Welcome to 2015! It was a good year for Manhattan Beach Real Estate. All told, 422 properties sold in total in 2014, down just 5 properties from 2013. Prices ranged from $465,000 for a 2 bedroom condo, to a whopping $15,750,000 for a 4 bedroom on the Strand, with the average coming in at $2,315,000.
Comedian Vince Vaughn purchased former USC football coach Lane Kiffin’s home, NFL quarterback Matt Leinart bought a home near the beach and former NHL head coach Terry Murray has sold and left town. If plans go through to build an NFL stadium in Inglewood, Manhattan is sure to become home to more pro athletes.
The Google purchase of 12 acres in Play Vista will likely to garner us some new neighbors as well, as Google will surely bring in lots of new employees.
According to the LA Times, many more Manhattan Beach homeowners who move up to larger properties became landlords last year than years before, by keeping the initial property and renting it out.
Here are Realtor.com®’s Top 5 Housing Predictions for 2015 with my take on how it affects us locally:
Millennials will drive household formations: Millennials (a segment of the population that came to maturity around the year 2000) still often can’t afford Manhattan prices so this may end up raising demand in Hollyglen, Torrance and Lomita where process are more affordable for a young couple starting out
Existing home sales will increase 8%: This is in large part due to the decrease in availability of foreclosures and distressed properties. In the South Bay we’ve already been limited in the amount of these available since mid 2013, so we will see prices go up a little but not at as fast a rate as the last two years. We’re basically back to peak-level pricing in most areas.
Home prices will gain 4-5%: Low inventory and lots of employment opportunities will drive prices up. While first-time home buyers have lots of economic factors working in their favor, increasing prices make it hard to get into high priced markets like ours. We have very strong job market in the South Bay with the entertainment industry nearby, athletes who like to live near LAX to get to away games easily, high tech companies like Boeing, Raytheon, Northrup-Grumman, SpaceX, financial trading in Downtown LA, and import/ export in Long Beach.
Mortgage rates will end the year at 5%: I can’t predict the movements of the Fed but I don’t think it’s going to be quite as high as this, but that may be just wishful thinking on my part. I do think the mortgage interest rates can’t possibly hold where they’ve been, which means right now is the time to buy or sell if you’re moving up because you’ll save more money on your new home than you are going to lose on what you’re selling.
Home affordability will decrease 5-10%: The article states increasing mortgage interest rates will affect affordability, but that will be offset by increasing incomes. I’m not sure that local incomes are going to go up because corporations seem to be holding a lid on that. But prices are certainly going up and it’s becoming more and more difficult to find something affordable in the South Bay.
The article states that on the whole, ten markets are “especially primed and ready for significant acceleration” and the Los Angeles- Long Beach area is one of them; “Los Angeles and Washington, D.C., were selected for their anticipated increases in home sales and household formation.”
Overall it looks like 2015 is going to be a pretty good year for real estate here in the South Bay – let my team help you take advantage of the trends!