th Century John Pierpoint Morgan was the man who saved the US economy not once but twice in a manner very similar to yesterday's scenario.

In 1895 during the Panic of 1893 the economy was in big trouble. At the time we were a gold based monetary system and a run on gold certificates led to banks closing their doors when they ran out of gold. The US Treasury was in no better shape as it too was about out of gold. The country was facing bankruptcy. JP Morgan and a few friends stepped in and managed to get loans equalling $65 million in gold to save the country from bankruptcy and economic chaos.

The Panic of 1907 was also known as the Bank Panic as banks were failing on a daily basis after the Stock market tanked almost 50% due to over-expansion and speculation that led to a stock market crash in the spring of 1907. Money was tight with little liquidity in the market as credit markets panicked. Hmmmmm sounds very familiar... In October 1907 the market crashed again. This time the crash was because of the shenanigans of one company, the Knickerbocker Trust. The ripple effect from the crash of the Knickbocker Trust failure spread panic to most of the major banks in New York.

Once again , this time at the behest of the Treasury Secretary, J.P. Morgan stepped up to help resolve the crisis. Morgan organized a team to help redirect money between banks, obtain credit and he even bought stock of corporations he thought were sound to stop the panic. Within a few weeks the panic passed and the country averted another major crisis that may well have destroyed the country.

One of the major outcomes of the steps taken by J.P. Morgan was to establish the Federal Reserve Act of 1913 which created the Federal Reserve system that we know today. While I'm often critical of some of the FED policies I think the move they made yesterday with JPMorgan Chase about Bear Stearns was probably the right one. What I find interesting is how similar the situation was in 1907.. then it was one company, the Knickerbocker Trust, that precipitated a massive panic. Yesterday it could have been Bear Stearns that started a total panic. Maybe we do learn a few things from our past mistakes.

California Foreclosures: Send in the Clowns

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Tue, 26 Feb 2008 18:09:58 -0600

On the front page of the LA Times there is a story by Jonathan Peterson titled Aid on Home Loans Sought...that should scare every potential buyer along with every homeowner. If the Boys in Washington DC have their way they are going to bring the mortgage market to a grinding halt. These clowns want to pass a bill that would allow bankruptcy Judges to not only alter the interest rate and payment on a mortgage but the amount of the loan itself in an effort to "save" homeowners. What a bunch of garbage! While I feel for those who have lost their jobs, had medical problems or faced a death or divorce.. the fact is they are in the minority.

Most of the helpless homeowners the government wants to save never should have been allowed to buy a home in the first place. They had rotten credit and no financial resources. The house payment isn't their only debt problem. Most have huge credit card debt. They can't afford the payment and upkeep on a home with all their other debt. 90% of them will still lose the house no matter what the government does as they have little sense of financial responsibility. The only thing this little bill will do is make most lenders back out of the market. The few who stay will push up rates by 1.5-2% or more to cover future losses.

Think about it... who in their right mind would make a loan to anyone if it could be altered or foregiven by filing bankruptcy. The courts would be clogged by people filing bankruptcy to have their rates lowered and or the amount of the loan discharged. The only thing I have to say about Sen. Richard Durbin ( D-Ill.) and Majority Leader Henry Reid(D-Nev) is what a couple of twits.

The mortgage market isn't in enough of an uproar. Nope.. so these two have come up with a little program to literally destroy the entire industry. Makes you wonder if they ever get outside and see what is really happening in the world. It also makes you wonder just what those guys are smoking in the back room.

I know when Stephen Sondheim wrote A Little Night Music .. he probable didn't have these guys in mind... nevertheless the lyrics sure seem to fit.....Where are the clowns?...Quick, send in the clowns....Don't bother, they're here....

I don't know about you but I'll be firing off a letter to my representatives in both the House and Senate

California South Bay- Beach-Beach Cities: What's Up With Interest Rates

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Sat, 09 Feb 2008 12:04:48 -0600

If you are looking for a new loan to purchase a home in Manhattan Beach or one of the Beach Cities or if you want to refinance your existing loan; you may be wondering where rates are going in the next few weeks. If you have been hoping to get a little insight from the "experts" in the field you may be disappointed.

