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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Here’s the big picture in chart form…

Monthly sales volume shows the amount of money pouring into the Manhattan Beach real estate market:

Here you can see that after a pretty average Fall and Winter, sales volume is up sharply this Spring. Here’s another way of looking at the changes in volume relative to the averages:

A total of 46 homes sold in April–39 being single family residences (SFR’s), 6 townhouses, and 1 condo:

Since the number of homes sold every month is relatively low in Manhattan Beach compared to other real estate markets, summary statistics jump around all over the place. Here’s an article on how to interpret the Best Manhattan Beach Real Estate Statistics, but check out this chart with median home prices to see the dilemma of just reporting monthly stats:

To smooth out monthly fluctuations, which often don’t say much about actual longer term trends, we look at moving averages:

Another way to look at the long term trend is to take the 6-month moving average (or, in this case, the moving median):

In both cases, we see the median home price, as well as the median price per square foot, inching higher over the last two months.

Since each of the Manhattan Beach neighborhoods is quite different, it’s often helpful to dig deeper into them separately.

Here’s a look at sales volume by Manhattan Beach neighborhood:

Median home price by section:

And finally, normalizing by the living area of each property, we calculate median home price by square foot:

Here’s a spreadsheet with last month’s Manhattan Beach real estate data 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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Have you ever noticed that real estate statistics seem to change depending on whose reporting them, and what their incentives might be? I’ll be the first to admit how tough it is to figure out the best way to calculate good stats. Do you use average or median home prices? And should we calculate those on the nominal sale prices, or should we look at prices per square foot to normalize for differences in dwelling sizes?

The story gets even tougher for Manhattan Beach real estate statistics. Our market rarely has more than 40 to 50 homes sold in any given month, and what does sell can vary wildly depending on the part of town, the neighborhood, whether the property is the original 1950′s structure, or a modern rebuild. Few properties in Manhattan Beach are cookie cutter track homes like you might find in other areas of the South Bay.

Let’s start from the beginning…

Median Home Prices are Better Than Average Prices

The first thing you should know about real estate stats is that calculating the median home price tells much more about your market than the average price. Here’s a good wiki page on real estate pricing if you want more detail, but the basics are that unless you have a large homogeneous data set you’re going to have some homes way above average (luxury), and some way below (distressed homes); an average calculation will give undue weighting to data points farther from the central tendency.

A median price calculation considers each home as a single ranked data point, regardless of its distance from the central tendency. Check out this wiki page if you want a refresher on calculating a median price.

Moving Averages Are Better Than Monthly Statistics

One way statisticians reduce short term fluctuations is by using moving averages. By combining several periods worth of data into a single calculation, we’re able to analyze changes over time without as much near term variability.

Just looking at the following median home price chart illustrates our dilemma:

Calculated on a monthly basis, Manhattan Beach real estate statistics look like noise. In fact, the standard deviation of monthly changes is about 20% for the nominal home price, and 12% for price per square foot.

Combining a few months worth of data together and then calculating the median starts to smooth out the curve:

The standard deviation between periods drops to 8.5% for the nominal prices, and 5.7% for the price per square foot. That’s a huge difference compared to the regular monthly prices!

The story gets even better when we calculate the 6-month moving average:

The 6-Month moving average drops standard deviation to under 4% for nominal prices, and only 2.1% for price per square foot. Here’s a summary of the variability stats:

Pay Attention To Price Per Square Foot

Finally, we have to consider that two homes right next to each other often vary in price simply because they vary in size. The best way to normalize for this is to divide the sales price by the square feet of the structure, which yields the infamous price per square foot.

Referencing the variability stats above shows a clear example of how price per square foot significantly reduces fluctuations. In the cases above, the price per square foot calculations demonstrated about 40% less short term fluctuation than the nominal home prices.

Putting It All Together

For all you Manhattan Beach home buyers, real estate agents, or brokers, just follow this simple recipe for interpreting sales data:

1. Use the median home price, not the average
2. Look for trends by analyzing the 6-month moving median
3. Pay attention to prices per square foot, not just nominal home values

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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Spring buying season hit the Manhattan Beach real estate market with full force. March home sales blew the historical average out of the water by almost 50 percent! Total sales volume came in at $77.6 million last month, versus a four year historical March average of $52.0 million. That’s a big deal.

Here are a couple charts that give a visual for this blow out:

Looking at the trend line:

Here’s how the stats came in:

Over the prior month, total market volume surged $55 million and the number of closed sales went from 14 to 45. Median sales came in at a nominal $1,352,000, almost $600 per square foot. Homes remained on market for an average of 40 days longer than those that sold in February.

