310.598.1227 (South Bay)
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Wow, here's an interesting new data bite. Foreclosure activity for Manhattan Beach, 90266, is down by nearly 16%, month to month. This is another indicator that our local housing market is definitely on the mend.
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NOTE: if you don't want to read the following prose and just want to see the numbers, you'll find my graph at the bottom of the blog entry.
South Bay real estate sales have been painfully hot over the last 30 days, with Manhattan Beach's 34* sold single family homes, representing over $56,000,000 in inventory, reigning king in the three beach cities that also includes Hermosa Beach and Redondo Beach.
Looking at the numbers, it's clear that the Manhattan Beach real estate market is in a league of its own. From first hand experience, we represented three buyers during this sample period and each of our presented offers was met by multiple buyers vying for the same property. Real estate blogs, news papers and financial experts tell the country that we're in a buyer's market—not in Manhattan Beach. Homes that are priced correctly, have updates and are in a "B" location or better are selling. I don't know if this will become an ongoing market trend, or if we're experiencing an anomaly based on pent-up demand, time will tell.
For now, it's war! The buyer who is willing to fight through the multiple offer battle and put together the most compelling offer wins.
Our recommendation if you are looking to purchase a home in Manhattan Beach
First and most importantly, only your agent can give you a true picture of the steps that you'll need to take to get the home you're going after. Sites like Redfin, Zillow, Turlia and others never take into account the sophistication of miro-markets like Manhattan Beach, especially homes West of Sepulveda.
Even if you are a professional negotiator by trade, real estate sales represents a unique and emotional path from offer to acceptance. Trust your agent to decipher the seller's motivation, gauge the overall interest in your subject property, and best case selling price. Unless a home has been on the market for 100's of days, forget the "lowball" offer, it probably won't work for you. In fact, many top agents refuse to put a lowball offer out as it usually upsets a seller and can damage an agents reputation within the real estate community, definitely a slippery slop on all fronts.
What's the difference between a Pending Sale and Backup offer?
Sorry, there's no simple answer here. From a 5,000 foot perspective, the pending sale is considered to be a little bit more solid, more of a sure thing. When an agent and seller are soliciting a backup offer, they're either concerned that their buyer may not be able to preform on their purchase, or they're simply playing it safe and trying to make sure that if their current deal goes south, that there's a backup deal ready to slide into the first position. Considering that over 25% of all deals fall apart for one reason of another, soliciting backup offers is a pretty prudent path for many home sellers. If there's a home you really like that shows as being in Backup Offer status, have your agent dig into the particulars to see if it's worth puting something down in writing.
Interpretation
It's way too early to call the market bottom, but the indicators are sure there. It's also interesting to note that the dramatic rise in activity fits the South Bay's normal, annual sales cycle, which accelerates in February and then peaks towards July. We don't anticipate housing prices going up dramatically, but the multiple offers we've been seeing will definitely push the overall market towards larger numbers. On the other side of the sales increase are the homes that are overpriced and sitting. More common than not, this group of sellers purchased at the peak of the market between 2006 and 2007, and are now underwater on their home's value. If the majority of these sellers accept a financial loss in equity or through a short sale, we'd see more sales at prices that could slightly reduce the comparables. On the REO front, homes like 660 33rd and 1026 Duncan are seeing loads of activity and the selling banks are looking for top selling dollars. Word on the street is that 660 33rd sold for well over $2,000,000 and had multiple, super qualified offers.
Because the economy is not stable, and won't be for years to come, real estate sales will continue to be astronomically influenced by the daily news of the world. Commercial real estate, a double-dip recession, and other financial events that could easily become more than blips on the economic radar need to be watched closely.
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1801 Elm is a probate sale that will be sold at an auction held at the property December 6th, 2009. What's interesting here is the MLS price of $399,000, but there's no minimum bid and no set "asking price," according to the agent notes on the MLS. The sale is "as-is" and is also subject to court confirmation. I'd guess that an overbid is also a possibility, which can muck things up sometimes. However, if there's no overbid, the auction winner is the winner.
If you're interested in the property, have your agent research the details.
Considering the listing price, I'd guess this home will generate a lot of interest
Read More: How to make a low ball offer that works, How to negotiate the sale of your home
When you list your home for sale, you envision a final sales price that is a blend on your hopes, recent area comps, and your overall motivation. However, when a potential buyer submits an offer that is well below your worst case scenario, how should you react?
