Well, it truly is a seller’s market now in Manhattan Beach. If you are sitting on the fence thinking about selling your home in Manhattan Beach, now is the time, because there is so little inventory just about everything is getting snatched up in days with multiple offers.
Two recent examples: last week, there was a complete “scraper” tear-down on a large for the Tree Section of Manhattan Beach (almost 5000 square foot) lot at 1805 John, Manhattan Beach considered an A (but not an A+) tree section location as John is very quiet without through traffic and it is close enough to walk to downtown Manhattan Beach. There were over 20 offers, most of them all cash, no contingencies. It was listed at $1.1Million and ended up going into escrow at a number rumored to be in the high $1.3Million range, almost $1.4 M.
This week, there was a darling family friendly home at 2705 Maple, also in the Tree Section, listed at $1.525M. It came on the market last Friday, had 6 offers and ended up at a rumored $1.6Million, all cash, no contingencies!
For the ordinary South Bay area buyer who needs a loan, this means one thing — you may have to be prepared to really pay significantly over asking for the really cute places. If you are going to beat out an offer that has no risk to the seller — because they don’t have to wait for a bank loan to be approved, they don’t have to worry if you are going to change your mind due to an inspection contingency, or because they don’t know if the home will appraise for what you paid for it — then you have to pay a risk premium to the seller or they will take the lower risk all cash no contingency offer.
The appraisal contingency is especially significant, since, in a rising price market like this, the recent comps from 3 months ago will probably be slightly lower in price than today’s values. This may mean you have to bring a little more down payment to the table. For example, if you offered $1,000,000 with a 20 percent down, 80 percent financing and your home only appraised at $980,000, then you would have to come to escrow with the originally planned $200,000 down PLUS the additional $20,000 down that the appraisal was “short” for. So this can be a real challenge for first time buyers!
At any rate, as we continue to see low and lower inventory (see previous post) and buyers sit up and notice the ridiculously low interest rates, we can only continue to see these multiple offer situations. For more advice on how to handle a multiple offer situation, see this post about Counter offers from a few years ago — the advice is just as good now as it was then!