The month of May turned out to be a busy time for Manhattan Beach real estate, particularly for the single family residence (SFR) market. SFR volume increased 80% to 36 closed sales from 20 last May, and sales price per square foot increased 8.4% year-over-year. However, before we get too anxious and declare a market bottom and turn-around in Manhattan Beach real estate, let’s take a closer look at the data.
|Comparing May 2009
to May 2010
|Single Family Residences
|Single Family Residences
|Median Sales Price
|Number Of Units Sold
|Median Price Per SQFT
|Average Days On Market
Analyzing Manhattan Beach real estate statistics is always a difficult task. Anyone can look at data for closed or pending sales, but discerning trends from such low volume and disparate property types is part science, and mostly magic.
As a case in point, despite a SFR median price per square foot increase of 8.4%, there was actually a 6.2% decrease in the overall median sales price! How can this be? How can two pieces of comparable price data show two different conclusions? Well, houses are all different. This is particularly true in Manhattan Beach, where one house with an ocean view can sell for $1 million more than another that does not, but is only one block over. It is tough to derive meaningful statistics from data sets with fewer than at least 30 samples.
Another thing to note is that the median SFR square footage in May, 2009 was 97 feet more than in 2010. Normalizing the 2010 median sales price by an additional 97 square feet at $612 per square foot brings the year-over-year difference down to less than 3%.
Average days on market from listing to close went up 8 days for SFRs. More houses sold, but each took a little over a week longer to sell than they did at this time last year.
Manhattan Beach Condos
Big things are happening in the Manhattan Beach condo market: Big reductions in year-over-year median sales prices (both nominal and price per square foot), and a sharp reduction in average days on market. In fact, condos sold this last month closed in half the time they did this time last year.
The same volume of condos sold in Manhattan Beach this May as they did in 2009, but prices dropped quite a bit. The median sales price for closed condos dropped 34.8% year-over-year, while median price per square foot fell 16.3%. Given the low transaction volume in the condo segment we could venture to say that the closed sales do not fully represent market value.
What Does It All Mean?
Potentially nothing. The only conclusions we can draw are that general price levels are deflating and transactional volumes increasing. It is likely that volume increases have more to do with various government incentive programs, which effectively draw future demand into the present. The logical outcome will be that when we make it into the future we will find it bereft of demand. Hence, expect further deflation in Manhattan Beach real estate prices.
Review our 2010 predictions on our Market Stats page. Essentially, we are predicting between a 4% to 9% decline in Manhattan Beach real estate prices.