I just received Dan Green's The Mortgage Reports where he has posted a link to Bank Rate's Trend Report. I love it.. even the "experts" are uncertain about where rates are going...

Bank Rate Panel Views on Where Rates are Headed:
Up:38%

Down:31%

Unchanged:31%

In my Post wondering on is it time to buy I received the following comment from a reader...

Now why would anyone buy in this market that is clearly coming down, just because of interest rates? Interest rates always adjust, cost of houses are fixed.

It's a reasonable question and in a normal market, where nothing except price changes, it makes sense. However I knew from the comment that the person didn't understand my premise. The low rates over the last few years have been because of the FED slashing rates to banks. This is going to change. Inflation, not recession, may soon be the item of concern. Inflation means higher interest rates. The current market is similar to the market of the late 70's and early 80's not that of the 90's... a war that may be winding down, high energy prices, a credit market concerned with liquidity... all of these items shot interest rates up to 17%. Don't think it can't happen again.. it can. <<<CONTINUE>>>

It's Tuesday February 5, 2008...VOTE!

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Tue, 05 Feb 2008 10:22:31 -0600

If you are in one of the Super Tuesday states today is the day you get to exercise your right to vote. There are hundreds of countries all over the world where people are literally dying in order to vote. We are very fortunate to have a process that while driving most of us nuts actually works.

It doesn't matter what your preference for President.. what matters is that you have a choice. Headlines scream everyday about those who have no choice... or are dying because they made a choice.

In CA we have a few propositions that also need to be voted on. How you vote on these will determine some important issues... like term limits, community college fees and extending Indian gambling. In Redondo there is a huge school bond issue. These are all issues that deserve our attention. Your vote does matter.. remember when you lost the class election by one vote?

So just do it.... VOTE!

California South Bay-Beach Cities: Cramer Says It's Time to Buy a House

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Mon, 04 Feb 2008 21:34:23 -0600

Redondo Beach Homes under $800,000

Why are you waiting... Jim Cramer says it's time to buy a house ....so it must be time to buy!

Looks as if the recent FED cuts have really stirred the pot. Jim Cramer, who just a few months ago, was telling anyone within shouting distance that buying a house was a stupid move and everyone who owned one should sell.. fast.. has had a change of heart. Not only does Cramer think it might be a good time for the general public to buy a home but he may even do it himself... WOW!

For a change, Cramer may be on the right track... If you need to buy then now might be a good time. It is definitely the time to refinance if you have a loan that will reset within 2 years. OK..so just take a deep breath and wait a minute before you start to beat up on me... If you need or want to buy a home within the next six months you should really do some homework. There are more properties available in the entry level in the Beach Cities then at any time in the last few years.

Manhattan Beach:
There are 17 properties under $1,000,000... 9 homes and 8 townhomes/condos.

Hermosa Beach:
There are 20 properties under $1,000,000...10 homes and 10 townhomes/condos

Redondo Beach:

North Redondo:
There are 54 properties under $700,000...22 homes and 32 townhomes

South Redondo:
There are 49 properties under $800,000.. 7 homes, 22 townhomes and 20 condos

El Segundo:
There are 27 properties under $800,000... 9 homes and 18 townhomes/condos.

These are much higher numbers for affordable properties then we have seen in a long time. No these are not 3000 sq ft less then 10 years old but they are the types of properties that most buyers used to buy as a first home. They are starter homes.. homes that start you on the way to your dream home. It made a lot of sense then and it still does... buyers need to get away from the idea that their first home should be bigger and better then the one that was the dream home of their parents. This is what got a lot of people into a lot of trouble.

So why does Jim Cramer think this might be a good time to buy then wait for the mythical 50% decline in price.

