Neighborhood Spotlight: El Porto, 90266

Now that the summer has ended (and what little summer we did have!) and the kids are back in school, I plan on periodically describing a local neighborhood and focusing on the pros and cons of living there.

The focus this time is on El Porto, the neighborhood at the north end of Manhattan Beach. Once an unincorporated part of LA County, El Porto is one of LA County's top surfing meccas. El Porto consists of roughly 20 street's just a stones throw from the water. Lots tend to be smaller and mortgages/rents are a little more affordable than the rest of Manhattan Beach; but you still get beach-close living with ocean views. On the downside, El Porto is adjacent to the Chevron refinery and one of the few beach front parking lots in Manhattan Beach - that helps explain the crowded surf and sand. However, if you're commuting north, you'll get a head start on the morning commute with easy freeway access and you'll be home that much faster. As for the real estate, El Porto offers many opportunities to buy a beach house, often with income options with the many duplexes in the area. The area still holds many fixers with sweat equity opportunities, and newer properties for those who want to move right in. Finally, with El Porto living you'll enjoy walking to the beach, restaurants and quick bike path access, along with tapping the benefits of the Manhattan Beach school district for the kids.

As for listings as of mid-October, 124 Moonstone Street, a 1,279 sq. foot 2/1 and 1/1 duplex beach bungalow is listed at $899k. It was listed by Fred Zuelich with Shorewood Realtors in early August and has seen one price drop from $925k to $899k. It gets you a vintage 2 bed, 1 bath classic beach bungalow with rental income in the $1,200/month range. That'll help pay the mortgage while you walk to the beach and pull into El Porto's barrels.

That's it for now. I think it's a great time do some bargain hunting and take advantage of the slow down in the real estate market and the record-low mortgage rates.

Kd

Back in Action - What's new around the beach and where's summer?

Happy Summer! We're now a few weeks into the Summer and if you're like me, you're wondering "When is summer going to start?" The feelings are two fold. Not only is the weather doing it's best impression of June, but the South Bay real estate market isn't doing a whole lot better. To put this to numbers, I searched sales under $2 million in the beach cities from Hollywood Riviera to Manhattan Beach. The period from January 1st to May 1st (4 months) shows 154 sales - Ave. price $1.08m; 2116 sq. feet; and 88 days on the market. Keep in mind this period covers US Tax incentives. From May 2nd to July 7th, in the same price and location range, there have been 90 sales - Ave. price $1.22m'; 2384 sq. feet; and 77 DOM. What do these numbers tell us? There has been a slight improvement in sales, but there is still a CA tax incentive available. The summer months are historically the best time to sell a house, but we're not seeing the increases we should expect with current record low interest rates and incentives.

I know that sounds a bit pessimistic, but like my hopes for some summer sun, I too am hoping for better sales numbers. On the flip side, if you're a buyer, this market continues to be a great opportunity to own real estate at the beach. As I mentioned earlier, we are seeing historically low interest rates and there are still many great houses to buy. To illustrate this, I want to point out 3005 Manhattan Avenue , Hermosa Beach 90254. Originally listed at $1.295m, it has been reduced to $1,049m; it is 1700 sq. feet on a 2450' lot with some ocean views and a block to the beach. Yes, a block to the beach! Granted, it is on Manhattan Ave and you do have some morning traffic outside your door; but what other SFR can you find that close to the beach with 1700', 2 car garage on a full lot? I think this one has potential.

That's it for now. Pray for sun and surf and keep you're eye on the market, things can change quickly!

Best Buys Update: Milne in Escrow

In consistency with the surrounding neighborhood, Milne is in escrow after about 2 weeks. The good ones go fast! This is a great reminder that if you want a good property, you'll need to have all your ducks in a row - pre-approval, liquid assets ready for a down payment, and know your market. By the way, the previous week's under $660k, 2401 Marshallfield LN , Redondo Beach 90278 has an offer and is in Back-up Offer status on the MLS.