Here’s a spreadsheet with last month’s Manhattan Beach real estate data 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.

Here’s are some charts breaking out sales volume, median sale prices, and median prices by square foot for each of the Manhattan Beach real estate sections:

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Of the 19 sales, 14 were single family homes, the other 5 being townhouses. The single family homes had a median sale price of $1,730,000 ($547 per square foot), while the townhouses came in at a median of $1,010,000 ($620 per square foot).

Here’s a snapshot of monthly sales volume, and how we’ve been doing over the last 12 months compared to historical averages:

Here’s a graph of how sales volume has trended over the last 12 months:

Considering that sales volume fell 43 percent below average in February 2011, the fact that volume last month was 1 percent above average bodes well for 2012. If history is a guide, we should start to see increasing volume as we enter the Spring buying season. Last year, we saw volume levels increase starting in April, then soaring through the summer.

The 14 single family homes sold for a median price of $1,730,000 ($547 per square foot), after an average of 78 days on market. The 5 townhouses sold for a median price of $1,010,000 ($620 per square foot) after an average of 119 days on market.

Here’s a spreadsheet with last month’s Manhattan Beach real estate data 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 Realtor with questions about any listing.

Here’s are some charts breaking out sales volume, median sale prices, and median prices by square foot for each of the Manhattan Beach real estate sections:

Bottom Line

Both sales volume and median sales price are significantly improved from the same time last year. We are still likely years away from another real estate bull market in Southern California, but the sky has stopped falling and all signs point to better times ahead.

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January is usually a slow month for Manhattan Beach real estate. This January we saw 16 closed sales worth a total of $31.9 million. Compared to historical sales volume, we actually exceeded the monthly average by 3 percent. Median price per square foot was up 5.7 percent over the last month, and 2.3 percent compared to January, 2011. Highlights for the month include a Strand sale for $9.25 million, and two properties selling for under $700 thousand. Manhattan Beach has something for everyone! Well, that is, everyone with at least a couple hundred thousand in savings, and well over $100,000 in household income…

An interesting note is that 1/4 of all Manhattan Beach sales last month were all cash purchases.

Here’s a snapshot of monthly sales volume, and how we’ve been doing over the last 12 months compared to historical averages:

All statistics need to be analyzed in context, so here’s a graph of how sales volume has trended over the last twelve months:

The way to interpret this chart is to see that 8 of the last 12 months have seen higher sales volume in Manhattan Beach than the historical averages for each of the months. February of 2011 was the worst month, with sales falling a whopping 43 percent below that month’s average; but, in total, sales volume has been 6 percent higher than historical averages over the last 12 months. This is definitely a bullish sign for the Manhattan Beach real estate market.

Of the 16 closed sales in Janurary, 13 were single family residences (SFR’s), 2 were townhouses, and 1 was a condominium. Combined median home price was $1.45 million, and homes closed after an average of 91 days on market.

Median home prices for the SFR’s was $1.45 million, or $600 per square foot. Homes closed with an average of 91 days on market.

For the townhouse / condo segment, median prices were $1.1 million, or $654 per square foot, and homes closed, on average, after 79 days on market.

Looking at sales by Manhattan Beach section we see that most of the action happened in the Sand Section last month. Over 60 percent of sales volume closed in the Sand, with the Tree section coming in a distant 2nd place with 20% of volume.

Here’s the actual breakout by section:

The next two charts show median home prices, and median price per square foot by section:

It’s tough to draw meaningful statistics for each of the Manhattan Beach neighborhoods, or MLS real estate sections, with so few sales. Some of the sections, for instance, have only a single sale, so “median” prices can easily be thrown out of whack.

Let’s dig a little deeper into what happened in each of the neighborhoods…

Manhattan Beach Sand Section

The Sand Section carried the weight of January sales volume due to one big sale at 2920 The Strand. This gorgeous ocean front, 7 bedroom, 6 1/4 bath, Strand home closed for $9.25 million.

Four other homes closed in the Sand Section last month, one being a townhouse, and another a condominium. Overall median home price was $2.675 million, or $836 per square foot, with homes remaining on market for an average of 100 days.

Hill Section

Only one home sold in the Hill Section last month, but what a home it was! 853 9th St closed at $2,666,250, or $630 per square foot. This “immaculately polished” 5 bedroom, 4 1/2 bath home has 4,233 square feet of living area sitting on a 6,300 square foot lot. The home sold after 139 days on market.