<<<<CONTINUE>>>>

Manhattan Beach, CA: Price Reduced..3612 Poinsettia Open House Friday 12-2

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Thu, 31 Jan 2008 12:26:05 -0600

Manhattan Beach Trees: Broker and Public Open House 12-2pm Friday

Big Price Reduction......now $849,000

3612 Poinsettia.. Manhattan Beach California

Join me Friday February 1, 2008 at 3612 Poinsettia, Manhattan Beach from 12:00-2:00 pm . This is one of the lowest priced homes in the Tree section of Manhattan Beach. The home has been maintained and is in average plus shape but is original with no major upgrades. It is a sweet little home... 2 bedrooms, 1 bath 865 sqft on a 4640 sqft lot with a tree view. The home is priced at $929,500. 3612 Poinsettia.. Manhattan Beach California

Call me at (310) 721-7438 or e-mail me for more information on this home or others in the neighborhood.

Southern California Real Estate: Walking Away is Stupid

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Tue, 29 Jan 2008 21:35:55 -0600

Last week was quite a week with mortgages bouncing up and down in a matter of days while Wall Street and the financial community tried to decide if the FED move was good, bad or mediocre. All of us in the South Bay-Beach Cities were also trying to decide how this cut and further cuts would affect our local real estate market.

Amid all the breaking news there have been a couple of related stories that tell a lot about the current housing crisis and the mindset of many consumers. Peter Viles who writes the The LATimes real estate blog LALand posted an article about people who were just walking away from their homes. One comment from a person who labeled herself as Condoblue wound up as another post. It seems that Condoblue has a mortgage that is getting ready to go up and her property has lost value.. so instead of making her payment ( which she can do) she plans to buy another home and walk away from her current home because it's good business.

Meanwhile over at CBS ....60 Minutes offered a report Sunday titled House of Cards:The Mortgage Mess. After all the requisite chat about rotten loan brokers and poor helpless buyers Steve Kroft talked to Matt and Stephanie Valdez, who bought a condo that went down in value. Although they too can make the payments they are contemplating walking away from the property... because it doesn't make sense to them to make the payment when prices are going down.

To Condoblue and Mr and Mrs Valdez I have three words... Shame on you! Didn't your parents teach you anything about ethics and values. You made a deal with the bank.. they would give you the money and you would pay them back. I don't believe the bank held a gun to your head or threatened to break your kneecaps if you didn't sign on the dotted line. However Condoblue and Mr and Mrs Valdez believe that only means something if prices are going up. If prices go down it seems that all bets are off. It appears that the only time someone has to honor a commitment or a contract is when it suits them.

What I found even more appalling was the number of people who seem to agree with them. Of the 69 comments about Condoblue most didn't find anything wrong with her stance to skip out on the old lender while she lied to the new lender. On the 60 Minutes site there were over 200 responses to the story. Those who found walking away offensive and wrong are barely in the majority.

It may seem to many that walking away is a no- brainer.. like returning a shirt to Nordstrom or a TV to Costco. But while Nordstrom will still take just about anything back... Costco had to change their policy on electronic items as consumers took advantage of them.

Those of you who say Banks are rotten and justify not honoring a contract by saying the principle is different are not getting the big picture. If you can afford to make your payments and choose to walk away you are taking advantage of not only the lender but all of us. In the case of Condoblue you are also committing loan fraud on your future purchase. For those of you who agree with this I have one word... DUMB!

Do any of you really believe that banks are going to let a bunch of people who can afford their payments walk away from their obligations without a consequence. They may not pay that consequence but I guarantee you will. You think the liquidity problem is tough now.. just wait. Banks make loans and charge for them based on risk. As more people who are not in dire straights walk from their obligations the banks are going to charge those looking for a loan a hefty premium to make up for their losses.

In addition to the costs of borrowing there is another little matter that may have escaped all of you who think that massive foreclosures are peachy because you will be able to buy a house cheap. You might want to rethink that if you work as a teacher, civil servant or for any state or government agency because you like their retirement benefits. If you have a company pension plan or use your 401K to buy stocks it might be a good idea to not be so gleeful. Most pension funds and mutual stock funds have part of their portfolios in financial stocks. B of A and WAMU are publicly traded companies.. if they tank so does any of the stock held by investors. Your pension fund or mutual fund could be one of those investors. That just might affect your benefits.

It's one thing when a little kid does something bad and tries to blame his imaginary friend. It's quite another when an adult decides to take no responsibility for their actions and skip out on their obligations. Frankly I have zip, zero, nada sympathy for Condoblue, Mr and Mrs Valdez or any of the others who are financially capable of making their payments but believe that walking out on a contract is OK. Aside from the fact that you are incredibly immature... you are also twits.