Here's a bonus Best Buy for the week. Listed at $689k and located West of Main on a 6750' lot in El Segundo is 232 W Oak AV , El Segundo 90245 listed by Kirk Brown of Main Street Realty. It's just over the $660k threshold, but maybe with some good negotiating you could slide right in there.

Have a great week and keep an eye out for those opportunities.

KD

More South Bay Inventory and better pricing

I introduced my deals of the week in my last blog, and despite my small following, maybe the market has responded positively (I don't really believe this but just humor me for a while). This week has brought a new deal of the week by virtue of two very quick price drops in no less than 15 days on the market (DOM).

$1.2m and under:
The property is 2900 Oak Avenue in the Manhattan Beach Tree Section.

It is listed at $849k but started at $965 on January 22nd. 1709 Oak sold in December at $990k - granted the house does not back up to Sepulveda and boasts an update with additional 3/4 bath - but $849k isn't to far off at $755/ft. With the extra money you can do some updates and add a bath. When you consider 1801 Elm sold at $805k at a frenzied auction, and it practically needs to be torn down, 2900 Oak looks even better. Now if you want a close second, take a look at 3212 Palm listed at $899k by Tony Barberi of Remax. It's a fixer and only has a one car garage but it's in a better location. Recent sales on Laurel and Pacific tell me this might go a little lower, but I'd throw out the comp on Poinsettia as that sold under $800k and seems a little fishy. Finally, for those looking for another starter option, 3004 Oak, listed at $799k boasts a pool and although it too backs up to Sepulveda, it has a nice wall blocking most of the noise and sights of Highway 1.

Under $660k:
As for the real deal of the week, I'm big on 4721 Milne Drive in South Torrance. It's a fixer on a 9000' lot, but is a very liveable 1078' with 2 beds and 1.75 baths.
You don't see too many places in this area of Torrance under $700k, let alone a 9000' lot under $600k. It may be tough for standard FHA financing but it may be worth considering a FHA loan with a rehab option. The neighborhood borders the famed Christmas Tree section and you can walk to Sea Aire Golf Course (that's where I had my only hole in one - when you see it you won't be that impressed with my golf game - it was a worm burner). Recent sales in the neighborhood include many in the neighborhood ranging from as low as $560k and as high as $865k. The lot sizes were all generally smaller but most of the places under $600k were on the market less than a month and many less than a week.

Finally, on the financing front, the word from David Curry at Platinum Capital is that things are getting easier on loans up to $1.5m, with rates under 6% with 20% down.

Have a great week and stay dry.

Best Buys

I figured it would be nice to identify some of the best buys in the South Bay. Since I'm still not that comfortable on the stability of the market well outside of agency conforming loans, although I'm hopeful this will change soon, I'm choosing to focus on the best buys under $1.2m and under $600k. This will greatly limit the neighborhoods accordingly, but my hope is that this will help readers weed through the new listings that we'll see through the year. Since the South Bay is a vague term, I'm going to keep the search between PVE (Valmonte and Malaga Cove) to El Segundo and as far inland as Anza Blvd. in Torrance. Here are this week's nominees:
$1.2m and under:
555 S Helberta AV , Redondo Beach 90277, listed by Rae Lord of Coldwell Banker has a nice 1400 3 bed/1 bath ocean view listing in a nice neighborhood of South Redondo on a 6600' lot. There are many $1mil houses in the neighborhood and an ocean view with a walk to the beach is hard to find for $889k. The one that got away is 220 Ave A listed at $859k. This is one of the coolest little craftsman homes in the avenues.

Under $660k:
2401 Marshallfield LN , Redondo Beach 90278 listed by Hady Chahine of Shorewood Realtors has a nice 3/1 on a 5000' lot listed at $569k. Not bad for a short drive to the beach and close to the main arteries for a freeway commute.

That's it for this week. Keep a smile on your face and your rain coat nearby just in case.