Tree Section

The most exciting Tree Section sale for my company (because it involved two of our agents-one listing and the other bringing the buyer) was also the highest priced. 2509 Laurel Ave closed for $1,575,000, or $431 a square foot. Given that the home is nestled right by the Green Belt, the low price per square foot is a bit surprising. This was definitely a great deal for the new buyers!

Four other homes closed in the Tree Section last month with a median price of $1.2 million, or $517 per square foot. Homes remained on market for an average of 96 days before closing.

Mira Costa

Two homes closed in Mira Costa last month, one being a single family residence “in need of major repair” at 1643 3rd St ($899,000, or $533 per square foot), and the other a nicer Cape Cod style townhouse at 1208 Tennyson #8 that sold for only $655,000, making it the least expensive home sold in Manhattan Beach last month.

Manhattan Beach Heights / Liberty Village

One home closed in this section, technically in the Liberty Village area: 1716 Marine Ave closed for $672,500, or $581 per square foot. The home is the traditional one-level styles built in the 1950′s throughout this section of Manhattan Beach.

Manhattan Village

One home sold in the Planned Unit Development (PUD) of Manhattan Village: 19 Chatham closed for $1.4 million, or $471 per square foot. Chatham sits on a large lot of 7,314 square feet, with 4 bedrooms and 2 1/2 baths in 2,972 square feet of living space. Manhattan Village is an immaculate gated community.

Summarizing Our First Month Of 2012

Only fools and charlatans try to predict the future with certainty, but what I can say is that things are looking good for Manhattan Beach real estate. Over the last year we’ve seen sales volume beat the averages 8 months of the last 12, with median price per square foot up 2.3 percent year-over-year compared to January 2011.

Expect to see increasing inventory to hit market as we enter Spring, but that’s also when we’ll see an increasing number of hungry buyers. Only time will tell which way the scales tip!

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Here’s a chart that shows monthly sales for 2011 compared to the 4-year average from 2007-11:

Breaking out median home prices for closed sales per Manhattan Beach neighborhood, or section:

Normalizing the same data by square footage for each property:

Here’s a summary of December, 2011 market stats for all Manhattan Beach 1-4 unit residential properties, including single family residences (SFR’s), townhouses, and condos:

Another way to look at the Manhattan Beach real estate market is to analyze each major neighborhood, or section, separately. Each neighborhood has its own micro-market, so let’s take a look at how they each fared independently.

Manhattan Beach Sand Section

The Sand Section consistently ranks as Manhattan Beach’s most expensive section. In December, 9 homes sold with a median price of $1,675,000, or $629 per square foot, for a total volume of $16,445,000. Listings that sold last month took an average of 119 days on market before closing. The most expensive home to sell in the Sand was a 3+ level, 4 bedroom, 6 bath,  Mediterranean style home with ocean and Catalina Island views at  416 10th St, which closed for $2,975,000. The least expensive Sand Section home sold last month was 527 24th St, which closed for $1,325,000.

Tree Section

Next in line for highest median home price is the Tree Section, which had 5 homes sell for a median price of $1,499,000, or $480 per square foot. Homes in the Tree section took, on average, 114 days on market before closing. The highest priced home to sell last month was 2909 Laurel Ave, which closed at $2,275,000 after 98 days on market. Sitting on a 5,406 square foot lot, this home was marketed as having the “charm and feel of a plantation home in the south.” On the low end of closed sales was 844 12th Ct, which closed at $1,150,000.

Mira Costa Section

Mira Costa had 7 homes close last month with a median price of $1,440,000, or $470 per square foot, and an average of 71 days on market. The big news for Mira Costa was 116 Terraza Pl closing for $4,900,000 after 164 cumulative days on market, and an original list price of $6,650,000. Click on the link above and check out the listings, it’s truly a remarkable home in Manhattan Beach’s “Mansion Area.”

On the other side of the spectrum, a more affordable entry level home at 1761 5th St closed for $805,000.

Manhattan Beach Heights / Liberty Village

Sliding further down the affordability scale, we come to Manhattan Beach Heights, and Liberty Village, which are traditionally lumped together for a single market area. December saw 3 homes sell in this section with a median home price of $865,000, or $470 per square foot. Home took, on average, 116 days on market before they closed. The most expensive home to sell here was 1900 Peck Ave for $1,190,000 – a single-story, traditional home built in 1964 with 2,530 square feet of living space, sitting on a 5,900 square foot lot.