I bought my current home in 1991 at the top of the market. I watched the price go down and down. Yet it never occurred to me to walk away from my home or stiff the lender. It was not an option for me or any of the rest of us who hung on to our homes during some very bad times. I signed a contract and made a commitment. I stuck to that commitment.

That's not to say I didn't believe that ultimately my home would be worth more then I had paid for it... I knew that even as the market was tanking. I knew values would come back. I had a down payment to protect and I wasn't going to walk away from that. Also my parents taught me to honor an obligation. If I gave my word I stood by that. I still believe that is the way to handle any situation business or personal.

So to all of you who are walking away from your homes because you think you only need to honor an obligation when it suits you... Bad behavior is bad behavior no matter how you try to justify it...

South Bay-Beach Cities: Conforming Loan Limits to Increase

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Fri, 25 Jan 2008 11:28:17 -0600

The House Republicans and Democrats with the approval of the Treasury have tentatively agreed to increase conforming loan limits to $625,000 from the current level of $417,000 as part of their economic stimulous package. The bill must still be approved by the Senate ans the White House before it becomes law. Speculation is that the bill will be signed and could impact loans as soon as February 15, 2008.

If the package goes through it would be a boost for the jumbo loan market and our South Bay-Beach Cities real estate market. The increase would be great for those who need to refinance and for many buying property at $900,000 or less. Loans up to $729,750 would get the same treatment as conforming loans of $417,000 or less now receive.. that is lower rates.

Brian Brady in a post this morning before the news from Washington hit the headlines thinks that rates may be headed higher instead of lower after The FED meets next week. He may be right.. if the markets don't like the FED cuts in the discount rates.. either too much or too little then the Bond market will be dicey.. and mortgage rates will be up for grabs. I know it's crazy but it's the market.

**** Looks as if the deal has been done and we can expect the president to sign as soon as it officially clears the Senate. BE AWARE.... These rates are only good for one year.. so if you need to refinance now is the time to do so... at least that's the story now...

Los Angeles County South Bay-Beach Cities, CA: Sold 2005-2007

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Tue, 22 Jan 2008 15:42:14 -0600

Classic Redondo Craftsman on the Avenues

There is no doubt that sales volume has declined from the peak of 2005. Prices, on the other hand, have increased in almost all areas and for all types of property in each of the Beach Cities. While 2007 was not a great year it was not as bad as many had predicted due to surprisingly strong sales in the first half of the year.

In August 2007 we saw the first hint of serious trouble within the financial community. Huge numbers of lenders have closed their doors because of losses from subprime loans. Lenders have supposedly revamped their requirements as Fannie Mae and Freddie Mac have restructured what they will buy and are putting a real premium on FICO scores with penalty points for those who have low scores.

While interest rates on conforming loans.. those under $417,000 are at one of the lowest levels in years.. jumbo loan rates continue on the high side. Lenders are claiming that the risk is too high and the cost(rates) must take risk into account... and who knows part of the statement is probably true. Wall Street is in real trouble and there is more to the problem then a few risky jumbo loans. My premise for that statement is that most areas of the country are still able to take advantage of conforming loan limits. It is only a few high priced markets that are dependent on jumbo loans... and surprisingly many of these markets are not in nearly as much trouble as their less pricey cousins.

Contrary to the thoughts and wishes of many our beach real estate markets have not crashed. Sales are slow but prices are holding up fairly well. The softest area seems to be townhomes in North Redondo which has always been less stable then other parts of our market area. North Redondo townhomes are our weakest segment and will be the first to be affected if there are a large number of foreclosures. so far we are not seeing the high numbers of foreclosures that were predicted. Rumors abound about lenders holding back massive inventories of foreclosed properties but I don't think we will see a lot of them here.

The biggest threat facing our market is if we wind up with a massive recession and people lose their jobs. The problems we saw in the 90's were because a large number of residents lost their jobs when the aerospace industry saw a loss of major government contracts with the end of the cold war. This time around we are a bit more diversified.. although I think settling the Writers' Strike would be a real boost to thoughts about our local economy.

