Manhattan Beach Real Estate Booming In June

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The Manhattan Beach real estate market kicked butt through the end of June! The second quarter (Q2) of 2010 saw Manhattan Beach single family residence (SFR) prices rise 8% compared to the same period last year, with 2.5% price gains in the month of June, comparing 2010 to 2009. 

Here’s a snapshot at how the Manhattan Beach real estate market looked this last month:

Since real estate markets are highly seasonal, it’s illustrative to compare periods across different years to see broader trends. In the table above we compare June 2010 to June 2009 to see how prices, volumes, and time on market compare.

Three clear trends stand out: Prices are up, volume down slightly, and homes are staying on the market longer this year than last. In particular, the condominium market fared pretty poorly. Median sales prices for Manhattan Beach condos are 21% lower this year than last, and are spending 38% more time on the market before closing.

Manhattan Beach SFR’s did much better, with median home prices up 2.5% when comparing year-over-year changes in prices per square foot. The flip side to this story is that homes are sitting on the market for more than twice as long before closing!

There are a couple key characteristics of the Manhattan Beach real estate market that make analyzing its statistics difficult: The market is small, with only about 30, or so, homes closing per month, and properties value significantly in values depending on location. An ocean view can swing values by over a million dollars!

To normalize for these mathematical disadvantages, our firm aggregates quarterly data and computes three month moving averages to discern core trends. The following table takes a look at SFR data for Q2 2010 and compares prices from the same three month period in 2009:

April-June 2010	All Sections	Sand	Hill	Mira Costa	Tree	Village	Liberty Village
Median Price Per SQFT	621	784	571	468	618	551	502
12 Month Change	8%	12%	-1%	11%	4%	-5%	3%
Average Days On Market	83	99	75	22	97	145	59
Number Of Units Sold	93	24	15	9	34	2	9
Highest Price Closed	$7,500,000	$7,500,000	$6,000,000	$2,020,000	$3,200,000	$1,680,000	$1,670,000
Lowest Price Closed	$760,000	$835,000	$1,030,000	$796,000	$760,000	$1,180,000	$760,000
Median Price Closed	$1,675,000	$1,744,500	$2,040,000	$1,456,250	$1,725,000	$1,430,000	$1,560,000

Looking across all Manhattan Beach neighborhoods, we see an 8% year-over-year increase in price levels per square foot. The median price for a SFR in Manhattan Beach over the last quarter was $1,675,000, with the lowest priced property selling for $760,000 and the highest closing for $7,500,000.

The Sand Section saw the largest year-over-year price gain of 12%, followed closely by Mira Costa at 11%. The Tree section and Liberty Village section saw modest price gains of 4% and 3%, respectively, while both the Village Section and Hill Section saw slight price declines. The worst performing neighborhood was The Village, with a 5% price decline over the last year.

The most active Manhattan Beach neighborhoods were the Tree Section, Sand Section, and Hill Section, with 34, 24, and 15 homes sold, respectively. The least active neighborhood was the Village section with only 2 SFR’s closing in the last quarter. This limited volume is the likely culprit for the 5% price decline.

Finally, our firm analyzes total market volume to gauge the overall level of capital entering the Manhattan Beach market:

The second quarter is typically a strong time of year for Manhattan Beach real estate, so the Q2 spike up in sales volume needs to be measured against historical averages. When looking at seasonal volume fluctuations, we find that Q2 2010 sales volume is actually 4.4% lower than the historical average over the last four years (which includes the bad years of 2008-2009).

Looking Forward

Pending homes sales are one way to look briefly into the future. This measurement analyzes sales contracts that are pending close of escrow. In essence, we get a 1 to 2 month preview of sales statistics.

The National Association of Realtors (NAR) just announced a 30% drop in pending home sales for the month of May, which we corroborated by analyzing Manhattan Beach pending home sales data. The report is available on our real estate blog.

Our Manhattan Beach pending home sales analysis points to a 30% volume drop, with a corresponding 5% price decline relative to Q2 levels.

With so much market distortion created by federal and state tax credit and first-time home buyer subsidy programs, we do not expect to be able to gauge the market’s broader trends until 2011. The next two quarters are likely to see declining volume and prices as conditions normalize post-bailout.