Keep in mind that your next step should be part of a negotiation strategy. If you're able to do it, emotions have no place here. It's simple math. You want "x" and you've been offered "y." But, most buyers who start low are willing to come up. As much as they hope you'll accept their first offer, protocol says that this is just a starting position.
There are three possible responses you and your agent can put together:
Because every deal and offer are unique, it's important to weigh-out all of your options before you respond or reject. We prefer to keep the ball in the air with most offers, especially those that are backed by solid financing. In most cases we would encourage you to make a good faith counter, which then puts the offer back into the buyers hands to respond. If they respond back at the same low starting position, then maybe it's time to cut bait.
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New to the Neighborhood is the Tin Roof Bistro at 3500 Sepulveda in Manhattan Beach (the North-West side of the Village Mall parking lot, just before you reach Rosecrans).
This is not one of those hidden, "ring the door bell" kind of places where grandma is in the back room cupping-out meatballs by the hundreds, this is a very well done formulaic creation that oozes with charm, Santa Barbara mission style design cues and and an open and spacious dining environment.
People in Manhattan Beach are always looking for the next cool place to make the new in spot, and this is it. The prices lean towards pricey, so this may not be the best family restaurant in the hood. But, for couples, date night and going out with friends, The Tin Roof Bistro is a must try.
The restaurant has front and side patios that offer a super comfortable open air place to sit and relax, a quality wine list* and full bar, and an "L" shaped main dining room that tastefully decorated and homey.
Out front there's a Bocce court and a mini vineyard—heck, we really like this place.
Manhattan Beach's Tin Roof Bistro's Menu <<-- click here to view
*From The Tin Roof Bistro's menu:
“FOH” Friends of the House - While living in st. helena, the heart of the Napa Valley, I was fortunate to befriend young wine makers and entrepreneurs. Being a small town, our source of entertainment was hosting festive dinner parties the deal was I’d prepare recipes from tra Vigne and they’d pour their latest barrel samples and releases. It has been a true joy watching my friends’ success grow over the years. Now, I have the opportunity to share their wines with you. that’s what life is all about – Friendships and great Wine!!
- Mike simms, Owner
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Back in the day, 881 10th was a joint spec project from local upscale builders Matt Morris and Dusty Gravatt. First sold in April of 2006, the home was originally purchased for $2,800,000, which was down significantly from its first listing price of $3,195,000 in late 2005
Sure there were some issues with the home, a lack of outdoor space plus stop-and-go traffic exposure at 10th and Poinsettia's four-way stop, but overall, this was a lovely property.
At a selling price of $2,150,000, the home was dumped!
This is a classic example of über seller motivation. Major congratulations goes out to the buyer who picked up the BEST deal we've ever seen for a desirable Hill Section home.
As we were not involved in the transaction we can only guess, from the little information we could gather, that the home was dumped as part of a corporate relocation effort. And, we're thinking that there's a large public company involved that helped soften the seller's loss as part of a relocation incentive package. But this really does not matter. $2,150,000 sets a new low water mark for quality-built Hill Section homes. And because some of you will ask, no, this was not a short sale or foreclosure.
Like so many things in real estate, putting together a compelling low-ball offer is an art and not a science. The art here is in the development of a "big picture," 5,000 foot view of a particular property and an understanding of the selling motivations of the current owners. Conversely, the science approach says that you always offer, for example, 70% of the MLS list price and then use the seller's reaction to determine your next steps.
In the South Bay, and in particular Manhattan Beach, home sellers are extremely sophisticated and up-to-date with local real estate trends. Making a low-ball offer without understanding the big picture and greasing the skids correctly will all but kill your opportunity to get the property 99.99% of the time.
For example, there's a lovely new construction home that's been on the market for three months that's caught your attention. The home was originally listed for $2,199,000 and has been recently reduced to 2,099,000. With your agents guidance and counsel, you decide to make an offer on the home at $1,500,000. Your offer of $1,500,000 is based on your finances and has nothing to do with the property's inherent value within the market. In this fictitious scenario, unless your agent warned you that the deal would not go anywhere, you can assume that your agent is new to the business, painfully inexperienced, and lacking in local knowledge and expertise. Miscalculating or misjudging a sellers motivation by submitting an offer way below market will lead to one of two negative responses:
If your agent had done their homework, they would have reported to you that although there have been several new construction projects that have sold in the $1,650,000 range, this particular home, because of its style and quality location would support a final selling price in the range of $1,850,000 and 1,950,000. Your $1,500,000 did nothing but upset the seller and listing agent because they felt you were wasting their time—and you were. And although this is example is made up, if it were based on a real offer, the subject property finally sold for $1,900,000 several weeks after your low-ball offer plopped back to earth like a giant, stinking pile of cow poop.