These are the numbers for the Beach Cities... Manhattan, Hermosa, Redondo and El Segundo from January 2005- December 2007.
Beach Cities: Sold 2005-2007 (click on graph to enlarge)

Manhattan Beach, CA: Home Prices 2005-2007

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Sat, 19 Jan 2008 11:55:52 -0600

Manhattan Beach Pier.. January 2008

The Manhattan Beach real estate market has always been contrary.. contrary to logic... to income standards... to investment basics... basically to most yardsticks used to measure property values in other places. We have continued to maintain high prices even as the market has slowed down. The number of sales have decreased, the days on market have increased while prices have only seen slight declines.

The question floating through our Manhattan Beach community is whether or not this will be the year that we see the real estate market move downward or will we continue with minor adjustments and a basically flat market. Buyers are opting for prices moving downward while sellers are hoping to hang on with a flat market or a minimal downturn.

Manhattan Beach and the Beach Cities in general have fared better then many similar communities in Los Angeles County. So far our foreclosure rate is minimal and the hope is to keep it that way. I'll be posting information about the Beach Cities in the next few days.

Manhattan Beach: Home Prices Sold.. 2005-2006 (click on graph to enlarge)

When you review the numbers for each neighborhood over the last three years it's amazing how stable the market has actually been. That may be about to change if the tight credit market continues into most of next year.

The big surprise may be that buyers are going to be fine as most people who want to buy in today's market have to have stable finances, cash for a down payment and good credit. The ones who may wind up in trouble are those who bought with marginal resources. We could also see problems if a recession does materialize. I think we will have a handle on where the Manhattan Beach and the Beach Cities housing market is headed by spring to early summer. If we make it through the next 6 months intact we are likely over the worst.

Manhattan Beach, CA: Home Prices January-December 2000-2007 Part II

Manhattan Beach CA/ e-PRO..... Kaye Thomas... (Real Estate West) — Thu, 10 Jan 2008 13:06:52 -0600

Manhattan Beach Home Prices : DOM & Median Price...2000-2007 part II

The Manhattan Beach real estate market has been slow the last few months when compared to the first part of the year. The national credit crunch along with continued high prices and fears of a recession have created a lot of questions about the direction of housing in most of California, Los Angeles County and locally in the Beach Cities.

While working on Part I and Part II of this report one of the things I noted is that trends in the Manhattan Beach market seem to be far more stable then many realize. The market started going up in 2002 and while price levels have bounced around they have not showed any major declines. Sales volume is off but not drastically when compared to the last three years. The DOM(Days on Market) for December 2006, January 2007 and December 2007 are almost identical. The fact is the market will probably see more changes next year but the magnitude of those changes is the question no one can answer at this point. No one is even sure if we are or are not in a recession.

Manhattan Beach: DOM and Median Price January-June 2000-2007 ( click on graph to enlarge)

Manhattan Beach: DOM and Median Price July-December 2000-2007

Currently there are 87 homes for sale in Manhattan Beach, 20 homes in escrow( 2 since January 1, 2008) and 3 closed sales since January 1, 2008. I held Open Houses on Saturday and Sunday in the rain.. one in the tree section and one in the sand section. On Saturday I had 10 couples come through and Sunday saw about 15 people. Not earth shaking by any means but rather interesting considering the weather conditions.

If the R Word rears it's ugly head in the South Bay we could see some trouble. However as we are more economically diversified then in the 90's it may not have as large an effect as the loss of aerospace jobs did at that time. It looks as if pressure is coming to bear on those involved in the Writers' Strike and we may see some resolution in that field before too long. Those in the financial markets must be feeling a pinch but again there is no data on how many or who will be affected.

There are Manhattan Beach homes that have received NOD's ( notice of default) and some even appear headed toward foreclosure. What is surprising is the few (3) I have seen in the paper as headed toward auction are not on the market... so I'm guessing the owners may be securing financing as the homes are worth a lot more then the amount of the mortgages recorded against them. But people are funny so you never know. In the 90's I met a number of homeowners who did not deal with the reality of their financial situation.