Where the 2012 Manhattan Beach Real Estate market is headed . . .
Ed's "State of The Market" Address
When analyzing the real estate market, how do you know when it has really changed for the better? Headlines. Just reading headlines in the news can give you a clue where things may be headed. Real Estate trends are based more upon consumer confidence levels, than almost anything else. Of course there are significant driving factors which include the overall economy, the mortgage meltdown and other global factors, but it is you and your neighbors that really create the effect of any significant movement in real estate prices.
Take a look at this week's headlines...
Warren Buffet on CNBC: I'd Buy UP 'A Couple Hundred Thousand' Single-Family Homes If I Could.
DS News: Housing Crisis to End in 2012 as Banks Loosen Credit Standards
RIS Media: Housing Expected to Add to GDP for First Time in 7 Years
National Association of Realtors: January Pending Home Sales Rise, Market on Uptrend
DS News: Proposed Bill to Speed Up Short Sale Process and Prevent Foreclosure.
Ed Kaminsky Real Estate Team: Multiple offers on our listings are back in 2012.
These headlines are easy to find and positive news is definitely dominating national Real Estate sections today. What about on the local level? What is happening in our back yard? Outside of following the headlines, just take a look at the faces of local realtors, and see if their 5 year frown is starting to turn upside down. From the more active agents you can hear sighs of relief that their listings are now selling before having to spend their entire commission on advertising. Sellers are thanking them for quick successes, and there is talk of multiple offers on many of the properties that are hitting the market.
If you are thinking of selling, it is possible that you could actually realize more money now than you did in 2009-2011. Does that mean property prices have appreciated? Well the overall statistics haven't shown that yet but there is no question we are now witnessing sales of homes at prices we know we couldn't get 18 months ago here in the South Bay.
Comparing inventory levels of homes for sale vs. those in escrow gives you the best look at the trend that is starting to take shape. In November of 2010 there were 4,231 homes for sale and 627 of them went into escrow; that is equivalent to about 7 months of inventory. Today there are almost half as many homes for sale at 2,395 and 885 of them went pending in January of 2012; that leaves only 3 months of inventory on the market. This is a tell-tale sign of a buyer's market standing eye-to-eye with a seller's market. Looking at the Manhattan Beach Real Estate market over the last 14 months we saw an inventory high of 169 homes for sale and we are currently down to 95 homes for sale in Manhattan Beach, of which 34 of them went pending last month.
CAUTION SELLERS: this does not mean you can expect to sell your property for what you paid for it in 2007, however it is going to get easier to sell and possibly sell for slightly more than you could have last year.
CAUTION TO BUYERS: when making offers you may not be in the driver's seat anymore; many homes will have competing buyers pursuing it at the same time you are. You don't have to get in a major bidding war, but you do have to be very realistic about what you offer if you want to end up with the home. It is also possible that if you do miss out on your dream home, the next one to come along could cost more money.
Note to Doubters: if you don't believe the market has hit bottom or is on its way to recovery, you might be right. We all look at the data available and make our best educated guess on what may happen. However if I was that smart, I would have bought more property in 1995 and would have sold everything I owned in 2006. That is not what I did. Your perspective on the data available is what will motivate you to do what you believe is right.
Ed’s Best Guess: by viewing the combination of a 5 year decline in Real Estate prices along with historical low interest rates, I trust that 2012 may be the best year to buy Real Estate that we have seen in the last 40 years. If you are a move up buyer there is no doubt that now is a great time to make that move. If you are buying for the first time and you have saved your pennies, then I say dive in! If you are downsizing and want to finally be a seller that can enjoy the selling process and not have to wait 6 months to sell your home, right now might be the time for you. In all cases be sure to consult your lender to confirm your qualifications, they may say guidelines are loosening but I haven't seen it yet. In addition, you should definitely seek advice from your tax advisor regarding the ramifications of buying and/or selling. After you determine if the timing is right for you, call the best Real Estate agent that you can find and drill them with questions on how they will best represent you and your situation.
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