Wow… Another year has come and gone! 2018 was a most interesting year. California got a new Governor and a lot of issues to contemplate. There was a mid-term election that changed how our national government and some state governments will operate for a few years. The stock market took a dive, then flew up, then took a dive then flew up.. and ended the year with a whimper instead of the big bang folks have seen in recent years.. Sadly too many people thought that taking a gun and killing a lot of people they didn’t know was a good idea There were hackers everywhere from National elections to Facebook and various sites in-between. And finally.one of the favorite topics locally and nationally .. what’s happening with 2019 home sales in the Beach Cities.
In California, the cost of housing and where prices are going is a major topic of speculation in newspapers as well as the local diner. The LA Times, Daily Breeze and other local papers have been speculating about whether the housing market is going to take a nose dive or a slight stumble. Rent control remains a hot topic even as rents are falling in some places. Major changes could be ahead if the state decides to get involved in the housing market. It seems everyone has an opinion.. including me!
The Beach Cities and the South Bay, in general, are not likely to see a major decline in prices anytime soon. What is probably going to happen in our little slice of heaven is that prices will remain fairly consistent or rise just slightly. Generally, as interest rates rise the number of folks who are looking to buy declines a bit as their buying power changes. While mortgage rates have gone up, overall rates are still at historic lows. A 30 year fixed rate loan is under 5%. Buyers are not going to drop out of the market unless they were very marginal. They may make a different choice in housing type or location.
People forget it wasn’t that long ago when 8% was the going rate and folks were buying relatively high priced homes. It wasn’t the interest rates that made the market take a dive it was really stupid lending practices and the gaming of the financial markets. That is not the case today.
We haven’t seen a normal market in so long many folks have forgotten that markets do move up and down and sometimes don’t do either one. Most buyers and seller like markets that are more predictable and less volatile. The biggest issue facing the Beach Cities remains low inventory, especially in the entry-level price range.
Overall home prices seem to be leveling off and not skyrocketing as in previous years. Some are selling under the asking price but usually not by a huge amount. And many homes are still selling over the asking price. In both cases, the amount under or over isn’t huge. Often the numbers are less a function of the market than a too high or too low listing price.
The 2018 median home sale price in Manhattan Beach was $2,400,000, Hermosa Beach was $1,700,000, North Redondo was $1,040,000, South Redondo was $1,175,000 and El Segundo was $1,200,000. Monthly prices are more volatile depending on the mix of properties. Finding an entry level property under $800,000 is difficult.
The chances of a massive market fall in the Beach Cities isn’t likely anytime soon. California will have to contend with high home prices and a lack of affordable homes until someone comes up with a better plan. The housing market has been on the upside since 2012. Generally, in California, real estate markets run 7-10 years. So you might have to wait a bit longer to see a change in the market.
There is an election coming in 2020 and the politicians will start running soon. Each one will have a different view of the economy. Wall Street might even be on its best behavior for a few months. This just might be a year with few surprises as far as home values go.