Getting a home for a Low-Ball price
Getting a great price on a South Bay home isn't so much about what you want, it's 100% about the seller's need to sell. Because the South Bay is still considered to be a very desirable place to live, home's that don't sell quickly here are usually flawed in some way or another. The most common flaw we see is price. If you're looking to put together low-ball offers, you'll need to compromise on the type of homes you're going to target.
Death, Divorce, Probate, Short sale, Foreclosure and Relocation
Within the local Realtor community, it used to be the two "D's" that could lead to a great deal for a buyer: Death and Divorce. In divorce, if the splitting couple can't decide on a price, a judge can mandate the property be sold ASAP. In death, if there's a lot of equity in the property, it's pretty common for an out-of-area relative to set up a tent in the front yard and dump the home for a quick cash-out. Murder and suicide in a home can cement a low, below market price. Short sales and Foreclosures represent distressed homes and they will often sell below market value. There are also homes that are being sold as part of a relocation effort, which are sometimes dumped, too. As each of these events can be a catalyst to a sale, you and your agent should be looking for these sorts of distressed homes.
The Evolving Target
As a home sits on the market, it's perceived value evolves. What might not work today in the way of a low ball price may be welcomed 5 months down the road.
The Research
If you're determined to be a low-baller, you'll need to go after distressed homes that fall into one of the following categories: Death, Divorce, Probate, Short sale, Foreclosure, and to a lesser extent, Relocation. However, also expect competition. Once a home has been stigmatized, the low-ball community smells blood, which can draw in multiple low offers.
Your research should answer all of the following questions:
Low Balling for the Sake of Low Balling
Look, it's your money and you can try and spend it anyway you want. But, unless the property is distressed, odds are against you winning with a low-ball bid. People often say that they want to throw an offer against the wall to see if it sticks, which is fine. I'm really talking about being realistic in your efforts. Most South Bay agents, at least those who are doing business, will normally refuse to write an unrealistic offer ($1,500,000 for home that supports a $1,900,000 price). The exception would be if you and your agent have a strategy you're working from, and you know that you're really both working towards a realistic number to bubble-up in the negotiations process. A low starting position is very different from low-balling. In the low starting price offer, the buyer's agent normally acknowledges that the offer is low and that the buyer and seller will need to negotiate to a number that works for both sides.
How to Make a Low Ball Offer That Works
Watch the market like a hawk—identify homes you like and keep them on your radar. Be prepared to make an offer when a good deal presents itself to you. Like any other form of investing, the process is analogous to mining for gold. The treasure is out there, somewhere, but you'll need to work hard to find it.
In addition to being price realistic, you should also:
And Last, Buy By No Means Least—Timing
Timing is everything. There are numerous examples of sellers that would not consider a low price in the past, who would love your low offer today. Sometimes your job is to wait out the market and strike once your target property's seller finally gets motivated.
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These two maps will be a real life saver if you're new to Manhattan Beach and are looking for information about neighborhoods and which schools they are serviced by. Both maps have been updated since I first introduced them in early 2008.
Sorry, if you want to print these maps, drop me a note and I can email you a version that is unlocked.
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502 24th is one of Manhattan Beach's most interesting and desirable homes. Please stop by our open house this coming weekend to see why this architectural masterpiece is one of the best priced homes in The Sand.
Modern homes of this quality and design are rarely built and should be seen to be appreciated. Designed for the needs of a family, as well as for entertaining, the modern beach house features an open floor plan with large glass pocket doors that open to patio and deck spaces that allow for true indoor/outdoor living. This solar powered home features 4 bedrooms with 4 bathrooms, powder room, office, kitchen by Valcucine, open living and dining areas, family room, rec/media room with wet bar & wine cellar.
Features
What people are saying about this home
note: property is listed with Sotheby's International Realty