And the winner for least expensive property in Manhattan Beach last month was an 852 square foot condo at 1311 Manhattan Beach Blvd, which closed for $374,000.

Manhattan Village

The Planned Urban Development (PUD) community of Manhattan Village only saw 1 closed sale in December with 1 Evergreen Lane selling for $1,240,000. This beautiful two-level Cape Cod style home built in 1985 has 4 bedrooms, 2 1/2 baths, 2,310 square feet of living area, and sits on a 3,674 square foot lot.

With the last month of the year closed out, we can look back and see that 2011 was a solid, healthy year for the Manhattan Beach real estate market. Prices remained flat, but sales volume increased over the last 4-year average. Let’s see what 2012 brings…

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The total income of the top 1%—or those earning more than $343,000 in 2009—fell by more than 30% from 2007, according to the most recent Internal Revenue Service data. By contrast, the average income of the bottom 90% fell less than 3% during the same period.

The article goes on to cite a study by Jonathan A. Parker and Annette Vissing-Jorgensen of Northwestern University that found that “the beta of the top 1% nearly quadrupled between 1982 and 2007 to 2.39. The top 0.01% had a beta of 3.96, making even the riskiest tech stocks look safe by comparison.”

What this means is that for every 1% fall in the stock market, the richest Americans are seeing a 4% drop in their net worth!

Couple this with a study I published in July on “How Stocks Effect Manhattan Beach Home Prices,” in which I showed that Manhattan Beach home values are 33.3% correlated to the S&P 500, compared to 18.3% for the rest of Los Angeles, and 4.3% for the national market.

The big take away is that wealth is not a guaranteed phenomenon, and affluent Americans are less secure as they increase their portfolios’ risk levels.

Given that Manhattan Beach home values are 670% more correlated to the stock market than national home prices, residents here should adjust their other financial holdings accordingly to account for elevated risk to local real estate exposure.

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The 25 homes closed in November pushed sales volume 16 per cent higher than the last four year November average. Median sales price came in at $1,237,500, which is an 8 per cent jump over October. Here’s a snapshot of monthly sales volume over the last four years:

Here’s a breakout of stats by section:

While it’s still too early to call this a rebound, I’m going to venture to call a bottom to our market. Prices have stabilized, and volume is better than average.

Seasonality of real estate means we likely won’t see appreciable growth in the Manhattan Beach market until Q2 2012, but the worst is behind us.

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Of the 23 sales last month, 15 were single family residences (SFR’s), and 8 were townhouses. Total market median sales price was $1.3 million, compared to $1.15 million last month, and $1.355 million in August. Median price per square foot went up to $612 from a $576 the previous month.

One item of interest is that the homes sold in October were on the market for considerably longer than the homes sold in September, average days on market shooting up to 105 compared to 74 the previous month. Overall, and despite slowing activity compared to the summer, October was a relatively healthy month with longer standing inventory finally clearing, and median prices edging up.

A quick plot of October median home prices by section shows a typical neighborhood profile, with the Sand Section taking the lead, followed by the Tree and Hill sections. Typically, Hill Section homes have higher values than Tree, but we only had one Hill sale in October, so the data is not fully representative of relative section values in that respect.

Another look at prices by square foot:

Looking at the median home price data by square foot helps normalize for better comparison of relative value. In October, the Hill sale came in at a higher price per square foot than the median Sand data. Hill and Sand sections sometimes swap for the #1 priciest location spot, but it’s rare for the ocean views and bigger lots in the Hill to overtake actually being on the ocean in the Sand.

Notable October Sales

2504 The Strand was the big deal of the month, closing at $5,150,000. This contemporary, 3+ level, Strand home is the epitome of Manhattan Beach living. Three ocean-side decks with views from Malibu to Catalina are enough to make any buyer salivate, but the price came down significantly off the original high of $7,190,000 when it was listed in March.

On the low end of the spectrum, 1131 22nd St closed for $600,793, or $350 a square foot. This home is an older short sale that closed after 10 days of being listed for an original amount of $775,000.

Coming Soon to SoCalREA

The only path to improvement is critical self evaluation. On that measure, the monthly market statistics presented on this site can be significantly improved by incorporating time series data, trends over time, and computing moving averages. We’re working on new data analysis to be presented over the next month that should provide much more insight to residents and prospective buyers in all of the Manhattan Beach neighborhoods.

Any and all suggestions are welcome, so please feel free to contact us with any requests on data, or new analysis you’d like to see!

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