Lessons from a surfer

The surf has been pretty big here in the South Bay the last couple of weeks. If you're a surfer here, you've learned to be prepared for those special days when the waves are really good - boards are waxed and ready, schedules cleared, and your wetsuits are dry and ready to go. It's not much different for the real estate market in the South Bay - you need to be ready for that diamond in the rough. Sure, there are currently many houses that have been on the market for months; in that case, time is on your side. However, most of the best deals in any neighborhood require you to be ready to take immediate action. If you're thinking of buying a home in 2010, or any time for that matter, here are some steps to get yourself prepared to score a deal in today's market.

1. Get prequalified for a loan. Meet with a mortgage banker or broker and find the type of loan and amount of loan that's best for you. Be prepared with recent tax returns, pay stubs, and bank statement.

2. Identify your needs. Do you need to upgrade or downsize? Are you a first time home buyer or are you looking for an investment property? A real estate professional can help you identify the type of property you are looking for.

3. Match your needs with your price range and find a target neighborhood.

4. Know the market. Have your Realtor update you on new listings and visit open houses in your target neighborhood.

5. Write an offer. Once you've found a house that meets your needs and affordability, it's time to identify your price and write an offer.

The bottom line is you need to establish some goals for finding a home and take action once you find that house. Don't be like the surfer who spends all morning checking out the surf on the webcams. In order to catch a wave, you need to paddle out to the surf.

Why we live here.

As I check the weather around the country, it is clear to me why so many people call Southern California home. From Atlanta to Boston, Dallas to Detroit, below freezing temperatures are what most of the country woke up to this fine Saturday morning. As I was wondering where I'd go surfing this morning, most Americans weren't even thinking of leaving the house. No wonder people visit and vow to return - with a moving van. In fact, my own father left Michigan in the 60's and has never gone back. Sure, with news of unemployment, foreclosures, and the ever present traffic, it's sometimes easy to forget the weather and beautiful beaches. However, as many of you already know, in the long run, the beach remains a very attractive place to buy a home. So as many football fans from Oregon, Ohio, Alabama, and Texas return home from the Rose Bowl after a week of perfect weather, I’m sure many are planning their moves back to Southern California. Sure, I could go into detailed statistics of why to buy a house here, but let's look at some of the basic and simple facts.

• Interest rates are still historically low. Assuming you buy a house worth $800k, with 20% down, a 30 year loan on $640k at 5.25% will cost you $3,534/month. If rates were to increase to 6.25%, merely 1 point, that same loan will cost $3,941/month, or roughly $70k in loan value. One thing is certain, I don't think interest rates can remain this low for much longer.
• Tax incentives - the US government will actually give you money to buy a home. Now there are restrictions on who qualifies, but first time home buyers and those that have lived in their previous home 5 of the last 8 years can receive $8k or $6.5k, respectively, if you buy a home by April 30th.
• Home prices are discounted. With prices in many areas of Southern California peaking in 2006 (median price was $585k in 2006 and was $340k in 2008), current price levels represent a significant discount. The South Bay has remained somewhat insulated from huge price drops, but it still remains a buyers market.
• Finally, look around. The lowest priced homes have seen bidding wars - yes, bidding wars. I had clients submit offers on two homes in Manhattan Beach last year that both had over 20 offers - in less than one week! What does this mean? People simply want to live near the beach. Low priced homes in the South Bay are in high demand, and will continue to as long as people want to live near the beach.

So what does this mean for the next year? I stand by this logic - if you like the house, want to live in it for the next 5 years or more, and can afford the payments, you can't go wrong buying a house in the South Bay.

New Year, New Opportunities

It's hard not to be optimistic about 2010 after surviving 2009. The South Bay Real Estate market certainly had it's ups and downs, but even in a tough year there were opportunities for savvy buyers. The border cities continue to offer great opportunities to live in the ocean breeze. I expect these opportunities to continue in 2010.