How Should We Spin May’s Statistics?

May 2012 is a great month for analyzing Manhattan Beach real estate statistics. In fact, we could write a case study for a real estate course with this month’s wacky numbers. How do you spin this: Volume way up over averages, median home prices down, but really up when you look at price per square foot on a 3-month moving median; or, we could say that prices are completely flat when looking at the 6-month moving median! I’ll let you decide…

We’ll start with the basic stats:

A total of 46 homes sold in May consisting of 35 single family homes and 11 being townhouses. Single family residences had predictably higher median sales prices, and prices per square foot; average and median days on market were also better for single family homes compared to townhouses.

Here’s where the stats get weird. If we were to simply compare the stats in this table to last month’s, you’d see about a 15% drop in median home prices, and a 3-4% drop in prices per square foot. Median DOM was 56 then, so the inventory that sold in May ended up sitting on the market for an extra month. None of these comparisons look pretty!

But the one thing I’ve been harping on for some time now with this blog is that the Manhattan Beach real estate market doesn’t have enough volume to simply compare monthly closed sales data; computing either a 3-month, or 6-month moving average, or median, is necessary to smooth out sharp fluctuations. Here’s an article I wrote explaining the best way to analyze Manhattan Beach real estate statistics.

Here are the 3-month and 6-month moving median charts, so you can get a better sense of the market trend:

The 3-month moving median shows a down tick in nominal prices, but an up tick in prices per square foot.

The 6-month moving median is almost completely flat in both nominal prices and prices per square foot.

Let’s dig a little deeper into the numbers:

We’re comparing the median price per square foot, the 3-month moving median price per square foot, and the 6-month moving median to last month, last May, and to the historical average for May (going back to 2008).

Compared to last month, the median price per square foot decreased 3.4%, the 3-month moving median jumped 4.6%, and the smoother 6-month median remained essentially flat at 0.2%. Comparing to the same period last year, the respective numbers are -5.5%, -0.7%, and 0.9%. And finally, comparing May’s results to the historical average going back to 2008 (which includes the market crash, so it’s skewed lower), we’re looking at a 1.0% gain, a 1.4% gain, and a larger 2.3% gain, respectively.

And so, we return to the title of this article: How should we spin May’s stats?

Let’s look at the volume picture:

Volume is way up over the averages from 2008, with the Spring and early summer showing significant capital flows to the Manhattan Beach real estate market. Here’s another way of looking at volume over the historical averages:

Manhattan Beach Neighborhoods

The bulk of the real estate action in May took place in the Sand Section with 17 closed sales. Tied for second place for the number of sales came the Tree Section and Mira Costa. Manhattan Village had 5 sales, and the Hill Section and Manhattan Beach Heights / Liberty village tied with 3 closed transactions.

Looking at how each neighborhood fared with respect to prices:

And normalizing by square feet:

Here’s a spreadsheet with Manhattan Beach closed sales data for May 2012 from MLS, including all closed sales for single family residences, townhouses, and condominiums.

To browse through what’s currently on the market, check out these Manhattan Beach home listings, or check out what we have available now with NW’s real estate listings. Contact a Manhattan Beach Realtorwith questions about any listing.

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